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The great flood of 1993: CPAs to the rescue.

As was the case in past disasters, CPAs were quick to offer their expertise to those in need when the Mississippi River flooded parts of the Midwest this summer.

The rising waters were estimated to have caused up to $10 billion in damage to farms, homes and businesses. Almost immediately, state CPA societies in the areas hardest hit began pitching in and mobilizing their members.

According to Stan Bonta, executive director of the Iowa Society of CPAs, the first objective was to get information out to CPAs, so they, in turn, could help their clients and the public.

"I immediately had discussions with the Internal Revenue Service district director from his home and the temporary offices he set up," said Bonta, "and he asked me to tell our members the IRS would be extending tax filing deadlines up to 30 days and possibly longer."

Since firms had no way of contacting the IRS office in downtown Des Moines--under water at the time--the letters the society sent its members were vital in helping the IRS disseminate information. The mailings also focused on how to handle the tax deposits of businesses unable to make them in a timely manner. "It wasn't unusual for a business to be flooded on the first two floors, with the checkbook up on the fourth floor where nobody could get to it," Bonta said.

"We're right in the middle of it," echoed Ron Wilson, associate director of the Missouri Society of CPAs. "We're compiling specific flood-related disaster information for our members so they can help their clients with some of the more esoteric tax and accounting information as quickly as possible."

CPA societies in several affected states, working in conjunction with the IRS and the Federal Emergency Management Agency (FEMA), sent forms to their members asking if they would be willing to help flood victims. "I was taken aback by the number of responses," Wilson said. "The fax didn't stop all day, and people are still calling."

Along with copies of the American Institute of CPAs award-winning Disaster Area Practice Guide (see box), the Iowa society sent members its own Disaster Recovery Bulletin. In addition to filing deadlines and other tax matters, the bulletin tells how to cope with destroyed returns and lost records. Various disaster assistance programs also are covered-particularly those of FEMA for providing emergency aid to individuals and businesses.

Similarly, the Missouri society distributed the AICPA disaster guide and made available its own 75-page disaster booklet.

CPA societies also set up volunteer-staffed flood hotlines, run from their respective state offices, to answer questions from the general public on matters such as handling general business taxes and casualty losses.

"We've gotten a lot of valuable information from the AICPA, the California Society of CPAs and the Florida Institute of CPAs," said Bonta. Indeed, CPAs' rapid response when earthquakes hit California two years ago and when Hurricane Andrew devastated parts of southern Florida set a standard for service by CPAs in times of need. Now, midwestern CPAs have added their own examples to inspire others.

A HELPFUL GUIDE FOR TROUBLED TIMES

The American Institute of CPAs Disaster Area Practice Guide (product no. 061056) has received the American Society of Association Executives' award of excellence, bestowed for demonstrating a commitment to making America a better place in which to live.

Originally developed by the AICPA individual taxation committee in response to Hurricane Andrew, the guide now applies to all types of natural disasters. With guidance on handling disaster-related tax issues for personal and business losses, it is a tool CPAs can use to help victims put their financial lives back together.

Copies of the guide are available without charge by calling the AICPA order department at 1-800-TO-AICPA.
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Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
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Title Annotation:includes notice of 'Disaster Area Practice Guide'
Author:Miller, Stephen H.
Publication:Journal of Accountancy
Date:Sep 1, 1993
Words:620
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