Issue
Prior-year filings and intercompany accounts had never been closely reviewed, leaving potential errors and tax exposure unaddressed for years.
Finding
Identified errors include incorrect accounting of 1031 transactions, leading to income overstatements for several years, as well as unresolved suspense and out-of-balance intercompany accounts. Additionally, improvements were depreciated over an unnecessarily long period, increasing current taxable income.
Solution
These issues were brought to the attention of the current accountants for correction, reducing unnecessary tax exposure going forward.