Lots of Americans invest a significant portion of their money into bonds because they have great tax advantages, they’re low risk, and because they return a consistent, albeit lower, profit. They’re much lower risk than, say, investing in the stock market, so if you’re playing the long game and you want to ensure your financial future, bonds are certainly something that you should be investing in. That said, some people would like to take some of the money that they’ve made off of their tax-advantaged bonds and put that money into the stock market or into other higher-risk, but also higher-yielding, investments. This practice is what’s known as arbitrage, and it’s actually frowned on the federal government. Thus, the federal government, and more specifically the IRS, has come up with all sorts of rules and regulations regarding this type of transaction.
If you have engaged in this type of transaction, then you are going to have to do some arbitrage rebate calculation. As you can likely tell from the explanation above, arbitrage is a rather complex financial practice, and arbitrage rebate calculation is even more complex. You can’t just hop on TurboTax or something like that and do your arbitrage rebate calculation. It’s something that has to be done by someone who knows about it, which means even your usual CPA might not be able to figure it out for you. There are CPAs out there who specialize in arbitrage rebate calculation and compliance, and if you think arbitrage rebate is something you need to be worried about this tax season, then you need to find one of these firms and hire them. It’s possible that your usual CPA can do it for you, but don’t get your hopes up.
Not only is arbitrage calculation quite complicated, but the repercussions for not following the regulations laid out by the IRS are severe. You could end up having to go to court over the issue, and you might end up having to pay not only your legal costs but also fees and fines associated with your breaking the rules. The IRS takes their arbitrage regulations quite seriously, so you need to make sure that you get your arbitrage calculation right the first time around. This is why it’s so important to hire CPAs that understand the process and know how to calculate it. It won’t take them long to figure it out, and they’ll get it right on their first try.
Firms like Arbitrage Compliance Specialists specialize in this type of accounting. In fact, Arbitrage Compliance Specialists has been working in the arbitrage calculation industry of accounting since 1986, and they’ve never made a single error during that process. Also, when their clients have been taken to court by the IRS, they have a 100% success record of defending them. That’s the kind of certainty and peace of mind that you want. If you want to rest easy knowing that your arbitrage calculation is being handled by people who truly know what they’re doing, they’re the firm to hire.