From Crains Chicago Business>>>>>
(AP) — Illinois businesses are reminded to adjust the way they calculate income taxes for employees starting Jan. 1.
The Springfield bureau of Lee Enterprises newspapers reports Gov. Pat Quinn's administration posted a notice this week on the Illinois Department of Revenue website with the information.
Employers
are reminded that the temporary income tax rate of 5 percent rolls back
to 3.75 percent at the beginning of 2015. State revenue department
spokeswoman Sue Hofer says officials wanted to make sure employers can
make adjustments.
She says "people will notice that in their paychecks."
Thursday, December 18, 2014
Affordable Care Act Pop Quiz
Ran accross this quick little pop quiz by our software publisher. It illustrates the complexity of the ACA. Never attempt to prepare your tax return alone.
Helen is a college student who lives with her father during the year. She is covered by his health insurance as long as she is a full-time student, but when she graduates on May 23, she is dropped from his policy. For several months, she works part-time and temporary jobs that do not offer health insurance, and she does not obtain her own insurance. On October 5, she starts working full-time and obtains insurance through her new employer. Helen was uninsured from June through September.
Question: Is there a penalty, and who pays it?
Answer: Because she was uninsured from June through September, the penalty is imposed for at least those four months. However, if Helen's father claims her dependency exemption on his return for the year, the penalty is imposed on him, rather than on Helen.
Helen is a college student who lives with her father during the year. She is covered by his health insurance as long as she is a full-time student, but when she graduates on May 23, she is dropped from his policy. For several months, she works part-time and temporary jobs that do not offer health insurance, and she does not obtain her own insurance. On October 5, she starts working full-time and obtains insurance through her new employer. Helen was uninsured from June through September.
Question: Is there a penalty, and who pays it?
Answer: Because she was uninsured from June through September, the penalty is imposed for at least those four months. However, if Helen's father claims her dependency exemption on his return for the year, the penalty is imposed on him, rather than on Helen.
Senate Passes Tax Extenders
As expected, a last minute passage of certain tax deductions and credits was approved and signed into law this week.
The IRS will be evaluating the impact of this legislation to forms, instructions, and the start of tax season. There is no published start date for e-file yet.
Our software publisher has posted a small newsletter detailing the legislation.
Please click on this link to read more.
Wednesday, November 5, 2014
The filing season is going to be the worst filing season since I’ve been the National Taxpayer Advocate {in 2001}; I’d love to be proved wrong, but I think it will rival the 1985 filing season when returns disappeared.”
From Forbes.com:
Internal Revenue Service Commissioner John Koskinen warned that close to half the people trying to reach the IRS by phone might not get through during the upcoming 2015 tax filing season. “Phone service could plummet to 53%,” he told an audience of tax practitioners at the AICPA National Tax Conference in Washington, D.C. today. That would be down from an already unacceptable 72% during the 2014 filing season. The average hold time projection: 34 minutes! What’s to blame? Budget woes. “All we can do is try to maximize our services as well as we can; as well as we can is still going to be miserable. You really do get what you pay for,” he said.
Koskinen’s remarks followed National Taxpayer Advocate Nina Olson who was even gloomier:“The filing season is going to be the worst filing season since I’ve been the National Taxpayer Advocate {in 2001}; I’d love to be proved wrong, but I think it will rival the 1985 filing season when returns disappeared.”
There are five key factors at play – complicating the upcoming filing season (that’s when you file your 2014 tax return). The IRS agency budget is the number one challenge, Koskinen said. The House has voted to cut the IRS budget for 2015 by $341 million, and the Senate has proposed to increase it by $240 million—that would still be 7% below 2010 funding levels.
In the meantime, Congress keeps passing laws that the IRS has to implement, namely the Affordable Care Act (“ACA”) and the Foreign Account Tax Compliance Act (“FACTA”). For example, Koskinen said the IRS requested $430 million in 2014 from Congress to implement the ACA but got zero, forcing it to take money out of enforcement and taxpayer services budgets.
This will be the first filing season with two major provisions from the Affordable Care Act –the premium tax credit and the individual shared responsibility payment–on Form 1040. National Taxpayer Advocate Olson said she’s very concerned about the IRS receiving accurate information from the health exchanges. It won’t be the IRS’s fault, but taxpayers will likely put the blame on the IRS. Koskinen touted the web pages that the IRS has created to help explain the ACA tax provisions.
Read more by clicking on this link.
Internal Revenue Service Commissioner John Koskinen warned that close to half the people trying to reach the IRS by phone might not get through during the upcoming 2015 tax filing season. “Phone service could plummet to 53%,” he told an audience of tax practitioners at the AICPA National Tax Conference in Washington, D.C. today. That would be down from an already unacceptable 72% during the 2014 filing season. The average hold time projection: 34 minutes! What’s to blame? Budget woes. “All we can do is try to maximize our services as well as we can; as well as we can is still going to be miserable. You really do get what you pay for,” he said.
Koskinen’s remarks followed National Taxpayer Advocate Nina Olson who was even gloomier:“The filing season is going to be the worst filing season since I’ve been the National Taxpayer Advocate {in 2001}; I’d love to be proved wrong, but I think it will rival the 1985 filing season when returns disappeared.”
There are five key factors at play – complicating the upcoming filing season (that’s when you file your 2014 tax return). The IRS agency budget is the number one challenge, Koskinen said. The House has voted to cut the IRS budget for 2015 by $341 million, and the Senate has proposed to increase it by $240 million—that would still be 7% below 2010 funding levels.
In the meantime, Congress keeps passing laws that the IRS has to implement, namely the Affordable Care Act (“ACA”) and the Foreign Account Tax Compliance Act (“FACTA”). For example, Koskinen said the IRS requested $430 million in 2014 from Congress to implement the ACA but got zero, forcing it to take money out of enforcement and taxpayer services budgets.
This will be the first filing season with two major provisions from the Affordable Care Act –the premium tax credit and the individual shared responsibility payment–on Form 1040. National Taxpayer Advocate Olson said she’s very concerned about the IRS receiving accurate information from the health exchanges. It won’t be the IRS’s fault, but taxpayers will likely put the blame on the IRS. Koskinen touted the web pages that the IRS has created to help explain the ACA tax provisions.
Read more by clicking on this link.
Thursday, October 30, 2014
October 2014 Client Newsletter
I spent a whole day in income tax school a couple of weeks ago focusing on two areas; The Affordable Care Act, a subject we continue to write about because it changes every tax return we will prepare next year, and new rules concerning the deductibility of repairs or improvements. The instructor started the presentation with this comment. “We are not here to have a political discussion today about Obamacare. With that said, as you will find, Obamacare is a law that is overly complex and overly burdensome.” For example, consider the calculation of whether a taxpayer is not covered by an approved health insurance policy in 2014. It is not $95.00 as many people believe including me until recently. . When a tax return is filed for the 2014 calendar year, the filer must show proof of medical insurance or a tax penalty is imposed, calculated as follows:
For 2014:
If one or more individuals in the household do not have health insurance, calculate the penalty as the greater of the following two tests:
- Flat Dollar Amount: $95 for each adult family member (kids 18 and younger are $47.50), not to exceed a household total of $285.
- Percent of Income Amount: 1 percent of annual household income (you may subtract exemptions and standard deductions). The law has a provision that the penalty amount calculated under this “Percent of Income” test will not exceed the actual cost of a “bronze level” plan in the state insurance marketplace. If 1 percent of a very high income (say $1 million) is $10,000, but the cost of a bronze level plan inside the exchange is $5,000 per year, the “Percent of Income” penalty would be capped at the $5,000.
An Example:
James works for Acme Construction. His wife works for a dental office. They each take their employer-provided medical plan for themselves. However, they choose not to cover their two children on the medical insurance since they feel the premium cost is too expensive. Their combined household income is $65,000 after subtracting standard exemptions and deductions. For 2014, this family would owe $95 under the flat dollar amount ($47.50 for each child) or $650 under the percent of income amount. Since the penalty is the greater of these two tests, they owe a $650 penalty for not having all family members covered by a health insurance plan. Calculation from affordable insurance.com.
