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In This Issue
Your BRC Team
John Shields, CPA, Staff Accountant, shares some thoughts on his role at BRC:
 
"As a member of BRC, when I perform an audit, I am doing much more than testing numbers. I am building strong relationships with clients and working with them to improve their businesses. As changes in regulation, the economy and accounting standards continue to impact each industry, BRC offers insightful and practical solutions to help clients prepare for the future."
Noteworthy Links
Five Weird Habits that Make People Successful and Awesome
The Seven Imperatives to Keeping Meetings on Track
C-Suite Executives Take Pricey Courses, Learn to Use Social Media
Defining Emotional Intelligence.  What's Inside?
Three Things for Small Businesses to Watch in 2014
Super Foods for Super Performance: Cranberries
Like advisors, not all foods were creating equally, some just deliver more...
 
Why They're Super
Cranberries are renowned for protecting against urinary tract infections, but did you also know they may improve blood cholesterol and aid in recovery from strokes? Cranberry juice has also been shown to make cancer drugs more potent.

How to Enjoy Them
Although available frozen year-round, enjoy these tart and tangy berries fresh during their peak season from October through December.
 
-ABCNewsHealth

January 13, 2014 
Here's to your success in 2014! Our team stands ready to support you in realizing your goals for the new year. We look forward to working with you as you face your challenges and opportunities related to current and anticipated tax reform legislation, changes in generally accepted accounting procedures, Affordable Care Act requirements and more.

As we gear up for another busy season, we pause to thank you for allowing us the opportunity to work with you and invite any feedback on how we can serve you better, especially in the ways that matter most to you, in 2014. 
 
-Wade Pack, Managing Partner 

Financial Reporting for Private Companies
Is Your Business a Potential User of the Guide for Evaluating Financial Accounting and Reporting for Private Companies?
By Dan Hayes, CPA, Partner

On December 23, 2013, the Private Company Decision-making Framework Guide was issued as part of the ongoing commitment of the FASB and the Private Company Council to consider the needs of both users and preparers of private company financial statements. It is believed to be a cost-effective alternative for private companies and use of the Guide may influence standard-setting activities for not-for-profit organizations and employee benefit plans.

How to evaluate if the Guide applies to you:
Business entities that are potential users of the Guide could consider potential alternatives within U.S. GAAP. Potential users are defined primarily by what they are not. A business entity is NOT within the scope of the Guide if it meets any one of the following criteria:
  1. It is required by the U.S. Securities and Exchange Commission to file or furnish financial statements, or does file or furnish financial statements (including voluntary filers), with the SEC (including other entities whose financial statements or financial information are required to be or are included in a filing).
  2. It is required by the Securities Exchange Act of 1934, as amended, or rules or regulations promulgated under the Act, to file or furnish financial statements with a regulatory agency other than the SEC.
  3. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer.
  4. It is required to file or furnish financial statements with a foreign or domestic regulatory agency in preparation for the sale of or for purposes of issuing securities that are not subject to contractual restrictions on transfer.
  5. It has one or more securities that are not subject to contractual restrictions on transfer, and it is required by law, contract, or regulation to prepare U.S. GAAP financial statements (including footnotes) and make them publicly available on a periodic basis (for example, interim or annual periods). An entity must meet both of these conditions to meet this criterion.
In following newsletters, we will summarize the five significant private company differential factors and their implications for private company financial reporting. 

Long Awaited Final Rule Published
Recipients of Federal Awards Can Expect Major Changes by the End of 2014 and Beyond 
By Wade Pack, CPA, Partner  
 
On December 26, 2013, the Office of Management and Budget (OMB) published in the Federal Register its Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Final Rule). This Final Rule was the result of a more than two-year effort by OMB and the Council on Financial Assistance Reform (COFAR) to streamline rules and regulations governing the award of federal financial assistance to non-federal entities. Based on overarching directives from President Obama to reduce improper payments of federal dollars while also reducing administrative burdens, OMB and COFAR have made significant changes to the requirements that both federal and non-federal entities must follow.
 
