THE CHALLENGE
It’s human nature for a client to expect their CPA to be well versed in the ever-changing tax laws that affect their business. A tall order, given many of our music industry clients conduct business across the U.S. and are subject to a unique set of tax laws governed by the state in which they transact business.
In response to this expectation, coupled with our belief your CPA firm should be the primary resource to assist you comply with all your tax reporting responsibilities, we have made our tax preparation and compliance services one of the cornerstones of our accounting practice.
Additionally, each year we develop, implement and monitor an effective tax compliance and minimization strategy for you and your company. This is generally accomplished hand-in-hand with our year-end accounting engagement, as your Company’s financial statements can provide insight into the profitability trends that ultimately create tax liabilities. Our job is to interpret this financial data, project the impact of your tax burden, make effective recommendations to minimize your taxes, and assist you in the execution of those tax saving strategies.
HANDLING THE BURDEN OF TAX RETURN PREPARATION
From a tax compliance standpoint, the preparation of your Federal income tax returns are generally straight-forward, as Federal returns are the same no matter where you live or conduct your business. However, state tax laws and income tax returns will differ from state to state. Through our use of the most comprehensive tax return preparation software (Wolters Kluwer CCH Axcess Tax), we are able to prepare all entity (i.e. corporate, partnership, individual, etc.) tax returns for every state in the United States. By using this comprehensive software, coupled with state-of-the art computing technology, we are able to prepare tax returns in a highly automated manner, which translates into a savings of time, effort and ultimately dollars for our clients.
DEDICATED TO TAX RESEARCH
We also have the ability to research any tax issue through the use of cloud-based tax research applications. This ever-changing technology gives us “up-to-the-minute” tax law, information and forms. For example, many of our music retailer clients rent and sell band and orchestral instruments. When they ask for the current IRS position on “rent-to-own contracts”, we’re able to respond with timely tax information and advice, due in large part to our resources for tax research coupled with our many years of experience in accounting for and taxation of rental instrument programs. Isn’t that what your accountants should be doing for you? We think so.
AUDITS AND ROOT CANALS
Let’s face it, nobody likes a tax audit…most people compare it to root canal surgery. But if care and thoroughness isn’t exercised in tax research, a bad tax position on a tax return can invite an audit with no RSVP needed. And if diligence isn’t exercised in the accounting process, tax returns can be materially misstated, resulting in large amounts of tax, interest and penalties when you least expect it and often when you can least afford it. Some audits are just dumb bad luck, but others can be avoided by employing proper tax research, planning and reporting. Although we’re experienced in handling tax audits, we’d much rather help you minimize the chance of an audit. Unless you like root canals.
“CAUSE I’M THE TAXMAN”
Like George Harrison intimated, ignorance of tax law will only serve to have you pay more or get you into trouble (“Should five percent appear too small, be thankful I don’t take it all”). Your tax return preparer needs to know you, your business, and equally as important, the nature of the industry in which you operate. At Friedman, Kannenberg & Company, P.C., we’ve made it our business to understand the tax issues unique to the music industry and your music business. Our government requires us all to comply with tax law and we work to that end. But in the end, your interests are the solely the interests we serve to protect…not Uncle Sam the Taxman.