What is interesting is the penalty, or as defined by the Supreme Court ruling an excise tax, for not having health insurance is somewhat a toothless tiger. The IRS cannot use any of their usual collection tactics to collect the penalty. No interest. No liens. No levies. They can only collect from future refunds. However, if you have received governmental assistance (credit) to reduce the amount of healthcare premiums due through the healthcare marketplace, and make a mistake, things are much different. If you understated your income on your application and received too much credit for your health insurance payments, you now have a tax liability due and payable with your tax return. IRS is allowed to use their full powers to collect this deficiency. That means liens, interest and levies. It appears at this point that the form used to reconcile the credit obtained through the health care, 1095A, to taxpayers that received assistance will more than likely not be distributed by the January 31, 2015 due date. This form is mandatory in order to prepare those taxpayer’s tax return. In fact, it may be not be available until April 2015. I hope the experts are wrong. IRS is planning on sending notices this fall to those taxpayers it believes may have misstated their income on their healthcare marketplace application. The hope is to avoid the issues involved with assessment of additional taxes and the more than likely bad press that will follow with the enforced collection of that tax.
And even more IRS issues continue to be front page news. 60 Minutes on September 21, featured a story about the proliferation of identity theft and fraudulent tax return refunds. Apparently Florida is the nation’s leader in fraudulently filed tax returns. Stolen identities are easily available in the “Sunshine State.” IRS can’t detect if it is sending multiple refunds to the same address, whether the W2 information is correct, or whether the preloaded debit card scheduled to receive the tax refund really belongs to the real life taxpayer. Fraudulent tax refunds based on identity theft are estimated to grow to $21 billion dollars in the next two years. Almost immediately after the story was televised the IRS responded with some proposed solutions. Essentially the IRS is looking to require employers to file their previous years W2 forms electronically by January 31 of the next year. It appears to be a reasonable solution. In order to file a fraudulent tax return you need two pieces of information, the stolen Social Security Number and a valid taxpayer identification number in order to enter fraudulent W2 information. If the IRS can check the W2 information in real time you eliminate the ability of the crook to file a fraudulent return. Social Security number and employee’s W2 forms have to match. If they don’t match, no refund. Seems to be a simple solution since we are required to furnish our employees their W2 forms by January 31.
Illinois is a Horrendus State. It's Like Doing Business In A Third-World Country
Consider these comments concerning Illinois being the 48th worst state to do business in according to CEO Magazine before you vote next week.
“Corruption and union pensions have made Illinois a poor alternative for business. Continually avoiding to address and fix the problems have only exacerbated the situation. More conservative states are easier to work in and with.”
“Illinois is rated in the worst category; their taxing scheme is deleterious toward small business.The Illinois Dept of Revenue seems most adversarial with respect to small business support and promotion. The Illinois House assembly is inept in addressing the hard issues associated with putting the state’s financial condition in order; they are a taxing and spending machine with little regard to the consequences and impacts to its citizens and businesses.”
“Illinois is a horrendous state in which to do business. It is governed by a class of incompetent, corrupt politicians. It’s like doing business in a third-world country.”
“Corruption and union pensions have made Illinois a poor alternative for business. Continually avoiding to address and fix the problems have only exacerbated the situation. More conservative states are easier to work in and with.”
“Illinois is rated in the worst category; their taxing scheme is deleterious toward small business.The Illinois Dept of Revenue seems most adversarial with respect to small business support and promotion. The Illinois House assembly is inept in addressing the hard issues associated with putting the state’s financial condition in order; they are a taxing and spending machine with little regard to the consequences and impacts to its citizens and businesses.”
“Illinois is a horrendous state in which to do business. It is governed by a class of incompetent, corrupt politicians. It’s like doing business in a third-world country.”
Tuesday, October 14, 2014
Before you even think about doing business with Intuit and Quickbooks read my transcript of a conversation with their Phillipine based customer service
The transcript of my two hour chat with the Intuit Customer Support.
info: Thanks for chatting with us today. Please wait for your Intuit Online Payroll support specialist to join this chat. The average wait time to chat with a specialist is 0 minute(s).
info: You are now chatting with 'Sheena'
Sheena: Hello Don! My name is Sheena and I'm a payroll specialist. Please give me a moment to pull up your account and review your question.
Sheena: No worries! I can definitely help you with that. I want to make sure that you have a great payroll experience with Intuit.
Sheena: I can see that we have not received the auth form for Federal E-services yet.
Sheena: Is it possible for you to send the auth form now?
DON FUENER: WE HAVE FAXED THEM NUMEROUS TIMES. THE 650-745-0651 FAX NUMBER DOESN'T WORK.
Sheena: Is it alright to email it to me? To make sure that I will receive it.
DON FUENER: THE ALTERNATIVE 800-663-7971. HAS GONE THROUGH. IN FACT WE FAXED THE AUTHORIZATION FORMS JUST AN HOUR AGO. YOU GOT THEM.
DON FUENER: HOW DO YOU WANT ME TO EMAIL IT TO YOU?
DON FUENER: WHAT IS YOUR EMAIL ADDRESS?
DON FUENER: AND WHAT HAS INTUIT DONE TO ADDRESS THE FAX ISSUE?
Sheena: Please send it to onlinepayrollattach@intuit.com and in the subject line, enter ATTN Sheena.
DON FUENER: WILL DO.
DON FUENER: WHY HAS THIS BECOME AN ISSUE?
Sheena: Sometimes, we have issues with the auth forms being sent through fax that's why we suggest for the forms to be submitted through email.
DON FUENER: WHY IS INTUIT CHARGING ME SALES TAX?
DON FUENER: IT APPEARS THAT THE ISSUE HAS NOT BEEN FIXED FOR SEVERAL MONTHS?
DON FUENER: WHO IT THE CONTACT PERSON FOR THE SALES TAX ISSUES?
DON FUENER: WHO IS THE CONTACT PERSON FOR THE FAX ISSUES?
Sheena: Have you sent us a sales tax exempt notice?
DON FUENER: WE ARE EXEMPT BASED ON THE FACT THAT WE DO NOT PURHASE ANYTHING FROM ITUIT? YOU A CLOUD BASED SERICE. ILLINOIS DOESN'T TAX SERVICES.
Sheena: The State of IL charged sales tax on Intuit Online payroll as of April ****.
Sheena: Your company or organization may be exempt from sales tax on your Intuit Payroll service fee if one of the following applies:
Sheena: •Your organization is a nonprofit with a sales tax exemption certificate.
Sheena: •Your company has multiple work locations, with most of the business conducted in a state that is exempt from sales tax.
DON FUENER: NO INTUIT MADE THAT DECISION AFTER BUYING THE PAYCYLE COMPANY THAT WAS BASED IN ILLINOIS. BEFORE THAT THE PAYCYLE COMPANY DID NOT CHARGE ME SALES TAX. WHO IS THE CONTACT PERSON THAT MADE THAT DECISION?
DON FUENER: SO WE QUALIFY UNDER THE THIRD EXEMPTION.
Sheena: That was before April **** and after that, we already charge some other States which includes the State of IL.
DON FUENER: Did you receive my email?
DON FUENER: Why can't you give me a contact person? Why the dance?
Sheena: Let me further check on it real quick.
Sheena: For the contact person, I am still checking with my supervisor on that.
DON FUENER: thanks
Sheena: You're welcome. It's my pleasure to help you.
DON FUENER: And the name is?
Sheena: One moment please. I am still checking on it.
DON FUENER: Did you get my email?
Sheena: Hi Don. Thanks so much for waiting,
Sheena: I have received the auth form, verified, and sent it to our back-end team for review.
DON FUENER: Good.
Sheena: Intuit will work with the government agencies to make your E-Services available (2 days for Federal E-Services).
DON FUENER: Contact names concerning the fax number and the sales tax issues?
DON FUENER: For 30 years, it's been all about saving you time. For three decades, we've dedicated ourselves to making the business of accounting more efficient for you and your clients. You've been part of this journey of innovation, so explore our interactive timeline and see where we've been—before we reveal the next big thing!
DON FUENER: That is an email I received from your company this morning.
Sheena: For the contact person, it would be our back-end team who handles the billing, Don.
DON FUENER: Any luck finding a contact within Intuit that is more than a third party customer service person?
Sheena: Do you have a sales tax exempt certificate?
DON FUENER: I do not need one.
Sheena: The State changes it's rule as of April **** and that is the reason why you were charged with Sales tax.
DON FUENER: What is the authority for that statement?
DON FUENER: My conversation with the State of Illinois is exactly the opposite.
DON FUENER: Why did Intuit charge me sales tax prior to April ****?
DON FUENER: Can you give me another person to talk to or not. If you can't let me know.
Sheena: Our back-end team would need the Sales tax exempt statement to verify if we should exempt you from it.
