The following is a copy of a recent letter outlining current tax problems faced by restaurant owners today.
Dear Restaurant Owner:
I have enclosed a copy of our year-end newsletter, along with some other promotional material. Perhaps you share my frustration with our current political situation. In any event, I hope you find this material entertaining.
Despite our attempts at humor, we take our tax responsibilities very seriously. Our commitment to provide the highest level of quality in our services is backed by the enclosed "Client Bill of Rights." We believe we are the first accounting firm in the nation to announce such a comprehensive level of client rights. We will continue to strive to improve and innovate in order to provide the best services possible.
In my experience, IRS has lightened up on small restaurants. In "MSSP 13" (Market Segment Specialization Paper), the government cites the high failure rate of small restaurants as the reason for fewer audits in this area. They encountered many instances where they could not collect additional taxes, even when there was unreported income, because of net operating losses and/or insolvency.
I have found the opposite to be true when dealing with the NY State Sales Tax Bureau. One of the main problems is the state usually audits 3 years at time. So even small percentage change in your mark-up rate can generate an enormous tax adjustment. After interest and draconian penalties, the result is often financial disaster.
In today’s complex financial environment, a knowledgeable CPA is a must. We provide a full range of tax accounting and income tax preparation services for NY restaurants. Our offices are conveniently located in NY City and upstate New York.
Respectfully yours,
To contact us Email to Masullo@catskill.net