BJM Posted June 13, 2007 Report Share Posted June 13, 2007 I have a fairly diverse practice consisting of most entities, individual and business, but not specializing in one prticular area. I would like a little advice from anyone who has experience working with a VFW post. I recieved a call, a referral, from a VFW member who would like me to take control of thier tax obligations, and as he puts it, a real mess they are in. It seems the person they had take care of thier books and records and filings just disappeared, leaving them with a burden. He went on to say they have a ton of notices from taxing agencies and the last one with a time frame of 30 days to respond. He of course does not know what any of it means or relates to and asked me to look over what they have. I was hoping maybe some one has experience with this type of organization, as I have not, and can give me a general idea of what is involved and how to proceed. Of course I have no idea of what is involved until I meet with them later this week. So I would appreciate a general outline of the work involved with this particular type of organization. Thank you, BJM Quote Link to comment Share on other sites More sharing options...
Eli Posted June 13, 2007 Report Share Posted June 13, 2007 BJM, More then likely they are set up as a non-profit. I have never dealt with this type of organization before. I think the best thing would be to look at the letters received to see what the IRS wants/needs from the organization. They can also sign a power of attorney for you and you can discuss it directly with IRS. It could be something fairly easy or might not be. I just helped a crime stoppers organization. They were getting letters requesting a form 8734. They were worried about it, but no one knew how to handle it. They had everything they needed to complete it :-). Hopefully this might be the case with the VFW. Good luck!! Eli Quote Link to comment Share on other sites More sharing options...
Daune/CA Posted June 13, 2007 Report Share Posted June 13, 2007 I have dealt with several different types of non-profits. First, you need to read IRS requests to determine what is necessary for you to respond. If you then decide to take on the project, immediately respond to IRS stating you will be working on their case, and request an extension of time to complete--depending on your assessment of how long it will take you to arrive at the correct information needed to satisfy IRS needs. Generally they will grant it--I would go for at least 45-60 days (guessing blind). You do not have to have an POA signed unless you really want to be in the middle of whatever it is IRS needs. You can complete info without discussing with IRS, until or after you have submitted your completed work to them. At which time, should you then desire a POA, at least by then you know what you have before you. I don't know what state you are in, but beware there may be state requirements to fulfill also. Daune/CA Quote Link to comment Share on other sites More sharing options...
OldJack Posted June 13, 2007 Report Share Posted June 13, 2007 >>a real mess they are in.<< The mess is probably because the fact that they are a "not-for-profit" entity does not keep them from having a taxable profit from some activities that are taxable. The IRS has probably audited in the past and wants taxes on those taxable business activities. Unless you have a clear understanding on getting a fair pay for your services you should consider passing as this type tax return/bookkeeping can be a real time trap. Quote Link to comment Share on other sites More sharing options...
taxxcpa Posted June 18, 2007 Report Share Posted June 18, 2007 >>a real mess they are in.<< The mess is probably because the fact that they are a "not-for-profit" entity does not keep them from having a taxable profit from some activities that are taxable. The IRS has probably audited in the past and wants taxes on those taxable business activities. Unless you have a clear understanding on getting a fair pay for your services you should consider passing as this type tax return/bookkeeping can be a real time trap. There would be a lot of UBI from selling drinks at the VFW. Also there may be slot machines and a lot of other sources of income unrelated to any non-profit aspect of the organization. Income from dues may be in the non-profit category, but that is probably only a minor part of their income. Quote Link to comment Share on other sites More sharing options...
Evan S. Golar Posted June 18, 2007 Report Share Posted June 18, 2007 As a prior poster stated - this appears to be a not-for-profit entity that is supposed to file a Form 990 or 990-EZ - depending upon the circumstances. A 990 filing due due 4.5 months after the close of the fiscal year. The organization most probably is supposed to also file with the State Attorney General. I would ask your contact person not only for the notices the IRS sent, but also a copy of the latest 990 filing - regardless of which year, in order to correlate the notices with the circumstances. I have some experience with 990 filings, as I have some tax exempt organizations, and as well, many years ago was involved in the filing of a 990 for a fraternal lodge. Quote Link to comment Share on other sites More sharing options...
