Letters

Ongoing Debate Over Electronic Filing
I applauded the letter, “Prefers Paper Filing” (JofA, Mar.03, page 11). However, I was then very dismayed to read the long, contrary letter, “In Favor of Electronic Filing” (JofA, May03, page 12).

Nonelectronic preparation of some returns is most appropriate and cost-justified, as is the nonelectronic filing of many completed returns with the IRS. There are numerous complex returns that require the attachment of elections and intricate schedules, and it is not too costly or difficult to obtain evidence of filing for paper returns.

Both paper and electronic filing require their own sets of processes and procedures, and each has its own cost and detail characteristics. Also, the IRS has greatly improved its transferring of information from paper returns.

Streamlining the refund process is not that significant because refunds should be minimized through effective planning since they constitute interest-free loans to the government.

Giving electronic copies of returns on a CD to clients is useless if the clients are not computer-capable.

Electronic filing benefits the government more than it benefits taxpayers and return preparers who often find paper filing has many advantages over electronic filing.

While electronic tax compliance has its place, it currently is not in a position to completely supersede paper filing. Our recent success in Iraq was achieved not only with modern precision-guided missiles, but also with old-fashioned infantry.

Stuart R. Josephs, CPA
Tax Assistance Practice
San Diego

E-Mail’s a Great Communication Tool
In “E-Mail Blues”(JofA, May03, page 12) the letter writer seems to be looking for a forest, but the pesky trees keep getting in the way.

The best way to help run a business is through communication, and e-mail does precisely that. A person could not deal with 75 people walking into the office on a daily basis. Face-to-face communication with each one would take more time. The same is true for the telephone.

Businesses solved the first problem by hiring receptionists to filter out clients. Voice mail has helped ease the time problem because the recipient can select his or her own time to respond.

E-mail makes the message available with details in the form of attachments—the recipient can deal with it at his or her convenience. In the case of 75 e-mails a day, a quick perusal of senders would permit the recipient to make decisions without ever opening the mail. Those continually forwarded miracle stories from your mother-in-law and the obvious SPAM could be deleted, and your ISP and/or SPAM-blocking software could block unwanted senders to slow those messages.

That would leave the obvious client correspondence. Any time spent on client correspondence is probably billable and demonstrates the accountant is always available for clients, gets to their problems quickly, communicates with them—and they don’t have to come into the office or spend time socializing on the phone.

Remember, we may have many clients, but most of them have only one CPA. Any tool we can use to keep the lines of communication open will help us keep them as clients.

Oliver W. Harbison Jr., CPA
Jasper, Texas

An Opinion on Dividends’ Taxation
There is no factual evidence that dividends are double-taxed. To claim they are is a complete falsification indulged in by many who would know better if they examined the facts.

Dividends are taxed only once to stockholders. The income taxes the corporation pays are completely different than those paid by stockholders—they are calculated at different rates and under different rules and regulations.

To say that stockholders pay corporate income taxes is at complete odds with the facts. The corporation is well-established as an entirely separate and distinct legal entity. The stockholders do not manage corporate operations or have title to its assets. They are not management and cannot take possession of a pro rata share of corporate buildings or other assets. Stockholders do not declare dividends or run the corporation’s daily operations—they simply own a piece of paper that entitles them to a share of net assets on dissolution and to dividends if corporate management declares any.

It is true the ups and downs in a corporation’s profitability will affect all parties interested in its operations whether they are employees, lenders, taxing authorities or stockholders, but it is not true they are all double-taxed simply because the corporation pays taxes on its income. So, let us therefore hear the end of the myth of the double taxation of dividends. It just doesn’t hold up under any honest study of the facts.

William N. McNairn, CPA
Palos Verdes Estates, California

A Future CPA Wants to Know
As a recent entrant into the accounting field, I do not write as an expert but as an eager student.

With all the Enron trouble and other scandals triggering Sarbanes-Oxley and various other reforms, why is there no requirement by the SEC or other corporate governance mechanism that public companies engage more than one competing CPA firm in the issuance of the audit report? This seems to make the most sense to ensure an adequate system of checks and balances. Perhaps there should be a primary auditor to perform the audit and a secondary auditor, a competitor, to approve the working papers and final audit report. It seems the accounting profession needs to expand its current system of peer review. Aren’t checks and balances in order here?

Barth Jones
Pittsburgh

Retention of CPA Employees
It’s sad the accounting profession has taken so long to realize it has been driving away its employees.

I entered the profession in 1989 at a time when new employees were expected to remain quiet and put up with whatever was thrown their way. Training often was, “Do this—this is wrong—what is the matter with you?”

Since leaving the firm, I have met a number of CPAs in private industry who, as I was, were negatively affected by their jobs in public accounting. By the time we left our firms, all of us were exhibiting the physical and mental symptoms of stress.

I have kept my licensing, but I would not consider returning to work in a CPA firm.

Linda Woodard, CPA
Sebastopol, California