Showing posts with label bookkeeping. Show all posts
Showing posts with label bookkeeping. Show all posts

Friday, November 30, 2018

IRS updates voluntary disclosure practices for hidden offshore funds

The Internal Revenue Service has updated its voluntary disclosure procedures for taxpayers with previously undisclosed funds, instituting tougher procedures. 
IRS deputy commissioner for services and enforcement Kirsten Wielobob issued a memorandum last week that the IRS posted publicly Thursday, outlining the process for all voluntary disclosures following the closing of the IRS’s Offshore Voluntary Disclosure Program on Sept. 28, 2018. She noted in the memo that the 2014 OVDP began as a modified version of the OVDP that launched in 2012 after earlier programs in 2009 and 2011. “These programs were designed for taxpayers with exposure to potential criminal liability or substantial civil penalties due to a willful failure to report foreign financial assets and pay all tax due in respect of those assets,” she wrote. “They provided taxpayers with such exposure potential protection from criminal liability and terms for resolving their civil tax and penalty obligations.” The new procedures are effective for all disclosures after Sept. 28, 2018. The penalties have grown steadily stiffer for taxpayers who continue to hide their funds in foreign bank accounts, and the latest version of the program may give taxpayers and tax practitioners pause. “Under the new procedures, taxpayers will find that the cost of making a disclosure has increased,” commented Barbara Kaplan, a tax attorney and shareholder at the law firm Greenberg Traurig, in an email from the firm. “A number of things have changed: the number of years for the program, the application of penalties, a right to go to Appeals to contest the IRS findings after examination, the making of the offshore and domestic programs the same and the requirement to include an explanatory narrative. It also appears that the examination phase is more like a true IRS audit than just a compliance review.” A fraud penalty, and a willful FBAR penalty for offshore cases where taxpayers intentionally failed to file a foreign bank account report, will now be applied to one of the six years of the disclosure period, or less if the noncompliance occurred over a shorter period of time, she noted. “Additional civil penalties can be expected,” Kaplan wrote in an email. “CI [IRS Criminal Investigation] will continue to screen all disclosures to determine if a taxpayer is eligible to make the disclosure. Once pre-clearance is granted, the taxpayer will have to disclose the nature of the non-compliance, including a narrative providing facts and circumstances, assets, entities and any related parties or professional advisors involved in the noncompliance.” That could have an impact on tax professionals who have advised taxpayers who have been hiding their funds. But taxpayers and their representatives will have to weigh the pros and cons of the new procedures. “The amended or delinquent returns will be examined and, at the end of the process, it is expected that an agreement will be reached,” said Kaplan. “Cooperation with the civil examination is required and, if not given, could lead to revocation of preliminary acceptance into the program. At the end of the day, taxpayers who afford themselves of this process will be relieved of criminal exposure but not the civil ramifications. For those who do not have criminal exposure, this program should not be used.”

Monday, November 26, 2018

140,300 new accounting and auditing jobs predicted by 2026

Approximately 140,300 new jobs for accountants and auditors are expected to be created by the year 2026, according to a new forecast.

The Knowledge Academy, a training and qualification provider, analyzed the findings from a Glassdoor report, “What’s Ahead for Jobs? Five Disruptions to Watch in 2018,” and estimated the number of jobs expected to grow the most by 2026. It found that the U.S. will see large growth in tech-related roles in non-tech industries such as finance, consulting and retail. However, many traditional jobs will also increase through the ranks as technology continues to develop.

The expected job gains come despite fears that artificial intelligence and automation will eliminate jobs in many sectors. AI is already helping the accounting, auditing and financial sectors, as well as many others. A recent study by the Pew Research Centre found that 48 percent of Americans are somewhat worried their job could be taken over by a robot and 25 percent are very worried at this prospect. Despite those fears, the unemployment rate is at its lowest point since 1969. According to the U.S Bureau of Labor Statistics, the unemployment rate in October was 3.7 percent, with the number of unemployed people in the U.S. around 6.1 million.


