Washington, D.C., November 15, 2000 -Securities and Exchange Commission unanimously approved rules concerning auditor independence requirements and market structure issues.

SEC chairman Arthur Levitt acknowledging the profound changes sweeping the markets and the importance of safeguarding the public trust voiced his appreciation of the feedback he received during the process. "As many know well, the process of working towards an effective but workable final rule has been a long, and often difficult one. Along the way, there have been some heartfelt differences of opinion on how best to handle certain issues. The Commission's staff has heard the specific concerns of all of the Big 5 firms and the AICPA, and the final rule reflects, to a great extent, their concerns."

Preparing a "Return of Organization Exempt From Income Tax", Form 990, can be an arduous experience. Besides filing the Form 990 with the Internal Revenue Service, a copy is required most states to be filed by the Non-Profit or charity, whether the engagement specifies a compilation, review, or audit. The task becomes more demanding upon involving a professional fund raiser.

A federal income tax deduction by the donors is only allowed toward 501(c)(3) organizations. Their reporting requirements are more detailed than the other 501(c) group. The information not required of certain portions of this group, such as the “statement of functional expenses”, may be required by most state filings. Therefore, a generic approach to the subject is taken. Hopefully, you will find "Ten Steps Toward Preparing a More Effective Form 990 and Audit" useful and helpful.

Alaskan Commercial Fishing: Part II - Processors & Brokers - Concentrates on issues to be considered during audit of fish processing plants; larger, vertically integrated organizations; and fish brokers. Specifically capital assets and transactions and foreign related party transactions.

Alternative Minimum Tax For Individuals - Discusses brief history of Alternative Minimum Tax (AMT). Provides line-by-line instructions for computing AMT on Form 6251. Includes prior law (prior to 1993) and current law (1993 to 1998).

Architects - Provides an examiner with background information when conducting the audit of an architect. Also useful for construction industry audits.

Artists and Art Galleries - Concentrates on use of "third party" contact to prove income since cash can be an integral part of the artist's life-style.

Auto Body and Repair Industry - Overview of the industry. Discusses some issues that may be encountered - including other sources of income; cost of sales; employment taxes; etc.

Aviation Tax - Pertains to excise taxes imposed on commercial and non-commercial aviation. Discusses which set of taxes applies to which type of flights.

Bail Bond Industry - Overview of the industry. Provides terminology. Potential issues include gross income, BUF accounts, collateral, etc.

Bars and Restaurants - Overview of the industry. Includes all types of entities from sole proprietorships to large franchises. Discussion of employment taxes - tip income.

Beauty and Barber Shops - Overview of the industry as well as audit techniques on reconstructing income.

Bed and Breakfasts - Discusses potential issues commonly found. Includes: sources of income other than room rental; business vs personal expenses; hobby vs trade or business.

Carpentry/Framing - Supplement to the Construction ATG. Provides audit techniques which apply primarily to small businesses engaged in remodeling, home improvement, carpentry, woodworking, framing and residential building.

Car Wash Industry - Overview of the industry. Potential issues include gross receipts, inventory, depreciation, etc. Discusses various indirect methods for reconstructing gross receipts.

Child Care Providers - Overview of industry. Includes baby sitters, family day care, child care centers and home care. Potential issues may include inadequate recordkeeping, gross receipts, food reimbursement, etc.

Coal Excise Tax - Provides excise tax agents with specific tools to examine issues relating to domestically produced coal. Based upon 1993 law.

Commercial Banking - Overview of the industry. Discusses potential issues and terminology unique to banking.

Commercial Printing - Discusses potential issues frequently encountered. Includes cost of sales (work in process), IRC section 263A, omission of certain direct material items from inventory, etc.

Computers, Electronics and High Technology - Discusses inventory, cost of sales, research and development, deferred revenue and international issues.

Contruction Industry - Overview of the industry including a glossary. Discusses types of contracts; types of contractors (large, small, home builder); change of accounting method; and joint ventures.

Drywallers - Overview of the industry. Addresses specific aspects of a drywall contractor's business - business/economic environment; relationship with general contractor; cash vs accrual method of accounting.

Entertainment - Important 1040 Issues - Covers performers, producers, directors, technicians, other workers in the film and recording industries and live performers. Discusses performing for compensation; searching for work; and maintaining skills.

