Dear clients & friends,
We would like to welcome our new partner Alan Fishman, CPA to the firm. He will help us to develop and market our medical industry niche. His 20 years of accounting experience encompasses a wide variety of industries with a focus in medical services, food services and the entrepreneurial small business arena. His accounting expertise in medical and professional practices has led to many financial success stories for his clients.
We look forward to the many contributions that Alan will make to our Firm.
The Partners of MayerMeinberg LLP
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MM Forensic File: Finding the Missing Factor
Prepared by Geraldine M. Wolk, CPA
In a recent case, we were engaged by an attorney to provide our expert testimony as to whether we agreed with the Internal Revenue Service's finding of underreported income of nearly two million dollars. If we could not disagree and refute this assumption and results, the client who had been charged with tax evasion would have been subject to a longer prison sentence and additional tax payments, penalties and interest totaling well over $620,000.
The case had been open for many years and we were not the first set of experts engaged to review the documents and to express an opinion as to the facts and the amount of the tax evasion. Many different amounts had amounts already been computed by the IRS and had been evaluated by previous experts and examiners. We received three CD's containing over 1,000 documents seized by the government, all listed by serial number, without name or description.
As a first step, we sorted and listed the files by topic in numeric order as a means of discovering the contents of this trove. There were business tax returns covering many years for many businesses, individual tax returns, bank and credit card statements, correspondence, analytical schedules, reports printed from various QuickBooks ledgers, real estate and mortgage closing statements, subpoena's, sales tax and payroll tax returns, miscellaneous business documents, some unreadable documents, and duplicates, triplicates and amended versions of all of the above.
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New tangible property regulations were released, replacing both the proposed regulations and the long-standing current regulations. These new temporary regulations, effective for taxable years beginning on or after January 1, 2012, update the prior rules and serve to codify a previously unclear area of tax law.
It is noteworthy that the new temporary regulations include rules that are significantly different from both the current regulations and the proposed regulations. Additionally, the regulations not only provided the expected guidance on amounts paid to acquire or produce tangible property, but they also offer unanticipated new guidance regarding the disposition of real property.
The regulations involve the treatment of expenditures incurred in acquiring, producing, selling, or improving and repairing tangible assets and are effective for tax years beginning on or after January 1, 2014, there is an option to begin sooner. Final guidance should be issued in 2013. These new regulations present taxpayers with both opportunities for tax deductions and compliance issues related to conforming to these new rules.
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1099 Filing Requirement by January 31, 2013
The Internal Revenue Service (IRS) requires businesses (including not-for-profit organizations) to issue a Form 1099 to any individual or unincorporated business paid in excess of $600 per calendar year for services rendered. This is required whether these payments are spread out over the course of the year or are paid in one lump sum payment. This form is generally not required to be issued to incorporated businesses. The only exception is when payments are made to incorporated law firms. A 1099 must be issued whenever payments in excess of $600 per calendar year are made to law firms.
The penalty for failure to file Form 1099 can be as much as 50% of the amount paid for services. The responsibility for filing the Form 1099 is on the organization paying for the services (each state component). It is the responsibility of the individual/business receiving the Form 1099 to handle it properly on their tax return.
Please contact us if you need help preparing these forms. | |
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Health Insurance Coverage Reporting
Due in January 2013 | |
There are new paperwork requirements for large employers, (those filing 250 or more Forms W-2) starting in January 2013. Employers will have to report the aggregate cost of employer-sponsored health insurance coverage provided to employees during 2012. Small employers are exempt from the new information reporting requirement, for another year at least.
No deferral for larger employers. Those employers filing 250 or more Forms W-2 for 2011, must report the aggregate cost of the applicable employer-sponsored health insurance coverage (as defined in Code Sec. 4980I(d)(1)) provided to employees during 2012 on the Form W-2, Wage and Tax Statement, filed before the end of January, 2013, and then filed with the Social Security Administration (SSA).
The reporting to employees is for their information only. It is intended to inform them of the cost of their health care coverage, and doesn't cause excludable employer-provided health care coverage to become taxable. (Notice 2012-9, 2012-4 IRB, Q&A 2)
Please click here to continue reading. |
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New NYS Sales Tax Reporting Requirement |
Clients who have to file NYS sales tax returns will have to modify their accounting system so that they will have the information required to be reported on their NYS Sales Tax returns beginning in 2013. Business will have to report "Gross credit card and debit card deposits" made to the business's bank account by credit and debit card processors on their NYS sales tax return. This is the same information that the credit card merchant processing banks report to IRS on Form 1099-K about debit and credit card transactions. NYS is requiring that credit card merchant processing banks also report this to information to NYS.
