Four Arguments for Documenting Procedures 

Documenting procedures hardly ranks as a high priority. Meeting deadlines and client needs are always on the top of the “To Do List”, pushing written procedures down to the bottom.


That is, until a key team member leaves, such as a project manager or accounting director. When that person’s knowledge walks out the door, the mad scramble to figure out what that person did, when and how they did it is on!


And what happens when a new person starts? Training and supervising new team members are time consuming and often inconsistent. It doesn’t have to be that way.


Four good arguments that documenting procedures should be higher on the “To Do List” are:


  1. Getting Agreement

All stakeholders who are involved in a process should have a role in documenting that process. Adopting an inclusive approach ensures that each person’s role is accurately reflected. Working together also promotes discussion about improving the process.


  1. Eliminating Misunderstanding

Documenting a process provides opportunities to clarify it for all stakeholders. Processes that are only communicated verbally are subject to misinterpretation. Think about that old game, Telephone. The message at the start is never the same at the end!


  1. Providing  a Consistent Reference

Documented procedures can be used for training new team members, or for periodic refresher training with the existing team. Errors could be due to missing a step. Referring to a written procedure helps team performance.


  1. Supporting Intended Results

A procedure document is the perfect place to state the purpose and expected result from the process. Stating the purpose and expected results keeps all stakeholders focused on a common objective.


Tired of repeating the same instructions over and over again? Too many errors? Stop figuring it out from scratch every time…document those procedures!

IRS Warning about Fake Tax Bill Emails

Scam artists making threatening calls to taxpayers have been all over the news. Now it seems the thieves are scamming unsuspecting taxpayers via email by sending fake IRS notices. The IRS recently alerted taxpayers and tax professionals to be on guard against fraudulent emails with an attached fake tax payment notice.


Taxpayers may get a written notice in the mail if information reported on her or his tax return does not match the information received by the IRS from a third party, like a bank or employer. The standard, computer-generated notice, called a CP2000, routinely asks for payment or an explanation from the taxpayer.


Scammers created a scheme sending fake CP2000 notices via email for the 2015 tax year. The fraudulent CP2000 notice includes a payment request to mail a check made out to “I.R.S.” to the “Austin Processing Center” at a Post Office Box address. This is in addition to a “payment” link within the email itself.


In its alert, the IRS emphasized four indicators of a fraudulent tax notice:

  1. These notices are being sent electronically, even though the IRS does not initiate contact with taxpayers by email or through social media platforms.
  2. The CP 2000 notices are issued from an Austin, TX, address not used by the IRS.
  3. The underreported tax issue is related to the Affordable Care Act (ACA) requesting information regarding 2014 coverage.
  4. The payment voucher lists the letter number as 105C.


Receive one of these scam emails? The IRS asks that you forward it to [email protected] and then delete it from your email. To determine if a CP2000 notice you received in the mail is real, see IRS information, Understanding Your CP2000 Notice, which includes an image of a real notice.


You’ve heard this advice before, but here it is again: Always beware of any unsolicited email purported to be from the IRS or any unknown source. Never open an attachment or click on a link within an email sent by unknown sources.

What is a Fiduciary?

A certain presidential candidate recently used the term “fiduciary” when referring to his personal income taxes. I was confused. Fiduciary responsibility is not about personal taxes or finances. It’s about the legal obligation to act in the best interest of another party or organization. It’s about keeping a promise to use funds for a specific purpose.


Other listeners were probably as confused as I was when hearing “fiduciary” in a personal finance context. Three facts about fiduciary responsibility should clear up that confusion:


  1. Obligation to Act on Others’ Behalf

A fiduciary relationship is based on mutual faith and confidence between the individual(s) placing and accepting legal responsibility to serve the best interests of others. That includes the interests of individuals or an organization. The duties of a fiduciary include loyalty and reasonable care of assets in custody.


  1. Relationship Extends to All Actions

A fiduciary relationship extends to every possible case in which one party places confidence in the other party and such confidence is accepted. Placing and accepting confidence creates dependence by one party and influence by the other. The fiduciary is trusted by the dependent party to act in its best interest at all times.


  1. Scrutiny of Fiduciary Actions

Financial transactions between parties involved in a fiduciary relationship are subject to higher scrutiny. The spotlight on these transactions is due to the fiduciary’s dominant role that provides the capacity to profit or otherwise gain from financial decisions at the expense of the party under her or his influence.


It’s no wonder that these three facts will never be included in any political speech. They’re pretty dry stuff. Regardless, understanding these facts is important, whether you are accepting or placing confidence as part of a fiduciary relationship.


Is the Home Office Deduction for You?

Do you use part of your home for your business? Questions about home office deductions come up all the time with new tax clients. The topic also came up at last month’s IRS Tax Forum in Washington, DC.


A home office deduction is a potential IRS “red flag” because of how often it is abused. IRS audits find some taxpayers who inflate home expenses or take a deduction that isn’t allowed. Home office audits were described at the IRS Tax Forum, and it didn’t sound like fun. IRS auditors come to your home and use a tape measure on your home office. For real!


So how do you follow the tax rules and avoid the tape measure? A home office deduction can be taken for:


  1. Regular and Exclusive Use

You must regularly use part of your home exclusively for conducting business. Generally, deductions for a home office are based on the percentage of your home devoted to business use. Keep in mind that the IRS is strict about exclusive use. That means no personal items in the home office. No shared spaces like hallways or bathrooms, either.


  1. Principal Place of Business

You must show that you use your home as your principal place of business. Your home office must be used to substantially and regularly conduct business, such as in-person meetings with patients, clients, or customers in the normal course of your business. It’s okay if you also carry on business at another location.


If you are an employee and you use a part of your home for business, you may qualify for a deduction for its business use. In addition to the tests discussed above, you must:


  1. Use the home office for the convenience of your employer, such as teleworking to reduce the employer’s real estate footprint. If you work at home to perform tasks around your personal schedule, a home office deduction is not allowed.


  1. Not rent any part of your home to your employer and use the rented portion to perform employee services for that employer.


If you qualify, the home office deduction can reduce your tax liability. Follow the rules and the IRS tape measure won’t stress you out.