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Scammers Posing as IRS

August 12, 2014

Authored by: Kirk Eck, Shareholder at CMP.

We get many calls from clients who have been contacted via telephone, email or mail, by someone purporting to be the IRS. Most recently, there has been an uptick in scam calls where individuals are claiming to be IRS employees. By March of this year, the IRS had received over 20,000 reports about the scam and estimated that over $1 million dollars had been stolen.

The crooks are using a couple different techniques when they call. They will present themselves as an IRS or CID agent and may ask for payments for unpaid tax and/or penalties related to the taxpayer’s tax returns. The caller often knows the last 4 digits of the victims Social Security Number and will tell them they must pay immediately with a prepaid credit card or direct wire transfer. Another approach is when they tell the victim that they are due a large refund and request personal information in order to process the refund for them. The crooks then use this information to commit identity theft in many different ways. Some of these scammers become very threatening and abusive, threatening victims with arrest or deportation if they don’t comply at once. They’ve also claimed that they will shut down the victim’s business or revoke their driver’s license if they don’t receive the owed money right away.

If you receive one of these calls, you should refuse to provide any information while on the phone. The scammers often make the caller ID information appear as though it is the IRS calling, so don’t rely on who your phone tells you is calling. You can ask the caller for a number to return their call later, and then confirm with the IRS if the phone number is valid by calling them at 800-829-1040. You should also alert the IRS to the call and provide them with all the details from the conversation with the scammer. We always encourage our clients to forward to us any correspondence from the IRS before responding, allowing us to review the notice and the validity of its claims.

The IRS will never initiate contact with a taxpayer via email, so any such email should be treated as a phishing scam and deleted immediately, regardless of how official it may appear.

The IRS’s process is to first try contacting a taxpayers via mail, and will often ask the taxpayer to then initiate contact with the IRS to resolve the problem via return mail or phone call. They will usually only contact a taxpayer via telephone after repeated efforts to contact the taxpayer via mail has failed. And they will never demand immediate payment via debit card, credit card or wire transfer on the telephone.

PENSION PLAN RESTATEMENT

August 6, 2014

Authored By: Jessica Haddock, Salt Lake City Office

The Internal Revenue Service (IRS) requires that all preapproved defined contribution plans be updated every six years to comply with changes to laws and regulations made since the previous restatement period. The current restatement period updates preapproved plans for changes made primarily by the Pension Protection Act of 2006 (PPA).

If you would like to read more about the updates that are incorporated into the PPA restatement you can visit the Department of Labor’s website at http://www.dol.gov/EBSA/pensionreform.html to learn more about the Pension Protection Act. Adopting a PPA document during the designated timeframe is one of the requirements of providing favorable tax benefits to the plan sponsor, plan participant, and their beneficiaries.

Since you are required to have your plan document restated anyway we can amend the plan as part of the restatement process. We would highly suggest you make any plan changes while the plan is being restated as this would save on fees for the amendments that can all be incorporated into the new plan documents. If you have any questions on the restatement process or are interested in our services, please contact us.

Are Work Clothes Tax Deductible?

July 23, 2014

Authored By: Tara Williams is a CPA in the Logan office of Cook Martin Poulson, P.C. Tara enjoys interacting with clients and working with them to create solutions to problems. Tara is a native of Layton and earned a bachelor’s degree in accounting from Utah State University and a master’s degree in accounting from Weber State University.

Generally, clothing costs aren’t allowable as ordinary and necessary business expenses. They are characterized as nondeductible personal expenses. The IRS describes clothing that would qualify for a deduction as “required by the employer and not suitable for everyday use.” Most clothing worn to work could be required by an employer depending on the environment, but the key is that it cannot be adaptable for everyday use outside of work. Clothing that would qualify as a deduction include:

• Uniforms worn by firefighters, police officers, letter carriers, healthcare workers, professional athletes, and delivery workers.
• Clothing that protects workers from injury, i.e., glasses, hardhats, work gloves, and safety shoes. See IRS publication 529 for more information.