DON FUENER: And the name is?
Sheena: Let me connect you over to my supervisor.
info: Please wait while I transfer the chat to 'Rei'.
info: You are now chatting with 'Rei'
DON FUENER: And have you reviewed this conversation?
Rei: Hi Don! My name Rei and I will assist you. How are you doing today?
DON FUENER: And have you reviewed our conversation?
Rei: Let me check the previous conversation so I can deal with this accordingly.
DON FUENER: Good idea?
Rei: It looks like you have inquiries on the sales tax.
DON FUENER: And the non working fax number.
DON FUENER: And need contact that is beyond a third party customer service agent.
DON FUENER: Are you Phillipine based?
Rei: Looking at the records and the state guidelines, you will be charged with the sales tax not unless you have a sales tax exempt certificate. Are you a non-profit organization or company?
Rei: Yes, I am.
DON FUENER: So who is your US contact?
DON FUENER: Realistically you cannot answer my question. Right?
Rei: We have the knowledge base in our system and we also have a view on your account. Our agents in the Philippines are well trained for US taxation and with the payroll system. Don, I want to make sure that we cover all the issues that you are contacting us with.
Rei: As an Intuit employee, we value your time and your business.
DON FUENER: You haven't provided me with a contact person. Why the dance:
DON FUENER: Why can't you provide me a answer?
Rei: We do not have any specific name from US if you prefer to speak with an American rep.
DON FUENER: Does Intuit not allow you to disclose this information?
DON FUENER: No who is the contact person?
DON FUENER: I want to know who made this decision in the US that they can't fix the fax issues and the sales tax issues?
DON FUENER: I cannot believe that Intuit doesn't have a U.S. based contact.
Rei: What fax number are you using to send us a document?
Rei: So I can check on it.
DON FUENER: 650-745-0651
DON FUENER: 800-663-7901
DON FUENER: And the contact person's name is?
Rei: This fax 800-663-7901 is working.
Rei: What document have you tried sending us if I may ask?
DON FUENER: We have faxed numerous time to this number. e services enrollment.
DON FUENER: And the name of the contact person is?
DON FUENER: Oh my I just checked the Intuit facebook page. It seems you guys have a lot of unhappy customers.
Rei: I can check the fax for you and would make sure that our back end (eservices) will get it.
DON FUENER: The other customer service agent, Sheena I believe, said she got my email.
DON FUENER: Why do you not answer my questions.
DON FUENER: Why would Intuit send me an email that says>>>>>
DON FUENER: For 30 years, it's been all about saving you time. For three decades, we've dedicated ourselves to making the business of accounting more efficient for you and your clients. You've been part of this journey of innovation, so explore our interactive timeline and see where we've been—before we reveal the next big thing!
DON FUENER: And the name of the contact is?
Rei: Don, I wish I can give a name but unfortunately we do not have a specific contact person. Once you get a chat agent, that agent would be able to assist you with your concern.
Rei: I can check that fax for you.
DON FUENER: So fix the problem. Or if you can't. Please say so. You don't have a contact person. Is that right? Or you are not allowed to give us the name of the contact person? Please answer my question specifically.
DON FUENER: Please note that after waiting 10 minutes for a response from Rei. I didn't receive any answer. Had to move on to other things.
Rei: Hi Don. As I checked the email/fax about your eservices enrollment, Sheena have taken care of it and she is currently working with our back end to activate your eservices enrollment.
Rei: Once the review is done, the eservices will be active in 2-3 business days.
DON FUENER: And the answer to my question is?
Rei: What question, Don?
Rei: I am really sorry, Don, but there are couple of questions that you asked and I have answered as well. If you don't mind me asking, what specific question were you asking few minutes ago?
DON FUENER: What is the contact name of the person that handles the sales tax charges in the USA?
DON FUENER: What authority to you base your statement the law changed in the State of Illinois for sales tax in April ****?
DON FUENER: Who is the contact name of the person that handles fax number issues in the United States? The fax number is based in the US, I can only assume, and it hasn't worked for months, so that would mean that we need a non foreign person?
DON FUENER: You really can't answer any of my questions. Right?
Rei: Unfortunately, we do not have a contact person for our fax. However, when you are sending us a document please contact us right away so we can check on it and retrieve those documents form our fax.
DON FUENER: Why would Intuit send me a solicitation email about dedicating ourselves to making the business of accouting more efficient for me and my clients.
DON FUENER: You haven't done either.
DON FUENER: Right?
Rei: I am sorry if you feel that way but we do not send solicitation email. Can you please send the email back to us so I can check on it.
DON FUENER: And your email is?
Rei: You may send it to onlinepayrollattach@intuit.com
DON FUENER: Did you get my email?
Rei: I am still checking on it, Don.
DON FUENER: Please email when you get a chance.
Rei: Yes, definitely.
Rei: I got your email. Let me read it really quick.
info: Your chat transcript will be sent to taxpartner@gmail.com at the end of your chat.
Rei: I apologize for this. This is actually a advertisement from Intuit. As much as possible, Intuit wants to involve you in any company activities. However, if you don't wish to participate on these nor want to receive any of these, you may unsubscribe by clicking the click here next to "To unsubscribe or change your email preferences."
DON FUENER: I guess you are missing the point. I don't want to unsubscribe. I want you to live up to the adverstisement promises. But by your own admission, you do not have the information, the authority, or to help me as a customer become more efficient. You do work for Intuit right?
DON FUENER: You are not dedicating your self to helping me as the email says you are dedicating your self to.
DON FUENER: I can't imagine you are paid enough to dedicate yourself in such fashion?
DON FUENER: Correct?
Rei: Don, I really want to help you with what you are contacting us for. Please let me know how I can assist you and I will be very glad to do so.
Rei: Your time and your business is important to us and we wish to give you the service that you need.
DON FUENER: Let me try it again.
DON FUENER: DON FUENER: What is the contact name of the person that handles the sales tax charges in the USA? DON FUENER: What authority to you base your statement the law changed in the State of Illinois for sales tax in April ****? DON FUENER: Who is the contact name of the person that handles fax number issues in the United States? The fax number is based in the US, I can only assume, and it hasn't worked for months, so that would mean that we need a non foreign person? DON FUENER: You really can't answer any of my questions. Right?
DON FUENER: Can you answer any of these questions?
Rei: We have the back end team who takes care of the sales tax charges but those people are not frontline agents. What we do is send them the sales tax exempt certificate that you are required to send us through the email address that I have sent you earlier.
DON FUENER: Let me try it again.
DON FUENER: DON FUENER: DON FUENER: What is the contact name of the person that handles the sales tax charges in the USA? DON FUENER: What authority to you base your statement the law changed in the State of Illinois for sales tax in April ****? DON FUENER: Who is the contact name of the person that handles fax number issues in the United States? The fax number is based in the US, I can only assume, and it hasn't worked for months, so that would mean that we need a non foreign person? DON FUENER: You really can't answer any of my questions. Right? DON FUENER: Can you answer any of these questions?
Rei: 1. I cannot provide you the name since we do not have a specific contact person who handles sales tax. They are a team.
Rei: 2. We were not the ones who change the taxability on the state. It was the state of IL. You may contact them directly if you have questions on that.
DON FUENER: Who is the team leader?
Rei: I am one of the team leaders who is handling the chat group.
Rei: 3. I cannot provide you the name since we do not have a specific contact person who handles sales tax. Each document sent will be handled by each rep who you spoke with.
Rei: 4. The fax is working fine.
DON FUENER: The assumption is Intuit is correct. I am a licensed tax preparer. Who do you contact if you cannot answer a question?
DON FUENER: The fax is not working fine.
Rei: The fax that I am referring to is 8006337901.
Rei: We have a group of people in the US that we contact to assist customers like you.
DON FUENER: Will you please forward my questions to the group of people that you refuse to name?
Rei: If you could send us your sales tax exempt certificate then we can move forward.
Rei: I am so sorry but I cannot do that.
DON FUENER: I do not have a sales tax exemption receipt.
DON FUENER: So you cannot answer my questions and you refuse to forward it to the group of people you refuse to name.
Rei: You need to get the sales tax exempt certificate if you do not wish to pay the sales tax. This is something that the state require.
DON FUENER: Sorry you are wrong.
DON FUENER: Please forward my question to the group of people that you refuse to name.
DON FUENER: 650-745-0651 is not working by the way.
Rei: I would suggest that you use the 8006637901.
DON FUENER: Oh my. We did and no one processed the various faxes.
