The thousands of questions asked in the TurboTax community make it clear that people have lots of uncertainty around tax issues, so it came as a surprise when enrolled agent Barbara Tackett told me that she and her peers have offered free tax help around the Sacramento region for two years now but haven’t gotten many takers.
“We’ve always been a little bit disappointed,” Tackett said, “so this year, we decided that we’d try to get out the word. We’re all kind of introverted. Accountants and tax people tend to be a little bit introverted … and so we have not known how to market ourselves so that people will know about the event.”
Members of the Sacramento Valley Chapter of the California Society of Enrolled Agents will answer your tax questions at no charge from 9 a.m. to noon Feb. 4 in Room 2 of Maidu Community Center, 1550 Maidu Drive, in Roseville. While you don’t have to register for the Tax Help Day, organizers are hoping attendees will do so to let them know how many people to expect. To register for the tax help, go here.
Enrolled agents, by the way, are licensed by the federal government to represent taxpayers before the IRS. Most obtain their licenses by passing a three-part exam known as the Special Enrollment Exam, or SEE, but some take the route that Tackett did.
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“I started out working for the IRS as a revenue officer, which is a collections person, back in 1981,” Tackett said. “I have been doing taxes and representation outside of the IRS for about 25 years. … I worked at the IRS for 10 years. Because of the nature of the work that I did for the IRS, I was able to get my enrolled agent’s license. I did not have to take the test.”
Tackett, now a partner at Sacramento’s Incompass Tax, Estate & Business Solutions, makes the majority of her income from preparing individual tax returns, the Form 1040, but she also has represented clients before the IRS and deals with any letters that the agency may send her clients.
This columnist couldn’t resist lobbing a question at Tackett:
Many Property Assessed Clean Energy financing companies lend money to homeowners for energy-efficiency updates on their homes. The homeowners then repay the loans through their property taxes. One company’s website and its representatives have touted that the entire loan, both principal and interest, was tax-deductible. Of course, they always added that consumers should check this out with their tax preparer. Is the principal really deductible on these loans?
“That is misleading, at best,” Tackett said. “You can set up the financing so that you are making the payments through your property tax payments. However, those payments are not tax-deductible. They are not taxes. Any interest you’re paying might be deductible as mortgage interest if it’s collateralized by your house, but the whole loan is not tax-deductible.”
Unfortunately, Tackett said, many homeowners just go to a tax preparer and tell them what their total property tax bill is. They don’t explain that part of the bill is related to a home loan, and the preparer may not ask.
After taxes are filed and the IRS sees a huge jump in property taxes on a home that the consumer has owned for years, Tackett said, it could trigger an audit. If something sounds too good to be true, she added, it usually is.
The last question for Tackett: What can people expect on Tax Help Day?
Attendees will register at the front desk, she said. If they want to ask questions of an enrolled agent, they will be assigned someone. The event also will feature workshops that will provide tax information on the Affordable Care Act, buying a home, business deductions, retirement planning, rental properties, tax credits and more.
“Enrolled agents are licensed to prepare tax. We focus on taxes,” Tackett said. “Tax laws are changing constantly every year, every administration. The state has its own set of laws as well as the feds, so we have a never-ending opportunity to learn.”
But Feb. 4 will be their opportunity to teach, if you’ll let them.