Alerts & Bulletins
IRS Driving Ahead with the Cadillac Tax
Discussed in the August edition of Cherry Bekaert Benefits Consulting’s (“CBBC”) Health & Benefits Update, the Internal Revenue Service (“IRS”) has issued new regulations to address additional concerns regarding the Cadillac Tax that will impact most employer-sponsored group health plans. To download the Update, which provides a brief summary of the Cadillac Tax issues addressed by the IRS’ recent notice, please visit the CBBC website. Also check out the March Update for more details on the Cadillac Tax.
NCMM & Cherry Bekaert Present the Second Quarter 2015 Middle Market Indicator Infographic
Cherry Bekaert LLP (“the Firm”), in association with The National Center for the Middle Market (“NCMM”), is pleased to bring you the results of the 2Q 2015 Middle Market Indicator Survey. Conducted by the NCMM, the survey represents the 14th consecutive query into the state and health of the nation’s middle market. In 2Q 2015, 75% of middle market companies reported increased revenue growth, although at a slower growth rate than the previous three quarters. Employment growth is also continuing a downward trend that started at the beginning of the year, with a growth rate just under 4% for the. Read More.
Georgia Resident? Don’t Miss Your Opportunity to Retroactively Claim Georgia Tax Refund for Texas Franchise Taxes Paid
We are excited to announce a tax refund opportunity for Georgia individual residents holding interests in pass-thru entities that conduct business in Texas. As you may be aware, in December 2014, the Georgia Tax Tribunal clarified that the Texas Franchise Tax is a tax “on or measured by income”. This means an individual Georgia resident owning an interest in a pass-thru entity doing business in Texas is allowed to subtract a portion of pass-through income already taxed in Texas at the entity level. Just recently, the final issues of the case have been settled and the decision will not be. Read More.
DOL’s Proposed Changes to Overtime Pay Will Impact Retail Industry
Possibly impacting employers in the retail industry, the U.S. Department of Labor (“DOL”) has proposed changes to overtime pay rules under the Fair Labor Standards Act (FLSA). Announced earlier this month, the DOL is proposing setting the minimum salary threshold at the 40th percentile of weekly wages for full-time salaried workers based upon Bureau of Labor Statistics data. The DOL also proposes publishing the minimum salary 60 days before going into effect, and is considering whether nondiscretionary bonuses will be allowed to fulfill a portion of the FLSA’s standard salary test requirement. If approved, the FLSA’s final overtime rules could. Read More.
Last Chance to File for Late Partial Disposition Election is Coming Soon
As you’re probably aware, under the old rules for tangible property, when replacing a portion of your asset, the replacement was required to be capitalized alongside the original portion of the asset that was disposed. This left you with the original asset and replaced portion on your fixed asset records, creating duplicate assets and depreciation deductions. With the new tangible property regulations (TPR), however, you have an opportunity to eliminate retired or disposed assets from your fixed asset records, and take advantage of a one-time election for partial disposition deductions. Claiming losses on partial dispositions for previous tax years is. Read More.
July 31 Filing Deadline for PCOR Fees
Discussed in the June edition of Cherry Bekaert Benefits Consulting’s (“CBBC”) June Client Alert , plan sponsors with applicable, self-funded arrangements including most Health Reimbursement Arrangements must pay the Patient Centered Outcomes Research Fee (PCOR) by Friday, July 31, 2015 for plan years that ended in 2014. Fees have to be submitted by the plan sponsor and not through a third party. When filing the PCOR, plan sponsors are required to use the updated Form 720, Quarterly Federal Excise Tax Return for 2015. The full Client Alert is available via the CBBC website .
Covered in the latest Health & Benefits Update , enforcement agencies are addressing how workplace wellness programs meet compliance with the myriad of federal standards like the Health Insurance Portability and Accountability Act (HIPAA). For instance, the Departments of Labor, Health and Human Services, and Treasury issued final workplace wellness regulations that update previous HIPAA guidance and incorporate changes in the Affordable Care Act (ACA). The complete Health & Benefits Update discussing workplace wellness is available on the Cherry Bekaert Benefits Consulting website.