DON FUENER: Why would Intuit include a fax number that doesn't work correct and have their customer servie people tell their customers to use another fax number?
DON FUENER: Please forward my questions to the group of people in the United States that you refuse to name. Why is not disclosing the peoples names an issue?
DON FUENER: Why do we have to have this prolonged chat, when in fact, you have told me you can't answer any of my questions?
DON FUENER: What is the procedure to handle questions that your call center can't answer?
DON FUENER: Don't you understand that this chat is going to publised on the internet?
Rei: As I validated with our back end team, the fax number 650-745-0651 is working fine.
DON FUENER: Sorry it is not working we just verified it.
DON FUENER: How do we get a hold of the "back end team" and where are they located?
Rei: Don, I know that I may sound like I am repeating myself over and over again. I really don't know how to tell you again that the back end team can not be contacted directly by customers. If you have questions on your account and would need further assistance, our frontline agents would be glad to assist you. I really wish I can give name, Don. If you only know, I really would. I don't want to waste your time and would only aim to give you an excellent service.
Rei: From the bottom of my heart, I really want to assist you with what you deserve. You are very important to us.
DON FUENER: So from what you are telling me Intuit is not going to let you answer my questions, or forward my questions to another person, and despite your assurances to the customer, we don't really feel that important. So my only solution is to go viral with this amazing customer service conversation. Right?
DON FUENER: I find it difficult to believe that Intuit has handcuffed its foreign based customer service agents in such a manner that it puts you in such a difficult position/awarkward crazy position.
DON FUENER: So really the problem is with Intuit? They will not let you do your job. Right?
Rei: I couldn't stop you on that, Don. If that's something that pleases your heart then so be it. Know that here at Intuit, we only aim for providing you a good customer service experience. If you would let me help you with any of your concerns then I will be very glad to do so.
DON FUENER: But you can't.
DON FUENER: I am emailing our conversation to Mr. Smith I guess. Thanks for your time.
info: Your chat transcript will be sent to taxpartner@gmail.com at the end of your chat.
info: Thanks for chatting with us today. Please wait for your Intuit Online Payroll support specialist to join this chat. The average wait time to chat with a specialist is 0 minute(s).
info: You are now chatting with 'Sheena'
Sheena: Hello Don! My name is Sheena and I'm a payroll specialist. Please give me a moment to pull up your account and review your question.
Sheena: No worries! I can definitely help you with that. I want to make sure that you have a great payroll experience with Intuit.
Sheena: I can see that we have not received the auth form for Federal E-services yet.
Sheena: Is it possible for you to send the auth form now?
DON FUENER: WE HAVE FAXED THEM NUMEROUS TIMES. THE 650-745-0651 FAX NUMBER DOESN'T WORK.
Sheena: Is it alright to email it to me? To make sure that I will receive it.
DON FUENER: THE ALTERNATIVE 800-663-7971. HAS GONE THROUGH. IN FACT WE FAXED THE AUTHORIZATION FORMS JUST AN HOUR AGO. YOU GOT THEM.
DON FUENER: HOW DO YOU WANT ME TO EMAIL IT TO YOU?
DON FUENER: WHAT IS YOUR EMAIL ADDRESS?
DON FUENER: AND WHAT HAS INTUIT DONE TO ADDRESS THE FAX ISSUE?
Sheena: Please send it to onlinepayrollattach@intuit.com and in the subject line, enter ATTN Sheena.
DON FUENER: WILL DO.
DON FUENER: WHY HAS THIS BECOME AN ISSUE?
Sheena: Sometimes, we have issues with the auth forms being sent through fax that's why we suggest for the forms to be submitted through email.
DON FUENER: WHY IS INTUIT CHARGING ME SALES TAX?
DON FUENER: IT APPEARS THAT THE ISSUE HAS NOT BEEN FIXED FOR SEVERAL MONTHS?
DON FUENER: WHO IT THE CONTACT PERSON FOR THE SALES TAX ISSUES?
DON FUENER: WHO IS THE CONTACT PERSON FOR THE FAX ISSUES?
Sheena: Have you sent us a sales tax exempt notice?
DON FUENER: WE ARE EXEMPT BASED ON THE FACT THAT WE DO NOT PURHASE ANYTHING FROM ITUIT? YOU A CLOUD BASED SERICE. ILLINOIS DOESN'T TAX SERVICES.
Sheena: The State of IL charged sales tax on Intuit Online payroll as of April ****.
Sheena: Your company or organization may be exempt from sales tax on your Intuit Payroll service fee if one of the following applies:
Sheena: •Your organization is a nonprofit with a sales tax exemption certificate.
Sheena: •Your company has multiple work locations, with most of the business conducted in a state that is exempt from sales tax.
DON FUENER: NO INTUIT MADE THAT DECISION AFTER BUYING THE PAYCYLE COMPANY THAT WAS BASED IN ILLINOIS. BEFORE THAT THE PAYCYLE COMPANY DID NOT CHARGE ME SALES TAX. WHO IS THE CONTACT PERSON THAT MADE THAT DECISION?
DON FUENER: SO WE QUALIFY UNDER THE THIRD EXEMPTION.
Sheena: That was before April **** and after that, we already charge some other States which includes the State of IL.
DON FUENER: Did you receive my email?
DON FUENER: Why can't you give me a contact person? Why the dance?
Sheena: Let me further check on it real quick.
Sheena: For the contact person, I am still checking with my supervisor on that.
DON FUENER: thanks
Sheena: You're welcome. It's my pleasure to help you.
DON FUENER: And the name is?
Sheena: One moment please. I am still checking on it.
DON FUENER: Did you get my email?
Sheena: Hi Don. Thanks so much for waiting,
Sheena: I have received the auth form, verified, and sent it to our back-end team for review.
DON FUENER: Good.
Sheena: Intuit will work with the government agencies to make your E-Services available (2 days for Federal E-Services).
DON FUENER: Contact names concerning the fax number and the sales tax issues?
DON FUENER: For 30 years, it's been all about saving you time. For three decades, we've dedicated ourselves to making the business of accounting more efficient for you and your clients. You've been part of this journey of innovation, so explore our interactive timeline and see where we've been—before we reveal the next big thing!
DON FUENER: That is an email I received from your company this morning.
Sheena: For the contact person, it would be our back-end team who handles the billing, Don.
DON FUENER: Any luck finding a contact within Intuit that is more than a third party customer service person?
Sheena: Do you have a sales tax exempt certificate?
DON FUENER: I do not need one.
Sheena: The State changes it's rule as of April **** and that is the reason why you were charged with Sales tax.
DON FUENER: What is the authority for that statement?
DON FUENER: My conversation with the State of Illinois is exactly the opposite.
DON FUENER: Why did Intuit charge me sales tax prior to April ****?
DON FUENER: Can you give me another person to talk to or not. If you can't let me know.
Sheena: Our back-end team would need the Sales tax exempt statement to verify if we should exempt you from it.
DON FUENER: And the name is?
Sheena: Let me connect you over to my supervisor.
info: Please wait while I transfer the chat to 'Rei'.
info: You are now chatting with 'Rei'
DON FUENER: And have you reviewed this conversation?
Rei: Hi Don! My name Rei and I will assist you. How are you doing today?
DON FUENER: And have you reviewed our conversation?
Rei: Let me check the previous conversation so I can deal with this accordingly.
DON FUENER: Good idea?
Rei: It looks like you have inquiries on the sales tax.
DON FUENER: And the non working fax number.
DON FUENER: And need contact that is beyond a third party customer service agent.
DON FUENER: Are you Phillipine based?
Rei: Looking at the records and the state guidelines, you will be charged with the sales tax not unless you have a sales tax exempt certificate. Are you a non-profit organization or company?
Rei: Yes, I am.
DON FUENER: So who is your US contact?
DON FUENER: Realistically you cannot answer my question. Right?
Rei: We have the knowledge base in our system and we also have a view on your account. Our agents in the Philippines are well trained for US taxation and with the payroll system. Don, I want to make sure that we cover all the issues that you are contacting us with.
Rei: As an Intuit employee, we value your time and your business.
DON FUENER: You haven't provided me with a contact person. Why the dance:
DON FUENER: Why can't you provide me a answer?
Rei: We do not have any specific name from US if you prefer to speak with an American rep.
DON FUENER: Does Intuit not allow you to disclose this information?
DON FUENER: No who is the contact person?
DON FUENER: I want to know who made this decision in the US that they can't fix the fax issues and the sales tax issues?
DON FUENER: I cannot believe that Intuit doesn't have a U.S. based contact.
Rei: What fax number are you using to send us a document?
Rei: So I can check on it.
DON FUENER: 650-745-0651
DON FUENER: 800-663-7901
DON FUENER: And the contact person's name is?
Rei: This fax 800-663-7901 is working.
Rei: What document have you tried sending us if I may ask?
DON FUENER: We have faxed numerous time to this number. e services enrollment.
DON FUENER: And the name of the contact person is?
DON FUENER: Oh my I just checked the Intuit facebook page. It seems you guys have a lot of unhappy customers.
Rei: I can check the fax for you and would make sure that our back end (eservices) will get it.
DON FUENER: The other customer service agent, Sheena I believe, said she got my email.
DON FUENER: Why do you not answer my questions.
DON FUENER: Why would Intuit send me an email that says>>>>>
DON FUENER: For 30 years, it's been all about saving you time. For three decades, we've dedicated ourselves to making the business of accounting more efficient for you and your clients. You've been part of this journey of innovation, so explore our interactive timeline and see where we've been—before we reveal the next big thing!
DON FUENER: And the name of the contact is?
Rei: Don, I wish I can give a name but unfortunately we do not have a specific contact person. Once you get a chat agent, that agent would be able to assist you with your concern.
Rei: I can check that fax for you.
DON FUENER: So fix the problem. Or if you can't. Please say so. You don't have a contact person. Is that right? Or you are not allowed to give us the name of the contact person? Please answer my question specifically.
DON FUENER: Please note that after waiting 10 minutes for a response from Rei. I didn't receive any answer. Had to move on to other things.
Rei: Hi Don. As I checked the email/fax about your eservices enrollment, Sheena have taken care of it and she is currently working with our back end to activate your eservices enrollment.
Rei: Once the review is done, the eservices will be active in 2-3 business days.
DON FUENER: And the answer to my question is?
Rei: What question, Don?
Rei: I am really sorry, Don, but there are couple of questions that you asked and I have answered as well. If you don't mind me asking, what specific question were you asking few minutes ago?
DON FUENER: What is the contact name of the person that handles the sales tax charges in the USA?
DON FUENER: What authority to you base your statement the law changed in the State of Illinois for sales tax in April ****?
DON FUENER: Who is the contact name of the person that handles fax number issues in the United States? The fax number is based in the US, I can only assume, and it hasn't worked for months, so that would mean that we need a non foreign person?
DON FUENER: You really can't answer any of my questions. Right?
Rei: Unfortunately, we do not have a contact person for our fax. However, when you are sending us a document please contact us right away so we can check on it and retrieve those documents form our fax.
DON FUENER: Why would Intuit send me a solicitation email about dedicating ourselves to making the business of accouting more efficient for me and my clients.
DON FUENER: You haven't done either.
DON FUENER: Right?
Rei: I am sorry if you feel that way but we do not send solicitation email. Can you please send the email back to us so I can check on it.
DON FUENER: And your email is?
Rei: You may send it to onlinepayrollattach@intuit.com
DON FUENER: Did you get my email?
Rei: I am still checking on it, Don.
DON FUENER: Please email when you get a chance.
Rei: Yes, definitely.
Rei: I got your email. Let me read it really quick.
info: Your chat transcript will be sent to taxpartner@gmail.com at the end of your chat.
Rei: I apologize for this. This is actually a advertisement from Intuit. As much as possible, Intuit wants to involve you in any company activities. However, if you don't wish to participate on these nor want to receive any of these, you may unsubscribe by clicking the click here next to "To unsubscribe or change your email preferences."
DON FUENER: I guess you are missing the point. I don't want to unsubscribe. I want you to live up to the adverstisement promises. But by your own admission, you do not have the information, the authority, or to help me as a customer become more efficient. You do work for Intuit right?
DON FUENER: You are not dedicating your self to helping me as the email says you are dedicating your self to.
DON FUENER: I can't imagine you are paid enough to dedicate yourself in such fashion?
DON FUENER: Correct?
Rei: Don, I really want to help you with what you are contacting us for. Please let me know how I can assist you and I will be very glad to do so.
Rei: Your time and your business is important to us and we wish to give you the service that you need.
DON FUENER: Let me try it again.
DON FUENER: DON FUENER: What is the contact name of the person that handles the sales tax charges in the USA? DON FUENER: What authority to you base your statement the law changed in the State of Illinois for sales tax in April ****? DON FUENER: Who is the contact name of the person that handles fax number issues in the United States? The fax number is based in the US, I can only assume, and it hasn't worked for months, so that would mean that we need a non foreign person? DON FUENER: You really can't answer any of my questions. Right?
DON FUENER: Can you answer any of these questions?
Rei: We have the back end team who takes care of the sales tax charges but those people are not frontline agents. What we do is send them the sales tax exempt certificate that you are required to send us through the email address that I have sent you earlier.
DON FUENER: Let me try it again.
DON FUENER: DON FUENER: DON FUENER: What is the contact name of the person that handles the sales tax charges in the USA? DON FUENER: What authority to you base your statement the law changed in the State of Illinois for sales tax in April ****? DON FUENER: Who is the contact name of the person that handles fax number issues in the United States? The fax number is based in the US, I can only assume, and it hasn't worked for months, so that would mean that we need a non foreign person? DON FUENER: You really can't answer any of my questions. Right? DON FUENER: Can you answer any of these questions?
Rei: 1. I cannot provide you the name since we do not have a specific contact person who handles sales tax. They are a team.
Rei: 2. We were not the ones who change the taxability on the state. It was the state of IL. You may contact them directly if you have questions on that.
DON FUENER: Who is the team leader?
Rei: I am one of the team leaders who is handling the chat group.
Rei: 3. I cannot provide you the name since we do not have a specific contact person who handles sales tax. Each document sent will be handled by each rep who you spoke with.
Rei: 4. The fax is working fine.
DON FUENER: The assumption is Intuit is correct. I am a licensed tax preparer. Who do you contact if you cannot answer a question?
DON FUENER: The fax is not working fine.
Rei: The fax that I am referring to is 8006337901.
Rei: We have a group of people in the US that we contact to assist customers like you.
DON FUENER: Will you please forward my questions to the group of people that you refuse to name?
Rei: If you could send us your sales tax exempt certificate then we can move forward.
Rei: I am so sorry but I cannot do that.
DON FUENER: I do not have a sales tax exemption receipt.
DON FUENER: So you cannot answer my questions and you refuse to forward it to the group of people you refuse to name.
Rei: You need to get the sales tax exempt certificate if you do not wish to pay the sales tax. This is something that the state require.
DON FUENER: Sorry you are wrong.
DON FUENER: Please forward my question to the group of people that you refuse to name.
DON FUENER: 650-745-0651 is not working by the way.
Rei: I would suggest that you use the 8006637901.
DON FUENER: Oh my. We did and no one processed the various faxes.
DON FUENER: Why would Intuit include a fax number that doesn't work correct and have their customer servie people tell their customers to use another fax number?
DON FUENER: Please forward my questions to the group of people in the United States that you refuse to name. Why is not disclosing the peoples names an issue?
DON FUENER: Why do we have to have this prolonged chat, when in fact, you have told me you can't answer any of my questions?
DON FUENER: What is the procedure to handle questions that your call center can't answer?
DON FUENER: Don't you understand that this chat is going to publised on the internet?
Rei: As I validated with our back end team, the fax number 650-745-0651 is working fine.
DON FUENER: Sorry it is not working we just verified it.
DON FUENER: How do we get a hold of the "back end team" and where are they located?
Rei: Don, I know that I may sound like I am repeating myself over and over again. I really don't know how to tell you again that the back end team can not be contacted directly by customers. If you have questions on your account and would need further assistance, our frontline agents would be glad to assist you. I really wish I can give name, Don. If you only know, I really would. I don't want to waste your time and would only aim to give you an excellent service.
Rei: From the bottom of my heart, I really want to assist you with what you deserve. You are very important to us.
DON FUENER: So from what you are telling me Intuit is not going to let you answer my questions, or forward my questions to another person, and despite your assurances to the customer, we don't really feel that important. So my only solution is to go viral with this amazing customer service conversation. Right?
DON FUENER: I find it difficult to believe that Intuit has handcuffed its foreign based customer service agents in such a manner that it puts you in such a difficult position/awarkward crazy position.
DON FUENER: So really the problem is with Intuit? They will not let you do your job. Right?
Rei: I couldn't stop you on that, Don. If that's something that pleases your heart then so be it. Know that here at Intuit, we only aim for providing you a good customer service experience. If you would let me help you with any of your concerns then I will be very glad to do so.
DON FUENER: But you can't.
DON FUENER: I am emailing our conversation to Mr. Smith I guess. Thanks for your time.
info: Your chat transcript will be sent to taxpartner@gmail.com at the end of your chat.
Sunday, September 21, 2014
September 2014 Client Newsletter
“You can have results or excuses. Not both.” – Anonymous
I ran across a great little book a couple of weeks ago by author George Cloutier, “Profits Aren’t Everything, They’re the Only Thing.” In the introduction Cloutier asks some very powerful questions. Do you take responsibility for every aspect of your business? You better. You are the boss. Are your blaming employees when they don’t do something right? Do you work on Sundays? Do your workers respect you, not like you? Are you aware of all your customers and their needs? Do you pay for performance? Do you pay yourself well? Are you satisfied?
Although I am still in the middle of the book, not quite done, I thought I would pass on some rather radical ideas not found elsewhere from Cloutier:
"Entrepreneurs are people that start a business thinking they can do it better than their boss did and to make more money and enjoy life more. But if you don't have the controls and processes in place, far from gaining control over your life, you lose it, and become a slave to the employees and vendors you have to pay to keep the business alive.”
The only solution to this and the only way to regain control: put profits first. When budgeting, the first thing to budget are profits. Assume a profit percentage rate equal to that of the industry top quartile, leaving an expense budget remaining for all remaining costs. No cost in business is truly fixed. There's plenty you can live without. Profits first budgeting is like the family that says "Okay, we are going to save $1000 a month and go without until we can put that $1000 into a savings account."
Cut ruthlessly to earn.
You must micromanage. Expect someone else to do something and 90% of the time it won't get done. You should wear the badge of control freak with pride. Always circle back and follow up to make sure every task was in fact done. With a small business you have to know everything that is going on at all times.
In a small business, you don't have the time or money to correct bad mistakes or to constantly be making the same mistakes. Small businesses fail too fast. Doling out extra responsibility and praise, and hoping that workers will just somehow magically rise to the occasion is wishful thinking.
Small business owners have an unlimited capacity for deluding themselves until they are broke.
Implement required changes without mercy. When needing to confront people, you can ease the process by asking permission to be confrontational at the onset of the conversation.
Remember, you can always hire someone better for less.
This is a great book to get the entrepreneur's juices flowing and remind him or her of the basics over and over again. If you are in business and you have not figured out that profit is the only thing that is worth working for then, as Cloutier says at some point 'you'd better go out and kill yourself'.
One last thing from Cloutier’s chapter about ending denial, question nine from his denial pop quiz.
What do you consider to be the most accurate barometer of your businesses success?
A: Profits and cash
B: Profits and cash
C: Profits and cash
D: Profits and cash
In what seemed a never ending parade of bad news, poorly presented sessions and a lack of ability to answer anyones questions, I was struck by how good the about to take place myRA accounts presented at the retirement session at July’s IRS Nationwide Tax Forum really is.
From the Department of Treasury web site:
For businesses, making myRA available to employees is straight-forward. Treasury will handle account set-up and maintenance and will provide informational materials for business owners to share with their employees. There is no employer-match or contribution. In fact, all that interested employers have to do is to make Treasury-provided program materials available to their employees and set-up ongoing payroll direct deposits into myRA for interested employees. myRA is intended for employees who do not have access to an employer-sponsored plan or who are not eligible for their employer’s plan. myRA is not intended to replace current employer-sponsored retirement plan offerings.
For workers, myRA is simple, safe and affordable. Employees will be able to start saving with an initial deposit of as little as $25 and recurring contributions each pay period of $5 or more. Account balances are protected--they will never go down in value, and there are no fees for savers to participate. The accounts are also portable so if savers change jobs, they can maintain their accounts across multiple jobs.
Contributions to a myRA are made with after-tax dollars, and when savers retire, they won’t have to pay taxes on what these accounts earn, provided they meet the relevant Roth IRA requirements.
While myRA is for employers of all sizes, Treasury knows that this program has the potential to be a powerful tool for small business owners who want to help their employees begin to save for retirement.
As an incentive to small business employers to offer the the myRa program the government is going to offer a tax credit for your troubles. Although I read some criticisms of the program while researching it, this is a program that even the lowest paid employee can participate in, a minimal amount of periodic savings deposit requirement, the principal amount of the account is backed by the federal government, and a tax credit for allowing your employees to participate, adding up to a very good thing. We will forward you information after the Treasury Department officially begins offering the accounts, hopefully this fall.
To the contrary I couldn’t help thinking that the enforcement of the Obamacare employer mandate, as presented at the IRS Nationwide Tax Forum, is going to pretty much be mission impossible.
2014 was the year that the Obamacare was suppose to impose the employer employee health care mandate was scheduled to be implemented. It obviously wasn’t implemented. For 2015 the employee health care mandate was again postponed for all employers with under 100 employees. By my estimation this postponement covered nearly 95 % of all businesses in the United States. Safely after election day the employer health care mandate will finally be in force for all businesses with more than 50 employees.
If you are an employer, and are mandated to cover your employee’s health insurance and you don’t, you are subject to a penalty of $2,000 per employee. Or if you have any employee getting a subsidy from the Healthcare Marketplace and you are not providing this employee health insurance, you are subject to a penalty of $2,000 per employee. Here is the rub. There are no forms to file, well kind of. The IRS is going to send you a bill, relying on information provided to them from three sources; Insurance companies, The Health Insurance Marketplace, The Employer.
Under current IRS Obamacare rules, three new forms have been developed to determine whether an employer is subject to the $2,000 penalty. The plan is for the already overburdened IRS to process these additional forms, compare the information, make a determination if the employer is in compliance. and assess any penalties if applicable. IRS currently processes, rather poorly, not my opinion but that of the Treasury Inspector General For Tax Administration (TIGTA), 173 million tax forms a year. I couldn’t find an estimate of the number of additional forms that Obamacare will generate, but it has to be in the tens of millions.
As proof of IRS’ inability to handle the upcoming responsibility to determine the employer mandate you don’t have to look any further than how it is currently enforcing other current portions of the Obamacare taxes. According to Yahoo news, Obamacare has instituted an excise tax – equal to 2.3 percent of the sales price of medical devices – that took effect in January, 2013 and is estimated to bring in about $20 billion through 2019, according to the Joint Committee on Taxation has said. Auditors say the IRS had originally estimated that the tax would bring in about $1.2 billion in the second and third quarters of 2013 – but it’s only received $913.4 million. Under the law, producers and manufacturers are required to file Form 720 that reports the medical device tax on their tax returns. But when TIGTA went to review how the agency was processing the tax returns this year, it found the agency had no way to identify which medical device manufacturers were required to pay the tax. It also had no controls in place to “ensure the accuracy” of the tax revenue reported. One can come to the conclusion that when the employer mandate is finally instituted next year the same results are in store. Like I said mission impossible.
One final note from the IRS Nationwide Tax Forum. You really are going it alone when it comes to tax law and certainly don’t rely on the IRS for help. I learned that a recent tax court case dealing with the number of allowed IRA rollovers is limited to one per taxpayer per year. This ruling is contrary to information that had been written in the previous IRS publications dealing with IRA rollovers. The ability to execute IRA rollovers on a one-per-IRA basis has been described in detail in IRS Publication 590, Individual Retirement Arrangements (IRAs), for at least 20 years “IRS publication is not official guidance” wrote the tax court. In the case Bobrow v. Commissioner, the Court looked at a situation where the taxpayer, Mr. Bobrow, had made two IRA rollovers within a 12-month period. Each rollover consisted of assets distributed from a different IRA. The Court disallowed Bobrow’s IRA rollover on the grounds that he was limited to one rollover per taxpayer per 12-month period, not one rollover per IRA contrary to IRS guidance. There you go.
There comes a time in a small business owner’s life where you figure it out or your business dies. The mistake most business owners make is a focus on production, not marketing. The number one mistake that small business owners make is that marketing is subject to the influence of, dare we call it salespeople. Advertising salespeople. Master the marketing of your business and you will succeed.
