Problem

A business owner switched their services to our firm. They were not getting proper guidance or even able to reach their previous accountant on time. During our initial onboarding process, we realized an error on their corporate tax returns. The client had sold a business on an installment sale and was collecting principal and interest over a period of time. The prior accountant had originally accounted for the sale but subsequently for 3 years they forgot to capture all the principal and interest collected by the client. Consequence to the client – Had they been audited, they would have to pay the tax liability, penalties and interest.

Solution

As soon as we identified the problem, we had a discussion with the client to rectify the issue. We analyzed the pros and cons and were able to ensure that all the principal and interest were appropriately captured in their tax returns. The client could not thank us enough. All they were asking was for someone to make sure that things were done correctly while they depended on professionals to do their job.

Benefit

The client was glad that this matter did not come up in an audit. Rather, it was found in time and the problem was addressed and fixed. This enabled our client's to focus on aspects of their business that required their attention. Krishnan Company ensures that great attention to detail is part of every tax return.