However, just because you’ve got the number, does not mean you have all the information about it. It will take around two weeks before your EIN becomes part of the IRS’s permanent records, and you have to wait until at least then to file electronic returns, make electronic payments or pass an IRS Taxpayer ID number (TIN) matching program.

Next step for an LLC

For those people who file as an LLC, there are several forms to file if you do not want to accept the default status of a partnership or ‘disregarded’ entity. You can use form 8832 to receive a corporation status instead.payday loans You should read and understand the instructions for this form, make sure you have complete information about it, and you may want to consult a tax professional. There is also a form 2553 (Election by a small business corporation form). File this in a timely manner (see instructions) to receive S corporation status, and again, make sure you understand the rules, and read the instructions, and consult a tax professional if you are unsure of requirements and procedures.

There will an acceptance or Non-acceptance of your election.

The IRS will inform you as to the acceptance or non-acceptance of the election by the LLC. The LLC should receive a determination on the election within 60 days after form 8832 or 2553 have been filed.

DO NOT FILE form 1120 or 1120S until you receive notification of the Iris’s acceptance of your election under owner of these two forms. You can download those forms at the IRS.gov site online.

Corrections must be made in writing and you have to mail the information to the IRS.

Overall, you don’t have to keep everything forever. Below is a partial listing of much of those requirements you can print out for your use or for the benefit of your employees.

You should pay attention to how those records are being eliminated. Don’t just throw them in the dumpster.payday loans That doesn’t work anymore, what with criminals going around and looking in the bins to see what they can get to help them steal identities.

Shred them.

This is not legal advice, but a partial list of record keeping requirements.

RECORDKEEPING in a AUTO DEALERSHIP

Accounts Payable  7 years

Accounts Receivable 7 years

Audits of accounts by Accountants permanent record

Bank account reconciliations 5 years

Bond records permanent record

Capitol Stocks permanent record

Cash ledgers permanent record

Charts of your accounts permanent record

Cancelled Checks 7 years

Contracts and leases that have expired 7 years

Contracts and leases not expired permanent while in effect

Correspondence 1 year

Correspondence for legal affairs permanent record

Credit applications 7 years for approved contract

Credit applications 25 months for non-approved applications

Deeds permanent record

Mortgages permanent record

Bills of Sale for property (not vehicles) permanent record

Depreciation records and schedules permanent record

Deposit slips 1 year

Employee personnel 3 years after termination

Employee position applications 3 years

Financial statements permanent record

General ledgers permanent record

Insurance policies 3 years after expiration

Insurance reports, records, claims permanent record

Internal audit and reports 3 years

Inventories of products and supplies 7 years

Invoices for customers 7 years

Invoices for products from vendors 7 years

Invoices for services from vendors 7 years

Minutes of meetings permanent record

By-laws and changes permanent record

Odometer statements 5 years

Payroll records 7 years

Petty cash records 3 years

Property appraisals permanent record

Purchase orders (non vehicle) 1 year

Purchase orders for vehicles 5 years

Sales records for vehicles 5 years, 2 years onsite, 3 years offsite but available

to DMV investigations.

Tax returns and documents permanent record

Time books for employees 7 years

Trade mark registration materials permanent record

Customers in their 70’s, 80’s and 90’s bring a wealth of experience to buying and ownership. They have the security to afford what they want and the ‘know how’ to find it. These customers can also bring unique challenges for businesses.

We have received calls from members who are being criticized, usually by the extended family of older customers, over deals they have made.

The complaints sometimes deal with issues of ‘capacity’. For example, the family feels the elderly customer was not able to make the ‘right’ decision, or has made a ‘bad’ deal. In many cases, it may just be that the adult children, and other family members, are unhappy that their aged relative is ‘spending their inheritance’!

How are Businesses supposed to treat their elderly customer?

With respect. They have contributed their entire life to our society and its economy and have the right to make a purchasing decision like any adult.

How are Businesses supposed to respond to the family?

With caution. Remember, they are not your customer, the buyer is. Because of privacy concerns, there may be little you can even discuss or disclose to the family, unless the buyer gives you permission, preferable in writing, to do so.

On the other hand, in some cases, the family may be able to produce legal documents, court orders or ‘powers of attorney’ that have some bearing on the issue of your customer’s mental ‘capacity’. If that is the case, make a copy of the documentation and call your industry association or attorney.

(This is not legal advice, if you need legal advise, please contact an attorney)

businesses have to look around them and see what has happened to other industries that have been targeted for regulation changes because some of their industry participants did not act ethically with customers.

What is regulation is all about? It’s about an even playing field for industry businesses AND THE CONSUMER. Yes, even the consumer has a lot riding on how regulations are enforced and written. Sometimes the regulations cost the consumers more than they are worth to have on the books.

