Comprehensive Business Review We will review many of the following items and report back to you with suggested improvements including a plan of action: •    Entity Selection – review existing entity in light of other entity options available as well as consideration of tax motivated business reorganization opportunities •    Accounting Method – review method of accounting to determine the existence of tax favored opportunities •    Nature of Income – review the nature of income (business, investment, passive, non-passive) to determine opportunities that may be available to free up suspended deductions and losses •    Compensation – review compensation planning issues including bonuses, income shifting amongst family members, coordination with entity losses •    Fringe Benefit Plans – review existing and potential fringe benefit plans including group health, cafeteria, executive, health reimbursement, HSA and disability plans •    Qualified Retirement Plans – review plan options including SIMPLE, SEP, 401(k), and defined contribution plans •    Section 179 Expensing and Bonus Depreciation – review expensing and accelerated depreciation options •    Shareholder Basis Issues – review basis and at-risk issues for availability of options to free up suspended losses •    Corporate Loans – review loan information in light of opportunities to affect basis •    Domestic Production Activities Deduction – review opportunities for deduction •    Alternative Minimum Tax – review existing and future issues regarding AMT exposure •    Tax Credits - review operations for availability of various business credits including FICA tip credit, research credit,  small employer pension plan startup cost credit, work opportunity credit, rehabilitation credit, empowerment zone employment credit and disabled access credit

E-Filing E-FILING IS HERE TO STAY…WE BETTER GET USED TO IT! As we have in prior years, we recommend that all returns be E-Filed during this filing season.  Last year, over 60% of returns filed with the IRS were E-Filed according to a recent IRS press release.  For 2009, the Virginia Department of Taxation has mandated that any preparer who submits more than 100 returns must E-File such returns even though the taxpayer has the opportunity to opt out.  E-Filing is not the problematic black hole that it used to be.  We have been actively E-Filing returns for three years and have witnessed the improvements in the system.  E-Filing offers the benefits of decreased postage costs, decreased time and travel costs to the post office and electronic filing receipt.  Our internal protocols address E-Filing in each of its stages of transmission, acceptance, receipting and the rare occurrence of rejections. DIRECT DEPOSITS / WITHDRAWALS – THEY ALREADY KNOW WHERE YOU ARE! In the past, most clients have accepted direct deposit although several have been hesitant to allow the taxing authorities to draft the balance of tax due from their bank accounts.  This hesitation is attributed to fear of allowing the tax authorities to “know where their accounts are located”, fear of withdrawing the wrong or excess amounts and concern that the balance due may not be withdrawn at all causing the assessment of penalties and interest.   Our experience with these issues has been positive.  Our internal protocols track the payment and refund authorizations by cannot track the actual deposit or withdrawal.  However, we have seen only a handful of errors, all of which were related to errors in submission.  Having your 2008 income tax refunds directly deposited to your bank account will allow you to receive your funds four to six weeks earlier than they may otherwise be received via check.  Allowing the IRS and Virginia to draft your bank account for any balance due offers the benefits of electronic payment receipt and scheduled date of account withdrawal. WE RECOMMEND THE USE OF E-FILING AND DIRECT DEPOSIT/WITHDRAWAL FOR 2008 RETURNS – LET US HELP SIMPLIFY YOUR TAX SEASON!