Reminder! Due Date for the BEA Foreign Investment Survey is June 30th
Every five years, the Bureau of Economic Analysis (“BEA”), a division of the U.S. Department of Commerce, gathers information regarding investments in foreign affiliates by U.S. persons, which include business entities, estates and individuals. The survey generally requests financial, operational, and ownership information about investments outside of the U.S. This is not a tax filing, and no payments are due. However, failure to file the required forms can result in substantial penalties. In the past, the BEA would send out notifications letting you know if you needed to file. This year, however, the rules have changed. If you are a. Read More.
FAQ Clarifies Coverage of No-Cost Preventive Services
Cherry Bekaert Benefits Consulting’s (“CBBC”) June Health & Benefits Update discusses the recently issued FAQs Part XXVI, which addresses no-cost preventative services coverage. With the Affordable Care Act requiring all non-grandfathered insured and self-funded group health plans to cover certain preventive services without cost-sharing, some plan members have expressed concern for being improperly charged. As a result, the FAQ clarifies that non-grandfathered group health plans must cover certain services at no cost to its members. For the complete Update, please visit the CBBC website .
IRS Releases DRAFT 2015 ACA Reporting Forms
The Internal Revenue Service (“IRS”) has issued draft versions of the 2015 Affordable Care Act (ACA) Reporting Forms 1094-C and 1095-C. Cherry Bekaert Benefits Consulting’s (“CBBC”) newly available Health & Benefits Update notes that the major change to this year’s forms is on Form 1095-C, which permits employers and service providers to include a two-digit Plan Start Month. While employers and service providers use the 2014 forms as templates in preparation for the reporting the new mandatory ACA requirements, the IRS stresses that the 2015 edition of Forms 1094-C and 1095-C should not be used until the final versions are issued. To read the. Read More.
Reminder! FBAR Must be Received Electronically by June 30th | New Penalties in Place
Introduced in September 2013 by the Financial Crimes Enforcement Network (“FinCEN”), Form 114, Report of Foreign Bank and Financial Accounts (FBAR), is required to be filed by Tuesday, June 30, 2015. Please note, this Form supersedes Form TD 90-22.1. If you are a U.S. person (i.e., a U.S. individual or U.S. entity) with a financial interest in or signature authority over one or more foreign financial accounts with an aggregate value that surpassed $10,000 at any time during the past calendar year, it is important that you are aware of the recent FBAR filing requirement changes. E-Filing Requirement for Form. Read More.
How Secure is Your Identity?
And what is the IRS doing to protect your identity? For 2014 tax returns, the Internal Revenue Service (“IRS”) is utilizing a filtering system for flagging certain tax returns as “suspicious” and pausing the processing of these returns until additional identity verification is received. If your tax return is flagged, you will receive a written request (Letter 5071C) to answer additional questions to confirm you are the correct taxpayer for that return. To answer the questions, you have the option of calling a toll-free telephone number, or visiting idverify.irs.gov . Due to high call volume, the IRS highly recommends using the. Read More.
TPR UPDATE: IRS Eases Compliance Requirements; Last Chance for Accelerated Deductions
If your business owns significant tangible personal or real property, it is very likely that your tax situation will be affected by the Tangible Property Regulations (TPR). As your tax filing deadline approaches, please consider the following TPR updates from the Cherry Bekaert Accounting Methods and Credits Team. Small Business TPR Relief On Friday, February 13, 2015, the IRS released Revenue Procedure 2015-20, offering eligible small business taxpayers a simplified process to implement the accounting method changes to adopt the final tangible property regulations. For qualifying taxpayers, the regulations would be applied on a “cut-off” basis beginning on the first day. Read More.
