27Oct 2011 by Nancy Smyth

How the IRS Feels About Employer Provided Cell Phones

IRS Information
The Internal Revenue Service has released guidance aimed at clarifying the tax treatment of mobile phones provided by employers to their employees. The guidance explains a provision of last fall's Small Business Jobs Act of 2010 that removed cell phones from the definition of listed property, a category under tax law that normally requires taxpayers to perform additional recordkeeping. IRS Notice 2011-72, issued in mid-September, provides guidance on the treatment of employer-provided cell phones as an excludible fringe benefit. According to the new guidance from the IRS, when an employer provides an employee with a cell phone primarily for noncompensatory business reasons, the business and personal use of the cell phone is generally nontaxable to the employee. The IRS will not require recordkeeping of business use in order to receive…
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27Sep 2011 by Nancy Smyth

Payroll Tip – Be Prepared for Wage & Hour and IRS Audits

Payroll Tips
This payroll tip discusses being prepared for Wage & Hour and IRS Audits - what records have to be kept, how long you need to keep them, etc.  From the General Ledger, a complete newsletter for Professional Bookkeepers published by the American Institute of Professional Bookkeepers. Break out the trusty old metal/wooden file cabinets and wipe off the dust --- or maybe it's time to invest in some virtual file cabinets where documents are scanned in and stored off-site but accessible if you need them.  Either way you are in for a shock! We've mentioned previously that the U.S. Department of Labor is making a major push on wage-hour enforcements and that the IRS has also beefed up enforcement efforts - but what we didn't include at that time was…
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26Jul 2011 by Nancy Smyth

Top 10 Tuesday – Tips from Around the Web – 7/26/2011

News You Can Use
Top 10 Tuesday includes our favorite tips and news stories from around the web.  This week there are some important articles for you to read and information to be aware of, split out into the following categories: QuickBooks News QuickBooks and Your Business - What to do When QuickBooks is (Not Responding) Tax News Accounting Today for the WebCPA - IRS Re-examines Unpaid Employment Taxes Construction News Georgia Construction Law Blog by Cobb Law Group - Some bad news for Georgia Lien Claimants! Conklin Roofing Systems - Your Estimate Can Cost You Credibility Architectural Records - AIA Creating Database of Stalled Building Projects Business, Social Networking, Customers & Websites Intuit Small Business Blog - Catch Me If You Can-Style Check Fraud Continues to Plague Small Business Darren Slaughter - Contractor…
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20Jul 2011 by Nancy Smyth

IRS Gives Truckers Three-Month Extension on Highway Use Tax Return

IRS Information
From the July 15, 2011 IRS Newswire - IRS Gives Truckers Three-Month Extension; Highway Use Tax Return Due Nov. 30, 2011 WASHINGTON — The Internal Revenue Service today advised truckers and other owners of heavy highway vehicles that their next federal highway use tax return, usually due Aug. 31, will instead be due on Nov. 30, 2011. Because the highway use tax is currently scheduled to expire on Sept. 30, 2011, this extension is designed to alleviate any confusion and possible multiple filings that could result if Congress reinstates or modifies the tax after that date. Under  temporary and proposed regulations filed today in the Federal Register, the Nov. 30  filing deadline for Form 2290, Heavy Highway Vehicle Use Tax Return, for the tax period that begins on July 1,…
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09Jun 2011 by Jo Ellen Peters

Payroll Tip – The IRS May Hold You Liable For 941 Payments

From Our Guest Bloggers, IRS Information, Payroll Tips
A payroll tip about who the IRS may hold liable for 941 tax payments. Are you the bookkeeper or accountant for your company? Are you a signer on any of the company bank accounts? What about your client’s accounts? Do you sign on any of them? If so, you may be held responsible by the IRS for underpaid 941 liabilities. Sounds scary, but it can be true. How is it possible that can be true? The IRS says the federal income tax and the employee’s portion of social security and medicare taxes withheld is a trust fund. It is to be deposited according to the schedule they have determined for your company. The IRS cannot collect this tax from the employee, even if the employer does not pay the tax…
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12May 2011 by Nancy Smyth

IRS Responds to AICPA Accounting Software Examination Letter

IRS Information
More about the IRS requesting backups of QuickBooks and Peachtree company files from the Journal of Accountancy, written by Benson Goldstein, J.D. In a March 29, 2011 letter from Patricia Thompson, chair of the American Institute of CPA’s (AICPA) Tax Executive Committee, to Chris Wagner, commissioner of the IRS’ Small Business/Self-Employed Division, the AICPA communicated its concerns regarding the Service’s program to request the accounting software files of certain small business taxpayers under examination; the letter cites QuickBooks and Peachtree as examples of accounting software actively used by small businesses. This is a critical matter because the use of accounting software has become commonplace by businesses in meeting the requirement to maintain proper “books and records,” including records involving income, expenses, assets and other pertinent information. If the firm is…
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04May 2011 by Matt Clark

Why Does the IRS Want to Audit My QuickBooks File?

