October
2001
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The Arkansas Public Accountant is the monthly publication of the Arkansas Society of Public Accountants. The society is a professional organization composed of Licensed Public Accountants, Enrolled agents and persons holding out to be accountants or tax preparers with their services available to the public. This organization is dedicated to helping our members give the best possible service to their clients. We are happy to accept articles and/or advertising that would be of interest to our members and ask that you submit any thing for publication by the 25th of the month to be included in the next month’s publication. Please send to: LaVERNE
LONG, Editor |
The Arkansas Public Accountant
OFFICERS & GOVERNORS 2001 - 2002
| OFFICERS | ||
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President President Elect 1st Vice-President 2nd Vice-President Executive Secretary |
DeQueen Hot Springs Newport |
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BOARD OF GOVERNORS |
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District I District II District III District IV District V District VI |
Pocahontas Searcy West Memphis Little Rock Prescott Nashville |
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FROM THE PRESIDENT’S PEN
Dear Members:
In the wake of the recent terrorist activities, trying to keep focused on everyday work and activities has been difficult for me as I'm sure it has been for most of you. However, President Bush tells us to "get back to work", and we of course know that's the thing to do. It has been said that God and prayer have been mentioned more in the last few weeks than in any time in our history. Too bad it had to come about in this way. I know you will join me in continuing to pray for our country and the leaders of the world as they make important decisions that will affect all of us in so many ways.
Our State Convention is this month's big activity. On the afternoon of October 16 we will be having our business session. PLEASE make an effort to be there. We need your input on the business of ASPA, and this is also where we vote on your board members and line officers. There will be no educational activities on that day, but the Gear Up Business Entities Seminar will be presented the following two days. I look forward to seeing you there.
As my year as President comes to a close, I want to thank you for your support this year. My appreciation also goes out to the Board for making an effort to come to our board meetings to attend to the business of ASPA. It's not always fun to sit through those (some times long) meetings and it requires giving up part of your work day and sometimes having to spend an extra night in a motel.
I have really enjoyed my year as President for the second time around, and look forward to my continuing relationship with all of you as I begin serving as NSA State Director.
Sincerely,
Shelly Russell
ASPA
President
Tax Information
from IRS
November 2001
Provided by SB/SE Taxpayer Education
and Communication
Nashville, TN
U.S. Treasury, IRS Launch Online Option For Paying Federal Taxes
WASHINGTON -- Treasury Deputy Secretary Ken Dam, Commissioner Charles O. Rossotti of the Internal Revenue Service (IRS) and Commissioner Richard L. Gregg of the Financial Management Service (FMS) announced today that businesses and individuals can now pay their taxes using the Internet.
At a press conference held this morning in Washington, D.C., Deputy Secretary Dam and Commissioners Rossotti and Gregg launched the federal government's newest option of the Electronic Federal Tax Payment System (EFTPS), EFTPS-OnLine, which allows businesses and individuals to pay all federal taxes through a secure Web site.
"EFTPS-OnLine provides a convenient and secure method for paying taxes that is consistent with the way people do business," Rossotti said. "The Internet is an increasingly integral part of today's business community. It makes sense to offer an online option for paying taxes."
EFTPS was originally introduced in November 1996, and since that time businesses have used it to pay more than $5.7 trillion in federal taxes.
Today's announcement highlights the federal government's commitment to utilizing technology to serve the needs of the taxpayer.
"As the federal government's cash manager," said FMS Commissioner Gregg, "FMS has the responsibility to help federal agencies find better ways to meet their customers' financial needs. EFTPS-OnLine provides a convenient way for businesses to pay their taxes but also offers a tremendous advantage for individuals who pay estimated tax." In addition to paying estimated tax, individuals can use EFTPS-OnLine to pay a balance due with their return.
Businesses and individuals can enroll for EFTPS-OnLine via the Internet, using a user-friendly Web interface. After enrollment, taxpayers will receive a confirmation kit by mail with instructions for obtaining an Internet password. A unique
Personal Identification Number (PIN) will be mailed separately, to new EFTPS users, for added security. Planning for EFTPS-OnLine started over three years ago with special consideration paid to security. "Confidentiality and privacy of taxpayer information is the highest priority at the IRS. EFTPS-OnLine users should feel confident that their private information will be protected," Rossotti said. The site exceeds private industry best practices with designs for prevention, detection and containment responses.
