IRS Changes Call First Policy for Audits
May 19, 2016
Most taxpayers are familiar with the IRS’ promise of not calling first. The IRS offers this assurance in an effort to combat scammers making unsolicited calls claiming to be IRS officials. However, this pledge has not been entirely accurate and lends to an explanation.
T
he IRS made such declaration with regard to phone calls made for the collection of taxes or requests for personal information. However, until recently the Internal Revenue Manual suggested the preferable way to schedule in-person field examinations was to make initial contact through phone calls. The IRS felt it was clear their previous assurance of not calling first related only to collection calls while calls to schedule audits were a completely different function. Unfortunately, the distinction is not as obvious to a taxpayer receiving a cold call from someone claiming to be from the IRS. Distinguishing between the two scenarios may be difficult. In an effort to avoid confusion, the IRS is changing their policy and will now send a notification of audit through the U.S. mail and will follow-up with a subsequent call to schedule an appointment.
This change in policy is the result of various complaints from attendees of a public forum held by the Taxpayer Advocate Service on May 5, 2016. The complaints argued taxpayers has received phone calls from the IRS to schedule audits, which contradicted the IRS’ assurance of never calling first. In response to these complaints, the IRS issued a statement that “in an abundance of caution and in light of pervasive phone scams seeking to extort money from taxpayers, the IRS has decided to adjust this policy for in-person field exams.”
This change in policy means the IRS will no longer make initial contact through phone calls, but will instead only contact taxpayers via for follow-up communication. An IRS Consumer Alertreminds taxpayers that the IRS will never do any of the following over the phone:
- Demand immediate payment
- Request you to verify your identity or ask for personal and financial information
- Ask for credit or debit card numbers
- Require the use of a specific payment method for your taxes, such as prepaid debit card
- Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying
If you receive a phone call from someone claiming to be from the IRS that involves any of the above red flags, do not provide any information and hang up immediately. You can then call any of the professionals at William Vaughan Company and we will assist you in determining if you have any obligation to the IRS.
By: Mark Sawyer, CPA
Categories: Other Resources, Tax Compliance
Protecting Your Brand on Social Media
May 17, 2016
Thanks to social media, grandparents are posting photos on their grandchildren’s Facebook pages, shoppers are reading product reviews online before making a purchase, and disgruntled customers are sharing their displeasure with anyone who will read their review.
The benefits of social media to small businesses may be considerable. However, it has introduced potential risks. One of the most critical threats to any business is a negative review. Such adverse commentary can ruin a business’s reputation, which could be fatal.
How can you protect your business from damaging online attacks? Here are some suggestions:
Join the conversation. If you’ve been visible on social media, you’ll have more credibility if something erupts. However, battling a possible negative comment or two is not the only reason to have a social media presence. Social media has leveled the playing field by offering the opportunity to market and promote your business through direct engage with your customers. The mere convenience of smartphones and tablets make utilizing social media to your advantage effortless. Take the time to know where your clients or potential customers visit and make an effort to engage in conversations or even start one of your own.
Pay attention. Monitor the Internet for news about your brand. Routinely check online review sites (if appropriate) and social networking sites for references to your company. There are programs designed to help you determine when your brand or name is mentioned on social media platforms. Such “brand monitoring” helps you preserve your brand and the light in which people view your organization.
Be prepared. You can’t draft specific responses ahead of time, but you can identify your vulnerabilities and draft a response strategy. You’ll be well ahead of the game if you do this before a crisis strikes rather than during one. You’ll also be able to dial down your emotions and respond more objectively. There’s another upside to identifying your vulnerabilities ahead of time: You have an opportunity to eliminate them.
Respond. Make sure you have the facts straight before you do anything. However, things can escalate rapidly online. So if you’re going to respond, do so quickly and publicly. That said, not every attack warrants a public response. The complaint may not be legitimate or the person complaining may be a troublemaker, in which case responding may be a waste of time.
Social media has opened the door for many businesses to connect with a wide prospect base. While the benefits of social media can be significant there is always a risk. Take the time to research and review your social media strategy. Effectively communicate your stance on handling potential threats to your staff and make sure you have a plan in place before you explore the world of social media.
By: Jessica Sloan, Marketing Manager
Categories: Other Resources
Industry Focus: Costing Accounting In the Food Processing Indsutry
May 16, 2016
During our most recent costing CPE, I became familiar with the various businesses of each our participants. As I have been teaching these courses for a number of years, I have discovered there are certain common characteristics between businesses and their cost accounting information. Even with an extremely diversified group of attendees, these reoccurring themes seem to be present at most of our presentations.
