October 12, 2011
Yana Weaver, CPA
The IRS considers any person that has control, receipt, custody, disposal or payment of any item of income of a foreign person that is subject to withholding a U.S. Withholding Agent.
A withholding agent is responsible to withhold tax on payments of US sourced FDAP (Fixed or Determinable Annual or Periodic) income to foreign personals and to make deposits of such tax to the US Treasury. The following items are examples of FDAP income: compensation for personal services, dividends, interest, alimony, rents, royalties, sales commissions regularly paid, etc.
Reporting requirements include filing Forms 1042, 1042-S & 1042-T.
If the withholding agent does not withhold and foreign person does not satisfy its withholding tax obligations, the withholding agent and the foreign person will be held liable for the tax and any associated interest and penalties. Even if the foreign person subsequently pays the tax, the withholding agent still could be held liable for the penalties and interest for the failure to withhold.
According to the IRS estimates, US source income paid to foreign individuals amounts to $140 billion each year. Not surprisingly, the IRS increased scrutiny on these payments and designated the US withholding on payments to foreign persons as a Tier I issue. The Service has broadened its focus well beyond financial institutions – the industry attracting most attention in the past – to now include all large and medium size business taxpayers that make payments to foreign persons.
Your ELLS Tax Advisors can help you cope with the challenges associated with reporting requirements and compliance with US withholding rules. Call us to find out more 714.569.1000.
By Yana Weaver, CPA
September 28, 2011
Anaheim Rotary Enterprise Zone Presentation
ELLS Shareholder Greg Lewis, Director of Marketing Lindsay Conderman, Anaheim Rotary President Greg Smith, ELLS Tax Manager Carol Painter and Shareholder Ed Lieber posed for a picture after the ELLS’ Anaheim Enterprise Zone Presentation. ELLS shared information about business/employee eligiblity, calculation of credits and other tax advantages to the Anaheim Enterprise Zone.
For more information about the Anaheim Enterprise Zone ELLS CPAs at 714.569.1000.
September 27, 2011
ELLS Certified Public Accountants & Business Advisors is seeking a Senior Auditor with a minimum of 3 years experience in public accounting. The person will work closely with shareholders and managers on all phases of projects and will maintain regular contact with assigned clients, keep responsible management informed about client developments, plan and organize audits, handle all aspects of fieldwork, prepare audit reports, research complex accounting issues, study and evaluate client internal controls, and be able to supervise multiple engagements simultaneously.
CANDIDATE REQUIREMENTS
Audit senior candidates should possess the following qualifications:
- Minimum 3 years of recent public accounting audit experience
- BA/BS degree in Accounting
- Knowledge of U.S. Generally Accepted Accounting Principles (GAAP)
- Leadership ability with positive team player attitude
- Solid interpersonal/communication skills
- Ability to handle multiple priorities and meet project deadlines
- Experience in implementing and performing engagement procedures, documentation of findings, preparation of financial statements and footnotes.
- Ability to work in a paperless work environment.
Email your resume to careers@ellscpas.com with salary requirements.
September 23, 2011
ELLS has found some significant advantages in depreciation for cabinets while working with property owners. Buildings and their components are typically depreciated over 39 years, or 27.5 years for residential rentals. If we can identify items which can be depreciated over shorter periods, we can impact cash flow in the near term by taking depreciation deductions sooner.
So how do we find faster depreciation for cabinets?
Here is what you need to know:
- Not all cabinets will qualify for a shorter life. The location or usage of the cabinets is the deciding factor. It turns out that the IRS considers restroom accessories of all kinds, including vanity cabinets and their countertops, to be an essential part of a building’s operation and cannot qualify for a shorter life.
- Cabinets and their countertops will qualify as personal property, like furniture, if they serve the customer or tenant. The resulting write-off will be over 5 years, a significant improvement over the longer building life.
- Many times the expense of the cabinets will qualify under some of the special incentive programs that give taxpayers an immediate write-off for this type of cost.
- Included in the acceptable category for faster depreciation are kitchen cabinets and closet shelves located in residential rental property.
Here are a few examples:
- Apartment building with many units, the cost of cabinets and countertops, other than bathroom locations, can result in a significant carve-out from the building cost.