Some business taxpayers are required to use EFTPS because their total deposits of designated federal taxes exceed $200,000 during a calendar year. These taxpayers are required to use EFTPS beginning in the second succeeding calendar year. Each year the IRS notifies taxpayers who are required to pay through EFTPS.
For added convenience and control, EFTPS-OnLine allows individual taxpayers to schedule payments up to 365 days in advance. Business taxpayers can schedule payments up to 120 days in advance. EFTPS-OnLine continues to provide the many conveniences of the EFTPS-Phone and PC-Software options.
New features include an instant, printable EFT Acknowledgment Number as documentation of every transaction and access to payment history for up to 120 days.
According to Gregg, "For years, FMS has been a leader in shifting government payments and collections from paper to electronic. EFTPS-OnLine allows us to take that process one step further and provide customers with online accounting and record-keeping information."
"And because the system is available 24 hours a day, 7 days a week, it enables businesses and individuals to pay their taxes from virtually anywhere," Gregg added.
EFTPS-OnLine has been in its pilot stage since October 2000. Like other methods of EFTPS, the online option is a service offered free to taxpayers by the U.S. Department of the Treasury.
For more information, visit www.eftps.gov or call 1-800-555-4477 or 1-800-945-8400.
TREASURY, IRS ANNOUNCE RELIEF FOR VICTIMS OF ATTACKS
WASHINGTON - The Treasury Department and the Internal Revenue Service today announced initial administrative tax relief for individual and business taxpayers who are unable to meet their federal tax obligations because they were affected by Tuesday's terrorist attacks.
The IRS and Treasury are providing relief to all taxpayers - regardless of where they reside - who are directly affected by the terrorist attacks. For example, this includes relief workers, the victims on the airplanes, taxpayers whose place of employment is in a disaster area, and taxpayers with records maintained in a disaster area.
In addition, the agencies are providing relief to all taxpayers in the five boroughs of New York City declared disaster areas by the President. They are also providing relief to taxpayers located in Arlington County, Virginia, home of the Pentagon, which was declared a disaster area today.
In the aftermath of Tuesday's tragedy, the IRS and Treasury want to assure taxpayers, businesses and tax practitioners that they are working aggressively to monitor the situation and resolve other potential tax administration issues as they are identified.
Affected taxpayers who have an original filing deadline between September 11, 2001, and November 30, 2001, have an additional six months plus 120 days of time to file that return and make any payment due with that return.
Taxpayers who are currently on an extension that expires between September 11, 2001, and November 30, 2001, will have an additional 120 days to file that return.
Affected individual taxpayers who face an estimated tax payment date on September 17, 2001 may postpone that payment by including the amount with their final estimated payments for Tax Year 2001, which are due on January 15, 2002. Affected corporate taxpayers who face an estimated tax payment after September 10, 2001, and before January 15, 2002, may postpone that payment until Jan. 15, 2002.
In addition, for six months the IRS will suspend many enforcement activities- such as levies, seizures and summonses -- for affected taxpayers.
Taxpayers who are entitled to the relief described above should add the following designation in red ink at the top of returns they file: "September 11, 2001-Terrorist Attack." If they receive a notice from the IRS, they should contact the IRS as indicated on the notice to explain why they are entitled to relief.
Although the IRS cannot extend the deadline for employment or excise tax deposits, the IRS will provide relief for businesses unable to make these deposits because of the terrorist attacks. The IRS will waive penalties on tax deposits required to be made by these businesses between September 11, 2001, and October 31, 2001, if those deposits are made by November 15, 2001.
The IRS will provide additional details on this relief in Notice 2001-61. Due to the unprecedented scope and breadth of this tragedy, the agencies will continue to monitor the situation and may issue additional guidance as appropriate.
The entire Treasury family extends its prayers and sympathies to the families, friends, government workers and others affected by this attack.
DYSFUNCTIONAL TAX CHEAT AVOIDS JAIL TIME
A woman pleaded guilty to a tax fraud involving more than a million dollars. The IRS said she was a canny businesswoman who deserved a 10 month jail sentence under normal sentencing guidelines.