The ethical businessman has a lot riding on how ALL the businesses are playing the game. A few businesses can take the rest of the industry down with them. The insurance brokering industry recently felt heat because of how insurance was being sold. Stock brokerage firms are seeing huge fines and losses of their clients because of unfair activities by brokers who were supposed to have their clients on their minds when they traded stock on their behalf.

Who is next? In Oregon, it was the broker who wa a broker one minute and a car dealer the next, depending only on when they can make the most money. Unfortunately, for them, there is a line somewhere, where a businessperson who says they are a broker for a customer can only be their agent. Is it unethical for a dealer to not tell a customer when he is their agent and when he is the agent of another dealer if he is switching back and forth?

Now, about the money. If this situation isn’t fixed, businesses are going to take a big hit if the consumers start believing they cannot get a fair deal because they are not trustworthy. The businesses and the industries become scuzzbags. Disreputable businesses want that to happen? No, not a chance.

So how about getting involved with your industry association and have real input?

The state in which they live evidently requires an EIN before the state will let them register the incorporation for their new company they are starting.  Although EIN Number Application assists clients in obtaining their numbers, EIN is not able to give interstate advice on tax issues.  Same story is true when a client starts asking ‘legal’ questions.

The only response that is possible is that EIN Number Application is not a CPA or licensed tax representative and is not an attorney.  While EIN Number Application does know quite a bit about how to apply, and how to make it an easy process for it’s customers, there is too much risk in trying to give those types of advice.  Just looking at all the forms a corporation might want to use to submit their taxes is a great example of why this is true.

A regular corporation might use a IRS Form 1120.  A sub Chapter S Corporation will likely use a IRS Form 1120S.  Below is a partial listing of different types of +IRS Forms in the 1120 series, and the type of corporation most likely to use that type of form.  This is from IRS information, and is not to be construed as giving legal advice.  Any time a person or company wants that type of advice, they should contact their legal and local representative.

The Form 1120 series returns:
• Form 1118        Foreign Tax Credit-Corporation
• Form 1120        U.S. Corporation Income Tax Return
• Form 1120-C    U.S. Income Tax Return for Cooperative Associations
• Form 1120-F    U.S. Income Tax Return of a Foreign Corporation
• Form 1120-FSC    U.S. Income Tax Return of a Foreign Sales Corporation
• Form 1120-H    U.S. Income Tax Return for Homeowners Associations
• Form 1120-L    U.S. Life Insurance Company Income Tax Return
• Form 1120-ND    Return for Nuclear Decommissioning Funds and Certain     related persons
• Form 1120-PC    U.S. Property and Casualty Insurance Company Income Tax
return
• Form 1120-POL    U.S. Income Tax Return for Certain Political Organizations
• Form 1120-REIT    U.S. Income Tax Return for Real Estate Investment Trusts
• Form 1120-RIC    U.S. Income Tax Return for Regulated Investment     companies
• Form 1120S    U.S. Income Tax Return for an S Corporation
• Form 1120-SF    U.S. Income Tax Return for Designated Settlement Funds     (Under section 468B)
• Form 1120-W    Estimated Tax for Corporations

LLC’s are different, generally, and the rules for LLC’s are different for single member LLCs and for Multiple member LLCs,

When these regulations took effect, all unsolicited facsimile advertisements will be required to include a clear and conspicuous notice on the first page disclosing that recipients have the right to opt out of receiving additional facsimile advertisements from the sender. The FCC has added a definition of “clear and conspicuous” to these regulations to promote compliance. The opt-out notice must be included in all facsimile advertisements, including those based on an established business relationship or in response to a recipient’s prior express invitation or permission. This notice must include a telephone number and facsimile number for the sender that the recipient may use to submit an opt-out request. If neither of these numbers is toll-free for the recipient, the sender must provide an additional cost-free opt-out mechanism, such as a website address or email address, for submitting opt-out requests. The opt-out mechanism must be always available to process opt-out requests. Opt-out requests must be honored within 30 days.

These regulations also provide that senders need only honor opt-out requests that are submitted properly. A request is proper if it identifies the facsimile number to which the request relates and is made using the opt-out mechanism identified in the sender’s fax. A sender can resume sending facsimile advertisements to a recipient who previously opted out if the recipient subsequently provides consent.

In June, I was “fortunate” to spend the day with one of our members during a visit from an Anti-Money Laundering agent from the Internal Revenue Service. Nope, our member hadn’t done anything wrong! This was a routine cash reporting compliance “review” that was scheduled in advance. Having said that, while the agent did not conduct this audit/review based upon suspicions of wrongdoings, make no mistake but that had anything been found, our fellow member would have clearly been turning on the “spit”. For a couple of years now, we have hammered home the fact that cash reporting/8300 audits were becoming more frequent and that our members needed to know the law and be prepared for these audits. So, with the blessings of our member-member, I will share with you what happened during that audit.

