Originally Posted by mawells

We keep our clients' ad funds separate from our management fees and can account for every penny. Our clients' get monthly reports that not only show the traffic, but the expenditures as well and we work with them to ensure that we have the best possible keyword phrases (ones that actually convert to sales). Most of our clients have been with us for several years and claim that their sales are skyrocketing as a result of their online ad campaigns.

With that said, we have encountered a problem with the IRS. It seems that we have to pay taxes on the "ad budgets" that our clients give us to spend on their behalf. Since 100% of that ad budget belongs to our clients, we have to add a 3.5% budget handling fee to cover the taxes. We are looking into creating a "client trust" that we hope would be non-taxable, but even the IRS can't give us an answer as to whether or not that would work.