Category: "regulations"

03/09/10

  11:12:05 am, Categories: regulations , Tags: tax season_ tax preparer

Now that you have the "tax season blues", it is time to prepare your tax return and pay the piper (the IRS). Most companies use a paid tax return preparer to prepare and file taxes. In 2009 the IRS conducted a review and estimated there are between 900,000 and 1.2 million paid tax return preparers in the US. How can you tell if you have an honest preparer and why does it matter?

If you go the IRS webpage and search for "tax preparer fraud", you will find over 350 IRS documents dealing with tax preparer fraud. Many of them report fines and jail sentences imposed on fraudulent tax preparers and tax payers who trusted these fraudulent preparers. The IRS is serious about tax fraud and is cracking down on third party tax preparers. If the IRS suspects a preparer of fraudulent activities, they will audit all of the preparer's clients. In addition to the hassle of an audit, if the IRS finds any inconsistencies in your returns, you are facing fines, penalties and additional taxes. It is imperative that you select your preparer carefully.

This has become such a large problem, the IRS has proposed that starting next year all preparers that do not hold a professional designation, will need to be registered with the IRS. Preparers would need to register with the IRS, pass a competency exam, and complete 15 hours annually of continuing education classes. They would also need to comply with the IRS Ethical Standards to continue to be registered as a paid tax preparer.

When selecting a preparer, be suspicious of anyone that claims they can obtain a larger refund than others or those who base their fees on a percentage of the refund. Look around for a tax professional that is established and will be there in the future to help you resolve any issues. The last thing you need to add to the tax season blues is to be audited because you used a fly by night preparer.

If you have a good brokerage software system, like TruckMaster's Freight Brokerage Solution, preparing your taxes is much simpler. You can print out an income statement and trial balance from the accounting system which will make preparing your tax return fast and accurate. Then you can easily check your preparer's figures against your actual income and expenses in the general ledger.

It may be too late this year to streamline your tax preparation procedures, but act now to make next year less painful and time consuming.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage

02/05/10

  11:56:42 am, Categories: regulations

For most of us, most of the time, the holidays at the end of the year are a season of good cheer, family, and hopeful dreams for the New Year. I am always bothered by the fact that the next thing you are slapped with is taxes. Couldn't they find a better time to assess taxes? Perhaps May, or June, by that time your year is either going well enough that you can stomach the tax challenge, or it is looking so bad you have worked up bad mood that matches the thrill of filing taxes. Sadly, the reality is we have to attack them head on, or face the consequences – fines.

While doing the research for this blog article, I was more than a little surprised by the severity of the fines imposed for things like 1099's. Not just for filing them late, but also for adjustments. Therefore, not only do you have to be on time, you must be accurate or face fines. The fines are not exactly cheap. If you make corrections within 30 days, it is $15 per 1099. Between April 1 and August 1, that goes up to $30 per 1099, and after August 1, it is $50 per 1099! Depending on the size of your brokerage, and the number of carriers you deal with on an annual basis, this could get to be quite an expense.

Taxes are certainly another instance when having a reliable, complete, and integrated brokerage system can save you time and money, and provide peace of mind. Whether you are trying to manage your business accounting manually or on spreadsheets, this type of itemization and report building is an enormous investment in time, and the result may be riddled with errors in data entry or incorrect calculations.

There are several stand-alone accounting solutions available which help, but for a freight brokerage, this means re-entering information into each separate module and risking data entry errors in each shipment's entries. TruckMaster's freight brokerage solution provides single entry, easy to follow data flow. You never have to enter the same data twice. Your 1099 forms are simply printed and ready to send. This means there is very little extra work at year-end, and no worries.

If you have found yourself stressed over filing tax forms this year, perhaps it is time to take a look at what TruckMaster's Freight Brokerage software can do for you.

More Info:
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf

http://www.ehow.com/about_4743118_reporting-requirements-small-business.html

http://www.mckenzielaw.com/INDEPEND.html

Kurtis Brown
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage

03/12/09

  02:27:09 pm, Categories: regulations , Tags: carrier qualifications, regulations

Within the recent court ruling in "Schramm V. Foster" the court said that a brokerage company was required to use "due diligence" in selecting a carrier. It is now more important than ever that you qualify your carriers prior to tendering them a load or you may be held liable along with the carrier.

"Due diligence" as applied by this ruling, requires each brokerage company to establish a corporate policy on qualifying carriers and always follow this policy before tendering to a carrier.

The following should be considered when establishing your policy:

  • Create a file for each carrier.
  • Include in this file a copy of the carrier’s operating authority and insurance filings with the FMCSA, along with the carrier’s insurance certificates.
  • Check the FMCSA safety rating and include in the file.
  • Do not use a carrier if their safety rating is "unsatisfactory".
  • If the safety rating is "conditional" or there is no safety rating at all, develop a program to check the carrier yourself. Always follow this policy before tendering a load.
  • Every carrier file must be kept current with any information received and should be review when appropriate. A monitoring process should be employed for this purpose.

A freight brokerage software system should include a way to establish a carrier file easily (preferably in electronic format to save time and money) and provide a monitoring process to know when it is time to update the carrier file with new insurance certificates and check their FMCSA file again.

TruckMaster Logistics Systems, Inc. has both the carrier file with electronic document storage and the carrier monitoring process which will not allow you to book a load on a carrier with expired qualifications.

You can't afford to ignore this court ruling, and I encourage all brokerage companies to stay current on this issue.

Craig Sorensen
TruckMaster Solution Provider
TruckMaster Your Freight Brokerage™

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