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A tax audit is usually not a welcoming experience for anyone in business. Whether it is in part or total, the experience can be a minor problem if the audit is only about certain records, or a major dile

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

mma in accounting for a complete audit of the business.

If your business is notified of an audit, you will be informed of which part or parts of your tax return will be examined so that you can assemble

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

he required documents. You must also make a decision as to who will represent you, yourself or hire a tax adviser. Unless you are well versed in business tax law, it is advisable to hire someone with ex

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

pert knowledge in the field. However, if you decide to represent yourself and encounter a problem during the audit, the taxpayer "Bill of Rights" permits you to request a suspension of the audit until yo

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

consult with a certified public accountant, tax attorney or until you are properly represented. Although a professional representation costs money, you will be assured that the audit is done efficiently

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

and saves you time, stress and money.

All available documents must be available for examination to support several crucial areas of the business that you reported on your tax return. Beginning with inc

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

me, your bank statements and deposit records for the income you reported will be reviewed, along with sales records, receipts, general ledger and other official accounting records. Proof of gifts you rec

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

eived, valuables, an inheritance or exchange of goods or services you received instead of cash, must be documented accordingly. Otherwise, the IRS could classify these as taxable income.

Accounting for

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ndebtedness regarding your business will be examined carefully. Expense items such as canceled checks, bank and credit card statements, receipts, and other business records can be compared with amounts r

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

eported on your tax return. Special attention will be given to debts or business losses, charitable contributions, travel, meal and entertainment expenses. Accurate records to validate these expenses ar

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

essential to confirm that only valid business expenses were accounted for.

Because interest on business loans is a deductible business expense, the financial records will be compared with bank statement

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

s and other financial records to verify that the money on loan was actually used for business purposes.

Workers' classifications will be examined to assure that all workers are classified properly. When

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

a worker is classified as an employee, the employer must make mandatory deductions and contributions to the proper taxing agencies and provide certain other employee benefits, including unemployment compe

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

nsation. Contract workers, as a rule, are classified as independent contractors or self-employed workers and are responsible for their own taxes, with no employee benefits. For this reason, data such as

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

time cards, job descriptions, benefit plans, contracts and other business records will be reviewed by auditors to ensure that independent contractors are categorized separately from regular employees.

Yo

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

ur business payroll records, such as canceled checks, tax returns, deposits and other business records are reviewed to see if the data is processed in a complete, accurate and timely manner. Other inform

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

tion examined by auditors includes state, federal and social security withholdings. Accounting practices for custody of Medicare taxes, unemployment compensation, along with salaries and bonuses paid to

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

owners and officers of your business are also reviewed to be confident they are justified and within industry standards.

Inspection of other business records may include accounting for such records as ba

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

k, customers, suppliers and especially financial records regarding your tax reporting. Aside from business records, your standard of living and personal finances may also be inspected to compare your cur

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

rent lifestyle with the income available on your tax return in order to determine if they are consistent. A tax audit can be extended to anyone who is knowledgeable about you and your financial situation

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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