Reading Between the Numbers . . . Providing Knowledge, Insight, Experience and Creativity for our Clients' Benefit.

Visit our blog frequently to read our take on developments and news about taxes, accounting, financial and retirement planning.

Protecting taxpayer confidentiality

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

By Bankrate

Protecting taxpayer confidentiality

Lawyers are held to higher standards than CPAs. Above, actor Bob Odenkirk, who stars as Saul Goodman in Better Call Saul, promised confidentiality to his client Walter White in Breaking Bad. Amanda Edwards/Getty Images

Fans of television’s favorite ethically challenged criminal lawyer Saul Goodman know that despite his many questionable actions, he definitely respects attorney-client privilege. He told Breaking Bad’s meth-making kingpin Walter White upon their first encounter, “Put a dollar in my pocket” to become a client and ensure that anything said between the two remained confidential.

Does the same apply to accountants? The question came up after the New York Times talked with Donald Trump’s apparently chatty former tax accountant.

Follow the (tax) code

Technically, accountants do not have the same legal constrictions, or protections depending on your point of view, as lawyers when it comes to client privacy.

But the Internal Revenue Code specifically says it is illegal to disclose a taxpayer’s information without that filer’s consent.

Section 7216 of the code says that as a general rule, any person who is “in the business of preparing, or providing services in connection with the preparation of, returns of the tax” is prohibited from “knowingly or recklessly” disclosing “any information furnished to him for, or in connection with, the preparation of any such return.”

Costly penalties for violations

That code section then notes that if a tax professional uses such taxpayer information “for any purpose other than to prepare, or assist in preparing, any such return,” that person has committed a federal misdemeanor and could, upon conviction, be fined as much as $1,000 or a receive a jail term of up to 1 year or both, plus court costs.

In addition to the criminal sanctions for improper disclosure of a person’s tax info cited in Section 7216, the U.S. Code also covers civil treatment of such releases in section 6713.

Under this section, improper use of tax info could bring a penalty of $250 for each such disclosure, with a maximum penalty per year of $10,000.

Specific CPA guidance

The American Institute of Certified Public Accountants, or AICPA, is the primary member association for the accounting profession. As such, it sets ethical standards for its members.

When asked about its member CPAs’ nondisclosure responsibilities to clients, the AICPA cites the U.S. code sections that address this issue.

The AICPA also has established its own ethical standards for the profession.

Its code of professional conduct specifically states that “a member in public practice shall not disclose any confidential client information without the specific consent of the client.”

Keep your mouth shut

Of course, such a stance does not, notes the AICPA, affect in any way an accountant’s obligation to comply with a validly issued and enforceable subpoena or applicable laws and government regulations.

But basically, when you share your tax information with an accountant and it’s all above board, you should expect that information to remain between just you and your accountant.

Or, as Amit Chandel, a CPA in Brea, California, told me: “We may not have attorney client privilege, but we have ethical standards to uphold and a fiduciary duty to keep our mouth shut most off the time.”

Are you comfortable sharing your tax details with your tax pro? Would you consider switching your tax preparation tasks to an attorney to get tighter client confidentiality coverage?

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

Growing Your Junior Golf Program

golf pro advisor

As readers of The Golf Pro Advisor know, I regularly stress the importance of increasing your value to your club. This can, in turn, increase your job security, your income, and your marketability (to other clubs).

One way to increase your value to the club is to create a vibrant, growing youth program. This offers several advantages:

  • Grooming a new generation of active golfers and potential members
  • Stimulating increased play
  • Generating income from program fees, lessons, clinics, coaching, and golf shop sales
  • Forging stronger ties with parents and increasing their loyalty to the club and to you
  • Attracting new members

If your club has, say, 300 members, there are probably at least 300 children between ages 5 and 17. Let’s say you recruit a quarter of this group into the golf program.

That could mean real money and, perhaps more importantly, a lot of parents who support the program and whom you develop a closer relationship with.

In developing a youth program, you face two potential problems: family indifference and adult golfer resistance.

You need to convince families that golf is fun, rewarding, and relatively easy to learn. You also need to establish a family friendly culture that encourages informal play on the golf course.

Here are three junior programs recently featured in PGA magazine:

1.  Golf Leagues

  • Program – Mark Keating at Reserve Vineyards and Golf Club in Aloha, Oregon created teams comprised of boys and girls organized by age group. One team was for 7-13-year-olds. Another was for 14 and 15 year olds.

Mark convinced a number of other Portland area clubs to field teams. Ultimately, there were 12 teams that played not only in the summer but also through the fall.