What changes relate to Single Audits?
One of those changes centers around which entities will still have to obtain Single Audits. Under the new requirements, the federal assistance threshold for entities to have a Single Audit will be moved to $750,000 (from a previous amount of $500,000), and this new threshold will apply to audits of fiscal years beginning on or after December 26, 2014. Essentially, the first single audits performed under these new requirements will be for December 31, 2015 year-ends. December 26, 2014 is also the date by which OMB has directed that federal agencies have adopted the necessary regulations to comply with this Final Rule.
 
When do these changes apply?
In a recent webcast, representatives from OMB and COFAR explained that federal assistance monies awarded prior to issuance of the implementing regulations would not be directly affected by the new requirements. In other words, there would be no retroactive effects on previously issued awards. However, some of the new requirements will involve non-federal entities having to make organization-wide changes, for instance in internal control over federal award programs, meaning that after any such conforming changes are made, those changes will affect previously issued awards prospectively as they are drawn down from the federal agencies.

What more could these changes mean to me?
Bernard Robinson's Governmental Practice Area staff is already hard at work reading and learning these new requirements so that we may assist our clients and other interested stakeholders to ensure they are prepared to better obtain, manage and oversee their federal awards, and we will continue to monitor developments in this area over the coming weeks and months so that we may keep you apprised of information that's important to you. Additionally, as a member firm of the AICPA's Governmental Audit Quality Center (GAQC), we recommend that you periodically visit the GAQC's website for alerts and other resources related to federal grant awards.

Tax Savvy
Tips for Taxpayers Who Travel for Charity
By Pat Price, CPA, Partner

 

Board members and other volunteers may qualify for a charitable deduction for any unreimbursed travel expenses they incur on behalf of a qualified charitable organization. Here are 5 tax tips the IRS explained in the IRS Summertime Tip 2013-05
 
  • To deduct the unreimbursed travel expenses, you must have been selected to attend a convention, board meeting or other event as a representative of a qualified charitable organization. (Most 501(c)(3) organizations that are current in their tax filings would be qualified.)
  • Travel expenses unreimbursed by the charity are deductible "only if there is no significant element of personal pleasure, recreation or vacation in the travel." A taxpayer that spends only a few hours working for the charity leaving most of the day free for recreation and sightseeing will not be allowed a deduction even if he or she works very hard during those few hours.
  • The duties performed must be "genuine and substantial" throughout the trip. Enjoying an evening out after spending the day at a charitable organization's regional meeting as a chosen representative, will not affect the deductibility of the expenses (as long as the taxpayer does not deduct the cost of the evening's entertainment.)
  • Deductible travel expenses may include; air, rail, and bus transportation or car expenses, lodging costs, cost of meals, and taxi fares or other transportation costs between the airport or bus/rail station and the hotel.
  • A volunteer cannot deduct the value of their time or services, or the value of income lost while working as an unpaid volunteer. The cost of travel for spouses and children is not deductible.
  • The volunteer must have adequate records to support their unreimbursed volunteer expenses: 
    • a cancelled check or credit card receipt;  
    • when neither a cancelled check or receipt is available, "other reliable written records" showing the donee's name, contribution date, and amount of the expenses  
    • If the expense is $250 or more a proper acknowledgement must be received from the organization. Acknowledgment from charity must contain (a) a description of the services provided, (b) a statement as to whether the charity provided any goods or services in return for the services and if so, a description and a good faith estimate of their value (or a statement that only intangible benefits were provided). The acknowledgment does not have to list the amount of the unreimbursed expenses. The acknowledgment must be received no later than the date the volunteer actually files a return for the year that the gift was made, or the return due date, including extensions.

Tax News
Government Shutdown Will Delay Tax Filing 
By Olga Oganesov, CPA, Manager 
 
With the tax filing season for 2013 returns just around the corner, many people are anxiously awaiting their tax refund. If you are one of those who like to file your tax return at the start of every tax season, you may have to wait a little longer to file your 2013 tax return.

Filing Season Will Open 10 Days Later
The IRS announced it will open the 2014 filing season on January 31, 2014 - 10 days later than originally scheduled. Even though many tax preparation and tax software companies are expected to begin accepting tax returns in early January, they would have to hold those returns until the IRS systems open on January 31. The IRS cautioned that it will not process any tax returns before January 31, so there is no advantage to filing a paper return before the opening date. 

