Form 1120 Due Diligence Worksheet
Client:______Preparer:______
Yes No N/A
1. Has engagement letter been prepared and on file? ______
2. Was Form 2553 revoked this year? ______
3. Is the accrual method of accounting required and
economic performance met? ______
4. Have prior year returns been review for accuracy
and compared with current year? ______
5. Has the per percentage of completion method been
used for long-term contracts? ______
6. Has IRS correspondence been reviewed and considered? ______
7. Have Controlled Group issues been addressed? ______
8. Have like-kind exchanges been reported on Form 8824? ______
9. Have revocation of previous elections been considered? ______
10. Have the depreciation considerations of mid-quarter
Convention, §179 and bonus been considered? ______
11. Has obsolete or unsalable inventory been considered? ______
12. Are travel & entertainment expenses substantiated? ______
13. Have cash-basis payments to related parties been made
prior to year end? ______
14. Have charitable contribution been properly documented? ______
15. Have entries been included for DPAD? ______
16. Have all pension plan contributions been made and
Form 5500 filed? ______
17. Have taxpayers consent for disclosure and use been
signed and retained in file? ______
18. Have the substantiation rules for automobile use been
met? ______
19. Has unrecaptured §1250 gain been reported? ______
20. Were any of these considered; (1) Built-in Gains Tax,
(2)Tax on excessive passive income or (3)LIFO
Recapture on converting to an S Corporation? ______` ___
21. All items allocated on per share/per day basis? ______
22. Have carryover schedules been properly completed? ______
23. Has the tax responsible party been determined and all
client confidentiality issues strictly complied? ______
24. Was client advised of any controversial issue on return
and necessary full disclosure made? ______
25. Do all positions meet the substantial authority and have
a reasonable basis and are adequately disclosed? ______
26. Were financial statements for the year reviewed? ___` ______
27. Was Alternative Minimum Tax (AMT) considered? ___` ______
28. Were Personal Service Corporation rules considered? ______
29. Should Net Operating Loss carryback period be
foregone? ______
30. Was shareholder compensation reviewed for
reasonableness? ______