Smyrna times., 1962-01-11

eral advice regarding taxes you
might give farmers?
/ would first like to express
my appreciation for an oppor-
tunity to answer questions of
interest to farmers. Farmers
form the largest business group
filing Federal income tax re-
turns; they file nearly one-third
of the total business returns fill
ed. We at Internal Revenue
Service are vitality interested in
seeing that the returns are as
nearly correct as possible when
we receive them.
No businessman, whether he
be engaged in farming or any
other type of business, can file
a correct return unless adequate
records OF business income and
expenses are maintained thro-
ughout the year. l strongly
urge each of you not only to
maintain adequate records but
as good records as possible.
am sure you will find that such
action will not only benefit your
government but you, as busi-
ness people, as well.
Where could a farmer secure
help in devising a system for
maintaining his records?
There are many sources of in
formation for this. We publish
booklet, the Farmers Tax
Guide, which gives a brief illus
traction of form the records
might take. l understand that
many farm machinery manufac-
turers have devised farm ac-
count books which they will
provide to farmers, and also
that some banks in agricultural
areas have record books of this
type. TIE local Department OF
Agriculture offices will supply
account books, and are an excel
lent source of information. Of
course, our local Internal Rev
enue offices will be more than
happy to answer any questions
along this line.
Do you feel a farmer needs
any special skills to maintain
good records?
! certainly do not. Good rec
ords can be very simple and in
formal, and require little time
to maintain. | do believe, though,
that the secret of keeping ac-
curate records is to record the
various transactions when they
occur, and not to depend on
memory at a later date.
What records does the Inter
nal Revenue Service require
farmers to maintain?
Our only requirements as to
accounting records of farmers
are that the records maintained
be sufficient to enable the farm
er to accurately prepare his tax
return and for the Internal Rev
enue Service to determine the
correctness of the return filed.
What type of record books
should be used?
There are no requirements
whatsoever as to what type OF
record books should be used or
in what manner or form the
records should be maintained.
The records need only meet the
requirements | stated in reply
to the previous question. How
ever they should be systematic
and show all the receipts and
expenditures for the year. They
should also show the cost of
So-called permanent assets and
additions or improvements to
permanent assets. These are as
sets and improvements having
a useful life extending substan-
TALLY beyond the taxable year
in which purchased. This is
necessary because the cost OF
these assets may not be deduct
ed in the year they are purch-
ased, but a substantial portion
of their cost may be deducted
as depreciation over the period
of their usefulness in the farm
business.
Any other advice on records?
Be sure to keep all documents
which can be used as evidence
of a transaction such as can
celled checks, sales slips, in
voices, and receipts. On an aud
it of a return, those items would
be needed. Before we leave the
subject of records, would again
like to point out that it is
certainly to the farmers or any
other businessman's advantage
to keep as good and complete
records as possible. Good rec