The new opening date will allow the IRS adequate time to program and test its tax processing systems. The annual process for updating IRS systems was interrupted in October during the 16-day federal government shutdown. "The government closure came during the peak period for preparing IRS systems for the 2014 filing season," the IRS said in a release. "Programming, testing and deployment of more than 50 IRS systems is needed to handle processing of nearly 150 million tax returns." 
 
The government shutdown in October put the IRS "nearly three weeks behind its tight timetable for being ready to start the 2014 filing season." During the 16-day government shutdown, the IRS furloughed more than 90 percent of its workers and closed most of its operations.
"Our teams have been working hard throughout the fall to prepare for the upcoming tax season," said IRS Acting Commissioner Daniel Werfel. "The late January opening gives us enough time to get things right with our programming, testing and systems validation. It's a complex process, and our bottom-line goal is to provide a smooth filing and refund process for the nation's taxpayers." 
 
Every year brings new changes and updates to the tax law, all of which must be worked into the IRS systems. There are a lot of tax changes for 2013 tax returns, particularly due to the new 3.8% net investment tax that resulted from the Affordable Care Act ("Obamacare"). Another significant change includes the matter of same-sex couples who are now eligible to file their federal tax returns as married couples. 
 
This will be the second year in a row that the IRS delayed opening of the tax filing season because of political bickering. The 2013 tax filing season was delayed until January 30, 2013 because of the last-minute major deal that adjusted tax rates and averted a possibility of the nation going off the "fiscal cliff". Some taxpayers had to wait until February or even March to file their 2012 tax returns.

So how will the delay affect you? 
Most of the taxpayers will notice no change to the usual process. Only the beginning of the filing season would be delayed, which means that the early filers would have to wait about a week longer than usual to receive their tax refunds. The actual processing times of the returns by the IRS would not be affected. So if you normally receive your refund in two to three weeks after you file, you should still receive it within the same timeframe. 
 
The IRS has emphasized that taxpayers who file their returns electronically will get their refunds much faster than those who file by mail. In addition, you can request direct deposit of your refund into your checking or savings account.

Even though the IRS issues most refunds in less than 21 days, some returns require additional review, and the refunds may be delayed. You can check the status of your Federal refund by going to the IRS website. The "Where's My Refund" tracking tool asks the taxpayer a few simple questions and displays progress through three stages: 1) return received, 2) refund approved, and 3) refund sent. 
 
The other filing deadlines did not change. Companies must still send out Forms W-2 and other income tax forms on schedule (typically by January 31), and taxpayers must still file returns by April 15. The April 15 tax deadline is set by statute and cannot be changed. However, the IRS reminds taxpayers that they can request an automatic six-month extension to file a tax return using Form 4868, which can be filed electronically or on paper. Even if an extension of time to file is requested, any tax due for 2013 must be paid by April 15, 2014.

But what about state tax returns? The North Carolina Department of Revenue warns taxpayers of the impact the IRS filing delay may have on the filing of North Carolina individual income tax returns. As a result of the IRS's delay, returns filed through the joint federal/state electronic filing program will not be forwarded on to the NC Department of Revenue until the IRS begins accepting individual income tax returns. In addition, state taxpayers who file their returns electronically before the federal filing season begins will not receive an electronic acknowledgment from the NC Department of Revenue until the IRS receives and officially begins processing tax returns.

Just like the IRS, the NC Department of Revenue offers a refund tracking tool on its website. "Where's My Refund?" tool allows taxpayers to check the status of their current year individual income tax refund and obtain information about amended returns and prior year returns filed late. 

Systems Check
Support is Ending for Windows XP and Office 2003 - Is Your Data Secure? 
By Casey Cox, CPA, IT Support Specialist

Issue:
On April 8th, Microsoft will no longer be supporting XP and Office 2003. This means no more security updates, hotfixes, or free or paid support. Once XP and Office 2003 become unsupported, any machines running this software will be vulnerable to security risks, which may include theft of data.

What you need to do:
If you are running Windows Vista or later, as well as Office 2007 or later, you are supported and don't need to do anything. If you have XP or Office 2003, you will need to upgrade to newer software. This may be a good time to replace aging computers, as the newer software may not be compatible with older hardware.

For more information: 
Please visit Microsoft's website.

Bernard Robinson & Company | (336) 294-4494 | pmcmillan@brccpa.com |
1501 Highwoods Blvd, Ste 300
Greensboro, NC 27410

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