Virginia Supreme Court Rules on Important BPOL Case
For almost 200 years, the Business, Professional and Occupational License (BPOL) tax has been a major source of funding for many counties and cities throughout Virginia. As a gross receipts-based tax, the BPOL is regressive in nature; a business that is sustaining significant losses is still subject to the tax. Far from being simple, a multi-state business with numerous locations must address a number of complexities in calculating its BPOL tax liability. The Virginia Supreme Court recently reversed and remanded a decision by the Arlington County Circuit Court which limited certain taxpayers from deducting out-of-state receipts from their gross receipts. Read More.
Government Provides Relief for Certain Healthcare Penalties
If you are a “small employer” who reimburses employees for health insurance premiums, or a 2% S corporation shareholder who is reimbursed for health insurance premiums, then recently released IRS guidance provides you valuable relief from potential excise taxes. For 2014 and through June 30, 2015, small employers can continue these reimbursements or payments directly to an insurance provider for individual coverage without incurring an annual excise tax of $100 per day, per person. Additionally, until 2016 or the release of future guidance, whichever comes later, 2% S corporation shareholders can continue the reimbursements or payments without incurring the excise. Read More.
Danish Meherally Article Featured in Global Tax Weekly
In the February 12, 2015, edition (Issue 118) of Wolters Kluwer’s Global Tax Weekly, Cherry Bekaert International Tax Associate Danish Meherally contributes one of the issue’s featured articles, “Willfulness and the Offshore Voluntary Disclosure Program v. The Streamlined Procedures: The Most Important of Decisions”. Per his article, Meherally examines the role willfulness plays in the Internal Revenue Service’s offshore voluntary disclosure program and Streamline procedure for reporting compliance. Providing guidance on willfulness, Meherally references the outcome of a 2012 case in which a taxpayer failed to report interests in two foreign bank accounts. Meherally’s complete article can be viewed in PDF. Read More.
Transition Relief to Retroactively Claim Work Opportunity Tax Credits (WOTCs)
Did your business experience significant hiring growth during 2014? Is your business in a high turnover industry? If you can answer yes to either of these questions, significant opportunities may exist to generate federal and possible state tax credits related to hiring new employees. Work Opportunity Tax Credits (WOTCs) are federal tax credits resulting from hiring individuals from certain targeted groups (veterans, Temporary Assistance for Needy Families, food stamp recipients, etc.). These credits range from $2,400 to $9,600 per qualified hire, depending on the targeted group. Certain state tax credits may also apply. WOTCs have been in existence for many. Read More.
A Perspective on Responding to Requests for Production
By: Hank Shechter , CFE The focus of my work is to provide litigation support services mostly in divorce matters. One important function in providing these services is to obtain and provide documents from the parties to properly analyze the financial condition and lifestyle of the divorcing couple. I interact with the parties’ attorneys who regularly prepare document requests, also called requests for production (RFPs), and motions to compel amongst other pleadings to identify assets, liabilities, earnings power, childcare needs and spending habits of the couple. It is an interesting exercise if you like piecing puzzles together. Some of the language in. Read More.
By: Katherine Newman , CPA, CFF Global companies are increasingly opting to include international arbitration clauses for dispute resolution in their cross border contracts. Disputes are generally resolved more quickly, and the litigation costs can be significantly lower. Traditional litigation in the U.S. usually entails sweeping discovery, even when a major portion of it is not used. Arbitration is usually faster and less time consuming, therefore less costly in terms of both internal and external resources. Perhaps the most compelling reason to use arbitration is having a neutral venue with well-defined procedures and standards. If a contract is between companies based in. Read More.
Valuation of Complex Capital Structure
By Gustavo Perez , ASA, IA; Principal, National Leader, Valuation Services The valuation of different layers of ownership securities in companies with complex capital structures has been gaining popularity among those looking to raise capital, as well as with investors willing to provide such capital in exchange for securities that are senior to common stock while still providing greater returns than debt. In addition, many companies see stock-based compensation grants, commonly referred as “cheap stock,” as a way to align their goals with the goals of their employees. As these securities continue gaining popularity among investors, employees and companies, the Internal Revenue service. Read More.