October 23, 2018
The American Institute of CPAs announced this week that four of its members have been honored with the 2018 Sustained Contribution Award. We are pleased to announce that our partner, Bert Denny was one of those presented with the award.
The annual award recognizes CPAs who have contributed measurably to the AICPA and the accounting profession through their dedication to volunteer service. Each recipient has participated in an Institute volunteer committee, task force or resource panel for 20 years or longer and has served at least once as a chair of an AICPA group.
“This year’s recipients have dedicated significant time into shaping the accounting profession through their efforts with the Institute,” said Ryan Screnar, CPA, chair of the AICPA’s award committee. “Their continued efforts over the years serve as a model for all volunteer members.”
Bert serves as our firm’s Director of Accounting and Auditing and Director of Quality Control. He has provided audit, tax and consulting services to a clients in a broad range of industries for over 40 years, both in Kansas and Oklahoma.
September 12, 2018
The Bipartisan Budget Act of 2015 introduced new partnership audit rules that took effect this year. Partnerships — including LLCs taxed as partnerships — should pay close attention to these rules. You might assume that audit rules are merely procedural, but the new rules make significant substantive changes, essentially subjecting partnerships to entity-level taxes for the first time.
In a dramatic departure from prior practice, the new rules permit the IRS to collect taxes from partnerships rather than from individual partners. By reducing the administrative burdens associated with partnership audits, the new rules will likely increase the number of audits. In addition, in many cases, application of the new rules will increase partnership tax liabilities. Why? Because the IRS will determine additional taxes by multiplying the net adjustment by the highest marginal individual or corporate tax rate for the year being audited (the “audit year”). The partnership must account for the resulting “imputed underpayment” in the adjustment year.
By imposing tax at the highest marginal rate, partners will lose the benefit of tax-exemptions, lower tax rates, or other partner-level tax attributes that would otherwise reduce their tax liability. However, partnerships will be able to reduce their imputed underpayments by providing the information necessary to establish these tax attributes.
Another burden imposed by the new rules: Since additional taxes are accounted for in the adjustment year, in some cases current partners will be held liable for tax errors that benefited former partners. Partnerships will have two options for avoiding this result:
- Arrange for audit-year partners to file amended returns reporting their distributive shares of partnership adjustments and pay the tax within 270 days; or
- File an election, within 45 days after the audit, to provide audit-year partners with adjusted information returns that will be reflected in their adjustment-year returns.
The new rules allow certain smaller partnerships to opt out in exchange for assuming additional reporting and disclosure obligations.
The IRS has issued both proposed and final regulations interpreting and clarifying the operation of the new rules. Partnerships should work with their tax advisors to evaluate the potential impact of the new rules and discuss strategies for avoiding harsh consequences.
August 14, 2018
With most of the changes from the Tax Cuts and Jobs Act going into effect this year, it’s a new day for tax planning. To save the most, you need to become familiar with the changes and be sure you’re taking advantage of every tax break you’re entitled to.
Our 2018-2019 Tax Planning Guide is designed to help you do just that. To view it, simply click on the link, navigate through the guide and learn about important tax law changes and ways to minimize your income tax liability. As you look through the guide, please note the strategies and tax law provisions that apply to your situation or that you would like to know more about.
At RCM, our professional are thoroughly familiar with the latest tax developments and tax-reduction strategies, and are eager to help you take full advantage of them. Let’s talk about ways to lighten your tax burden and better achieve your financial objectives.