MEALS & ENTERTAINMENT
If you have a large amount reported on your schedule M-3 for Meals and Entertainment, its good business practice to re-examine what was left on the table. Statistical sampling is an effective tool for this, allowing us to work smarter, not harder.
Opportunity: With tightened cash flows during these new and challenging economic times, taking a closer look at a company’s meals and entertainment expenses subjected to the 50% “haircut” can save tax dollars and lower a company’s effective tax rate.
Implementation: Meals and Entertainment can be reviewed annually, or up to 3 years in a single sample. The process begins with an electronic data dump of your meals and entertainment account(s). After the Client data is received and cleaned up, its gets analyzed and stratified to obtain a “sample pull list” for ThreeFive auditors to perform a field audit review. The A/P review is performed by a team of ThreeFive specialists to capture the line by line data items required to support the deduction and arrive at the final number.
Result: Upon completion of a meals and entertainment study, our clients will benefit from tax savings and a lower effective tax rate. Our billing is based on that result.