Archive for the ‘Tax’ Category

Game Over! Income Tax Law to Reset to 2001 – Maybe…

Monday, September 6th, 2010

The income tax cuts that were enacted in 2001 and 2003 under President Bush expire on December 31, 2010.  Unless Congress acts now, which means the Democrats and Republicans have to agree on what should be extended and what can expire, everything resets to the tax law in effect as of January 1, 2001.  Click here for a summary of some of those changes and actions you may want to take to avoid the changes; any actions should be discussed with your tax advisor.  (more…)

How will the Healthcare Reform Legislation Impact you?

Tuesday, August 17th, 2010

The healthcare reform legislation that was enacted in two parts earlier this year impose on businesses a number of reporting requirements and potential tax penalties.  The legislation will also impose significant new taxes on higher income individuals.  The two most impacting tax provisions are the 0.9% High Income Tax and the 3.8% Unearned Income Medicare Contribution.  The following is a summary of these two new taxes, which take effect in 2014.  Note that high-income taxpayers may well be subject to BOTH new taxes. (more…)

DC Launches Tax Amnesty; Waives All Penalties and Fees on Back Taxes Paid by September 30, 2010

Wednesday, August 4th, 2010

On Monday August 2^nd 2010, the DC Office of Tax and Revenue announced the start of its long-anticipated Tax Amnesty program. Under this program, delinquent taxpayers will:
(a) Get a rare opportunity to pay outstanding taxes and interest to the District.
(b) Have their penalties and fees waived, and
(c) Avoid criminal prosecution. 

The Amnesty program will run from August 2, 2010, through September 30, 2010. A public awareness program is underway to reach the residents of the District, adjacent suburbs and across the country. DC has also set up a special website (www.dctaxamnesty.com) to assist affected taxpayers.

Aronson & Company’s team of state and local tax experts is ready to assist affected taxpayers with issues such as eligibility requirements; required documents, including application forms; and, expediting payments and liability resolution. Affected taxpayers should contact either Jack Koniszewski at 301-231-6205 or Henry Chiwaya at 301-222-8217 or visit our website.

Foreign Transaction Tax Reporting Issues-Statute of Limitations

Friday, July 23rd, 2010

Please be aware that a failure to file information returns with respect to certain foreign transactions (specifically IRS Forms 8865, 926, 8621, 5471, 5472, 3520, and TD F 90.22.1) can not only result in significant penalties but also that the statute of limitations with respect to the entire tax return (not just items related to the missing information or forms) does not begin to run until the required information has been provided (See IRC  6501(c)(8)).  There is no “reasonable cause exception” with respect to the statute of limitations issue at this time although such a provision is included in pending tax legislation.  Please note that this can have significant FIN 48 implications as well.

Government Contracting: Look Before You Leap!

Friday, June 4th, 2010

Entering the government contracting sector seems especially enticing during a recession. While contracting may be a good fit for your business, make sure you’re aware of the unique aspects of dealing with the government.

Government contracting is big business in the Commonwealth of Virginia. Federal procurement spending in Virginia across all agencies totaled $53.9 billion in 2008.  Historically, some have considered federal government work to be a safe haven during uncertain economic times. While profit margins on government contracts are relatively low, Uncle Sam tends to be a reliable and potentially long-term customer. During the current recession, the lack of private sector work combined with “stimulus” spending under the American Recovery and Reinvestment Act of 2009 (ARRA) is causing some companies to consider government contracting. Many of these companies are small businesses.  Contracting with the federal government imposes requirements on companies not commonly found in the commercial market. By and large, the government is spending taxpayer dollars. Understandably, the government requires much greater visibility into how dollars are spent than is typically required in the private sector.

Read entire article at VSCPA site for an overview of some of the unique aspects of government contract accounting and the challenges that commercial companies will encounter as they move into the government market.

Tom Marcinko and Bill Foote, CPA, are with Aronson & Company, a nationally ranked top-50 accounting and consulting firm. As a member of Aronson’s Government Contracts Services Group, Tom assists clients with both pre- and post-award contract administration, compliance and other regulatory requirements. Bill serves as an officer in the firm’s Forensic & Valuation Services Group, where he assists government contractors with valuation projects and contract disputes. He is also a member of the VSCPA Editorial Task Force. Contact Tom at tmarcinko@aronsoncompany.com and Bill at bfoote@aronsoncompany.com.

Independent Contractor or Employees? Encore free Webinar 6/17/10; Construction Industry Article!

Wednesday, June 2nd, 2010

On June 17th, Aronson will offer our popular free seminar “Independent Contractor or Employee: Classification is the Elephant in the Room!“  focused on the issue of worker classification.  This is one of those tricky compliance issues that everybody knows about, but nobody wants to talk about. With more and more states passing legislation to penalize employers who misclassify workers, audits are a valid concern for all businesses. Don’t be intimidated by this important topic – instead, be informed! Join Aronson & Company and FosterThomas for this insightful event on June 17th at FosterThomas’ Corporate Office that addresses how your company can prepare for audits and reduce liability.

Interested in the specific impact on the construction industry?  See recently republished article,  “New Employee vs. Independent Contractor Considerations – What You Need to Know Today and for the Future“  by Tim Cummins, Officer of Aronson and Company’s Construction Industry Services. This article was republished in the March 2010 edition of the Washington Building Congress (WBC) Bulletin available for download via the following link: https://www.wbcnet.org/Bulletin/Bulletin-March-2010-FNL.pdf.

