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Rosemont, Ill. (August 28, 2014) By Daniel Hood Adding a set of simple sentences to your firm’s engagement letters could go a long way to making your firm safer from lawsuits, a legal expert told accountants at the Midwest Accounting Show. In a session on “Protecting Your Practice from Internal and External Perils,” Michael Ripani, counsel at law firm Seyfarth Shaw, laid out the case for a strong engagement letter, To start, he noted that the American Institute of CPAs’ standards require a written engagement letter. They should describe the nature and scope of the work, the standards involved, the services you are providing (“Don’t just say ‘Accounting services,’” Ripani cautioned. “Be specific.”), and your procedures and testing. The letter should also include these liability-limiting statements: Limitation of damages. Include a short sentence to the effect that your errors & omissions liability will not exceed fees collected. A judge may overrule this, Ripani noted, but it may make a client think twice about suing. Modification of statute of limitations. The period within which a client can decide to sue you varies from state to state, but you can attempt to limit it with a sentence that says the client must take action within a certain period. “A lot of courts have considered one year to be a reasonable time,” Ripani said. In Illinois, which has a two-year statute of limitations, “That could cut your risk in half.” Alternative dispute resolution. Include a sentence that keeps disputes out of court by requiring either mediation (which is non-binding) or arbitration (which is binding). Among other things, you’ll avoid the public record of your firm having been sued for malpractice. Client lack of cooperation. Include a sentence to the effect that a client not living up to their responsibilities -- delivering source documents, meeting deadlines, etc. -- constitutes a violation of your agreement and gives you the right to withdraw from the engagement. At the very least, Ripani said, “This will scare the clients a little,” and make them more cooperative Attorney fee-shifting provisions. These require that the unsuccessful party in a lawsuit has to pay their opponent’s legal fees. It can be an effective deterrent -- but it also leaves you open to unreasonable fees from your client’s lawyer if you lose. Indemnification. This would reimburse you for any expenses you may incur if you’re dragged into a dispute your client has with a third party -- if you’re subpoenaed by the third party, for instance. “You don’t want to have to pay out of your pocket because of a dispute your client got into,” Ripani said. Ripani suggested keeping these to one sentence each, and to keep your overall engagement letter short, so clients don’t balk at reading and signing them. He also noted that if you have clients for whom you don’t have engagement letters, it’s never too late to create one. He told a story about an accountant who sent out engagement letters with all of his longstanding clients’ tax returns, and got 60 percent of them to sign. In the end, Ripani said, “Having engagement letters won’t prevent you from getting sued. The hope is that before an issue blows up into a lawsuit, the client will think twice.”

White Lie Cake You are going to love this - especially all of the ladies who bake for church events. Alice Grayson was to bake a cake for the Baptist Church ladies group bake sale in town, but she forgot to do it until the last minute. ... She remembered it the morning of the bake sale and after rummaging through cabinets she found an angel food cake mix and quickly made it while drying her hair and dressing and helping her son Bryan pack up for Scout camp. But when Alice took the cake from the oven, the center had dropped flat and the cake was horribly disfigured. She said, Oh dear, there’s no time to bake another cake. This cake was so important to Alice because she did so want to fit in at her new church and in her new community of new friends. So, being inventive, she looked around the house for something to build up the center of the cake. Alice found it in the bathroom, a roll of toilet paper. She plunked it in and then covered it with icing. Not only did the finished product look beautiful, it looked perfect! Before she left the house to drop the cake by the church and head for work, Alice woke her daughter Amanda and gave her some money and specific instructions to be at the bake sale the minute it opened at 9:30, and to buy that cake and bring it home. When the daughter arrived at the sale, she found that the attractive, perfect cake had already been sold. Amanda grabbed her cell phone and called her Mom. Alice was horrified she was beside herself. Everyone would know, what would they think? Oh, my, she wailed! She would be ostracized, talked about, ridiculed. All night Alice lay awake in bed thinking about people pointing their fingers at her and talking about her behind her back. The next day, Alice promised herself that she would try not to think about the cake and she would attend the fancy luncheon/bridal shower at the home of a friend of a friend and try to have a good time. Alice did not really want to attend because the hostess was a snob who more than once had looked down her nose at the fact that Alice was a single parent and not from the founding families of town, but having already R.S.V.P. she could not think of a believable excuse to stay home. The meal was elegant, the company was definitely, Upper Crust Old South and to Alice’s horror, the CAKE in question was presented for dessert. Alice felt the blood drain from her body when she saw the cake, she started, out of her chair to rush to tell her hostess all about it, but before she could get to her feet, the Mayors wife said, What a beautiful cake! Alice, who was still stunned, sat back in her chair when she heard the hostess who was a prominent church member say, "Thank you, I baked it myself." Alice smiled and thought to herself, GOD is good.

