The New England Accounting Advisor

The IRS has issued proposed regulations that provide guidance on the medical device excise tax imposed by Code Sec. 4191. Starting in 2013, any manufacturer, producer or importer of certain medical devices is subject to the tax, which is equal to 2.3 percent of the price for which the medical device is sold. The medical devices tax was enacted by the Health Care and Education Reconciliation Act of 2010 (P.L. 111-152) in conjunction with the Patient Protection and Affordable Care Act (P.L. 111-148).

All businesses, no matter the industry or size, can be targets of fraud. However, small businesses tend to have disproportionately large losses from asset misappropriation, and are far less likely to recover from fraud. They often employ friends, family members, and other “trusted individuals,” and rely on personal trust rather than systematic internal controls to protect them from fraud. Trust, without internal controls and checks and balances, is a recipe for employee theft. Often, the very traits that invoke management to rely on a trusted employee without checking his or her work make fraud possible. Remember, you can’t steal from people who don’t trust you.