- Medical Offices can have significant costs for cabinets holding medical supplies and files.
- Auto Dealership has cabinets and shelves in the showroom area, and the parts department and body shop that the IRS accepts a shorter life.
- Restaurants and Retail Establishments have cash register counters that will have a shorter life, as well as any which qualify as fixtures due to display of merchandise for the customer.
For more information about the depreciation of cabinets and other building components call ELLS CPAs at 714.569.1000
September 15, 2011
Edward Lieber, CPA
Congratulations to the newly appointed
Anaheim Enterprise Zone.
Anaheim joins 42 other cities in California that also are home to these incentivized areas for businesses. Businesses in Anaheim can look forward to hiring tax credits, sales or use tax credits, increased expense deduction, net operating loss carry forward and net interest deduction for lenders.
ELLS CPAs is a proud supporter of the California Enterprise Zones and we look forward to helping businesses in Anaheim get the “credit” they deserve.
For more information about the Santa Ana and Anaheim Enterprise Zones call ELLS CPAs at 714.569.1000.
Posted 9/15/11
September 13, 2011
The Department of Labor (DOL) requires an ERISA pension audit for all “large” pension plans, those with over 120 participants. Not only should the auditor you hire help you to meet the audit requirement but they should also add value to through financial and operational suggestions. New regulations require plan sponsors to have a documented annual review of the fund line up (how are funds performing, cost ratios, do these funds still fit within our investment parameters), cost analysis of all parties (TPA, fund provider, auditor), and participation rates (new enrollees, average contribution per participant). This article from an ERISA attorney highlights “The Top 10 Major Misconceptions Plan Sponsors Have About Their Retirement Plans”. If you are a trustee or plan administrator this information is worth five minutes of your time!
For more information about how ELLS CPAs can add value to your pension audit or if you need assistance with new DOL regulations please call ELLS CPAs Pension Audit Department at 714.569.1000
By, Christopher Stumpf
Posted 9/13/11
September 6, 2011
Sherry Radmore, CPA, MST
For those of you that missed the August 31st
Offshore Voluntary Disclosure Initiative (OVDI), it has been extended to Septmeber 9th. This extention also applies to taxpayers that are filing FBARS.
For more information about filing call ELLS CPAs at 714.569.1000
Posted 9/6/2011
By Sherry Radmore, CPA
August 19, 2011
Effective June 10, 2011, Nevada Assembly Bill 273 provides individuals and businesses with mortgage deficiencies protection against double dipping by either servicers or investors who purchase distressed notes at discount. Now a note holder is only entitled to their purchase price of the note rather than the face value. In other words, a $1 million mortgage sold to an investor for $500,000, is only entitled to a deficiency based on the $500,000 that was paid. In addition, the law reduces the time period for a secondary mortgage holder to file for a deficiency from 6 years to 6 months. Please note this is applicable only for foreclosure sales after June 10, 2011.
For more information call ELLS CPAs at 714.569.1000
By Christopher D. Stumpf
Posted 8/19/11
August 16, 2011
Sherry Radmore, CPA, MST
The
IRS initiated a program that enables mid to large size companies to work with the IRS to identify and resolve tax issues prior to filling. This program is known as the
Compliance Assurance Program (CAP). The program was in trial mode for the past 6 years and in June the IRS announced that they would be keeping and expanding the CAP program.
As part of the program, companies will work along side a team of IRS representative on tax issues and generally taxpayers will see shorter and narrower post-filing examinations. The IRS hopes that this program will create greater cooperation and transparency for taxpayers and the IRS.
Only businesses with assets of $10 million or more are eligible to participate at this time as smaller companies tend to have less complicated tax issues.
For more information call Sherry Radmore at 714.569.1000
Posted 8/16/11
August 9, 2011
Gregory N. Lewis
Is he/she an employee or an independent contractor? As the Internal Revenue Service begins to crack down on this issue business owners must be sure that they are choosing the correct classification. There are a few ways that you tell whether you have an employee on your hand or an idependent contractor. Take a look at this blog I wrote for
advancedplanning4docs.com,
click here.
For more information call Greg Lewis at 714.569.1000
Posted 8/9/11