Besides accounting and auditing, other sectors are expected to gain an even greater number of jobs by 2026, according to The Knowledge Academy. They include home health and professional care aides (1.1 million new jobs), waiters, food service and cooks (907,700 new jobs), registered nurses (437,000 new jobs), software developers (253,400 new jobs), janitors and cleaners (233,000 new jobs), operations managers (205,900 new jobs), medical assistants (184,600 new jobs), nursing assistants (164,000 new jobs), and construction laborers (153,300 new jobs).

Saturday, July 21, 2018

Senate panel advances IRS commissioner and introduces IRS reform bill

A closely divided Senate Finance Committee advanced the nominee for the next Internal Revenue Service commissioner, Charles Rettig, by a vote of 14 to 13, but he awaits a vote by the full Senate.

Rettig is a tax attorney at the Beverly Hills law firm Hochman, Salkin, Rettig, Toscher & Perez, P.C. who has spent most of his career representing clients before the IRS. If he is confirmed by the full Senate, he would succeed acting commissioner David Kautter, who is also the Assistant Secretary of the Treasury for Tax Policy. Kautter has been acting commissioner since the end of John Koskinen’s term last November. Rettig would be coming in at a time when the IRS is dealing with the massive tax cuts law that Congress passed last December.

“For the IRS to implement the biggest tax overhaul in a generation, it is essential that the agency is fully staffed and led by a strong, capable commissioner,” said Senate Finance Committee chairman Orrin Hatch, R-Utah, in a statement. “The job of commissioner is further complicated by years of mistrust and scandals at the agency. Chuck Rettig is the right pick to both implement tax reform and restore trust in the IRS. I am pleased that the committee advanced his nomination, and I look forward to the Senate acting quickly on his nomination so he can get started on the hefty tasks he will be charged with as the agency’s leader.”

However, Democrats on the committee voted against confirming Rettig, in part as a protest against the IRS and the Treasury Department’s decision this week to let 501(c)4 tax-exempt organizations, such as political action groups, avoid listing the names of their donors (see Many political tax-exempts no longer required to report donors).

“The Trump administration has taken a qualified nominee and dumped him right in the middle of a dark-money political firestorm of their own creation,” said Sen. Ron Wyden, D-Ore., the ranking Democrat on the committee. “And a radical change in tax law regarding transparency and disclosure has dragged the IRS and Treasury into a swirling set of questions about the president’s foreign financial ties and motivations. As a result, this nomination is no longer an isolated debate that can begin without context.”

Despite their differences, Hatch and Wyden agreed to introduce bipartisan legislation Thursday aimed at reforming some of the IRS’s administrative practices, echoing legislation that already passed the House in April.

The Taxpayer First Act is also based on two 114th Congress bills (S. 3156 and S. 3157) that passed the Finance Committee unanimously in 2016. It aims to increase taxpayer protections and electronic filing; enhance whistleblower protections; reform policies concerning IRS employees; increase scrutiny of IRS audit criteria; and support prevention of identity theft and tax refund fraud.

“Ensuring the IRS has greater flexibility and bringing it into the 21st century continues to be a top priority – especially with the largest rewrite of the tax code in more than three decades on the books,” Hatch said in a statement. “We’ve been working hand in glove with the administration to ensure a proper and seamless implementation of new policies and are confident this bill will streamline the agency in a way that protects taxpayers from fraud and abuse, increases electronic filing and supports IRS employees.”

“With every passing day there’s a new headline about hackers and crooks stealing taxpayer dollars and personal data,” Wyden stated. “Congress must do more to protect American taxpayers from fraud and financial abuse. This bipartisan legislation will make common-sense changes to help taxpayers and streamline administrative rules at the IRS, which will allow tax officials and agents to better safeguard the American people against financial predators.”

Tuesday, June 5, 2018

GDPR can have an impact on U.S. accountants

The European Union’s General Data Protection Regulation takes effect Friday, and it could affect accountants and auditors, along with their clients, in the U.S.

Under the GDPR, any company that gathers, monitors or manages the personal information of EU residents will need to make drastic changes in how it gets and stores the data. Companies in both Europe and the U.S. have been blitzing consumers in recent weeks with emails about new user agreements and privacy policies, while some U.S. businesses have announced they will need to exit the European market.

