RE: CPA Meeting Today

i met with the CPA today to go over the auditor's document request.

I went over all of the items of the document request. I had already given them item #s 1, 2, 3, 6, 7, and the COGS backup. Everything reconciles to the penny. The auditor had asked for copies of two checks (item #4 & 5). These are both salary payments from Sublime to Anastasiya for the period 7/2014 - 12/2014). I've requested copies of these checks from the bank so should have those shortly.

Item #8 covers the worksheets that were referenced. The glaring item is the "Understatement of Income" as totaled on the Bank Deposit Analysis for AS' personal bank accounts. The total "Understatement of Income" is $698,446 (again, for AS' personal accounts, not Sublime Arts). Of this, $641,000 is gifts from the LB Trust. See my attached breakdown (again, reconciles to the penny).

The CPA said we could ask for an extension but he saw no reason for it. They have all of the documents requested. As far as the $641k from the Trust, the CPA keeps asking if I have some sort of documentation that is non-taxable. Of course, I don't so I'll leave that up to you on how to handle that.

I am now puzzling through the "Understatement of Income" total of $52,136, which comes from the Bank Deposit Analysis Worksheet for the Sublime Arts bank accounts. Of this, $50k is the salary payment to Anastasiya for the period 7/14 - 12/14 as referenced earlier. Not sure why this wouldn't have been reported because it was always classified as salary. As for the remaining $2,136, I'm sure I'll figure it out within the next couple of hours.

when is the meeting scheduled. anastaysia can provide a letter that 641 is a gift. and for verification we will fax the agent a letter of confirmation from lb accountant. -- good work on the reconcilation. was the salary picked up?

So... what do I tell the CPA about this letter from LB accountant? Is it coming by Thursday? Faxed directly to the CPA or the auditor?

what would he prefer. i think a letter addressed to auditor could be either delivered by him or sent directly to her. re the 52k , if it is a loan repayment , the funds need to be traced.

The $50k that we're discussing were salary payments from Sublime to Anastasiya (two separate payments). Again, not sure why they wouldn't have been reported on the tax return because they've always been categorized as salary.

I'll ask CPA what he would prefer for the gifts from trust.

if it were salary , were taxes withheld? ss paid. etc.?

yes... again... sent an email asking CPA to check on how that $50k was categorized.

jon if you can send me the name and address of cpa , I will messenger a letter addressed to and to be handed to the agent

David Weiss is the company owner, but send to Jay's attention because he is the holder of all papers related to this audit. I'll tell them to expect it:

Jay Kim, CPA
David Weiss CPA, PLLC
183 Madison Avenue, Suite 803
New York, NY 10016

Sent from my iPhone

Forwarded message
From: Jon Tomlinson
Date: Tue, May 23, 2017 at 9:21 AM
Subject: Re: CPA Meeting Today
To: jeffrey E. jeevacation@gmail.com

David Weiss is the company owner, but send to Jay's attention because he is the holder of all papers related to this audit. I'll tell them to expect it:

Jay Kim, CPA
David Weiss CPA, PLLC
183 Madison Avenue, Suite 803
New York, NY 10016

Sent from my iPhone

THANK YOU!!
I will send to Jay Kim.