There are numerous changes to North Carolina Sales and Use Tax law effective March 1, 2016. North Carolina has issued several notices and directives regarding these changes which can all be found on the North Carolina Department of Revenue website.
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Access Bernard Robinson & Company's 2015-2016 Tax Planning Guide here!
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No Scientists Required to Benefit from R&D Credit
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 By Tim Hooks, CPA, Partner
Discussion about research and development ("R&D") credits often involves client skepticism about the related benefits. Many clients wonder if they even qualify for the credits. They often get stuck on the words "research and development," conjuring up the image of Einstein level scientists in a lab working day and night. The rules are far less complex and qualification is far more likely. 1) The Protecting Americans from Tax Hikes ("PATH") Act included a few important updates to the R&D credit, including: Permanency - After more than 30 years of expiring every two to three years, it is now permanent. As with all laws, permanency merely means the law will not change absent an act of Congress. 2) Payroll tax offset: For tax years that begin after December 31, 2015, a qualified small business may elect to claim a portion of the R&D credit against its employer FICA liability, up to $250,000. A qualified small business is one with gross receipts in the current year of less than $5 million that has earned revenue for less than five years. 3) AMT Offset: Outside of a temporary reprieve in 2010, no R&D credits could be used against Alternative Minimum Tax ("AMT"). For eligible small businesses and owners, which may or may not be qualified small businesses, R&D credits can be used to offset all income taxes, regular and AMT, effective tax years beginning 2016. If you design, develop, or enhance your current products, processes, formulas, software, etc., you may be eligible. Common industries for an R&D credit include manufacturing, textiles, construction, demolition, and engineering. Current numbers indicate that over $12 billion in R&D credits are taken annually. Don't miss out on your piece of the pie. To find out if your business and/or you qualify for this and other tax credits, consult your tax advisor throughout the year. |
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| How Enron Costs Companies $250 Million A Year |
By Ben Ripple, CPA, Senior Manager
In February 2001, Enron's Chief Accounting Officer Rick Causey told budget managers "From an accounting standpoint, this will be our easiest year ever." Less than a year later, Enron filed for bankruptcy. This is the part where I would say "and the rest is history," except it is not history. Companies are still paying for the sins that Enron committed fifteen years ago, and while some of these costs are hard to pin down, there is one that is very measurable, the enactment of the Sarbanes-Oxley Act.
The Public Company Accounting Oversight Board (PCAOB) was established as part of the Sarbanes-Oxley Act that followed in the wake of the Enron scandal. The PCAOB is a nonprofit corporation with the mission to oversee the audits of publicly traded companies and to protect the public investors' interests. This includes setting audit standards for public companies and conducting inspections of public accounting firms that audit public companies. The funding for the PCAOB comes from fees charged to publicly traded companies, broker-dealers, and public accounting firms. In 2014, the last available audited financial statements of the PCAOB, these fees came to $253,635,677. This observable quarter of a billion dollars does not include the additional audit costs caused by the wave of new accounting standards that followed and applied to all companies, publicly traded or not. So when you hear about accounting fraud, remember that companies throughout the United States are still paying a hefty bill each year for Enron's fraud that came to light fifteen years ago.
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Probate: What, Where, When, and Why
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 By Christina Chong, CPA, Manager
When a person dies, the administration of his or her estate usually requires probate. Probate is the legal process that appoints the executor or personal representative who will administer the estate and distribute the assets to the beneficiaries. Probate also involves the recognition of the validity of a will, if applicable. All states have some form of probate, though the requirements of each state vary.
The executor or administrator must find, secure, and manage the estate assets during the probate process. Additionally, the executor or administrator is responsible for filing a decedent's final individual income tax return, estate tax return (if appropriate), and estate income tax returns (if required) during the estate administration period. He or she is also charged with paying debts and filing court required documents, such as annual and final estate accounting.
Among the debts and taxes to be paid from the estate are any costs associated with probate, including legal and other professional fees. The average estimated probate cost in North Carolina is 4% to 10% of the value of the estate.
Some assets do not go through the probate process, such as assets that are owned with rights of survivorship or transfer on death clauses, life insurance, pensions, and IRAs. Additionally, assets that are in a trust at death may avoid probate. It is highly recommended that you consult with a professional who is well versed in the laws of probate while preparing your estate plan or handling the affairs of a decedent.
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By Kyle Corum, CPA, Senior Manager
Fraud.
It is one of those words in business that most of us pass by without much thought. We read about it in the newspapers and think, that could never happen to me or how could they let them do that? Then after a few days, we forget about it and go along our merry way and never think about it again.
Preventing fraud does not have to be a tedious process, but it needs to be something we think about. If we never think about it, then we never do anything to prevent it. And then we go down that slippery slope and just hope and pray it never happens to us. Here are a few easy things you can do to keep your attention on fraud throughout the year:
4) Set up a Google Alert to notify you of fraud and embezzlement in and around where you live and work. You can set these alerts to come to you when they hit the internet: https://www.google.com/alerts.
In our busy lives, these quick and easy links will help us think about fraud throughout the year and give us more knowledge about fraud.
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Bernard Robinson & Company | (336) 294-4494 | [email protected] |
1501 Highwoods Blvd, Ste 300
Greensboro, NC 27410 |
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BRC Strategy is designed to provide information of a general nature and is not intended as a substitute for professional consultation and advice. The opinions and interpretations expressed should not be construed or used as legal or tax advice, written or otherwise, and cannot be used for the purpose of avoiding any penalties that may be imposed under federal, state or local law.
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