Thursday, September 4, 2014
Forbes.com Obamacare is dampering the job market in three ways
From Forbes.com
For most Americans, Labor Day is an opportunity to take an extra day off of work and enjoy a long weekend with family and friends. But for more than 100 million Americans, Labor Day isn’t a day off from work. That’s because two-fifths of the population is either unemployed, or out of the workforce altogether. The U.S. economy is still not back on its feet, six years after the financial crisis of 2008. One big reason is Obamacare, a law that is hampering job growth in three principal ways.
Read more by clicking on this link
Thursday, August 21, 2014
Don't be surprised by Affordable Care Act Penalties
Click the link below to download from CCH a free pdf newsletter outlining important stuff you need to know about the Affordable Care Act premium tax credit which may be very good or very bad.
Click here>>>>>
ACA Guide download
Click here>>>>>
ACA Guide download
Wednesday, August 20, 2014
August 2014 Client Newsletter
It was day two of the IRS Nationwide Tax Forum last month. I was attending the session dealing with the new regulations concerning matching health care premium credits to clients tax returns to health insurance premiums paid during 2014. Coincidentally two appellate courts the same day issued conflicting decisions concerning the constitutionality of health care premium credits. Big front page stuff that day. Do you think there was even a mention about the decisions by the IRS counsel making the presentation? Nope. No time for questions either. By the way the IRS just released a statement that taxpayers should ignore the decisions and continue as if there was not a decision.
At the IRS exempt organization presentation, the subject of intense pressure from Congress because of IRS’ failure to approve certain “tea party” applications for tax exempt status because they were “tea party” organizations, the IRS representative wasn’t prepared to answer any, even the easiest procedural questions, after her presentation. Of the four questions time allowed, her response was always the same, “I am not prepared to answer any questions at this time, you can call our customer service for more information.” After the fourth in a row ‘I am not prepared to answer your questions’ response, the audience laughed very loudly and quickly dispersed. I just shook my head and the fellow tax geek next to me said, “You gotta be kidding.” Why ask the audience for questions if you not prepared to answer any of them. You really can’t make this stuff up.
Of the last ten or so IRS Nationwide Tax Forums I have attended, last month’s was not the greatest. In fact I would rate it rather poorly. The quality of the speakers has declined rapidly the last couple of years. There is nothing more thrilling than listening to the speaker read everything off the presentation screens, offering no real insight into the subject, just reading the powerpoint presentation. A session I attended concerning passive income limitations, not exactly the most exciting subject granted, was so poorly presented that the guy in the row in front of me fell asleep within the first ten minutes and was snoring rather loudly. Nobody seemed to notice, maybe they were sleeping as well.
Remember last month I predicted that the center of discussion would be the IRS email scandal. Well I was wrong. It became very apparent, very quickly, that I was in the no criticism of the IRS zone this year. Not even a whimper about the challenges that IRS is facing with the demands of the health care legislation enforcement coming online this year and even more budget cutbacks. This is a distinct change from the previous years when IRS speakers were more than willing to share the problems the agency was facing, offering tax practitioners tips about how to overcome the problems and asking for our cooperation and patience.
Without becoming Mr. Negative here, there is always something that you pick up which is why I will still be going back to learn what the latest emphasis from mother IRS is going to be. You really want me to.
Here is some points covered in the conference that I found interesting.
- By statute, that means the law is very specific, if you owe $5,000 or less to the IRS you can automatically establish a payment agreement that will pay off the liability in 72 months or less. The thresholds for the establishment of online, that means virtually automatic, have been increased in some instances to $50,000.
- Failure to pay payroll tax withholding continues to be a focus of the collection division, but even in cases where you many owe up to $25,000 in trust fund taxes you can also set up a two year payment agreement online. Not paying the payroll tax trust funds are considered “most egregious” of all penalties, thus the most attention from the collection division.
- The reality of the IRS today, less funding, less people, and more stuff to do. The answer is more online collection opportunities.
- On your 2014 return if you received some sort of health care insurance assistance you will have to reconcile that assistance on your return. Obamacare has completely changed the tax return you will be filing this year. Several new forms will be required to file your return this year including form 1095A issued by the health insurance marketplace and form 8962 Premium Tax Credit. Both forms are about to finalized this month. IRS is still working on it. Even if you have no income tax liability this year and traditionally have not been required to file a tax return, you will this year because of form 8962. This 8962 form will be required whether you are filing 1040EZ, short form 1040A, or long form 1040 if you received assistance/health insurance premium credit this year. Divorce and lack of marriage has complicated the filing of form 8962 and who is entitled to take the credit.
- The popularity of the S Corporation or Small Business Corporations continues to grow. This year more than 70% of the 4.1 million tax returns filed in the United States will be S Corporation returns. 68% of those 4.1 million tax returns had problems. And that problem was little or no compensation paid to officers.
- The amount of compensation paid to stockholders/employees/officers of S Corporations continue to be the focus of IRS enforcement. The lack of compliance by many S Corporation officers to take what is called a “reasonable compensation” has generated yet another IRS form, 1125E. On form 1125E we are required to report the names, social security, address, percentage of ownership and amount of compensation your corporation paid to its officers/shareholders.
- How do you know if the IRS is getting serious about S Corporation officer reasonable salary compliance? They are now penalizing tax preparers for their lack of “education” to their clients about the reasonable compensation requirements. Late this month we will be sending all S Corporation clients a very important letter about the importance of reasonable employee compensation to officers. By the way there has been 25 cases filed in Tax Court since 2008 concerning the reasonable compensation issue and the IRS has won every single one of them.
- The IRS has backed off the home office deduction in the last couple of years, even issuing a safe harbor per diem to help us. They are now recommending that we issue a 1099 form from the corporation to the shareholder for rent expense paid by the corporation.
- The IRS has focused in the last year on advertising expense audits. Apparently there has been a tendency of some taxpayers to throw everything but the kitchen sink in the advertising expense category. Also don’t forget if you give an employee more than $25.00 as a gift, you have to include it on their W-2 forms.
- There are more than 50 different tax provisions that have expired this year. The prediction is another last minute fix by Congress in November or December causing yet another delayed tax season. Some things never change I guess.
More to come about the forum next month, including a real good idea called My IRA and the crazy, boy is this going to be trouble, way the Obamacare employer mandate is going to be enforced by IRS and why it just may be Mission Impossible.
Friday, August 15, 2014
New regulations issued in July make it easier to deduct S corporation losses
An issue concerning the deductibility of suspended S Corporation losses just got a little clearer.
From Forbes.com
So essentially, you took 3,500 words to explain that if 1) I can’t generate debt basis in an S corporation merely be guaranteeing debt of the S corporation, and 2) if I have a related party that is loaning money to my loss S corporation, the best way to fix the problem and give myself debt basis in the S corporation is to have the loaning related party distribute the note receivable to me? That is some quality, succinct writing.
Read more at forbes.com
From Forbes.com
So essentially, you took 3,500 words to explain that if 1) I can’t generate debt basis in an S corporation merely be guaranteeing debt of the S corporation, and 2) if I have a related party that is loaning money to my loss S corporation, the best way to fix the problem and give myself debt basis in the S corporation is to have the loaning related party distribute the note receivable to me? That is some quality, succinct writing.
Read more at forbes.com
Thursday, July 31, 2014
July 2014 Client Newsletter
Anyone who has to deal with the IRS, like your tax guys, knows that the services’ computer systems, they use five different systems, are to put it nicely antiquated. Compound that with the fact the fact that their information technology protocol is incredibly poor, you have a recipe for a political scandal. What I believe hasn’t been reported widely, Lois Lerner, former chief of the IRS tax exempt section, and center of the current IRS scandal, was simply following IRS protocol. Like all IRS computer users, she used her own discretion in deciding what should be saved and what did not need to be saved. When it came to saving her outdated emails, she followed customary for IRS practices by saving the messages on her computer’s local hard drive rather than a larger back-up system. Once her computer crashed, it became nearly impossible to retrieve the database of electronic mail communications. Because the IRS uses Microsoft’s Outlook email system, there is a limit on the amount space allowed on their servers to store their employees email. After you use your quota of space, which apparently is what happened to Lois Lerner, the story gets a little murky.
