After two years of collaborative work between the Internal Revenue Service and the AVMA, a revised version of the Veterinary Audit Technique Guide is now available. It may be accessed at www.irs.gov/pub/irs-mssp/vet.pdf.
Audit technique guides are used as guidance for IRS auditors who examine the financial records of businesses.
Organizations choosing to partner with the IRS offer valuable assistance by providing pertinent information relevant to the manner in which those businesses function. New wording has been added, for example, explaining that veterinarians are often engaged in nonprofessional activities such as boarding, grooming, and the sale of pet products.
Those distinctions can assist auditors in deciding whether incorporated veterinary practices may qualify for the lower tax rates enjoyed by C corporations as compared with qualified personal service corporations.
Another feature of the revised ATG reflects new IRS Code changes, which determine whether cash or accrual accounting methods may be used.
Although the ATG may serve as a valuable source of information, it is always recommended that tax professionals be consulted for advice on business structure, accounting, and tax-related issues.