IRS is on its way to see who’s been naughty and nice….

You better watch out, you better not cry,

You better not pout, I’m telling you why,

The IRS is coming to town.

He’s making a list, and checking it twice, Gonna find out who’s naughty and nice,

The IRS is coming to town.

He sees you when you are cheating, he knows when forms are fake,

He knows if you’ve been bad or good, so be good for goodness sake!

I do hope my clients this year have been good.  Last year, many of them were…bad.  In fact, some of them were very, very bad.

The IRS Santa this year promises to be meaner and less forgiving, with all of the new internal revenue agents and officers hired over the past year.  The agency needs to justify the additional expense of the newly hired agents’ salaries and benefits.  And these eager agents and officers are eager to prove their worth, retain their jobs, and be rewarded.  So beware, comrades…better think twice who’s been naughty.  After reading Circular 230, I’m concerned; so should you.

The obvious signs of naughty clients include the following, and a whole lot more:

  1. Clients submitting trial balances or just P&Ls.  Better get those bank statements and see if cash ties into the bank statements.
  2. Commingling of personal charges and transactions in the business. 
    1. Watch those meals and entertainment charges.
    2. Double check those auto expense charges.
    3. Beware of personal telephone charges.
    4. Scrutinize those nondescript office expenses, etc.
  3. Large deposits occurring in January, that may have been constructively received in December.
  4. Oh, God, the list is endless.  This elf is tired already; and probably suffering from low elf-esteem.  (Boo, but old bloggers never die, they just get de-pressed.)

Oh, well, time to renew my errors and omission insurance, and revise that ten-page engagement letter for my tax clients.  Perhaps it’s time to have all the letters notarized and witnessed.  And call my attorney, too….

William Brighenti, Certified Public Accountant, Certified QuickBooks ProAdvisor

Accountants CPA Hartford, LLC

About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
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