The information that the credit card merchant processing banks report is the "gross amount", the total dollar value paid to the participating payees on the cash basis and the payments can include sales tax, fees, tips, and other amounts that are not revenue to the merchant. The gross amount also includes out-of state sales, exempt sales, and non-taxable sales. The gross amount does not include any credits, charge-backs, fees, cash equivalents, discounts, refunds or any other amounts. The reporting date is the date that the merchant accepted the payment card.
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Retroactive Treatment of Lifetime Transfers from IRAs to Qualified Charities | |
The American Taxpayer Relief Act of 2012 includes the retroactive reinstatement of Qualified Charitable Distributions ("QCDs"), which allow certain individuals to direct tax-free lifetime transfers from their IRAs to certain charitable organizations. Certain distributions made in January, 2013, can now be treated as QCDs made in 2012.
QCDs allow taxpayers who are at least 70½ to direct up to $100,000 from their IRA "directly to charity." Such amounts qualify as required minimum distributions (RMDs) from their IRAs, are not includable in the IRA owner's gross income, but do not qualify for a charitable contribution deduction. Congress allows taxpayers who otherwise qualify for QCD treatment to take advantage of this provision for the 2012 tax year.
The 2012 Tax Act provides three ways in which eligible taxpayers can take advantage of the transitional rule:
- Taxpayers who directed otherwise qualifying transfers in 2012 in anticipation of the reinstatement of QCDs, can in fact treat those distributions as QCDs.
- A taxpayer can direct a distribution from their IRA to a qualified charity in January of this year and (at the election of the taxpayer) and it will be deemed to be made as of December 31, 2012 assuming other QCD requirements are met.
- If the taxpayer took an IRA distribution in the month of December, 2012, the taxpayer could now make a cash contribution (not stock or other appreciated asset) of any or all of such December distribution to a qualified charity out of their own pocket during the month of January and treat such contribution as if made as of December 31, 2012 (they would not have to take the December distribution into their income).
In addition to the retroactive features for 2012 described above, this provision will be in effect for all of 2013. |
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The Wage Theft Prevention Act Notice is Due
The annual notice required under the NYS Wage Theft Prevention Act:
- The notice must be provided between January 1, 2013 and February 1, 2013.
- This notice applies to all private sector employers with employees in New York State.
- The notice must contain the following information:
- The employe's rate(s) of pay;
- The basis of the employee's rate(s) of pay (e.g. by the hour, shift, day, week, salary, piece, commission, or other);
- Whether the employer intends to claim allowances as part of the minimum wage, including tip, meal, or lodging, allowances, and the amount of those allowances;
- The employee's regular pay day designated by the employer in accordance with the frequency of pay requirements in the Labor Law1;
- The name of the employer and any "doing business as" names used by the employer;
- The physical address of the employer's main office or principal place of business, and a mailing address if different;
- The telephone number of the employer;
- Any "such other information as the commissioner deems material and necessary."
- Employers must keep the signed notices for six years and be made available to the Department of Labor upon request.
- The notice can be given electronically, but there needs to be a system where the worker can acknowledge the receipt of the notice and print out a copy of the notice.
For more information regarding important FAQ's please click here to view the attached PDF file. | |
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Robert O. Mayer,
Co- Managing Partner |
Robert Mayer was profiled in NYREJ: Year in Review.
Also quoted in LIBN article about technology investments.
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Lois Clinco, Partner |
Lois Clinco was featured in LIBN Who's Who in Accounting/ Audits.
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Carol Markman, Tax Partner |
Carol Markman was featured in Westbury News for being honored by Planned Parenthood of Nassau County. View article. |
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Mark Goldschmitt, Manager |
Mark Goldschmitt was quoted on Bankrate.com
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MayerMeinberg in NYREJ
Robert O. Mayer, Lois Clinco and Woody Goldstein were all featured in New York Real Estate Journal in an article about the Board's Fiduciary Duties Seminars hosted in November. View article. | |
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We would like to welcome our new clients and we hope you will take full advantage of our pro-active accounting services and experience the many different ways MayerMeinberg can help you meet your financial goals - both professionally and personally. | |
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