“There’s a lot of U.S. companies that are selling goods and services to individuals in the EU, and there are many dotcom companies and ecommerce companies that have a global footprint and are selling to people all over the world, even if their employees and infrastructure are all in the United States,” said Jeffrey Sanchez, security and privacy managing director at the global consulting firm Protiviti. “Certainly GDPR applies to those organizations. GDPR also applies to other brick and mortar companies that are selling goods and services, whether it’s airplane parts, construction equipment, or a variety of finished products in Europe, where GDPR is going to apply. The reach of GDPR is very broad. One of the biggest changes between the previous privacy legislation and GDPR is that GDPR applies to any company, regardless of where they’re physically located if they’re selling goods and services to people inside the EU.”

Even though the deadline for complying with the new rules is supposed to be Friday, May 25, 2018, many businesses in the U.S. are only now hearing about the new rules, and their accountants can help them get up to speed and audit their compliance.

“Accountants play lots of different roles,” said Sanchez. “If you talk about accountants that play an internal audit role or advisory role, we see in many companies internal audit playing a key role of assisting the organization with their implementation of GDPR. For example, one of the requirements of GDPR is to develop an inventory of all the processing activities. It’s called a Record of Processing Activities, or a ROPA. Internal audit and the accounting people who generally make up an internal audit function are uniquely positioned to be able to assist the organization with developing that because internal auditors generally have a very broad understanding of the organization. They’re very process oriented and they have the skill sets and tools to do data flow maps. I think internal audit in particular is very well suited to helping an organization to go through this process.”

He also sees a role for internal audit in evaluating whether a company is complying with GDPR. “It’s not unlike auditing other regulations, going through and assessing is the company following its policies and procedures,” said Sanchez. “I think those are all activities that internal audit or accountants working in a business consulting advisory type of model are very well suited for assisting organizations.”

Accountants might even be able to help with all those emails that have been hitting inboxes recently. GDPR requires a lawful basis for processing of personal data by companies, and in many cases companies have been updating their privacy agreements while notifying customers about the changes.

“Organizations that are subject to GDPR, those that are offering goods and services into Europe, are going through and revamping their privacy policies,” said Sanchez. “That’s why you see all these companies releasing new privacy statements and privacy policies in the last couple of weeks. One of the requirements of GDPR is that organizations have to have a legal basis for processing. That means that there has to be a legitimate reason why the organization is allowed to use and process the personal data on the European data subjects, so we also see a lot of activity with organizations going through and updating consent language, or documenting other legal bases of processing if they’re not using consent as the basis of processing. I think that’s something accountants can help organizations update their legal basis of processing and assist with the documentation associated with that activity.”

Some of the main requirements of GDPR include the right to access, which gives people the right to obtain their data and to know how it’s being handled; the right to rectification, allowing citizens to amend and correct their personal data; and the right to erasure, also known as the right to be forgotten, permitting subjects to request deletion of their related personal data.

Ready or not, the GDPR takes effect Friday, so companies are scrambling now to comply as best they can.

“The European privacy authorities have all said there’s not going to be an extension,” said Sanchez. “One of the privacy authorities stated that companies have had two years to implement this. That was their two-year grace period, and there’s not going to be any additional grace period, but I think what we’re seeing in reality is many companies are not going to be 100 percent compliant by the deadline, so this exercise of obtaining compliance is going to be an ongoing activity.”

Many businesses in the U.S. have never heard of GDPR or only heard about it recently, so it’s not surprising the level of preparedness is low in this country.

“My experiences with companies in the United States is the awareness started ramping up in late 2017,” Sanchez said Thursday. “Starting in early 2018, we saw the acceleration of awareness, and companies are trying to rush through this. But still a lot of organizations aren’t going to be compliant by tomorrow, and we’re expecting to see the activity of organizations that are getting to compliance continuing for many more months.”

Businesses not only have to worry about their own compliance with the new data privacy rules, but how well their business partners are complying as third parties who handle their customers’ data.