But she said her ability to understand her behavior had been impaired by her history of depression, stress resulting from the death of her 12 year old daughter, her husband's alcoholism, her dysfunctional relationship with her son, and a suicide attempt.
Court: No jail time. After repaying the tax due, the woman is sentenced to probation and four months of in-house detention which will allow her to continue psychological counseling. Carolyn Shore, DC MA, No. 00-cr-10196;87 AFTR2nd p.2001-825.
NSA ALERT
OFFER IN COMPROMISE UPDATE: On Friday, September 28, Bill Stevenson and Mike Chakarun met with staff from the Senate Finance Committee and House Ways & Means Committee to discuss concerns over IRS administration of the Offer in Compromise {OIC} program and the denial of installment agreements to certain taxpayers. Committee staff offered to follow up on a number of OIC cases NSA submitted Commissioner Rossotti late last year to gain first-hand exposure to the problems faced by taxpayers and practitioners with the program. Staff also indicated that they were well aware of the problems with the installment agreement program and a solution was under development. On October 3, NSA and other stakeholders will meet with IRS officials to discuss the OIC program.
INTERNAL REVENUE SERVICE ADVISORY COMMITTEE (IRSAC) HOLDS OPEN MEETING. On Friday, September 21, 2001 NSA, Mike Chakarun and Bernie Phillips attended an open all-day meeting of IRSAC. NSA has two members on this committee Roger Harris and Eugene Braam.
The meeting began with an address by Internal Revenue Commissioner Charles O. Rossotti on the recent tragedy and IRS quick response. IRS made a quick decision to extend filing dates not only for the disaster area but also for the entire country. And IRS got this news out immediately.
The Committee's sub-groups gave recommendations to the representatives of three or the four Operating Divisions of IRS. Highlight topics were Understand the Tax Law and Enforcing the Earned Income Credit; Taxpayer Understanding of Taxation and Penalties Related to Early Withdrawal of Retirement Funds; Offer in Compromise; and Safe Harbors\ and Published Guidance for Small Business.
Joe Kehoe, Commissioner of SB/SE division of IRS, along with Jerry Songey of TEC noted that the SB/SE division is producing a CD ROM for Small Business that will contain all necessary tax information. The disk should be available by November.
One of the highlights of the meeting was a report by Larry Levitan, Chairman of the IRS Oversight Committee appointed by Former President Clinton under Congressional mandate of the Restructuring Act of 1998. Levitan began his report with the words "The IRS is broken!!" He went on to state the IRS does not have the personnel or the money to complete the modernization that Congress mandated. For example, although the technical blueprint calls for $700 million a year, the House Appropriations Committee has proposed $391 million, far short of the need. Incidentally, Congress failed to fund the Oversight Committee. Budget constraints have slowed the modernization in other areas including compliance and collection.
IRS IS CHANGING THE LOOK OF THEIR WEBSITE
Mike Chakarun and Bernie Phillips were invited to review IRS's new website at a showing at IRS. The new website, which they expect to put into operation by the coming tax season, has a more business-like appearance and is more user friendly. It will contain additional information and capabilities. If you have anything you would like to see added to the IRS website, please send comments to Bernie Phillips at www.bphillips@nsacct.org.
Every patient is a doctor after the cure
Nobody owes anybody anything; it's up to each individual to set high standards for himself or herself, and to set about working hard and creating a solid future.
GREETINGS FROM NSA STATE DIRECTOR SHELLY RUSSELL
As I mentioned last month the NSA Convention will be in Hawaii in August 2002. NSA should be sending me (hopefully by our Convention) a tentative schedule and a little more detail about planned activities. Be sure to come by the NSA table during the Convention to check it out!
During the convention in Minneapolis, a memorial service was held in memory of members of NSA who had passed away since the last convention, two of these were our own members, Bob Johnston and Juanita Smith. Norma Zahrte, NSA State Director of Montana sang a special song which also happened to be written by her.
As you may have read in the September "Practitioner" there were a number of awards presented during the awards ceremony during the convention. For those of you who attended our "Quickbooks Seminar", you will be pleased to know that Phil Gomez deservedly received the Speaker of the Year Award.
