VIA EDGAR SUBMISSION
May 19, 2006
United States Securities and Exchange Commission
Division of Corporation Finance
100 F. Street N.E.
Washington, D.C. 20549-0406
Attention: Mr. Larry Spirgel
Assistant Director
RE: Gilman + Ciocia, Inc.
Form 10-K for Fiscal Year Ended June 30, 2005
Filed September 28, 2005
Form 10-Q for Fiscal Quarter Ended September 30, 2005
Form 10-Q for Fiscal Quarter Ended December 31, 2005
File No. 000-22996
Dear Mr. Spirgel:
This letter is being furnished in response to the comments contained in the
letter dated March 16, 2006 (the "Letter") from Larry Spirgel, Assistant
Director, of the Staff (the "Staff") of the United States Securities and
Exchange Commission (the "Commission") to Dennis Conroy, Chief Accounting
Officer of Gilman + Ciocia, Inc. (the "Company"), as well as in response to
follow-up questions via telephone from the Staff regarding our March 29, 2006
written response. All other comments from the March 16, 2006 letter and our
response dated March 29, 2006 have been resolved except for the item below. The
comment of the Staff and the Company's response is set forth below and is keyed
to the sequential numbering of the comment and the heading used in the Letter
related to the one item outstanding with the Staff.
Consolidated Statements of Cash Flows, page 36
4. We note your response to comment 3; however, it is unclear to us why you
believe that changes in receivables from officers, shareholders and
employees should be included in the operating activity section. Please
tell us whether these loans impacted the income statement, and if so,
explain to us your GAAP basis for this accounting treatment. Please refer
to paragraph 21 of SFAS 95 which states "Cash flows from operating
activities are generally cash effects of transactions and other events
that enter into the determination of net income." In addition, please
explain to us the nature of the Due From Office Sales line item and how it
caused a $709,061 decrease in investing cash flows in fiscal 2004.
Further, in light of our other comments, we believe that you should revise
your 10-K for the year ended June 30, 2005 and subsequent 10-Q's to comply
with this comment. Please revise or advise.
Upon final resolution of all Staff comments, the Company will amend both
its 10-K for the period ended June 30, 2005 and its 10-Qs for the periods
ended September 30, 2005 and December 31, 2005 to include Receivables from
officers, shareholders and employees in the investing section of the cash
flows.
The Staff is supplementally advised that the Due From Office Sales line
item represents note receivables established upon the sale of practices by
the Company to purchasers. The majority of the decrease of $709,061 in
investing cash flows in fiscal 2004 is due to the sale of our North Shore
and North Ridge offices in the amount of $900,000. This was offset by cash
receipts against all other notes receivables related to office sales.
------------------------------------
As a result of subsequent inquiry by the Staff via telephone conferences,
the Staff is supplementally advised upon further review that the $900,000
the Company financed for the sale of its North Shore and North Ridge
offices was included in three line items; (1) as a deduction to operating
activities in the $6.2 million (Gain)/Loss on Sale of Discontinued
Operations; (2) as a deduction in Due From Office Sales; and (3) as an
increase in Proceeds From the Sale of Discontinued Operations in investing
activities.
Upon final resolution of all Staff comments, the Company will amend its
10-K for the period ended June 30, 2005 to correct the following two line
items for the $900,000 the Company financed as follows: (1) as a increase
in the Due From Office Sales, which is also being reclassified to
investing from operating activities; and (3) as a decrease in Proceeds
From the Sale of Discontinued Operations in investing activities.
The Company acknowledges that:
o the Company is responsible for the adequacy and accuracy of the disclosure
in the filings;
o Staff comments or changes to disclosure in response to Staff comments do
not foreclose the Commission from taking any action with respect to the
filings; and
o the Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
If you have any questions regarding our responses above, please feel free to
contact me at 845-471-4457.
Sincerely,
Dennis Conroy
Chief Accounting Officer
Gilman + Ciocia, Inc.
cc: Adam Washecka, Staff Accountant, US Securities and Exchange Commission
Carlos Pacho, Senior Assistant Chief Accountant, US Securities and
Exchange Commission
Michael P. Ryan, President Gilman + Ciocia, Inc.
Laurie A. Cerveny, Bingham McCutchen LLP
Carlton Vogt, Sherb & Co
Arthur J. Radin, Radin, Glass & Co., LLP