“The data controller is the organization that receives the data from the individual, but all of the data processors, which could be vendors to the data controller, all have to comply as well,” said Sanchez. “One of the things we’re seeing now as well is every company is sending letters to every one of their vendors asking them about their compliance with GDPR, asking them to sign privacy addendums. You can imagine all of the different companies and all of the different vendors — we’re talking about millions of these requests going around right now — asking organizations to describe their controls or commit to comply with GDPR. That effort alone is going to take a lot of time to evaluate all those vendor relationships. That’s definitely one I’m seeing go past the deadline for many companies.”

However, companies that decide to ignore the new requirement could find themselves facing heavy penalties. “The fines are enormous,” said Sanchez. “The European authorities have the ability to fine up to 4 percent of global revenue. The maximum fine is the greater of 20 million euros or 4 percent of global revenue. That gets people’s attention. That can be a big number, and we do expect to see the European authorities open investigations and actively enforce compliance. That’s one of the things where there’s a little bit of wait and see as to what happens starting tomorrow. The European authorities have hinted that they’re intending to actively enforce GDPR.”

GDPR Misconceptions

Robert Cattanach, a partner at the international law firm Dorsey & Whitney and a former trial attorney at the Justice Department, has been closely watching developments with the GDPR and believes there are many misconceptions with it.

“Some common misperceptions being heard around the U.S. and Canada include:

"If I don’t have operations in Europe, it doesn’t apply. Wrong. Any U.S. company offering goods or service to EU residents — i.e., anyone with a website — is likely required to comply," Cattanach said in a statement.

“If I am covered by the GDPR I have to appoint a Data Protection Officer (DPO) in the EU. Wrong. A U.S. company’s obligation to appoint a DPO, or even a designated representative, is a complex and highly fact-depedent analysis,” Cattanach said.

"If I am not covered by GDPR I don’t have to update my Privacy Policy. Wrong. A lot has happened in the U.S. since companies started adopting boilerplate Privacy Policies without really understanding what they were committing to do, and not to do," Cattanach said. "Regardless of whether you are covered by GDPR, basic principles of good information governance mandate a careful look at your privacy policy and terms of use on your website. The biggest risk: overstating who you share your data with. Virtually all websites employ third-party data analytic services, which often open the door to opaque gathering,mining, and trading of a person’s data in ways the website owner may not understand at all — and often conflicts with commitments made to customers and website visitors.”


"If I’m a small to medium-sized U.S. company, there’s virtually zero chance of any enforcement action against me so i can just wait until we understand better how it’s all going to work. Maybe — maybe — right. EU regulators will likely target the larger companies, especially U.S. tech companies, at first but GDPR allows private citizens to lodge complaints, and even bring class actions," Cattanach said. "All it will take is one disgruntled customer or employee whistle blower to spotlight someone who thought they could fly below the radar for a few years. If your appetite for risk is voracious, you might avoid detection for a while. But if you completely ignore GDPR and get caught, the financial exposure to penalties and long-term scrutiny could be breathtaking.”

Sunday, May 27, 2018

Cómo Miami se convirtió en la capital de la clase media de América Latina

Mientras muchos inmigrantes llegan a Estados Unidos a pie por la frontera con México, otros, con más recursos se instalan en la ciudad más hispana del país en busca de seguridad y prosperidad.
Desde hace años, Miami es un paraíso de sol, playa, fiesta y compras. Pero la capital más latina de Estados Unidos no sólo atrae a turistas, sino también a latinos profesionales y pudientes que buscan proteger sus inversiones y una vida tranquila.
Mientras miles de inmigrantes pobres tratan de cruzar a Estados Unidos por la frontera sur de México, otros, mucho más pudientes, llegan a Miami sin atraer tanta atención mediática y sin tanta polémica.
Armados con permisos de trabajo, con mayor formación que los latinos que llegan a pie por la frontera, con altas expectativas y deseos de avanzar, muchos de ellos llegan a Miami y compran casas con piscina, jardín y acceso a buenas escuelas.
Mientras el candidato republicano a la presidencia Donald Trump promete construir un muro a lo largo de la frontera con México, apenas se habla de los migrantes que llegan a Miami, una metrópolis de 2,5 millones de habitantes, en la que casi el 70% de la población es hispana.
El español se habla en casi todas las partes y la mayoría lo asume sin verlo como un problema.
Puente entre culturas
Juan Pablo Restrepo es de Colombia. Vive con su mujer y su hijo cerca a la playa. Trabaja de curador musical en Mood Media, una compañía que suministra música que se escucha en los comercios en todo el país.
"Miami es muy atractivo para los latinoamericanos. Pueden estar en Estados Unidos, con todas su ventajas, pero al mismo tiempo mantener su raíces culturales", dice Restrepo a BBC Mundo.
"También es un puente entre ambas culturas, la anglo y la hispana. Si vas a otros lugares en el país, sientes mucho más las tensiones raciales y culturales".
Restrepo es parte de la diáspora latina que ha convertido Miami en la ciudad de Estados Unidos con el mayor porcentaje de residentes nacidos fuera del país, cerca de un 51% de la población, según Guillermo Grenier, profesor de Sociología de Florida International University.
"Los cubanos comenzaron a llegar (después de la Revolución) en 1959 y después de eso fueron llegando latinos desde diferentes países", dice Grenier.
En los últimos años han seguido a los cubanos cerca de 100.000 latinoamericanos de ingresos medios desde Colombia, Argentina, Venezuela y Brasil, entre otros, dice el sociólogo a BBC Mundo.

