Broker Check

                                                                                                                                                                                       May 31, 2011



It Was A Very Good Day


            During the latter part of tax season, we called those clients that we have not heard from to see if they expect to send in their information and whether they expect to file on time or whether there was a need to file an extension of time to file. In pursuing this, one elderly long time client for whom we also invest her money could not be reached. Our Office Manager took the initiative and tracked her down. It turned out she was injured and in a rehabilitation facility and was not allowed to make a toll telephone call from the premises. Yes, not all people have cellular telephones!


            Our Office Manager asked her what we could do for her. She said she would like us to send some money to the family that was taking care of her child. We provided her with our toll free number and told her to call us if she needed anything. Oh yes, she was going to go on extension.


            That was a very good day knowing we went the extra distance for our client. That day, a picture of the word service would have been a portrait of our Office Manager.


The IRS Wants Your Records


            The IRS is moving aggressively to collect more taxes from small businesses and as part of this change of attitude, it is telling companies being audited to turn over the exact copies of electronic records kept in their business accounting software programs such as Intuit Inc.’s Quickbooks and Sage Group’s Peachtree.


            Many accountants, including this one, are worried this could lead to fishing expeditions to find problems beyond the scope of the requested information. This is not the same procedure the IRS uses for large companies. Physicians and lawyers should be alarmed because if patient or client information is entered directly into the software, the turning over of information may endanger patient privacy and client confidentiality and open the professionals to lawsuits and ethical violations leading to loss of licenses to practice.


            Other concerns are about agents’ access to unrelated data such as customer lists, fearing what would happen if word gets out that a business was talking to the IRS. Small businesses do not want the IRS calling customers and asking questions.


            The American Institute of Certified Public Accountants sent a letter to the IRS in March suggesting that companies be allowed to redact software to release only relevant data, as has been the unofficial policy in the past. The IRS rejected the request and suggested that small businesses back up a year’s data at the end of the year so that the IRS would only get a year’s worth of data, patients, clients, and customer lists, etc.


            We do not trust the government to take the file offsite and examine it and protect its contents. We suggest you take steps now to sever any non-accounting information from the software as soon as possible.


            If you need help in doing this, Melissa is available as part of a special engagement to help you accomplish this. Wall Street Journal 5/26/11.


            As always, if you have any questions about these or any other matters, do not hesitate to call us.

            Remember, We’re Here For You!