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Policies & Documents



Contact Bradley Kirschner CPA for any further questions or concerns

Policies & Documents

Privacy & Security

Federal law requires this notification by tax return preparers.  As your CPA, I collect information required for the preparation of you tax return. I obtain this information from the data you provide in your tax organizer, worksheets and other documents. I also collect information through discussion with you, and I may develop additional information from other sources. As your CPA, I keep all information about our engagement confidential. I do this and have always done this as a part of my commitment to you, and in response to the Codes of Professional Conduct of the American Institute of Certified Public Accountants and the Washington State Board of Accountancy. I will not disclose any information about you unless I have your approval, or am required to by law. This applies even if you are no longer a client.

There are three exceptions where minimal information is available to people other than the principals and staff of Bradley Kirschner PC.

  • I use computer software to perform the final computation and printing of your tax return.  This software is supplied by a third party vendor. Your name and tax identification number may be released to that vendor for processing authorization and billing purposes.  No other client information is available to the vendor.
  • I participate in a system of peer review, where I engage another CPA firm to review my policies and practices to ensure my work conforms to professional standards.  This review requires access to selected client files.  A peer review is required by the standards of the Accounting Profession and the rules of the Washington State Board of Accountancy.
  • Most tax returns are required to be filed electronically. Complete tax return information is transmitted to a computer service bureau, who in turn submits the information to the taxing authorities. The service bureau is obligated not to disclose the information to third parties or to use the information in any other way.

As your CPA I am committed to the safe keeping of your information, and I maintain physical, electronic and procedural safeguards to protect your information. As implied above, this statement clarifies the policies I have always maintained for the confidentiality of my clients' information.

Affordable Care Act

2014 saw the implementation of the Affordable Care Act (ACA, The ACA has been the topic of heated political discourse over the past couple of years; the fact is that it is the law and one with which we must comply.  While the ACA deals with health care, Congress has chosen to delegate a significant portion of the compliance under the law to the tax system, which is administered by the Internal Revenue Service.

There are three portions of the ACA which will impact the preparation of your tax return and the resulting tax liability.

Coverage - All United States persons must be covered by some form of health care insurance.  If they are not covered, and do not qualify for one of the exemptions, they may be subject to the health care individual responsibility payment, which will be calculated and included in the tax return. Those whose health care coverage was obtained through the ACA Marketplace will be receiving Form 1095-A -- Health Insurance Marketplace Statement, which will detail the coverage and premium information.  If you had coverage through an employer, you may receive Forms 1095-B and 1095-C. 

Exemption - Certain individuals are exempt from ACA coverage, and that exemption will be reported on Form 8965.  Practically speaking, the exemption will apply most often to those residing outside of the United States and those who cannot afford coverage.  The ability to afford coverage is an objective rather than a subjective test.

Premium Credit - Certain individuals will qualify for a Premium Credit, the intent of which is to reduce the cost of health care coverage for those of lower income.  The credit will be computed as a part of the preparation of the tax return, reducing the tax liability.  Those who purchased coverage through the ACA Marketplace may have been granted an estimated credit, reducing the premiums paid.  This estimated credit is treated in a way similar to income tax withholding from your salary.  The credit computed in your tax return will be reduced by the estimated credit granted by the ACA Marketplace and reported on Form 1095-A.  If the estimated credit is less than the actual credit, the additional amount will be claimed on the tax return.  On the other hand, if the estimated credit is greater than the actual credit, the difference must be repaid in the tax return.  This will cause some surprises.  The Credit will be computed on Form 8962.

 Tax due dates in the United States

The basic due date for filing US individual income tax returns and payment of tax is April 15th of the following year.  Where April 15th falls on a holiday or weekend, the due date is the next business day. The due date is June 15th  for certain Non-residents or taxpayers who are out of the United States on April 15th.

It is possible to apply for an automatic extension of time for filing the tax return to October 15 by filing the extension request, generally Form 4868, by the original due date.

Tax returns that are delinquent, that is filed after the original due date without an extension being filed, or filed after the extended due date, will be subject to a penalty of five percent per month, or fraction thereof, of the balance due, to a maximum penalty of 25% of the balance due.  The penalty is computed from April 15th. Filing a delinquent return may also mean that selected beneficial filing options may not be available, as they require a timely filed return.

The balance of tax due on a tax return is due April 15th (or later as explained above if April 15th falls on a holiday or weekend), and will incur interest charges from the original due date until paid.  An extension of time for filing a tax return does not extend the time for paying the tax.  Payments made after the original due date may also be subject to a penalty for late payment, computed at one-half of one percent per month on the unpaid balance up to 25%.  This penalty is coordinated with the late filing penalty so that the total of the penalties has a maximum of 25%.  Either of these penalties can be waived for “reasonable cause.”  Interest charges cannot be waived.

