Hello,
Something comes up again and I really appreciate your input.
After the tax season, another reviewer has come on board. I admire her for her knowledge and detailed-oriented spirit. However, I kind of disgree with a lot of practices that she has been carried on for more than 20 years. She would spent lots of hours reviewing each return, for example, she compares each number on client's P & L to our tax input, she changes presentations, combinations etc, sometimes our client's lovely P & L is 3 to 4 pages long so she spends more time. Often, it takes 2 hours to make our those changes and the bottom line does not change at all.
The reason for her to do that is to avoid or minimize IRS letters. She gave me one example. One client has a joint interest in a rental property owed by many investors and our client received his P & L for the rental. We input all info into schedule E according to the P &L, we input one number into "mortgage interest," however, the IRS sent a letter saying there isn't any matching 1098. In this case, of course, it wouldn't be since there is only mortgage by many investors. In order to avoid that, from now on we put into "other interest."
Does it make sense? Was it a coincident?
So she is doing all of those changes to avoid letters. This would be all unbillable time.
Since I only work for one firm, I really would like to know how other firms do reviews.
Thanks a lot.
Something comes up again and I really appreciate your input.
After the tax season, another reviewer has come on board. I admire her for her knowledge and detailed-oriented spirit. However, I kind of disgree with a lot of practices that she has been carried on for more than 20 years. She would spent lots of hours reviewing each return, for example, she compares each number on client's P & L to our tax input, she changes presentations, combinations etc, sometimes our client's lovely P & L is 3 to 4 pages long so she spends more time. Often, it takes 2 hours to make our those changes and the bottom line does not change at all.
The reason for her to do that is to avoid or minimize IRS letters. She gave me one example. One client has a joint interest in a rental property owed by many investors and our client received his P & L for the rental. We input all info into schedule E according to the P &L, we input one number into "mortgage interest," however, the IRS sent a letter saying there isn't any matching 1098. In this case, of course, it wouldn't be since there is only mortgage by many investors. In order to avoid that, from now on we put into "other interest."
Does it make sense? Was it a coincident?
So she is doing all of those changes to avoid letters. This would be all unbillable time.
Since I only work for one firm, I really would like to know how other firms do reviews.
Thanks a lot.