  • Results – 15% increase (?) in lessonrevenue from kids and additional lessons for parents. Another benefit was the cart rentals from the parents who watched their kids play in the leagues.

2. Club Fitting Day

  • Program – Hugh Matthis at Tavistock Country Club in Haddonfield, New Jerseruns an annual event to fit kids for clubs and golf clothing. The event includes games to keep the kids occupied.

Hugh also promotes Club Fitting Day via the club newsletter, email blasts, and flyers.

  • Results – Some 75 kids participated in the event last year and sales of equipment/clothing increased by 15% over the previous year.

3. Themed Competition

  • Program - Andy Miller at LedgeRock Golf Club in Reading, Pennsylvania runs a Drive, Chip & Putt Championship as part of the junior golf program. Last Fall, he divided the juniors into four teams, each with players of varying ages and skill levels.

Each team had college name – Ohio State – Red; Auburn – Orange etc. This summer he will use an Olympic theme and assign each team a country name.

  • Results – A 3% to 5% increase in overall club revenue. This is the result of not only the program fees but of additional golf shop purchases and food purchases by parents watching their kids play.

These are only three examples. There are more in the Best Practices section on the PGA Magazine site.

It’s not too late to develop fall junior programs. That may a good way to test concepts that you can roll out more formally next year.

As you develop your 2017 junior golf plan this winter, keep in mind the following:

1. Set Goals – Create revenue and participation goals for each program plus ancillary revenue from lessons and golf shop sales

2.  Measure Everything! – If you don’t measure it, you can’t manage it

3. Promote Effectively – Send targeted promotions directly to the families with kids as well as general information to the entire membership.

4. Keep Your Golf Committee Informed – Share your plans and program results with your golf committee. Make sure the committee recognizes the impact of the programs!

IRS selects 4 private tax collectors

Westchester NY accountant Paul Herman of Herman & Company CPA’s is here for all your financial needs. Please contact us if you have questions, and to receive your free personal finance consultation!

By Bankrate

Former IRS Commissioner Douglas Shulman, above, pulled the plug on previous efforts by private collection agencies to collect unpaid taxes, saying the task was best left to the IRS. Win McNamee/Getty Images

If you have an unpaid federal tax bill, Uncle Sam is coming for his money. But instead of Internal Revenue Service agents, he’s sending bill collectors.

Yes, the IRS is once again using private collection agencies to bring in unpaid taxes.

It wasn’t the agency’s choice. A provision in the Fixing America’s Surface Transportation, or FAST, Act that became law last December requires the IRS to turn over some unpaid tax accounts to private collectors.

 US Federal Debt Held by the Public

Earlier debt collection efforts

The IRS has tried private debt collection 2 previous times, back in 1996 and then again from 2006 to 2009. Both prior efforts were problematic and didn’t produce the results that advocates had hoped.

In fact, in the last effort, then IRS Commissioner Douglas Shulman ended the collection early, saying that the “work is best done by IRS employees.”

Still, Congress has decided to give private collectors another shot. And they’ll be on the job starting next year.

Here’s what you need to know.

What to expect

The IRS has selected 4 companies to provide some federal tax collection support. They are CBE Group of Cedar Falls, Iowa; Conserve of Fairport, New York; Performant of Livermore, California, and Pioneer of Horseheads, New York.

The agencies will be assigned overdue accounts that are no longer being worked by the IRS.

Taxpayers whose unpaid federal tax bills are transferred to private collection agencies will get a letter from the IRS letting them know. The collection agency then will follow up with its own notification letter.

Employees of the 4 private collection agencies will be able to identify themselves as IRS contractors who are seeking payment of the overdue taxes. But they must follow Fair Debt Collection Practices Act guidelines and must be courteous and respectful of taxpayer rights.

Added scam potential

I suspect this 3rd private collection of federal debt will be no more successful than the previous 2 efforts.

I also suspect it will produce taxpayer confusion and anger, as well as give con artists yet another way to try to scam folks out of their personal information and tax refunds.

The IRS says it will work to make this private tax collection process as smooth as possible. But if you have a concern about a tax debt collector or feel that the company is not following the rules, let the IRS know.

The same advice applies if you get a scam private tax collector call.

Paul S. Herman CPA, a tax expert for individuals and businesses, is the founder of Herman & Company, CPA’s PC in White Plains, New York.  He provides guidance and strategies to improve clients’ financial well-being.

Any U.S. tax advice contained in the body of this website is not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions.