NewsFlash March 9, 2017

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New Rules Affect Popular Tax Credits

Here’s an update on the child tax credit, the earned income tax credit, and the American opportunity tax credit.

By Sally P. Schreiber, J.D.
journalofaccountancy.com

In December 2015, the Protecting Americans From Tax Hikes (PATH) Act, P.L. 114-113, permanently extended a number of tax provisions that are popular for individual taxpayers, finally ending the practice of waiting until the end of the year or even until the next year to pass retroactive extensions. Among the provisions that were permanently extended and otherwise modified were the child tax credit, the additional child tax credit, the American opportunity tax credit and the earned income tax credit (EITC). 

At the same time, there were some other, less-publicized changes that affected those individual tax credits that were less favorable for taxpayers (see “Congress Makes Changes to Popular Tax Credits,” Tax Insider, Jan. 28, 2016). This article reviews developments in three areas since that article was published: the new due-diligence requirements for tax preparers who submit returns claiming the child tax credit, additional child tax credit and American opportunity tax credit; the penalties (now indexed for inflation) that are imposed on preparers for failing to follow these due-diligence requirements; and the provision requiring the IRS to delay processing tax refunds of the additional child tax credit and the EITC until Feb. 15 to give it more time to review those refund claims.

To read the full article, click here.


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ASB Issues New Going Concern Auditing Standard

By Hiram Hasty, CPA
journalofaccountancy.com

Accounting and auditing standards for going concern achieved greater harmony recently when the AICPA Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) No. 132, The Auditor’s Consideration of an Entity’s Ability to Continue as a Going Concern.

SAS No. 132 supersedes SAS No. 126 of the same title and will be effective for:

  • Audits of financial statements for periods ending on or after Dec. 15, 2017; and
  • Reviews of interim financial information for interim periods beginning after fiscal years ending on or after Dec. 15, 2017.

The primary objective in the development of SAS No. 132 was to consider the accounting provisions of the FASB accounting standard that was issued in 2014 and the GASB accounting standard for state and local governments.

To read the full article, click here.


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FASB Updates EBP Master Trust Presentation, Disclosure Requirements

By Ken Tysiac
journalofaccountancy.com

FASB recently updated accounting rules for how employee benefit plans report their interest in a master trust.

The new guidance is contained in Accounting Standards Update No. 2017-06, Plan Accounting: Defined Benefit Pension Plans (Topic 960), Defined Contribution Pension Plans (Topic 962), Health and Welfare Benefit Plans (Topic 965): Employee Benefit Plan Master Trust Reporting.

In a master trust, a regulated financial institution serves as a trustee or custodian, holding assets of more than one plan sponsored by a single employer or sponsored by a group of employers under common control.

FASB concluded that stakeholders consider the current master trust disclosure requirements in GAAP to be limited and incomplete, particularly related to disclosures of the plan’s interest in the master trust.

The new standard is designed to make disclosures more useful to users of financial statements. All plans will be required to disclose the dollar amount of their interest in each general type of investment. This will supplement the existing requirement to disclose the master trust’s balances in each general type of investment.

The amendments also will require all plans to disclose their master trust’s other asset and liability balances. These include, among other items, amounts due from brokers for securities sold; amounts due to brokers for securities purchased; accrued interest and dividends; and accrued expenses. Plans also will be required to disclose the dollar amount of the plan’s interest in each of those other asset and liability balances.

In addition, the amendments will require health and welfare benefit plans to disclose the name of the defined benefit pension plan in which investment disclosures relating to 401(h) account assets are provided.

The update takes effect for fiscal years beginning after Dec. 15, 2018. Early adoption is permitted, and an entity should apply the amendments in the update retrospectively to each period for which financial statements are presented.

Ken Tysiac (Kenneth.Tysiac@aicpa-cima.com) is a JofA editorial director.


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Why the IRS Isn’t Giving Up On Compliance and Enforcement

Even with fewer resources, the IRS will persist in its mission to enforce tax laws. Here are 10 reasons.

By Jim Buttonow, CPA/CITP
journalofaccountancy.com

For the past five years, taxpayers and their tax professionals have been hearing news about a downsized IRS – mired in budget cuts, cutting resources, and reducing audits and compliance activities

But most people don’t realize the IRS’s main priority still is compliance – and that its mantra is enforcing the tax laws. Here are 10 facts that show why tax compliance and enforcement is and will be an IRS priority for years to come.

1. The tax gap is almost as much as the budget deficit.
Every year, people in the U.S. who don’t file a return, underpay their taxes, and underreport their income cost the government about $458 billion, according to IRS estimates. This difference between the amount taxpayers owe and the amount the IRS collects is called the tax gap. Add to the tax gap the cost of international non-compliance, which represents between $43 billion and $123 billion a year. In total, these numbers are close to last year’s budget deficit of $587 billion.

Based on the last IRS study for 2010, taxpayers comply with their filing and payment responsibilities about 82 percent of the time. This is called the voluntary compliance rate. Every 1 percent increase in the voluntary compliance rate adds about $25 billion to the U.S. Treasury. Reaching 100 percent compliance is impossible without placing a substantial burden on taxpayers, but the IRS makes a clear case for increasing its enforcement resources to close the tax gap. In its current strategic plan, the IRS has set a target for 86 percent voluntary compliance for 2017.

Although the IRS mostly has experienced budget cuts in recent years, it plans to realign its resources with a Future State Initiative. This plan will modernize IRS service to taxpayers through electronic tools, such as an online account for balance inquiries where taxpayers can look up their tax due, including penalties and interest. By modernizing its service tools, the IRS can accomplish two critical goals:

  • Provide better service to taxpayers who voluntarily comply with their obligations.
  • Make more efficient use of scarce resources to better focus compliance efforts.

To read the full article, click here.


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10 Competencies of Top Staff Accountants

Set yourself apart with exceptional skills – and not just technical ones.

By Gary Hohbein, CPA
journalofaccountancy.com

Distinguishing yourself as a top staff accountant can lead to many rewards: more responsibilities, higher job satisfaction, promotions and higher pay. But making your mark involves more than debits and credits. Here are 10 qualities that top staff accountants must master to set themselves apart.

  • Accuracy. Details matter, and there is no room for error in accounting. Staff accountants must become experts at self-review by coming back to their work as a reviewer would to find any mistakes before sending it to their manager. They pay attention to materiality: The bigger the dollar amount relative to the whole, the more times they check it.
  • Stepping back. Top staff accountants understand their tasks, why they are performed and how they fit into the big picture. They make sure their journal entries make sense and reconciling differences are appropriate and easy to explain. If something doesn’t seem right, it probably isn’t, and they seek an explanation.
  • Hitting deadlines. Few professions are as deadline-driven as accounting. When top staff accountants receive a deadline, they give themselves earlier personal deadlines, allow extra time and assume the worst (someone will inevitably get sick or not respond to a request, computers will crash, the website will be down or something will get lost in the mail). They turn in work early, recognizing others depend on their work to be completed on time.
  • Keeping their managers informed. Managers appreciate regular updates. The best performers communicate the status of their projects to their managers and all constituents, especially during month-end and year-end closes. If they discover an issue, they ask for help and know two or more minds working on the solution are better than one. Keeping a problem to themselves or sweeping it under the rug is not an option.
  • Helping their managers. Top staff accountants make their manager’s priorities their priorities. They gain a reputation for taking extra steps even for small tasks, and they provide solutions rather than creating different problems. They assume their manager always is pressed for time and has deadlines to meet. Simply saying, “I’m planning to work on the bank rec this morning, but I can help with anything more pressing” goes a long way in helping their team succeed.
  • Professional integrity. Upper management teams want to know about any unscrupulous happenings to address and correct them immediately. Staff accountants are trusted to do the right thing and not to overlook dubious activity. Staff communicate professionally and start with their managers, trusting them to make correct decisions to keep upper management informed, but sometimes they need to ask again or seek help from a colleague.
  • Mastering time management. Top performers use time to their advantage. They schedule specific times to complete tasks, avoid procrastinating, start their most difficult tasks first thing in the morning, follow up on requests and use downtime for planning and preparation. They break up projects into specific action steps to keep the process moving.
  • Conquering emails. The best staff keep their emails clear and short and gain a reputation for following up and responding to emails promptly. They keep their emails organized, rather than wasting time searching through correspondence. 
  • Becoming an Excel guru. Excel is the accountant’s most valuable tool, and those who master it have a distinct advantage. Top performers use Excel to save time and reduce inefficiencies, and they use every available tool – formatting, formulas, macros and pivot tables.
  • Improving themselves. Education is never complete, and top achievers take responsibility for their education by reading books and articles, watching videos, and listening to recordings on topics such as time management; writing skills; teamwork; presentation and communication skills; project management; judgment biases; supervising; management and leadership; and other personal improvement topics. They stay up to date on current accounting standards and interpretations, recognizing the profession constantly is evolving.

 Gary Hohbein, CPA, is the controller of the Society of Critical Care Medicine in Mount Prospect, Ill. To comment on this story, contact Chris Baysden, senior manager of newsletters at the AICPA.


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The Habits of Highly Innovative Companies

By Neil Amato
cgma.org

While companies continue to focus on in-house innovation, they understand good ideas can come from anywhere. With technology quickening the pace of business change, research and development is taking on new meaning as it goes increasingly outside company walls.
Businesses are creating venture capital arms to mine for on-the-rise companies or new technologies that can be integrated into their operations.

In the first half of 2016, 53 new corporate venture capital units made their first investment, according to CB Insights data, the most recent available. That was on pace to continue a full-year growth trend that started in 2011.

And some investment in innovation is through acquisition. Microsoft bought LinkedIn for $26 billion, and Facebook bought Instagram.

Some lesser-known deals also help companies advance strategic efforts. For instance, Under Armour, a U.S.-based athletic apparel company, has branched out into technology through the purchase of personal fitness applications Endomondo and MyFitnessPal. The acquisitions, combined with the company’s existing app MapMyFitness, give Under Armour data on the exercise habits of about 120 million users from around the world. That sort of insight can help the company tailor products to everyday athletes.

The Boston Consulting Group (BCG) annually ranks top corporate innovators, and more of them are looking far afield. General Motors’ investment in tech start-ups such as Cruise Automation, which GM said in March would add “deep software talent and rapid development capability” to the company’s development of self-driving vehicles, was listed as an example in the group’s report.

Under Armour is ranked No. 22 and GM No. 27 in the BCG report, which bases its list on financial metrics and a survey of innovation executives. The report lists three habits that separate strong innovators from their less innovative peers: They cast a wide net; they excel at using multiple data sources; and they use external data in multiple phases of the innovation process.

To read the full article, click here.


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Image: Three generations were represented at the Roundtable. Pictured left to right: Trisha Floyd, Ken Kelly, Jennifer Stevens, Mia Thomas, Phil Pace and Pete Jordan.
Three generations were represented at the Roundtable.
Pictured left to right: Trisha Floyd, Ken Kelly,
Jennifer Stevens, Mia Thomas, Phil Pace and Pete Jordan.
Roundtable Attendees Discuss Workplace Generation Gaps

Generations in the workplace were the topic of an FICPA Roundtable in Tampa on Feb. 24. FICPA Market Development Manager Morgan Watson presented and moderated a discussion with FICPA members in business and industry.

For the first time in history there are four generations in the workforce, and by 2020 there will be five – each with different expectations and mindsets. In the workplace today are Traditionalists, Baby Boomers, Gen X and Gen Y (Millennials). Gen Z, born since 1995, will be the fifth. Each generation has its own characteristics, values and attitudes toward work, based on life experiences.

The workplace generation gap is impacting all professions. In the accounting and finance professions, known for technical competencies, companies that always clamored for technical skills now look for interpersonal skills. For succession planning, companies need staff with the ability to manage others, deal with conflict, communicate the story behind the numbers and lead.

To meet the challenges of the generation gaps at work, companies need to create a strong corporate culture. Investing in a strategic professional-development program can deepen employees’ connection and engagement at work.

The FICPA offers various leadership-development resources, including those available through its partnership with The Business Learning Institute. For more information, contact Morgan Watson at watsonm@ficpa.org.


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Membership Roundup

Update Your Profile
Is your FICPA profile current? Is your preferred FICPA chapter correct? Have you changed firms? Is your email address correct (required for FICPA website login)?

Please update your personal and company information here, or contact our Member Service Center at membership@ficpa.org or (800) 342-3197, Ext 1.

Just In Time For Tax Season!
Special: Boise X-9 Multi-Use Copy Paper – only $25.99/case. A 20 lb., 92 Brightness Case = 10 reams, 500 sheets per ream.


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Apply to Serve on FICPA Committees

Will you take advantage of your opportunity to strengthen your leadership skills, play an influential role in shaping the future of accountancy and grow your network with other professionals throughout the state?

With more than 30 committees for which you can volunteer your service, it’s easy to find a way to put your expertise, skills and passion to good use.

Committee membership is open to all FICPA regular members, non-resident members, accounting educator members, associate members, retired members and lifetime members in good standing.

To help you get started, we’ve developed the 2017 Committee Volunteer Guide. Use it to review our list of committees and learn more about how you can get involved. Apply today!

Submit Your Application Today
Ask Us: Member Service Center (800) 342-3197 | (850) 224-2727 | msc@ficpa.org


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FCT is in the Mail

The March/April issue of Florida CPA Today (FCT) is in the mail to members. This issue features the winners of the FICPA's 2017 Horizon Awards, recognizing the brightest young CPAs at the forefront of the profession. Other articles are “Changing Generations: Engaging Millennials in Your Firm;"  "Growing Pains of a New Firm;" and "Wealth Transfer Tax Issues Affecting Non-resident Aliens."

In this issue is a profile of FICPA Past Presidents Jim Campbell and Jim Lane, who recently passed away. Also included is a recap of Accel 2017, an FICPA leadership and advocacy event for young CPAs. 

Thank you for your FICPA membership, and happy reading!

“Thumb” through the online version.


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Introducing OneSource
Your New Solution for Classified Ads, Job Postings and More

To make our classified ad and job board system easier and more effective, we’ve introduced OneSource. It’s our new platform that puts everything you need in one place, whether you want to rent an office, find your next staff accountant, apply for your next career opportunity or recruit interns for busy season. OneSource can help you do all of that and much more.

Post.

  • Set up, pay for and post your ad with ease in our secure system.
  • Get connected to hot leads looking for ads like yours.
  • Access candidate résumés to find the perfect fit for your organization.
  • Attract a buyer or merger opportunity for your practice.
  • Use marketing tools to boost your message.

Find.

  • Find your next career move and apply for positions at companies throughout Florida.
  • Secure new office space for your growing practice.
  • Discover accounting practice sales and merger opportunities.

Grow.

  • Access the Career Learning Center for helpful webinars and resources.
  • Get professional résumé-writing assistance.
  • Apply for internships and jobs for your start in the accounting industry.

Log in today and learn how OneSource can work for you!

Access OneSource

Ask Us: Member Service Center (800) 342-3197 | (850) 224-2727 | msc@ficpa.org

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Health Care Industry Conference (17 CPE)
April 20-21, 2017
Orlando or Online

 

 

What are the experts saying about the Trump administration’s health care reform legislation? Attend the Health Care Industry Conference and find out. This April, FICPA will have a panel of subject-matter experts who will discuss the strategic focus during the Trump administration and other health care trends. Join us to earn up to 17 hours of CPE credit and learn information that’s critical to your business.

We’ll also offer an A&A track and a track for Young CPAs and CPAs new to the field. There’s something for everyone – with more than 20 breakout sessions, choose the topics that are important to you.

Don’t miss this opportunity, register by March 20, 2017, and receive early-bird pricing. Not in the Orlando area, or want to attend from your home or office? Register for the Simulcast.

Need Ethics Credits?
Join us on Wednesday for Ethics: Protecting the Integrity of Florida CPAs (4 ETH). This course addresses the ethical and professional obligations CPAs have to their clients, employers, colleagues, regulators and the public. We’ll discuss recent trends in business and professional ethics along with the specific rules and requirements applicable to CPAs outlined in Florida Statutes, Florida Board of Accountancy Rules and the AICPA Code of Professional Conduct. The course fulfills the biennial ethics requirement for Florida CPAs and is designed for professionals in public practice and those working in industry or government. Separate registration is required for this course.

Register for the Conference or Simulcast | Register for the Pre-Conference Ethics | Learn More
Ask Us: Member Service Center (800) 342-3197 | (850) 224-2727 | msc@ficpa.org


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Florida State University Accounting Conference (17 CPE)
May 11-12, 2017
Tallahassee or Online

 

 

Join us at the home of the Seminoles for this conference, which offers up to 17 CPE credits covering employment law, internal controls, accounting for leases, tax reform, revenue recognition and more – plus the updates you need on the economy, single audit, not-for-profit reporting and GASB.

It’s also a great chance to grow your regional network with fellow FSU alum and local professionals. If you can’t attend in person, we’re offering up to 15 CPE credits from the conference via online Simulcast.

Save $55 with the early-bird price by registering to attend in person before April 11, 2017. With the in-person event and the Simulcast, first-time attendees can save $100 by using promo code NEWFSU17 during registration,* and young CPAs can save $150 by using promo code YCPAFSU17!**

Register Now | Learn More
Ask Us: Member Service Center (800) 342-3197 | (850) 224-2727 | msc@ficpa.org


Look for the next issue of FICPA NewsFlash March 23, 2017.

Comments or Suggestions?

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