One particular fact which has impressed me is how the food processing industry is focused on maintaining and applying costing information. I suspect much of the effort being placed on such data is the result of the highly competitive nature of the industry and the need for accurate data related to pricing. In an industry where raw material prices can change dramatically depending on the season, the pressure to remain profitable is considerable. With stiff competition and an extremely short shelf life, a focus on product cost is an appropriate priority.
I have experienced situations where the shelf-life is only days or hours and raw material costs can change 30% or 40% over the year due to food product seasonality. Thus, it is essential to compare selling prices to those of competitors in order to remain competitive in the market. As a result, many food processors depend on extremely accurate and responsive costing systems. Such strategic data allows managers to recognize and react to price changes. Also, operations can constantly be monitored to improve efficiency and positively impact profitability. If such information is not available through a cost system, the financial results will be undesirable as the management team will have antiquate data not practical nor functional for the success of the business.
I suggest any food processor, particularly those preparing fresh food products, consider how you are reporting your costing information. If necessary, upgrade your system to become timely and comprehensive with regard to your cost information. Your management team is only as good as the data you provide them!
Categories: Cost Accounting
Financial Planning Is For Everyone
May 13, 2016
That’s right — even you! From buying your first home to planning for retirement, financial planning can set you on the right course. Make your planning session with your financial professional a success by deciding what you want to accomplish and preparing ahead of time.
Share Your Info
Your advisor will need to know every detail regarding your finances and your investment goals before mapping out a strategy. It is essential to bring all of your important financial data with you when meeting. This includes bank, investment, and retirement account statements; information on loans and other debts; and last year’s income-tax return.
Define Your Risk Tolerance
If you’re designing an investment plan, your financial professional will help you assess your investor type— conservative, moderate, or aggressive. Your ability to handle risk, as well as goals you’ve set for yourself, will serve as a guide for choosing investments that meet your objectives and comfort level. Exposing your portfolio to too much risk may put your savings in jeopardy, while holding too many “safe” investments may prevent you from reaching your goals.
If you’ve already chosen an investment strategy, use the time with your financial professional to review your progress toward your goals. If your investments aren’t performing the way you expected, you may want to make some changes.
Bring Your Spouse
If you’re married, both you and your spouse should attend the meeting and be prepared to discuss your goals and expectations. If you and your spouse have different objectives or risk tolerances, your advisor can help you come up with a plan that addresses your differences. Your session may be more productive if you and your spouse discuss financial issues before the meeting
It’s a Lifelong Process
You can’t simply “set and forget” your financial plan. Over time, your goals and risk tolerance may change. You’ll probably achieve some of your objectives, and new ones may take their place. Even events that are out of your control, such as market volatility and inflation, can affect your plan. Reviewing your strategy periodically with your financial professional can help you stay on track.
Categories: Other Resources
Ohio BWC Annual Payroll True-Up & Ohio Unclaimed Funds Returns
May 10, 2016
Over the past few months, the Ohio Bureau of Worker’s Compensation (BWC) has been sending notices to businesses as a reminder of the new regulations which have been in affect over the past year. After the final June 2016 payroll, businesses will need to file an annual payroll true-up return. This will include all wages paid from July 1, 2015, through June 30, 2016. Businesses will be required to report the total wages paid for this period along with the deposits submitted to the Bureau of Workers’ Comp since last July and into the current year. Deposits should have been paid – some organizations elected to pay 1 payment while others decided to pay bi-monthly. Organizations should not include the amount paid for your 1st half 2015 wage report filed last July/August. Only payments made on this new payment schedule must be reported
In May, employers should receive a notice of estimated annual premiums along with their annual certificate of coverage. Letters and emails have been sent to businesses regarding the payroll true-up. Such letters provide instructions on establishing an e-account online to file the return in July. Filing can also be completed over the phone. The BWC will no longer mail paper returns. True-up returns are due August 15, which happens to be 2 weeks earlier than in previous years. When filing, if your organization owe’s money, you will pay the outstanding balance at this time. In addition, any refunds will either be applied to the following year’s installment payments or will be refunded. Employers must pay online to be eligible for the Go-Green rebate which is calculated at 1% of your premium up to $2,000.
Ohio Unclaimed Funds Returns – Due November 1, 2016
Now is also a good time to review monthly bank reconciliations for old checks which have not cleared the bank. If they are over a year old, chances are the check has been lost. Once you have checked to make sure you have not resubmitted the payment or the check has been voided, you may contact vendors or employees. A simple change of address may assist you in getting your books organized before June 30th. The sooner you start reviewing old checks and determining why they have not cleared, the easier it will be to file a negative return on June 30th.
If you have any questions, please contact William Vaughan Company.
Sandra Stone Accountant
Categories: Other Resources