Entertainment - Music Industry - Overview of the industry. Covers song writers, publishers, performers, record producers, managers and videos.

Farming - Specific Income Issues and Farm Cooperative - Overview of the industry. Discusses potential for unreported income from primary farm income and nonfarming sources.

Furniture Manufacturing - Overview of industry with emphasis on California businesses. Discusses balance sheet analysis, sale and income issues, cost of goods sold, Maquiladoras and expenses.

Garden Supplies - Concentrates on retail and wholesale aspects of garden supplies (garden centers and equipment dealers, greenhouses, nurseries and mulch companies). Provides suggested audit techniques for examiners and discusses potential issues


Garment Contractors - Overview of the industry. Entities responsible for the construction and assemble under supervision of the manufacturer.

Garment Manufacturers - Overview of industry. Entities that design the garment, procure fabric and materials, coordinate all aspects of the construction of the garment and sell finished product to retailers.

Gas Retailers - Provides an overview of the industry and alternative approaches to computing income.

General Livestock - Provides a focus on the business of breeding, raising, buying and selling livestock.

Grain Farmers - Overview of the industry. Provides terminology. Topics discussed include underreporting of income, employment taxes, accounting methods, government farm programs, etc.

Hardwood Timber Industry - Provides general and technical information useful to examiners in classifying, preplanning and examining returns relating to this industry.

Independent Used Car Dealer - Overview of the industry. Discusses dealers not affiliated with an auto maker, whose principal business is the sale of used cars.

Low Income Housing - Provides examiners with technical support for identifying and developing issues related to IRC section 42.

Manufacturing Industry - Overview of the industry. Emphasis on change of accounting method, IRC section 263A, and inventory.

Masonry and Concrete Industry - Provides industry practices; description of the industry; potential issues and terminology.

Ministers - Discusses several potential issues commonly found on ministers' tax returns. Includes: employee vs. independent contractor, parsonage allowance.

Mobile Food Vendors - Focuses on food catering trucks and espresso carts.

Mortuaries - Overview of the mortuary and cemetery industry including structure and function; governing laws; industry terminology; accounting practices, etc.

Oil and Gas Industry - Provides information on basic operations and common terminology. Includes reference to royalty owners and an introduction to financial products.

Passive Activity Losses - Provides examiners with specific guidance on potential audit issues, issue identification and lead sheets and other job aids. Examples and citation are based on 1994 law.

Pizza Restaurants - Focuses on small, individually owned pizza restaurants. Includes the ingredient markup method for reconstructing income.

Placer Mining - Provides guidelines for the examination of taxpayers in this industry. Focuses on small mining operations represented as sole proprietorships on Schedule C, but can be adapted for partnership and corporate returns.

The Port Project - Provides examiners assistance in auditing industries related to coastal and inland waterways.

Reforestation Industry - Overview of the industry. Discusses some issues that may be encountered - including employment taxes; poor accounting records; etc.

Rehabilitation Tax Credit - Provides examiners with audit aids (i.e. issue checksheet, pro forma Information Document Request, and standardized audit reports, etc.) which assist in identifying and addressing common rehab tax credit issues.

Retail Liquor Industry - Overview of the industry with respect to the state of Massachusetts. Provides examiners with background information on the industry.

Scrap Metal Industry - Provides overview of industry, glossary and examination techniques for both purchasers and sellers of scrap metal.

Sports Franchises - Focuses on major league franchises. Potential issues may include revenue (sponsorship, broadcast, season tickets), strike fund payments, stadium issues, player contracts, purchase/sale of franchise, league expansion, etc.

Taxicabs - Provides a formula for reconstructing income/gross receipts. Also discusses employment tax issues.

Tobacco Industry - Focuses on techniques for examining tobacco farmers, dealers and warehouse operations.

Tour Bus Industry - Includes charter tours, scheduled daily tours, airport shuttle, limousine service and car rental agencies paying mostly cash commissions for reservations and referrals made by hotel employees.

Trucking Industry - Overview of the industry includes freight forwarders, shipper's agents, consolidators, break-bulk agents, custom house brokers, distributors and warehousers.

Veterinary Medicine - Overview of industry includes discussion of types of business entity (especially personal service corporation); cash vs accrual method of accounting; and inventory vs supplies.