NSA is in the process of soliciting to redesign the NSA website (www.nsacct.org) so it can provide more member services such as paying dues on line, registering for courses, etc. They are also putting together a convention section on the web that would contain photos and relative articles from the recent convention.
I'll look forward to visiting with you during the ASPA Convention.
FAMOUS EXCUSES FOR FAILURE
1. We have never done it that way!
2. No one will come.
3. It's too expensive.
4. It takes too much time.
5. It's too far.
6. Our members don't welcome change.
7. No one will take charge.
8. That will be too much trouble.
9. I don't know how.
10. It lasts too long.
FAMOUS ATTITUDES FOR SUCCESS
1. Let's try it! We can always go back.
2. Those who care will come and we can work on the others.
3. This should be a special time.
4. We can make the time.
5. It will be further but great fun and fellowship.
6. We can talk it up to our members.
7. Ask and you shall receive.
8. I can handle it.
9. I don't know how but I can learn.
10. It may be a little long but we can break it up and keep it interesting.
As always, the difference between failure and success is matter of attitude. How's your attitude?
This is being reprinted from the Mississippi State Society publication with permission. The author is Sanford D. Warren. CPA and the Executive Director of MAPA.
Ethics in Business
Webster's New World Dictionary, 3rd Edition, defines "ethics" as relating to what is good or bad, or having to do with moral duty and obligation. {Moral is defined as relating to principles of right and wrong.}
"In a general sense," Dr. Albert Schweitzer said, "ethics is the name we give to our concern for good behavior. We feel an obligation to consider not only our own personal well-being, but also that of others and of human society as a whole." Ethics is a way of being human. If early men and women had not identified their own welfare with that of others, they could not have survived and developed.
Business ethics involves being fully aware of what we're doing, including the consequences and complications of our actions. Being ethical in business requires action with an awareness of:
- The need for complying with rules, such as the laws of the land , the customs and expectations of the community, the principles or morality, the policies of the organization and such general concerns as the needs of others and fairness.
- How the products and services of an organization, and the actions of its members, can affect its employees, the community and society as a whole, either positively or negatively.
- Public concerns about ethical practices in business usually relate to issues like embezzlement, accepting bribes or poisoning the atmosphere.
Such examples suggest manager's problems with ethics consist of nothing more than violations of clear cut, well defined laws, rules and codes of conduct. Managers, on the other hand, mostly cite examples that arise directly from routine business practices. Their ethical concerns are about relationships and responsibilities where correct decisions are not perfectly clear and there are no hard, fast rules to follow.
Many people report that the ethical dilemmas they face are difficult because they involve relationships with people (employees, peers and bosses) with whom they have to work and on whom they are dependent. The dilemma is further complicated by the fact that these critical people may have contrary goals and competing needs. A misstep in handling an ethical issue may well affect a relationship or the conscience for years to come.
Some of the issues we may be confronted with as accountants involve:
- making decisions about other peoples' lives;
- complying with the issues some clients wished to have
- implemented;
- supporting some unwritten policy;
- misrepresenting issues to others;
- withholding important data to protect others;
- making it rough for someone so they will quit;
- permitting substandard quality in a service provided;
- deferring action on health and safety issues; and
- stealing or permitting others to steal or misuse company time, tools or materials.
It is remarkable how often other managers act as if there is no need to examine the ethical overtones of a decision made by a senior manager or person. Ethics have somehow been suspended from evaluation for this particular event. When and where do we develop ethical values? Are we born knowing right from wrong? Do our values develop in a vacuum? Is there a time in our lives when our ethical values are "set" - when we know, from that time on, the ethical basis on which to make decisions in our lives? In human society, a series of nurturers and teachers influence the ethical view of each individual.
Over time, codes of conduct were developed to insure survival. These codes included the nurturing of children, forming of family and tribal units and hunting rituals. Even the earliest people realized that there was danger of extinction if violent acts were not curtailed, if thievery went unhampered, if no one could count on anyone else to exercise the "right" behavior. Thus, a system of acceptable behavior was formed. Because of the constant headlines and media, we as accountants, have to constantly watch our every action to insure that we are not violating our own ethical value system.
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