From Bloomberg Businessweek:
When an IRS employee’s e-mail account is full, he or she needs to decide what is an official work record and must be archived, in compliance with the Federal Records Act and other pertinent regulations. The archive is maintained on the employee’s computer—not on a corporate server—and is not part of the daily systemwide mail backup, which covers about 170 terabytes of e-mail data the IRS stores at three data centers. Before May 2013, those backups were stored for only six months; the data are now retained, which costs $200,000 per year, the IRS said. “An electronic version of the archived e-mail would not be retained if an employee’s hard drive is recycled or if the hard drive crashes and cannot be recovered,”
Missing emails are nothing new in Washington. Both the Clinton and the Bush administration both claimed that certain emails relating to the then political scandal of the day were erased. Government by its nature and design is inefficient. It should be no surprise that the IRS has problems with it computer systems. For example in 1913, thinking it was being overcharged by the steel companies for armor plate for warships, the federal government decided to build its own plant. It estimated that a plant with a 10,000-ton annual capacity could produce armor plate for only 70% of what the steel companies charged.
When the plant was finally finished, however - three years after World War I had ended - it was millions over budget and able to produce armor plate only at twice what the steel companies charged. It produced one batch and then shut down, never to reopen.
So the next time you receive an IRS notice indicating that you owe them money, stop for a second, and remember, this is the same organization that can’t recover its emails or for that matter can’t make armor plate either and give us a call.
Later this month I will be attending the IRS Nationwide Tax Forum in New Orleans. I gotta tell you this email deleted scandal will be the topic of discussion with fellow tax geeks. I will write to you next month about what others are saying.
When tax time rolls around do you find yourself pawing through piles of paper on your desk looking for credit card receipts from your business trip? Or are you upside down digging under the seat of your car trying to figure out where all your gas receipts are? Are you wondering if that coffee stained piece of paper is an invoice from a supplier? Do you have a vague feeling that someone, somewhere owes you money but, you just can’t remember who it is? If so, you’re probably guilty of operating with the Fly By the Seat of Your Pants accounting method.
Using this accounting method has a tremendous impact on your business's cash flow. Unless you have a system to track your business finances, you’ll always be operating in the dark and in danger of imitating George of the Jungle as he slams into a tree. Help is on the way. Go online. Free advertiser supported online accounting software is available. Probably the most popular software online is Wave. Here is a link to their website http://waveaccounting.com/. It is easy. Fairly comprehensive. Working with your tax guy is easy, too. Just invite us as a Guest Collaborator and we can both see your data, securely, in real time. Perhaps the best part is the automatic download your bank account into your accounting records limiting the amount of data input you have to do. Advantages? It is free. It is intuitive. No need to change the way you are doing business today. We like wave accounting so much we became a Wave accounting pro advisor. We have posted a link to wave accounting on our blog.
Monday, June 30, 2014
Link to wave accounting software
Free advertiser supported online accounting software is available. Probably the most popular software online is Wave. Here is a link to there website http://waveaccounting.com/. It is easy. Fairly comprehensive. Working with your tax guy is easy, too. Just invite us as a Guest Collaborator and we can both see your data, securely, in real time. Perhaps the best part is the automatic download your bank account into your accounting records limiting the amount of data input you have to do. Advantages? It is free. It is intuitive. No need to change the way you are doing business today. We like wave accounting so much we became a Wave accounting pro advisor.
Thursday, June 26, 2014
June 4, 2014 Client Newsletter
Do you know how much marketing money our tax business spent this year? I bet you would be surprised if I told you $50.00. Yet we grew our business exponentially this year.
How is this possible? Like most small businesses our new business comes from referrals. Yet, like most small business owners, I bet you’re just like us, probably not doing everything you can to get more referrals.
Here are a few useful tips from smallbizcontent.net on how to use referrals to increase your growth .
Ask for referrals. Many entrepreneurs fail to benefit from referrals because they’re simply too shy to ask.
Most satisfied customers are happy to give you referrals–but they won’t think of it if you don’t ask them.
Know the right time to ask. Aim to gather referrals at the completion of a project or upon delivery of a product. The goal is to approach the customer when they are happy with the purchase and the transaction is still fresh in their minds.
Create a system. Set up a procedure for capturing referrals. This can vary depending on your industry. A business-to-business company might ask for referrals during a post-sale phone call or email. A retailer could enclose a card with each purchase that customers can fill out to refer a friend.
Offer a reward. Encourage customers to give referrals by offering incentives, such as a discount on their next purchase, a free month of service or a small gift. Making rewards contingent on whether the referral makes a purchase can encourage higher-quality referrals who are more likely to buy. We do that, thus the $50.00. However we have found that most clients don’t even want the finder’s fee. They are glad to pass on our name to their friends, relatives, and colleagues.
Build trust. Customers don’t want their friends bombarded with marketing messages. Make them comfortable providing referrals by explaining how you will use the contact information they provide. Will you send direct mail? Will you contact the person by phone?
Follow up in a timely fashion. If you let referrals languish for months, their value can fade as the relationship between your customer and the prospect changes or your customer becomes less enthusiastic about your business. Set up a system to contact referrals within two weeks of obtaining them.
Mention the connection, but don’t rely on it. When you contact a referral, be sure to let them know who referred them to you. However, don’t assume that this connection alone will spur the prospect to buy. You need to put forth as much effort as you would with any sale.
Get to know them. Don’t give a “hard sell.” Lay the groundwork for a relationship by offering the referral something useful as an introduction to your business. This could be a whitepaper related to their industry, a free consultation, or a discount on their first purchase.
Provide outstanding service. When you win business from a referral, always provide outstanding service to the new customer. Otherwise, you will make the referring customer look bad for having recommended you, and you might lose not only the new customer’s business, but the old one’s as well.
We spent the Memorial Day weekend in the Detroit, Michigan, suburbs helping my son and his wife move. Much in the news that weekend was the size of the State of Michigan’s budget surplus. Whether it was a $100 million or $1 billion surplus seemed to be the center of discussion. In either case, it sure beats the alternative we find here in our home State of Illinois. The recent Illinois legislative session ended yet again putting off all the tough decisions, deciding that the best course was to kick the can down the road. How is it that a state like Michigan, with the problems of Detroit worst then you can possibly imagine...they can’t even afford to light or replace their street lights….very eerie at night...manage to generate a surplus, while Illinois seems to just be stagnant?
In our opinion and others in the know it is all about the poor business climate in Illinois.
A couple of months ago we wrote about the poor economic report card for Illinois’ economy. Chief Executive Magazine has published in May, an updated ranking of the 2014 best and worst states to do business in. Guess where Illinois landed? 48. We did beat New York and California if that is some consolation.
Comments from chiefexecutive.net concerning Illinois’ poor ranking include:
“Corruption and union pensions have made Illinois a poor alternative for business. Continually avoiding to address and fix the problems have only exacerbated the situation. More conservative states are easier to work in and with.”
“Illinois is rated in the worst category; their taxing scheme is deleterious toward small business.The Illinois Dept of Revenue seems most adversarial with respect to small business support and promotion. The Illinois House assembly is inept in addressing the hard issues associated with putting the state’s financial condition in order; they are a taxing and spending machine with little regard to the consequences and impacts to its citizens and businesses.”
“Illinois is a horrendous state in which to do business. It is governed by a class of incompetent, corrupt politicians. It’s like doing business in a third-world country.”
It is the one CEO comment concerning the Illinois Department of Revenue that really caught our attention. We have daily contact with the Illinois Department of Revenue. Talk about an unhappy place. Short staffed, computer systems that aren’t exactly working the way they are suppose to, and a mandate to collect back taxes that that places a priority on collection and not on common sense. Remember the recent publicity over the closing of the Springfield school supply store Ergadoo? The audit of their business by the Illinois Department of Revenue over their failure to identify the source of cash sales by non profit customers is the definition of deleterious. Rather than fight, they closed their store.
Currently the only way to get any type of response in any of the sticky situations our clients find themselves involved with the Department is by filing a what is called a Board of Appeals Petition. At a hearing last week, the Board of Appeals administrative law judge lamented that the backlog to hear a case is at least a year, maybe two, phone calls are not returned and their staff of nine is “overwhelmed.” The problem is and remains to be the fact that it is not going to get any better any sooner.
Later this month we plan on sending to all tax clients our annual summary that we call “things really smart people, our clients, do such stupid things to their taxes.” You won’t believe what some of our six figure income clients are telling us about why they can’t pay their taxes. Stay tuned.
We can help you save money on your credit card processing. At no charge and for no obligation we will analyze your credit card processing fees. In some cases, including ourselves, we have discovered that you can save hundreds of dollars from what you are paying now. We live in a debit card world. If you have considered accepting credit/debit cards for you business the rates are now extremely competitive. And if you are currently accepting not credit cards you are not married to your current processor. Call our office for details.
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