Given the penalty structure outlined above, it is my policy to extend the tax returns for all clients for whom I prepared returns for in the prior year and have not heard from prior to the original due date, unless I know they have made other arrangements.

There are many reasons for requesting an extension of time, such as:

-Postponing the due date for contributions to a qualified retirement plan (other than an IRA). The due date for such contributions generally is the due date of the tax return, including extensions.

-Documentation supporting the tax return will not be available by the original due date.  This may include partnership, fiduciary or corporate information, revised brokerage statements, etc.

-Complex tax issues that require extensive research.

-Workload compression.  There is only a finite amount of talent available to complete a tax return. When more work comes in the office than can be completed, some of that work must be extended.

-Procrastination. Some of us simply put off addressing our annual tax obligation-it is a part of human nature.

 When a tax return is extended and subsequently filed, the IRS will be looking for payment, and will commence collection activity if the payment is not made concurrent with the filing of the tax return.

 IRS Scams

 One day recently I received three phone calls from clients and others who had received a phone call from one who was claiming to be an agent from the “Internal Revenue Service,” demanding immediate payment of a claimed tax deficiency and threatening a lawsuit or criminal prosecution.


If you receive one of these phone calls, just hang up and do not return the call.  These calls are from con-artists seeking to separate you from your money.


The IRS will not initiate such a phone call.  Similarly, the IRS will not engage in an e-mail discussion.  Where there is a potential tax issue, they will always initiate the conversation with a written letter.


If you do receive any written correspondence from the IRS, always send me a copy before taking any action.  While a letter from the IRS can strike fear in the heart of almost anyone, these notices are often incorrect, and a brief review of the letter with a proper response can often reduce or eliminate the claimed deficiency.  Many of these notices also propose penalties, many of which can be abated for reasonable cause.

Taxable Income in a Retirement Account


It is generally assumed that income earned within a retirement account, including 401(k) and IRA accounts, is not taxable until the funds are distributed.  This is not always the case.


A retirement account is a tax-exempt entity similar to charity or business league.  To prevent tax-exempt entities from using their tax-exempt status to unfairly compete with a taxable entity, the law imposes an income tax on the taxable income of the entity that is unrelated to its reason for being tax exempt.


In the past couple of years I have been seeing more and more IRA accounts invested in certain publically traded limited partnerships that generate unrelated business taxable income.  How can you tell if you have such investments in your IRA? Ask your broker.  Look for partnership investments being listed in your periodic statements.  If you are invested in a partnership, you will receive a Schedule K-1 from the partnership after the close of its year reporting your share of the partnership’s income, deductions and credits.


If your retirement account is invested in one of these partnerships, I strongly advise you to talk to your broker about selling the investment.  The problem is that most of the investments are relatively small, and should there be an income tax reporting requirement for the retirement account, the cost of preparing and filing the necessary income tax return will usually far exceed any income generated by the investment. 


A word to the wise.


Joint Ownership of Property


The most common form of ownership for bank and investment accounts is “joint tenants with right of survivorship.”  The concept is that upon the death of the first owner the property immediately transfers to the second owner.  While this form of ownership may be appropriate for some, especially married couples, there are at good reasons to consider other strategies.  I’ll give three examples:


A client was named as a joint owner on his father’s accounts.  He was an only child.  The purpose was to enable my client to act on his father’s behalf should the father become unable to act—a perfectly good and common reason for using joint ownership.  My client, realizing his own mortality, decided to take similar action, putting his son on his accounts.  Unbeknownst to my client, the son had substantial delinquent child support.  When the State authorities discovered the existence of the account, they took the unpaid amounts from the joint account, taking most of my client’s savings.  There are other methods that could have been used to accomplish the same goal.


An elderly client had two children, one living locally and one living in another state.  The client’s goal was to leave everything equally to her children.  As is common, she put the one local child on the account.  As it turned out, the children did not get along with each other.  When my client died, the account transferred to the child named on the account, leaving the other child with nothing—an ugly situation.


Time and time again I have seen people engage in extensive estate planning to minimize future estate taxes, care for disabled children or to leave a charitable bequest.  Joint ownership can defeat the best of planning.


My advice—talk to your advisor before setting up joint accounts.  Not only can you avoid the issues mentioned above, but you can also eliminate potential gift tax reporting.  There are a multitude of techniques to avoid the issues mentioned above, and all of them might involve invested some money in professional fees, but to ignore the situation is to create future problems for you and your family.