The National Public Accountant

Washington Comment The nuances involved in the definition of the practice of public accountancy, which state accountancy laws and regulations inadequately and obscurely define, are examined. A key problematic area is the inclusion of the phrase 'holding out' in the definition of public accountancy. Unless the true meaning of the phrase is resolved, a concise definition of the practice of public accountancy is considered far-fetched.

Automating your accounting.

Debits & Credits The transition toward computerized accounting pursued by Lamers Food Distributors in Tulsa, OK, is recounted. Automation in the food industry is considered as a difficult decision because of the lack of information on its impact on gross profit. However, Lamers' computerized accounting system was installed after carefully studying and selecting from available software programs.

Complying with the Americans with Disabilities Act: costs and tax treatment.

An analysis of the kinds of costs employers will incur resulting from compliance with provisions of the Americans with Disabilities Act of 1990 is presented. Two tax provisions which employers can avail themselves of in mitigating the net costs of compliance are specifically explored. These are the architectural and transportation barrier removal expense and the disabled access credit.

Converting a principal residence to rental property.

The tax advantages to be derived from converting a principal residence to rental property are discussed. The tax implications of such a move are also explored, including such issues as the tax basis of the converted property for depreciation, the deduction of a capital loss in the case the property is sold at a loss, the eligibility for deductible casualty and theft losses and the eligibility for the $125,000 capital gain exemption for taxpayers 55 years and older at the time of sale.

IRS: offer in compromise.

A discussion of the IRS' new guidelines on Offer in Compromise procedures is presented. The new rules are geared toward boosting the collection of outstanding tax liabilities, or liabilities that have increased steadily over the past years. The Offer in Compromise rules allow the partial collection of such unpaid taxes under certain conditions. Toward this end, the IRS Collection Division evolved a training program to heighten the awareness of its revenue officers regarding these procedures.

Liability, quality and delusion.

The use of quality concepts in accounting - Guest Column - Column Accounting firms are urged to employ the quality concepts being implemented by American manufacturers to help reduce tort liability and the threat of government intervention in the accounting profession. A reorientation of accountants' attitudes toward their work is considered essential to accomplish these goals. Audits should be seen not only as work papers and procedures but as part of an integrated management system geared toward attaining quality output.

Return to safe harbor.

Tax shelters for high-income individuals - Capitol Corridors A bill introduced by Sen Dale Bumpers provides a safe harbor for high-income individuals with large hikes in taxable income by allowing them to pay 100% of their prior year's tax liability. The proposed legislation is intended to rectify the problems faced by this group of taxpayers as a result of Congress' repeal in Nov 1991 of the estimated tax safe harbor for certain individuals and small businesses.

Supporting worthy causes through the enhanced deduction: examine the benefits in excess inventory.

The tax and accounting issues covering charitable gifts of inventory are discussed. Regulations governing estimates of tax deductions allowed for charitable gifts of inventory are reviewed and relevant tax reporting requirements are identified. The reporting requirements for charitable gifts of inventory under generally accepted accounting principles are also explained.

Tax talk.

Six tax issues Six tax issues are briefly described. These cover limited liability companies, 100% penalty provisions of the IRS for failure to remit withheld employee income and excise taxes, the reporting rules for direct rollovers, minority discounts for intrafamily stock transfers, bad debt and start-up company and installment payment of taxes with the IRS to facilitate collection.

The importance of continuity planning.

A three-step approach for reviewing contingency planning methids are discussed based on lessons derived from Hurricane Andrew, which hit southern Florida in 1992. The need to extend continuity plans to include community-wide events is stressed and different approaches for extending existing contingency plans and identifying problems caused by community-wide disasters are introduced.