"Si eres un empresario de América Latina puedes venir a Miami, porque tienes una audiencia, un mercado. Puedes hacer cinco llamadas en español y establecer la infraestructura para tu negocio", añade, y subraya que cerca del 25% de los negocios en el estado de Florida son de propiedad de inmigrantes latinoamericanos.

IRS provides info on tax reform changes to moving, mileage and travel expenses

The Internal Revenue Service offered information Friday about changes from the Tax Cuts and Jobs Act on the rules for moving expenses, vehicle expenses and unreimbursed employee expenses, along with higher depreciation limits for some vehicles.

The TCJA, the tax overhaul that Congress passed last December, suspends the deduction for moving expenses for tax years beginning after Dec. 31, 2017, until Jan. 1, 2026. During that suspension period, the IRS won’t allow deductions for use of an automobile as part of a move using the mileage rate listed in Notice 2018-03. However, the suspension doesn’t apply to members of the armed forces on active duty who move because of a military order related to a permanent change of station.

Unreimbursed employee expense deduction

The new tax law also suspends all miscellaneous itemized deductions subject to the 2 percent of adjusted gross income floor. The change has an impact on expenses such as uniforms, union dues and the deduction for business-related meals, travel and entertainment that the employer isn’t reimbursing.

That means the business standard mileage rate listed in Notice 2018-03, which was issued before the tax overhaul passed, can’t be used to claim an itemized deduction for unreimbursed employee travel expenses in taxable years starting after Dec. 31, 2017, and before Jan. 1, 2026. The IRS issued revised guidance on the matter Friday in Notice 2018-42. It supersedes the earlier notice and includes info about the update to the standard mileage rates, along with details about the suspension of the deduction for operating a vehicle for moving purposes.

2018 standard mileage rates

In Notice 2018-03, which the IRS issued earlier this year, the standard mileage rates for use of a car, van, pickup or panel truck for 2018 remain:

- 54.5 cents for every mile of business travel driven, a 1 cent increase from 2017.

- 18 cents per mile driven for medical purposes, a 1 cent increase from 2017.

- 14 cents per mile driven in service of charitable organizations, which is set by statute and remains unchanged.

The standard mileage rate for business comes from a yearly study of fixed and variable costs of operating an automobile, while the rate for medical purposes depends on variable costs.

Taxpayers can opt to calculate the actual costs of using their vehicle instead of using the standard mileage rates.

A taxpayer can’t use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System or after claiming a Section 179 deduction for that vehicle, however. On top of that, the business standard mileage rate can’t be used for more than four vehicles simultaneously.

Increased depreciation limits


The new tax law ups the depreciation limitations for passenger automobiles that have been placed in service after Dec. 31, 2017, for purposes of calculating the allowance under a fixed and variable rate plan. The maximum standard automobile cost can’t exceed $50,000 for passenger automobiles, trucks and vans that have been placed in service after Dec. 31, 2017. Prior to the change, the maximum standard automobile cost was $27,300 for passenger automobiles and $31,000 for trucks and vans.