I am the Technical Manager for a very small, new company and temporarily also functioning as the QC Manager. There is currently no manufacturing at this location, just a warehouse & sales office.
I am in the process of establishing a gage calibration program for this facility. We will only be using calipers, micrometers and thread gages. These will be used to inspect product in inventory if there is a quality concern communicated to us by a customer.
Are there any good references out there for setting up a new program, without having to buy software? Or can someone recommend a calibration interval for these types of gages, keeping in mind that they will be used sparingly?
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dirk 1/8/2001
I was able to find the specific information regarding the deductibility of
registration expenses. Here is the rest of my answer:
In its January 2000 issue, THE INFORMED OUTLOOK reported that the IRS
announced a ruling on January 6, 2000, that permits costs incurred by
businesses to "obtain, maintain and renew" ISO 9000 registration will be
fully deductible in a single year. The exceptions are certain long-term
costs, such as those involving the creation of an organization's quality
manual, which is not directly tied to the registration services but rather to
the QMS and must be deducted over time.
The IRS ruling rest on application of Internal Revenue Code Section 162 in
deducting registration expenses, which permits the expenses to be counted in
one year rather than amortized over the life of the registration certificate.
The actual IRS position is spelled out in Rev. Rul. 2000-4, which was
published in Internal Revenue Bulletin 2000-4 dated January 24, 2000. The
document can be downloaded from the IRS's web site (www.irs.gov) or can be
obtained by calling 1-800-829-1040.
The organizations that sought the ruling--the National Association of
Manufacturers, the National Federation for Independent Business and several
others organizations--petitioned the IRS to permit full deduction of
registration expenses in a single year in 1998.
qdigest 1/8/2001
Thanks for your question. Although I know the item you are making reference
to, I do not have at my fingertips such information about IRS rulings and
will need to do some research on the matter and get back to you. However, I
think you need to understand what the IRS ruling or regulation concerns.
Two or three years ago, an organization registered to ISO 9001 or ISO 9002
requested a ruling from the IRS regarding HOW the costs specific to
implementation and registration of an organization's QMS ARE TO BE AMORTIZED,
not whether such expenses are deductible. If ISO 9001/2 conformance or
registration is a contract requirement or potential contract requirement
(i.e., an organization plans to pursue business with a potential client or in
a sector where ISO 9001/2 registration is frequently required to bid on
contracts), an organization can consider it a cost of doing business, and I
don't think the IRS has ever questioned the right to claim clear
implementation/registration costs (e.g., consultant, training and third-party
auditing expenses) as deductible business expenses.
What the ruling concerned was whether the cost of registration (i.e.,
pre-assessment and registration assessment) could be claimed completely in
the year when the certificate of registration was issued and/or when the
services for that registration were paid or if they needed to be spread out
over the lifecycle of the certificate of registration, which is most
frequently 3 years (during which time surveillance audits would also be held
annually or twice annually and could be immediately deducted). Thus, the
question was:
Are registration certificates to be treated like equipment purchased for use
in a business and thus subject to depreciation over several years or can they
be "depreciated" and claimed in full during the year when the services
involved occurred?
I cannot be certain of the answer and will have to do some checking, but I
believe the answer was that registration expenses must be depreciated over
the time that the certificate is in effect (e.g., if pre-assessment and
registration assessment expenses totalled $60,000 in 2000, XYZ Company could
claim $20,000 in business expenses in each of 2000, 2001 and 2002 relative to
those expenses).
Again, I will need to check my reference sources to see if there was ever a
ruling regarding the actual right to deduct registration costs as a business
expense. Clearly, it could be a complicated issue if a corporation with
multiple facilities and production lines subject to several different
registrations and/or different state laws had to apply those expenses against
those operations.