BJM Posted June 18, 2007 Author Report Share Posted June 18, 2007 I met with the principals of the VFW to get a grip on what their "mess" is. They had some one who prepared their payroll and 990 returns. This person became a "person of interest" when funds started to disappear. When questioned about this he walked out later that day and just left everything, except he deleted a lot of files on their computer. They want to get things straigtened out as they have recieved notices concerning the non filing of some 941's, 940's, 990, W-2's. Of course the books are just boxes full of paper that have no organization to them. The VFW also has a forensic computer guy comming in to see if he can retrieve the deleted files. Going through some of the boxes of records, there are some of the forms questioned as non-filed in there. It looks like the guy did the returns, such as the W-2's and gave them to the employess but just never filed them. He wrote out checks that would equal the 8903 deposit amount, but never deposited, the forms are in the box. From what I have seen so far, my job is to get them current and request abatement of the penalties. The penalties are the big amounts due, civil on the W-2's and so on. The only 990 I could find was from 3 years ago, it did have the UBI reported and a quick look over it seemed he knew what he was doing, I will of course go over them and hopefully find some work papers that tie to the return numbers. It would seem right now, my job is to get them current on thier returns and request abatements. The time factor will be locating records and hoping I have a paper trail to follow. I am trying to figure now if I should split my billing time in two catagories, bookkeeping and tax billings. The fun part of the job was they were real relaxed, the officers and others would come into the office to offer help if they could, each them would always have a beer in their hand, so it is a happy place to be. Quote Link to comment Share on other sites More sharing options...
BJM Posted June 18, 2007 Author Report Share Posted June 18, 2007 I met with the principals of the VFW to get a grip on what their "mess" is. They had some one who prepared their payroll and 990 returns. This person became a "person of interest" when funds started to disappear. When questioned about this he walked out later that day and just left everything, except he deleted a lot of files on their computer. They want to get things straigtened out as they have recieved notices concerning the non filing of some 941's, 940's, 990, W-2's. Of course the books are just boxes full of paper that have no organization to them. The VFW also has a forensic computer guy comming in to see if he can retrieve the deleted files. Going through some of the boxes of records, there are some of the forms questioned as non-filed in there. It looks like the guy did the returns, such as the W-2's and gave them to the employess but just never filed them. He wrote out checks that would equal the 8903 deposit amount, but never deposited, the forms are in the box. From what I have seen so far, my job is to get them current and request abatement of the penalties. The penalties are the big amounts due, civil on the W-2's and so on. The only 990 I could find was from 3 years ago, it did have the UBI reported and a quick look over it seemed he knew what he was doing, I will of course go over them and hopefully find some work papers that tie to the return numbers. It would seem right now, my job is to get them current on thier returns and request abatements. The time factor will be locating records and hoping I have a paper trail to follow. I am trying to figure now if I should split my billing time in two catagories, bookkeeping and tax billings. The fun part of the job was they were real relaxed, the officers and others would come into the office to offer help if they could, each them would always have a beer in their hand, so it is a happy place to be. Quote Link to comment Share on other sites More sharing options...
BJM Posted June 18, 2007 Author Report Share Posted June 18, 2007 Sorry, hit the button twice. I work with a beer in my hand too! Quote Link to comment Share on other sites More sharing options...
samingeorgia Posted June 18, 2007 Report Share Posted June 18, 2007 If I was a betting man I'd say that the former bookkeeper diverted some or all of the 941 deposits for his own use. It's gonna be a long, bumpy ride: get an engagement letter and a hefty retainer. IRS may waive some penalties but they're not likely to waive interest. Depending on the ultimate amount, they may wind up needing to get a loan on their building to settle everything out. Recovery from the former bookkeeper will be nil. Quote Link to comment Share on other sites More sharing options...
Daune/CA Posted June 18, 2007 Report Share Posted June 18, 2007 Many years ago, a non-profit of which I was a member had a person who embezzled ovr $40K. Their insurance bond covered most of the loss, have the VFW check with their insurance agent should there be funds missing--maybe even report it to them now, just in case. If you take this on be sure to ask IRS, and any possible state agencies, for extension of time to complete necessary filing reports. That should at least stop any collection effort they may deem necessary do to non-response. Good luck, you will definitely need it. Daune/CA Quote Link to comment Share on other sites More sharing options...
kcjenkins Posted June 20, 2007 Report Share Posted June 20, 2007 The time factor will be locating records and hoping I have a paper trail to follow. I am trying to figure now if I should split my billing time in two catagories, bookkeeping and tax billings. The fun part of the job was they were real relaxed, the officers and others would come into the office to offer help if they could, each them would always have a beer in their hand, so it is a happy place to be. I see no reason to split the billing unless you just want to. You should bill them for your time, and for your knowledge, so even if you arrive at your fee by using different rates for different types of work, I see no benefit to either you or them by breaking id down for them. it's just something to cause them to wonder what the difference is. Or for some anal-retentive member to argue about the allocation between the different allocations. Serves no purpose that I can imagine. Watch out for those beers, they can make you too happy if you're not careful! Or give someone a reason to argue that you billed too many hours, because you were drinking beer instead of working! Quote Link to comment Share on other sites More sharing options...
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.