The IRS Agent began with a lengthy interview that helped to establish the nature of the business, ownership, officers and partners, whether incorporated or a partnership, etc. The other questions asked were:

• Name of office manager
• How long in business
• When incorporated
• Length of time at present location
• Whether the business had a service facility
• If vehicles were leased or rented
• If the member was engaged in the buy here-pay here business
• If the member repossessed vehicles
• If the member conducted in-house financing
• Hours of operation
• When the member principal first became aware of cash reporting requirements with a very strong emphasis on WHEN?
• If the member had a copy or copies of a form 8300 on premises
• If the member had a copy of IRS publication 1544 which details the cash reporting requirements
• If the member had EVER reported a cash transaction of any sort
• If a transaction had been reported, when was it and did the member maintain a copy
• If reported, did you send the customer a letter advising them that the report had been made and was a copy of that letter maintained in the member’s records
• If the member had ever had multiple transactions by a single customer within a 24 hour period
• If the employees of the business are trained on form 8300 cash reporting requirements and does the business have a written policy
• If employees are trained, who are those who have received training and from what source was the training received
• Who in the business is responsible for preparing the 8300 forms and the customer letter and is there an audit procedure in place to ensure it was done properly
• Has the business ever had a “suspicious transaction” and if so, was a form 8300 prepared
• Has the member ever received a cash payment as a down payment and then had a near-immediate request for a refund and if so, was the refund in cash
• Has the member ever identified an effort on the part of the customer to use a false ID and if so, was that effort documented
• Have any of the member’s employees ever instructed a customer on how to avoid the cash reporting requirement
• Names of any employees who handle cash
• Has the member ever encountered an effort by a customer to engage in a multiple transaction involving a combination of cash and cash equivalent monetary instruments (money orders, cashiers checks, etc.)
• What forms of ID does the member seek from a customer in order to verify identity and are copies made and retained
• Have cash payments on an installment agreement ever been made by someone else on behalf of the customer
• Specify the nature of the business records and bookkeeping systems
• Are deposit slips maintained as evidence of the nature of deposits
• If using a management software system, does the software automatically note cash transactions over $10,000.00
• Does the business provide receipts to customers for down payments and are copies maintained as financial records
• Do your bank deposit slips note the nature of the payment (e.g. cash, check, money order, etc.)
• Where do you bank and how many accounts do you have at each bank
• Do you make copies of all checks, money orders, cashier checks, etc. that are received as a down payment
• How often do you make bank deposits, who prepares the deposit slips and who actually takes the deposit to the bank
• If you receive cash on the weekend or bank holiday, how is it handled and safeguarded
• Have you ever taken a check from a customer, gone to the customer’s bank and had the check cashed
• Do you have an internal policy for resolving discrepancies in bank deposits
• Has anyone ever embezzled from your business
• Has the owner or principal ever extended loans to the business and if so, was it cash or check
• Do you have any foreign bank accounts or investment accounts
• Do you conduct any international business
• Who are your competitors in your immediate vicinity (more on this later)

Fortunately, our member is a believer in member education despite operating his business in a state where mandatory continuing education is not yet the law. For all of the questions listed above, he had the proper and satisfactory response.

At this point in the audit/review, the IRS Agent was gracious enough to field some questions from us and to provide advice useful to you, the reader.

First and of paramount importance was the reminder and admonition that “coaching” or “structuring” a payment in a fashion to avoid the cash reporting requirement is, plain and simple, A FELONY. On that topic, I guess I need not say more?

The Agent emphasized that knowing your customer was a key to making the cash reporting law effective as a tool to identify drug members, money launderers and terrorists. I read this to mean that extraordinary diligence is called for with unknown customers who may make efforts to pay large sums in cash or cash equivalents.

We were again reminded that multiple non-cash equivalent transactions MUST BE REPORTED. The example being a transaction totaling at or near $10,000.00 that is paid with multiple money orders, cashier checks, etc.

Another piece of advice centered on multiple customers aggregating or pooling their cash money to make a single purchase of a vehicle but with no single customer’s share being $10,000.00 or more. The IRS Agent advised that this was a ploy they were seeing more of and that unsuspecting members were falling prey to this since they thought that the money must come from one customer per deal. According to the IRS Agent, this type of transaction MUST BE REPORTED.

Suspicious activities are just that….SUSPICIOUS! The Agent advised that any effort, no matter how subtle, to remain UNDER the $10,000.00 threshold was considered suspicious and MUST be reported, no matter the amount.

