WHY WAS THE COMMERCIAL PRINTING INDUSTRY SELECTED? During the examination of printing companies in Georgia, a pattern of similar issues was noted. As a result, an information gathering project was started to provide the Internal Revenue Service with an opportunity to gain knowledge of this very large manufacturing industry, to identify common areas of non-compliance, and to develop techniques and procedures to help promote compliance in the industry.
The issues most frequently encountered were in cost of sales, particularly work-in-process, IRC section 263A, and omission of certain direct material items from inventory. Other issues included change in accounting method (from cash to accrual), sales cutoffs, officer's compensation, and depreciation.
BACKGROUND AND PURPOSE
The purpose of this manual is to afford the examiner an opportunity to gain a better understanding of the commercial printing industry, and to provide a specialized examination tool, by focusing on the printing processes and the accounting and records flow associated with the business.
