Q.  Do most companies segregate tax prep fees as directly associated unallowable cost or keep them in reasoning the expenses are a cost of doing business and the prep fee is not a direct result of the tax expense? Also is this email (the question was emailed to us at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ) a good way to ask you questions?

A. Yes, email is a good vehicle to submit questions. If you would like to talk to a real live person, either follow up your email with a call to (925)362-0712 or simply call us. As for your question, I assume you are asking about tax preparation expenses associated with preparing taxes that may be unallowable e.g. federal income taxes.  That is a particularly interesting question since I rarely see either internal or outside tax preparation costs segregated as to allowable or unallowable costs (unless it relates to a business combination). Rather, all audit and accounting costs, including tax preparation, are normally included as G&A expenses and I have never seen auditors question those costs (they are usually immaterial). However, in a technical sense, since federal income taxes (not state taxes) are unallowable, then you could argue the costs for preparing them are associated unallowable costs.

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