Posted by kathy/ca on 11/8/11 10:43am
Msg #403147

Once a CA notary turns in their journals to the County Clerk

office when deciding to get out of the business, I am just curious what one would do if audited by IRS at some point and had no journals to show fees. I am not ready to do this at this point but am just curious about it when the day comes. Any comments or experiences with this folks? Any other advice regarding ending ones notary career?

Reply by Notarysigner on 11/8/11 10:55am
Msg #403149

I remember when I first starting with NR there was a post about a notary retiring after many years here in N Calif who appeared to be very popular. The members here were trying to organize some sort of farewell acknowledgement. Maybe other members will remember her and chime in about how she's doing. Maybe she'll have the answer. Good question though.

Reply by Jillian Hinrichs on 11/8/11 11:00am
Msg #403151

Never show an auditor your journal!

Don't you have any other paperwork or documentation to show the fees you charge? Do you really just use your journal to figure out what to file on your taxes? Most notaries use some sort of software for this or at least an Excel doc, which they could then show to the auditor. You should NEVER show an auditor your journal as it has private information in it that the auditor has no right to see!

Reply by kathy/ca on 11/8/11 11:09am
Msg #403153

I did not mean I would actually SHOW the journal to anyone,

I meant for myself to see the fees and yes I do have all my fees listed in a separate accounts receivables. More than anything I wanted to be sure there was nothing else that needed to be considered before turning everything in when the time comes.

Reply by John Tennant on 11/8/11 11:29am
Msg #403155

Re: Record keeping

Speaking as an E.A., accurate bookkeeping records would be all you should need if you were audited. If the records were sloppy, inconsistent, or out of systematic order, an auditor would take a closer look. Other than that, you should be home free.

Reply by Jillian Hinrichs on 11/8/11 11:29am
Msg #403156

Re: I did not mean I would actually SHOW the journal to anyone,

I don't think so... but I did read on another forum about a notary who retired and then was asked to produce proof of a notarization. He told them he had turned in his journals and they were not able to find them. Apparently his state just throws all journals into boxes and puts them in storage without any label or anything! OMG

Reply by GOLDGIRL/CA on 11/8/11 12:12pm
Msg #403162

Re: I did not mean I would actually SHOW the journal to anyone,

I once did a signing with a woman who works at the County Clerk's office and she said that's exactly what they did with the journals- throw them all in a room and shut the door. Period. I didn't ask what they did with them when the room got filled up.

Reply by kathy/ca on 11/8/11 12:18pm
Msg #403163

I wonder what happens in case a notarization needs to be

proven and we no longer have the journal in question and the CC office doesnt know where it is. It almost makes you hesitate to turn the journals in but it is a requirement once you retire! Anyone on this board that has had experience with this, please weigh in! Ha ha!

Reply by FlaNotary2 on 11/9/11 12:57pm
Msg #403270

Thank goodness we keep our journals in Florida

I think we, as notaries, are far more competent to take care of our own records than the incompetent clerks at the courthouse down here. I have it in my will that upon my death my records are to be held in the Special Collections Office at the University of South Florida library. They will be of vital importance to somebody's grandchild or great-great-grandchild.

Reply by Linda_H/FL on 11/8/11 11:26am
Msg #403154

Your journal is your only proof of how many notarizations

you did - for purposes of exempt income.

I, personally, make a note at the top of the invoice - "XX/XX" - "number of notarizations/balance" - equals the fee - a $150 fee with 8 notarizations would be 80/70. BUT, if that auditor wants proof of how many notarizations, what other PROOF do you have other than your journal? IRS auditors are not going to accept my "notations" at the top of an invoice.

And no, you wouldn't show the auditor the whole journal - you'd black out the PII letting him see only date of act and doc notarized.

This is a really good question, especially for CA notaries.

Reply by Jillian Hinrichs on 11/8/11 11:32am
Msg #403157

Re: Your journal is your only proof of how many notarizations

If you are being audited, it's probably not very likely that it is due to the income listed for notarizations vs. overall income, but yes that would be how to do it. If the journals were turned in the auditor would have to get the Sec. of State to provide that for him/her, and good luck with that.

Reply by BigD/TX on 11/8/11 1:41pm
Msg #403173

Re: Your journal is your only proof of how many notarizations

In TX, as a notary, you are a officer of state (or government), regulated by the Sec. of State in TX. Your journal records are considered public record and subject to open record requests by any individual who requests them (and there are strict guidelines in TX regarding open records requests). Because of this, the legislature here, in the past few years, has made changes in the notary laws related to what information can be captured in the notary journal. No longer can the ID information (i.e. number) be recorded in the journal (only the type of ID used).

Reply by bagger on 11/8/11 3:35pm
Msg #403183

Regulations vary by state

In Illinois, we are not required to keep a journal, but if we go to court with one of our clients, we SHOW the complaining attorney our journal. The journal does NOT leave our hands, the complaining attorney CANNOT make copies.
So, to prove my exemptions to the IRS, my invoices are itemized. e.g.

Item Qty Rate Total
Notarizations 10 1.00 10.00
E-docs 1 35.00 35.00
Appointment 1 75.00 75.00

Total due 120.00

I am not an attorney, yada yada yada, but of the IRS wants to see my journal, there may be a problem.

Reply by SharonMN on 11/8/11 3:42pm
Msg #403187

Re: Your journal is your only proof of how many notarizations

I fill out a sheet for every job I do that includes contact info, name of signer, docs notarized, etc. It is part of my business records and separate from my journal. I do not include anything about fees in my journal.

As far as "proof" goes - what "proof" does any other business have other than their own records? The IRS auditor would definitely expect to see business records and may not even be aware that notaries are required to keep a journal!