Is this normal? Expenses are deducted twice in tax form

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April 12, 2026

by a searcher from Marymount University in Charlotte, NC, USA

Is this normal? Expenses are deducted twice. Looks like tax fraud to me
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Reply by a professional
from Liberty University in Fort Myers, Florida, United States
From the information you sent, it does look like they have deducted their expenses twice. While not common, I do see issues like this on the QoE reports we do from time to time. I saw a deal recently deduct the full inventory balance from their return each year, with no adjustment for the starting inventory balance (while they had purchases flowing through the P&L). Effectively reducing their tax burn by 90%+ each year.
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Reply by a professional
from University of Massachusetts Amherst in Hartford, CT, USA & Chicago, IL, USA
At a high level, if you can reconcile YoY retained earnings per Sch. L, Book income per Sch. M-1 agrees to your R.E. roll forward and taxable income per Sch. K agrees to Sch. M-1, then that's one way you can confirm if it's being double deducted on the return, or if the SDE calc is not right.
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