My husband annoys me periodically by snarling at the TV while we are watching a perfectly reasonable police show. Based on his long-ago job in a peripheral law enforcement position, he gets worked up when the show’s cops do something that he says real-world officers would never do. I tell him that it’s just a little dramatic license. Who cares? He should be quiet and watch the program.
Then, last night, watching a new favorite show, I found myself yelling, “No, no! That doesn’t happen.” And, “No, don’t pay! The bill is wrong!” And, more!
Most people don’t get their tax advice from comedy TV shows… I hope! But, still, the assumptions made by the characters on the show are the same misconceptions people who come to us for professional advice have. The blatant mistakes got me worked up!
3 Things The Kominsky Method Got Wrong
I enjoy the characters and witty writing of Netflix’s The Kominsky Method.
But, the drama of the episode I was watching was based on one of the characters learning that he received a letter from the IRS complaining that he had not filed taxes for three years and they were billing him for $300,000 which he decided to pay.
Wrong #1: The IRS does not wait for three years and send you one letter for all of the years you’ve missed. They send you a letter and a bill for a single year when they have discovered you’ve not filed for that year.
Why would they wait? To make the total owed larger and dramatic? Only on TV!
Wrong #2: When you don’t file a return (or you omit some information from a return you do file), the IRS assumes the worst. So, if the IRS learns from 1099’s or W-2’s that you’ve had income of $100,000, they will send you a bill for a tax on the full $100,000 without any deductions. They’ll also add on penalties and interest, even though in some circumstances you might be able to have penalties waived.
When you get a bill like that from the IRS, the solution is to see a CPA and file your taxes. Claim your expenses, exemptions, and deductions! Don’t just pay what the IRS says you owe!
But, in the TV show, what the IRS said the taxpayer owed was treated like it was written in stone.
Then on the program, another character offered to give the money to the IRS for the person who hadn’t filed. But, the donor said, we have to call it a “loan”, so you don’t have to pay taxes on what I pay for you.
Wrong #3: Gifts are not taxable to the recipient. So, there was no reason to call the gift a loan.
Gifts over a certain dollar limit need to be reported by the donor to the IRS, and gifts may decrease the amount available to be passed on tax free in an estate. But, they are not taxable to the person that receives them.
Moreover, calling something a “loan” when you don’t want or expect the money to repaid is lying to the IRS. No tax or legal professional would ever suggest lying. Neither should a television show!
Don’t Take Take Advice from a Comedy and I Won’t Use a Police Drama to Train Rookie Officers
Okay, okay. I now understand why my husband objects so strongly to the harmless dramatic license on crime shows!
When you see something on TV — or on the Internet — what happened sticks in your mind. You believe what the characters do in the show represent what reasonable people do. Don’t believe it!
The Kominsky Method has lots of great moments. And, the episodes need drama, even if it’s a bit contrived. So, I’ll calm down and let the tax misstatements wash over me.
But, if you get a notice from the IRS, don’t follow the Kominsky Method of dealing with the taxes. Call us!