In a 2011 tax court case, Leyla Diaz was employed as an assistant to the operations manager at a company that owned and operated 11 Midas locations. According to Leyla, she was required by her employer to wear “standard khaki pants, a red polo shirt, and sneakers.” She explained that she did not wear her work clothing other than in connection with her employment. She attempted to deduct $1,400 of clothing and shoe expenses on her tax return as unreimbursed employee business expenses. The court ruled that because the clothing was adaptable to general use, she was not entitled to a uniform and shoe expense deduction. Had Leyla been a service technician that was required to wear a uniform and safety gear, those expenses would have been allowable.

Before taking the uniform tax deduction, keep in mind the two steps that are required for the deduction. Uniforms must be required by your employer and cannot be suitable for everyday use. If you have any questions feel free to contact your CPA at Cook Martin Poulson, PC.

IRS Prevents Employers From Pushing Workers Into Health Care Exchange

July 9, 2014

Authored By: Chad Lambert, Chad works in the Logan office. He enjoys working with clients in a variety of industries to help them with individual and business taxes and payroll preparation. Chad is currently working towards his CPA certification and enjoys learning new things that will help him to better serve his clients.

Obamacare has forced many employers to think differently about providing health care for their employees. Since employers with over 50 full-time equivalent employees will be required to provide health care for workers beginning January 1, 2015, many companies have been exploring the most suitable option for their situation. For some businesses, the most reasonable option was to send employees to the health care exchange to find coverage on their own and provide a tax-free payment to employees to offset some or all of this cost. This provided health insurance to employees while reducing some of the burden on the business.

With many companies considering this option that would shift some of the responsibility of health insurance elsewhere, the IRS responded in May 2014 with a Q&A to clarify IRS Notice 2013-54. The IRS stated that plans in which employers provide tax-free benefits to employees to purchase insurance from the exchange do not satisfy federal rules. When an employer reimburses employees for premiums, the arrangement is known as an employer payment plan. “These employer payment plans are considered to be group health plans,” the I.R.S. said, but they do not satisfy requirements of the Affordable Care Act. Failure to comply with these regulations can bring about large penalties for employers of up to $100/day, per employee for a total of $36,500/year, per employee. Such penalties will eliminate employers from sending employees to Health Care Exchanges and leave them looking for another viable solution.

To see the IRS Q&A “Employer Health Care Arrangements” click the link below:

http://www.irs.gov/uac/Newsroom/Employer-Health-Care-Arrangements

Business Consultants: Why You Need Them

July 7, 2014

Oprah Winfrey had Barbara Walters, Steve Jobs had Bill Campbell, while Mitch Albom had Morrie Schwartz. Many industry performers and famous people have a mentor, coach, or consultant. Great mentors share their experiences and challenge you to become more than what you think you can be. Coaches help unleash your potentials and guide you through the uncertain path, while consultants offer to share their expertise in a specific field.

There’s a thin line separating mentors, coaches, and consultants, but all of them share one goal: to help a person or organization be the best they can be. Business mentors, coaches, and consultants play an important role in helping an enterprise succeed.

Hundreds, if not thousands of industry leaders can attest that having someone to consult during critical points in business is one of the keys to achieving goals.

A Great “Necessity”

More companies are recognizing the importance of having a helping hand and consultants have somewhat become a necessity in business. Consultants bring a high level of technical knowledge and expertise to the table. They help you see the “big picture”, identifying opportunities for improving business in ways you would not have figured out on your own.

Not Just Business Consulting

Consultants today not only provide technical expertise, but sometimes act like mentors and coaches, too. They sometimes provide expert advice based on experience and empower business owners to reach their greatest potentials. Some help startups set goals effectively and make short-term and long-term plans for their companies, while others assess an organization’s performance.

Taking Your Business to the Next Level

Business consultants help take companies to the next level. They provide the expertise needed to improve efficiency. They help accomplish special projects, offer an objective point of view, and provide assistance in dealing with complex issues your organization faces. They are a “safe pair of hands.”

Even if you think you’re an expert in your field, chances are you don’t have all the skills needed for the job quite just yet. You need some help. For quality business consulting and bookkeeping services, contact us. We’ll help advance your business and bring your company to the next level.

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