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...

Tax qualified retirement plans are required to hold employer and employee contributions in an irrevocable trust, which is separate from the employer’s funds.  ERISA, which governs these programs, creates various types of legal liability for a plan’s fiduciaries.   Department of Labor penalties and litigation from plan participants can arise, and can be brought against an individual fiduciary.  The issue of who is or is not a fiduciary is not determined solely by a person’s title.  

ERISA’s...

This month's issue of IT Informer includes the following articles:

• Happy Holidays from Skoda Minotti!
• The Tablet Revolution and Why it Matters to Your Small Business's Technology Plan
• Five Common Ways Your Employees Put Your Company's Data at Risk Using Mobile Devices
• We've Expanded Our Helpdesk to Support Your Technology Needs
• Skoda Minotti's Brian Rosenfelt Listed as COSE Mindspring Expert
• 3CX Phone System Case Study

Happy Holidays from Skoda Minotti! 

We would like to wish you and your family...

If you haven’t noticed, tablets (like the iPad) are becoming more and more common. And, in my opinion, they are here to stay. This trend is obvious in the consumer space – we are seeing people getting iPads (or similar devices) for use at home on a weekly basis. So how might this affect my business, you ask? The answer: In more ways than you can imagine.

According to a recent Pew Research report, approximately 11% of adults in the United States own a tablet computer – that’s a big number. Of...

Have you put together your 2012 marketing plan? There is still time.

The Coming Year

Moody’s, Goldman Sachs, the Economist and other sources point to 2012 as another year of stagnate growth for the U.S. economy. Most of these sources point to less than 2% growth in GDP. As you know, anything can happen but it appears to be another tough year to grow your business. You need to plan for more of the same and hope for better. 

Part of this planning should include developing your marketing programs and...

The issue of whether a worker should be treated as an employee or an independent contractor has been an area of significant IRS interest for decades. The IRS has the ability to assess significant employer penalties for failure to withhold employment and income taxes on a worker who should have been treated as an employee.

If an employer is faced with this issue upon an IRS examination, the IRS will typically offer to settle the penalties at a discounted rate under Internal Revenue Code (IRC)...

As the Internal Revenue Service continues to move into the electronic age, it has adopted the EFAST-2 filing system to electronically file tax returns related to employee benefit programs.  For the 2010 tax year, the IRS provides a choice of filing mediums for tax-qualified retirement programs that cover ‘one-participant’ plans—the paper Form 5500-EZ or the electronically filed Form 5500-SF.  Let’s briefly go over the filing rules:

1. What is a “one participant plan?”  A ‘one-participant plan’ is a...

The buzz of cloud computing seems to have hit a fevered pitch in industry magazines, trade publications, and the mainstream media recently.  It seems like every day our Technology Services Group is being asked by clients what the "cloud" is, or to suggest cloud-based solutions for applications or services that were (or are) typically on a server in their offices.  

Is your business thinking about making the switch to cloud computing? If so, we've put together a quick list of things you need to...

• Investment Reporting and Disclosure
• 403(b) Plans - How Many Are There?
• DOL and Internal Revenue Service (IRS) Annual Filings
• Required Fee Disclosures to Plan Sponsors - 408(b)(2) Interim Final Regulations
• Defined Benefit Plan Amendment Deadline Extended by the IRS
• EBSA Enforcement Actions to Protect Employee Contributions
• Do you have a "Mr. Forfeiture" in your Plan?

Recent EBP Developments

Change and transparency are...

On March 29, 2011, the government agencies who are enforcing the Dodd-Frank Act’s provisions relating to financial institutions (including but not limited to the SEC, OCC, FDIC, OTS and NCUA) issued a further proposed rule relating to incentive compensation programs offered to employees of financial institutions with over $1 billion in assets. While echoing many parts of their February 4, 2011 proposal (click here for more information), the gist of these proposals is that incentive compensation...

Although employers who maintain tax-qualified retirement plans are well aware of the requirement to file an annual information return (Internal Revenue Service (IRS) Form 5500), many employers appear unaware of their responsibility to file a similar return for other employee benefit programs.  If the IRS discovers that required filings have not been made, penalties are severe.  This article will discuss what types of plans need to file, potential penalties and a program that can minimize the...

This month's Special Delivery E-Newsletter includes the following articles:

• Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010
• Year-End Tax Planning Letter for Individuals
• Year-End Tax Planning Letter for Businesses
• What Are the Benefits of Buy-sell Agreements?
• Don't Miss Out on Above-the-line Deductions
• Keeping Records for Your Business Car
• Aurum Capital Markets Summary
• R&D Tax Credit Extended for 2010 and 2011 Calendar-year Expenses
• IRS Increases Business Mileage...

Part 3 of 3

Hiring Unemployed Workers: Hire a worker who has been unemployed for at least 60 days before year-end if you are thinking of adding to payroll soon. Your business will be exempt from paying the employer's 6.2% share of the Social Security payroll tax on the formerly unemployed new-hire for the remainder of 2010. Plus, if you keep that formerly unemployed new-hire on the payroll for a continuous 52 weeks, your business will be eligible for a nonrefundable tax credit of...

This month's Special Delivery E-Newsletter includes the following articles:

• Skoda Minotti Expands its Compensation and Benefits Advisory Services Group
• Own Rental Property? New Law May Affect You
• Capital Gain Exclusion on Small Business Stock
• One Last Chance to Repair Deferred Compensation Plan Issues
• Common Benefits of a Business Plan
• Home-office Deductions: Terms of Tax Endearment
• Cutting the "Kiddie Tax" Down to Size
• Aurum Capital Markets Summary
• Skoda Minotti Only Company Recognized at Inc....

One Last Chance to Repair Deferred Compensation Plan Issues

December 31, 2010 marks the closing of a window offered by the IRS to self-correct non-qualified deferred compensation programs (NQDC) for failure to comply with Internal Revenue Code Section 409A (409A).  Although many employers have reviewed their programs for 409A compliance, some have not and should do so.  Let's briefly look at the issue and what should be done before year end.

Click here to read more about section 409A and the...

2010: The Right Time to Convert to a Roth?

2010 offers a unique opportunity for high-income individuals to convert their 401k to a Roth IRA.

As you may know, Distributions from a traditional IRA are generally taxed at ordinary income rates currently reaching as high as 35%. (Future tax rates are currently scheduled to rise.) The taxable portion includes earnings within the tax-deferred account and amounts attributable to deductible contributions.

Conversely, "qualified distributions" from a Roth...

This month's issue of Valuation & Litigation Advisory Insights includes the following articles:

• FAQs About Business Valuations
• Measuring the Intangible: Valuation Issues in Health Care Transactions
• Single Price Quote Supports $10 Million Lost Profits Award
• Skoda Minotti Employee Recognized For Outstanding Report Writing

FAQs About Business Valuations

From business acquisitions to estate planning to shareholder transactions, executives often run into situations in which performing a business valuation...