Any account that is paid in cash that adds up to $10,000.00 within a 12-month period MUST be reported. An example would be a $5000.00 cash down payment on a $15,000.00 car with 12 equal payments of $1000.00. Once the $10,000.00 threshold has been met, the form 8300 must be filed.

If a cashiers or bank check is presented for payment and exceeds $10,001.00, the member has no reporting requirements. The reason for this is that when the customer presents cash to the bank in that amount, the bank files a form 104 that is the bank’s equivalent to the form 8300.

We were reminded of the absolute requirement to advise the customer in writing prior to 31 January of the following year if you filed a form 8300 resulting from a cash or cash equivalent transaction. Since the sending of that letter could be easily overlooked, the IRS Agent recommended sending the letter within a week of the actual transaction. This letter is NOT required if a form 8300 is filed and is related to “suspicious activities”.

The Agent recommended that any form 8300’s a member files be kept in a separate file with a copy also contained in the jacket or paperwork of the transaction record.

The IRS Agent said that the NUMBER ONE issue during the actual audit was the failure of the member to identify the nature of the money received in the business general ledger and deposit slips. This failure will result in the business having to go to the bank and obtain records reflecting the nature of the deposit.

Again, we were reminded of the harsh civil and criminal penalties for either unintentional or intentional failure to comply with this section of the law. Business can and will be hit with significant financial penalties and actual federal prison sentences for violations!

Lastly, I made mention earlier that the IRS Agent asked our member-member to identify other business in the immediate proximity. Why? So that the Agent can schedule audits of those business! The rationale being that if the member currently being audited is in compliance, that the “bad guys” might seek out other business that ARE NOT! So, head’s up! If you discover that a business in your area has been audited, plan on your business being audited in the near future.

Non-profit organizations include corporations, trusts, limited liability companies, and unincorporated associations that qualify for tax-exempt status under Internal Revenue Code (IRC) 501(a) as described in Publication 557, Tax-Exempt Status for Your Organization (PDF).

In the article, a businessman found out his CFO was stealing. He only lost one of his operations over that.

• Several years ago, long time California auto dealer, Cal Worthington, learned two employees stole a hefty sum to feed a Vegas gambling habit.
• In 206, a CFO for a luxury car dealership in Florida was caught stealing also to pay off gambling losses. The CFO rejected the owner’s offer to hire help with the accounting and an independent audit revealed the theft.
• In Queens, New York, the FBIs is investigating a theft ring involving at least businesses. Managers at the stores (different owners) were sending products to a gang who would steal them. The product was then going to the Dominican Republic. This scheme was exposed when a NYC police officer killed when he stumbled upon a theft in process.

Our member had a partner, in business with him for over 10 years, clean him out. Trust & Verify. That’s the key. Make sure employees and partners know what at least some of the checks and balances are you are using. No checks and balances at all? That’s a recipe for disaster. If you are afraid of hurt feelings because you are good friends with your employees or partners, you are not operating correctly. If they’re such good friends, if they are valuable employees and partners, they will understand the necessity for the checks and balances in a business. If they don’t, they need to deal with it. You are responsible for your own business, and to your family and other employees to stay in business and not let somebody steal it all from you. Need ideas on what to do? Call your association and talk with your staff.

In addition to Dealers Open Lot Insurance which covers vehicles you own what about vehicles you do not own?   Garagekeepers Insurance provides coverage for most nonowned vehicles.  This is not in any way to be confused with Dealers Open lot insurance.  It is a different coverage and does not provide any insurance coverage for inventory autos.  And, with most dealer insurance policies, it does not cover consigned autos.

This coverage is written on dealer insurance to cover a dealer who has a customer car for some reason and a covered event happens while the dealer has the customer vehicle in his care, custody or control. Examples might be that the dealer is test driving and has not purchased the vehicle yet.  Or he decides to put tires on the car the week after it is sold to a customer.  Or it might mean that the dealer does some repair or service work and he has cars from customers on the lot.  In these examples the dealer could damage a vehicle belonging to a customer.  Since these are not owned vehicles, they would not be covered by Dealers Open Lot insurance.

It is also important to understand if you carry theft coverage what kind do you have.  Some policies require that your vehicles be inside a building or inside a fenced area in order to have theft coverage?  What about false pretense or trick and device?  If you give the keys to a customer and tell him to take a drive and he fails to return the vehicle, is this theft or is it “trick and device?  Most policies would require an endorsement to your insurance policy to provide for “false pretense”?

Every insurance policy is different.  And each insurance company can write insurance coverage in different combinations.  Know what you have.  It doesn’t help after a loss has already occurred to say, “Well, I meant for it to be another way” or “I thought I had that”. What is written in the insurance policy is what you have and how your claim will be settled.

This article is the final part in this business series – To see part I of this series please click here. To see part II of this series please click here.