"The Lord Works In Mysterious Ways." I had everything planned and had told my wife I would not be going to church with her on Sunday. My wife reminded me that Sunday was the Sabbath Day and hunting a trophy buck should not be part of the Sabbath. 1. I scouted the area all summer. 2. I searched out the best location for my tree-stand. 3. I set it all up a month ahead of time. 4. I trailed the herd. 5. I picked out a trophy buck. 6. Two days before opening day I rechecked every aspect of the hunt. 7. Everything was in place. 8. Sunday morning, I woke up at 2 am. 9. I put on my camo, loaded my pack, set out for my stand. 10. This was destined to be an epic hunt. 11. As I approached my deer stand......I found this! I called my wife and told her I had decided not to hunt on the Sabbath and would meet her at church. The Sunday sermon was entitled "The Lord Works In Mysterious Ways".

Five Ways to Get Tax Deductions for Local Transportation Uses by Ken Berry, CPA, Practice Advisor Tax Correspondent for CPA Practice Advisor publication http://www.cpapracticeadvisor.com/news/11656241/5-ways-to-get-tax-deductions-for-local-transportation-uses Frequently, the IRS challenges deductions for business-related driving expenses, especially when they involve local travel. Start with this basic premise: To qualify for transportation deductions, you must be traveling away from your tax home to a business location. For this purpose, your tax home is generally your principal place of business, not the place where you live, eat and sleep. Therefore, you can’t deduct the cost of commuting back and forth from work, no matter how much your clients believe they should be able to. The IRS views this as a purely personal expense even though you’re going to work for business reasons. And it doesn’t matter if you’re driving or if you travel by bus, rail or taxi or if you do work during the commute. Period. But that doesn’t mean a client can’t deduct some transportation expenses that are in the nature of commuting, but fall outside the technical definition. Here are five prime examples: 1. Working from home: If your home office is your principal place of business -- for example, you’re self-employed or your employer requires you to work from home -- your tax home is the same as your home. In this case, you can deduct the cost of visiting a client or customer across town as long as you keep the proper records. But if you stop for a carton of milk on your way home, the portion of the trip representing personal travel is nondeductible. 2. Multiple business locations: Suppose that you’re based at one of several local job locations and travel between them. For instance, you might be a dermatologist with countywide offices or an officer at a bank operating multiple branches. The cost of the travel between the two business locations, regardless of the method, is deductible. However, if you don’t go directly from one place to the other, your deduction is limited to what it would have cost you for direct travel. 3. Short business stops: It may be advantageous for you to stop off and visit a client or customer on the way into work or on the way home. Accordingly, you may deduct the cost attributable to the travel between your regular place of business and the client or customer’s place of business. But the rest of your commuting remains a nondeductible personal expense. 4. Temporary assignments: Your business may require you to work at a distant job site for a short period of time. Instead of making a long commute each day, you might decide to stay close to the work site and come home weekends. Assuming that the job lasts no more than a year, it qualifies as a temporary assignment. This means you can deduct your lodging and meal expenses, within certain limits, plus the travel between the distant work site and home. 5. Business education: If you’re taking courses at a local college to improve your job skills, you may usually go straight to school after work on weekdays. The cost of the travel between work and the school is deductible (or between school and work if you’re taking a morning class). Naturally, you can only deduct those T&E expenses that are properly documented. (We’ll have more on this in a future article). Also, if you’re a company employee, you must claim these expenses as miscellaneous itemized expenses, subject to the usual limits

