Benefit Plan Audits

The category of travel expenses is one of the most common type of business deduction and also one of the most confusing.  Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job. You cannot deduct expenses that are lavish or extravagant or that are for personal purposes.

There are generally two reasons an employee/business owner may incur travel expenses.  Traveling away from home because your duties require you to be away from...

Recognizing that many employers were unaware of their responsibility to file an annual return for various types of retirement and welfare employee benefit programs, the Department of Labor (DOL) created the Delinquent Filer Voluntary Compliance Program (DFVCP) in 1995.  DFVCP allows an employer who has not filed required Form 5500s to file all required Form 5500s for a particular program at one time, and pay a reduced one-time penalty.  The penalty amount will vary depending on the number of...

In this inaugural issue of A&A Insights, we'll take a closer look at recent accounting rule changes, review proposed accounting rule changes and dive deeper into how new AICPA rules may provide GAAP relief for private companies.

We hope you find these updates helpful. Feel free to contact our Accounting and Auditing group at 440-449-6800 with any questions that you may have.

Accounting Rule Changes

Effective for 2012

• Fair Value Disclosures
• Health Care Entities
• Testing Indefinite-Lived Intangibles
• Multi...

There are several new accounting pronouncements as well as significant proposed changes for 2013 and beyond.  There are also some “hot topics” in the areas of auditing and reporting that you should consider.

Fair Value Disclosures

Financial Accounting Standards, issued by the FASB, now require nonpublic companies to make some additional disclosures for calendar 2012, principally in the form of a discussion of the valuation process and certain quantitative details involving Level 3 investments....

Well-drafted executive compensation programs aren’t just used to recruit and retain top-level leadership to your company. Public and private companies can tailor executive pay packages to encourage executives to achieve certain goals.

We can put strings on short-term and long-term benefits to drive executive behavior and that’s one of the things that’s really coming to the forefront now.

What are the key components of an executive compensation program?

In general, an executive compensation program...

This month's Special Delivery e-newsletter includes:

• Donations of Stock: Give the Right Stuff
• Keeping Records to Protect Travel and Entertainment Deductions
• Six Tips for “Shaping Up” at Work
• Tips to Increase the Value of Your Business

Donations of Stock: Give the Right Stuff

Do you want to give a large gift to your favorite charity without hurting your cash flow? You do not necessarily have to donate money. For instance, if you hold shares of stock that have appreciated in value, you may decide to...

If your company has a benefit plan such as a 401(k) with 100 or more eligible participants, each year you are required to have an audit performed on that plan that is filed with the IRS and the Department of Labor (DOL). Failing to do so could mean major penalties for your business.

What often happens is that a company gets to that 100 employee mark and it is not aware of the requirement.  A few weeks before the deadline, the company that is preparing the required Form 5500 for all benefits plans...

This issue of Tax Advisory Insights includes the following articles:

• What Are Your Chances of Being Audited?
• Are You Filing All of the Form 5500s That You Need to be Filing?
• Nonprofits Face Harsh Consequences for Noncompliance
• Managing Energy Expenses

What Are Your Chances of Being Audited?

By Galina Velcheva, CPA, MT

Earlier this year the IRS issued its annual data book, which provides statistical data on its fiscal year (FY) 2011 activities. The data book provides valuable information about how many...

There are several areas of an employee benefit plan where employees or plan sponsors have the ability to commit fraud.  The following are key areas where an employer should focus when reviewing their plan.

Contributions

Contributions are one of the most susceptible areas of the employee benefit plan.  The payroll clerk or HR manager could have the ability to divert more deferrals or another employee's deferrals into their own account.  Additionally, the plan sponsor may not be remitting the...

This month's Special Delivery e-newsletter includes:

• IRS Issues New Tax Blueprint for Buildings
• Tax Angles to Vacation Home Rentals
• Should You Rush Into Crowdfunding?
• Employee Benefit Plan Audit Update

IRS Issues New Tax Blueprint for Buildings

The IRS recently issued lengthy and complex temporary regulations relating to business repairs and capital improvements. These new regulations cover expenses paid to acquire, produce or improve tangible property. They are generally effective for tax years...