"Stuff" No One Ever Told Me About..., From Our Guest Bloggers, IRS Information
If you are reading this article then it is likely that you or your client has received a request to submit a QuickBooks file in conjunction with an IRS Audit or an audit by another government agency. The Internal Revenue Service started this new level of enforcement in 2010 in which their agents are now requiring the actual accounting database (be it QuickBooks or another accounting software) as a part of the audit process. Certainly, government revenue departments can use information to gather any sort of data relevant to an audit. In my role in helping clients prepare their files for submission to these governmental agencies I have noticed some patterns in what the IRS seems to be looking into and I wish to share that with you here. Improper…
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19Apr 2011 by Nancy Smyth

Top 10 Tuesday #QuickBooks Tips from Around the Web-4/19/2011

News You Can Use
Top 10 Tuesday features 10 of our favorite tips from around the web. This week's favorites include: Microsoft Demo:  Create and use an e-mail template in Outlook 2007 Top Notch Bookkeeping The IRS May Hold You Liable for 941 Payments AccountingWeb Senate repeals 1099 provision; bill goes to President Obama for Signature Obama signs repeal of expanded 1099 requirements Scott Gregory How Do I Remove the Intuit Payment Network Stuff from My Invoices? QuickBooks & Beyond Intuit Statement Write Update Long for Success Top 10 QuickBooks Technical Support Questions QuickBooks and Your Business How to Restrict User Access in QuickBooks? The Contractor's Perspective The Small Business Jobs Act raises the stakes for fraudulent small business Intuit Small Business Blog 10 of the Best, Boldest, and Most Outrageous Tax Deductions Ever…
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29Mar 2011 by Nancy Smyth

Top 10 Tuesday – Tips From Around the Web 3/29/2011

News You Can Use
Welcome to Top 10 Tuesday - Tips from around the web!  I hope you all survived your Monday. This weeks top 10 articles are from: Business Blogs: Social Media Explained in Plain English Intuit Small Business Blog Should You Let Your Employees Telecommute?  Legal Questions to Consider. How Does Asset Depreciation Work? Inc. Magazine You've created a company Facebook page.  Now what? Social Media ToolKit Forbes Magazine IRS Wins Big in Six Year Audit Push Journal of Accountancy A primer for accountants on the ins and outs of using LinkedIn for business purposes Nerd Enterprises How to insert videos, images, and formatted text into your Facebook page Accounting Web Federal Contracts - Unallowable Costs Explained One Hour Bookkeeper Diary of a Bad, Bad Bookkeeper - A Warning Sign That's it…
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18Mar 2011 by Nancy Smyth

Freebie Friday – Your QuickBooks file, the IRS & YOU eBook

Be A Better Bookkeeper, Free & Fee-Based QuickBooks eBooks, IRS Information
Oh sweet Friday - sometimes you come way to fast and other times not fast enough! Yup, it's time for "Friday eBook" here on the QuickBooks for Contractors blog. This week, I confess, I took a shortcut and turned our popular series "Your QuickBooks file, the IRS & You" and turned it into an eBook and called it good!  Friday's come too fast for me, in terms of getting things done (I do just about all of my blogging at night, early in the morning, or on the weekend otherwise I would never get any real work done during the day) - so I hope you will excuse this shortcut on my part. One of the reasons that I decided to turn it into an eBook is so that you…
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14Mar 2011 by Nancy Smyth

Company Short on Cash? This is the bill to pay FIRST!

Be A Better Bookkeeper, IRS Information, Payroll Tips
Is your company short on cash and wondering which bill to pay first?   That bill should be your payroll taxes! At one point or another, every business is going to be short on cash and will be faced with the challenge of figuring out which bill they should pay first.  The first bill that you absolutely have to pay first is your is your payroll tax bill - otherwise it is going to cost you dearly in the long run! Below is a real example, taken from the March edition of The General Ledger, a monthly newsletter from the American Institute of Professional Bookkeepers. To deal with its financial problems T Corporation decided to pay several creditors, putting off for two quarters paying employment (payroll) taxes and filing related returns. …
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02Mar 2011 by Nancy Smyth

Create a QuickBooks External Accountant User For An IRS Audit

Be A Better Bookkeeper, General QuickBooks News, IRS Information
Giving your QuickBooks company data to an IRS Auditor is almost like inviting a stranger into your home - you don't know what they will do, and at this point in time, I haven't found any information on exactly what an Auditor will look for or what they will do once they do get their hands on your data file. To be honest, I don't even know if they are required to return your QuickBooks (or Peachtree) data file to you once they are done.  I do have to assume that they are required to do so, but you never know........... Hopefully, you will follow the suggestions outlined in An IRS Audit and They Want Your QuickBooks File - Best Practices article and provide a data file that ONLY contains…
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28Feb 2011 by Nancy Smyth

Your QuickBooks Company Data File, the IRS and You

Be A Better Bookkeeper, General QuickBooks News, IRS Information, QuickBooks Setup & Cleanup
Yes, it's true.  The IRS can *LEGALLY request a backup of your QuickBooks (or Peachtree) company data file if you are being audited. BACKGROUND: In 2010, the IRS purchased somewhere between 1,500 and 2,000 licenses for the QuickBooks 2010 Premier Accountant Edition from an ISP (Inuit Solutions Provider) and not directly from Intuit as it is made to look in announcements (SEE NOTE BELOW). Approximately 1,100 agents were trained to utilize QuickBooks and these agents have been instructed to obtain a copy of the taxpayer's data base for the year under examination ONLY when it is necessary.  This method of examination of taxpayer records will not be used in all cases -- however, it will be up to the examiner. When requested, the electronic files should be provided on a…
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14Apr 2010 by Nancy Smyth

IRS to Step up Audits of Sole Proprietors

IRS Information
From WebCPA The Internal Revenue Service plans to check for unfiled tax returns and look for unreported income from sole proprietors of small business during correspondence audits. Estimates by the IRS show that $68 billion of the $345 billion tax gap in 2001 was due to the underreporting of income by sole proprietors. The IRS conducted more than 5.1 million correspondence examinations between fiscal year 2004 and FY 2008 that recommended the IRS collect approximately $35 billion in additional taxes, according to a new report by the Treasury Inspector General for Tax Administration. For each tax return examined, a correspondence examination generated about $6,800 in recommended additional taxes. TIGTA found 129 audits where sole proprietors may have avoided tax and interest assessments totaling more than $1.7 million because the IRS…
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