OCD Nightmare. I'm getting one of these for my office

I guess it's time to add that lawn mower repair business for the off season. /s

One my clients received one of these calls today. Scam Phone Calls Continue; IRS Identifies Five Easy Ways to Spot Suspicious Calls Español IR-2014-84, Aug. 28, 2014 WASHINGTON — The Internal Revenue Service issued a consumer alert today providing taxpayers with additional tips to protect themselves from telephone scam artists calling and pretending to be with the IRS. These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. They may know a lot about you, and they usually alter the caller ID to make it look like the IRS is calling. They use fake names and bogus IRS identification badge numbers. If you don’t answer, they often leave an “urgent” callback request. “These telephone scams are being seen in every part of the country, and we urge people not to be deceived by these threatening phone calls,” IRS Commissioner John Koskinen said. “We have formal processes in place for people with tax issues. The IRS respects taxpayer rights, and these angry, shake-down calls are not how we do business.” The IRS reminds people that they can know pretty easily when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam. The IRS will never: Call you about taxes you owe without first mailing you an official notice. Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe. Require you to use a specific payment method for your taxes, such as a prepaid debit card. Ask for credit or debit card numbers over the phone. Threaten to bring in local police or other law-enforcement groups to have you arrested for not paying. If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what you should do: If you know you owe taxes or think you might owe, call the IRS at 1.800.829.1040. The IRS workers can help you with a payment issue. If you know you don’t owe taxes or have no reason to believe that you do, report the incident to the Treasury Inspector General for Tax Administration (TIGTA) at 1.800.366.4484 or at www.tigta.gov. If you’ve been targeted by this scam, also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov. Please add "IRS Telephone Scam" to the comments of your complaint. Remember, too, the IRS does not use unsolicited email, text messages or any social media to discuss your personal tax issue. For more information on reporting tax scams, go to www.irs.gov and type “scam” in the search box. Additional information about tax scams are available on IRS social media sites, including YouTube and Tumblr where people can search “scam” to find all the scam-related posts. Follow the IRS on New Media Subscribe to IRS Newswire Page Last Reviewed or Updated: 29-Aug-2014 The IRS says that they have now received 90,000 complaints about this scam.

I used to be paranoid. Then I learned they really are out to get me.

Exactly, I just leave my preparer information on all my returns business, payroll and personal.

This would be a giant pain, but anyone with a deposit account with JPMorgan/Chase should get all new accounts with new numbers. This would entail restructuring all ACH withdrawals and direct deposits, but the security of knowing that the hackers do not have your account information anymore would be worth it. However, Chase will probably try to charge you for changing them. This is the only way to be certain your accounts aren't drained and should be done ASAP. I have done ZERO business with Chase for over 5 years. They have lousy customer service and are ridiculous with their rules and exorbitant fees. They are too big for anyone's (except their own)good. They have lost all touch with who is really the customer and what customer service is. They should spend enough money to hire geeks with enough skill and knowledge to protect their systems. It can be done, and is being done by many companies.

I was around for the last quarter (roughly) of that year. So here is a giggle for y'all: less than two months before my 56th birthday I got carded! Was buying a bottle of wine at a new-to-me grocery store, in company with Gwen (the younger daughter). Cashier asks for my ID. I asked if she was serious and she said yes. Gwen & I both busted out laughing, I handed my license over, and the response was, "I don't believe that year." But she let me buy the wine...