All Ohio businesses should be aware of several tax programs that are currently underway that may be of benefit to you depending on your current tax situation.

General Tax Amnesty Program

As you may remember from a past column, for the first time in six years, the state of Ohio is making a general tax amnesty program available for a very limited window. The time to take advantage of that window is now.

The program began on May 1 and runs through June 15, so you will need to act quickly.

The amnesty...

Due to the new regulations under 408(b)(2), plan sponsors/fiduciaries are required to provide written disclosures with their service providers that are in line with the new regulations by July 1, 2012 for any services where fees of $1,000 or greater are charged. 

If the written disclosures are not in place than the fees paid to these service providers will be considered prohibited transactions under the plan and are required to be disclosed in the supplemental schedules of the plan’s audited...

Most medical practices are aware of the HIPAA and HITECH requirements that affect their organizations, and the fines that they face if they are not compliant in the ways they handle patient health information (PHI).

What a lot of professionals don’t know is that a recent addition to the HIPAA and HITECH regulations holds business associates, (i.e. other professionals from other companies who have access to patient health information) just as responsible for sensitive patient data privacy and...

The Internal Revenue Service (IRS) has been increasing its audit activity in the qualified plan area.  The IRS recently indicated that it had audited approximately 10,000 qualified plans in 2011 (an 18% increase from 2007, the last year for which data is available), as well as conducting 4,500 “compliance checks,” new program which includes a lower level of review than an audit.  Additionally, the IRS has created a new program (Employee Plans Team Audit) which targets plans that have in excess...

CLEVELAND – Skoda Minotti is pleased to announce the acquisition of Core Information Management, Inc. As a part of the acquisition, Joseph Compton, CISSP, CISA joins the firm as principal in charge of Skoda Minotti Financial Institution Services Group.

“Joe has spent the last 15 years helping clients in the financial institution industry solve compliance and security management challenges and has developed a very specific skill set that can benefit our current financial institution clients...

This month's Not-for-Profit Update includes:

• Predicting the Impact of Changing Tax Treatment of Charitable Contributions
• Payroll Audit Updates                
• The Age of Nonprofit Mergers is Upon Us
• The Case of Exempt Organizations in the Tax Reform Debate
• New District of Columbia Nonprofit Corporation Act
• Executive Compensation: Did We Do All The Right Things?
• The IRS Issues Guidance on Tax Treatment of Cell Phones and Provides Recordkeeping Belief 
• More Changes and Debate Over the FASB's Proposed...

This month's Special Delivery e-newsletter includes:

• Payroll Tax Cut Extension
• IRS Reverses 1099-K Reporting Rule
• New Strategic Marketing Website and E-Book Available
• Take Tax Credit When They Are Due
• Locking in Deductions for Mortgage Interest
• How to Reduce Employee Turnover
• Ohio Construction Reform is here
• IRS Issues Guidance on Work Credit for Hiring Veterans
• Join the 123 College Facebook

Payroll Tax Cut Extension
 
Although not signed into legislation just yet, the Senate and the House have both...

In the past week I’ve received three articles from colleagues related to benefit plan sponsors receiving fines.  The majority of these articles seem focused on fiduciaries not taking responsibility over plan operations or the lack of documentation of fiduciaries’ consideration when making decisions that affect the plan.  So, I thought I’d take a moment to summarize some of the requirements shown on the Department of Labor (DOL) website in relation to fiduciary responsibility.  Please remember,...

Captive insurance companies are often owned by a large sophisticated financial entity, because there are minimum net worth and other regulatory requirements.  In many cases, the regulatory authority will accept a letter of credit in lieu of an actual cash investment for the initial capital requirements of the captive.  This results in “GAAP exception” financial reporting but is perfectly acceptable to the regulator.

Normally, single sponsor captives are wholly-owned subsidiaries and are included...

If you have been working a long time, you may be looking forward to retirement in the not-so-distant future. Hopefully, you will be in good health at that time and able to pursue your favorite activities.

But the “golden years” may be tarnished if you are not careful. Here are five common mistakes that can hinder your ability to retire comfortably and securely.

1. You are overburdened with debt. Owing money is not necessarily fatal to a happy retirement. But credit card debt with high interest...