Don’t forget, on June 17th, Aronson & Company’s tax experts will help you gain an understanding of the issue, the costs to your business of noncompliance, and steps you can take toward compliance. Seats are limited, so register today!

IRS’ 401(k) Plan Questionnaire Coming to 1,200 Employers – RESPONSE REQUIRED!

Wednesday, May 26th, 2010

On May 17, 2010, the IRS Employee Plans Compliance Unit “EPCU” sent out a letter with instructions to 1,200 employers with 401(k) plans (plan sponsors) requiring them to complete the 401(k) Compliance Check Questionnaire.  The plans were randomly selected from  401(k) plans that filed a Form 5500 (Annual Return/Report of Employee Benefit Plan) for the 2007 plan year.  The questionnaire is accessed through a secure website and requests a wide range of information related to the Sponsor’s 401(k) plan. The questionnaire is very comprehensive as evidenced by the fact that it is 46 pages in length (see sample questionnaire, IRS Form 14146).

Completion of the questionnaire is required, and failure to respond, or to provide complete information will result in “further action or examination, which may include an examination of your plan” as indicated by both the IRS announcement of this initiative and the irs.gov’s FAQ.  Furthermore, many questions are either compliance in nature or tie directly back to the Plan’s Form 5500 filings.  A respondent could mistakenly indicate a myriad of compliance violations or a disconnect with a previously filed Form 5500. We advise completing this questionnaire with an advisor that is familiar with your plan and the strict rules governing qualified retirement plans.  For additional information or assistance please contact Mark Flanagan of Aronson & Company’s Benefit Plan Services Group via email or at 301-231-6257.

Guidance for Qualifying Therapeutic Discovery Project Credit Issued

Tuesday, May 25th, 2010

On Friday, May 21, 2010, the Treasury Department issued IRS Notice 2010-45 which provides information regarding the application process for the recently enacted $1 billion Qualifying Therapeutic Discovery Project Credit.

The guidance provides that taxpayers wishing to be considered for the credit must submit an application, on Federal Form 8942, no later than July 21, 2010. A separate application must be submitted for each project.  Applications submitted by July 21, 2010 will be considered to have been submitted by October 1, 2010, the beginning date for the formal 30 day review for all applications.

The Credit application Form 8942 has not been issued yet, but it is expected to be issued by June 21, 2010. Check back frequently for further details on this emerging topic.  Also see our May 3, 2010 post.

UPDATED! New Federal Investment Tax Credit for 2009 and 2010 Therapeutic Discovery Projects

Monday, May 3rd, 2010

UPDATED!! Friday 5/21/2010 – Guidance for Qualifying Therapeutic Discovery Project Credit Issued – see posting

Known as the Qualifying Therapeutic Discovery Project Tax Credit, Discovery Project Credit, Biotech Tax Credit or  Therapeutic Tax Credit, the new healthcare reform Act law has created a two year investment tax credit (or cash grant) targeted specifically for the biomedical industry.  Effective for expenses paid or incurred after Dec. 31, 2008, certain biomedical industry taxpayers are allowed a new nonrefundable investment tax credit (or cash grant) equal to 50% of their qualified investments in qualifying therapeutic discovery projects.

The IRS is shortly (no later than May 21, 2010) scheduled to issue guidance concerning the application process for the credit or grant. If you are going to take advantage of tax credit, you need to act now!  Contact Aronson and Company’s Tax Experts for assistance: Henry Chiwaya, Senior Tax Manager, 301.222.8215, hchiwaya@aronsoncompany.com.  Click below for additional details on the Therapeutic Discovery Project Credit.

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Encore Seminar on 5/13! Independent Contractor or Employee: Classification is the Elephant in the Room!

Friday, April 16th, 2010

Worker classification is one of those tricky compliance issues that everybody knows about, but nobody wants to talk about. With more and more states passing legislation to penalize employers who misclassify workers, audits are a valid concern for all businesses. Don’t be intimidated by this important topic – instead, be informed! Join Aronson & Company and Helios HR for this encore event on May 13th at the Tower Club that addresses how your company can prepare for audits and reduce liability.

Additional information and FREE registration is available via the following link:

Starts:	Thursday May 13, 2010, 08:00AM
Ends:	Thursday May 13, 2010, 10:30AM
Event Type:	Training/Seminar
Location:	The Tower Club 8000 Towers Crescent Dr #1700 Vienna, VA 22182 US
Price:	Complimentary
Website:	http://www.aronsoncompany.com/events/events-calendar/icalrepeat.detail/2010/05/13/41/33|32|28|30|27/OTFjZTI1ZmRmMjRkMjAzM2U1OGE0OTQyNDk3YTVlMzk=.html
Industry:	accounting
Keywords:	Independent contractor misclassification; Worker misclassification; IRS
Intended For:	HR Managers, CEOS, CFOS
Organization:	Aronson & Company and Helios HR

Did you know that:

• The IRS has begun randomly selecting 2,000 taxpayers each year for the next three years for a comprehensive employment tax law compliance audit?
• Independent contractor misclassification is now more likely than ever before to result in heavy fines and penalties?
• Worker misclassification invites trouble with the IRS, Department of Labor, and state and local governments?
• All companies are vulnerable, but construction and government contracting businesses are being targeted in particular?

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