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IRS To Issue More ACA Penalties

The IRS began issuing Affordable Care Act penalty assessments in its Letter 226J tax notice in November 2017. These notices are being sent to employers who the IRS identified through its recently developed Affordable Care Act Compliance Validation System “ACV” System, as having failed to comply with the ACA’s employer mandate.  So far, the IRS has issued more than 30,000 of these notices containing employer shared responsibility payments (ESRPs) assessments of more than $4.4 billion.

Under the ACA, organizations with 50 or more full-time employees and full-time equivalent employees, are required to offer minimum essential coverage to at least 95% of their full-time workforce (and their dependents) whereby such coverage meets minimum value and is affordable for the employee or be subject to IRS 4980H penalties. These organizations are referred to by the IRS as applicable large employers (ALEs).

According to the latest report from the Treasury Inspector General for Tax Administration (TIGTA), the IRS identified 318,296 organizations that qualified as ALEs for 2015. Of that amount, TIGTA reports that 49,259 are at risk for compliance action by the IRS. Employers who have not yet received a Letter 226J penalty notice for 2015 should not breathe a sigh of relief yet.  There are still more Letter 226J penalty notices to be issued for 2015.

The TIGTA report also indicated that the IRS now has the data to begin the analysis to calculate the potential ESRPs for tax year 2016 to be issued to those ALEs determined not to be in compliance with the ACA.  TIGTA reports that the IRS has spent over $2.8 million to improve the process for identifying, calculating, and processing ALEs who are not in compliance with the ESRP.

As the IRS improves its ACA enforcement process, employers need to assess their potential risk of receiving IRS penalties for not complying with the ACA.  We find many vendors are not providing clients with copies of their filed 1094-C, 1095C, and Receipt IDs provided by the IRS for the 2015-2017 tax years.  Consider undertaking a spot audit of your IRS information filings for 2015, 2016 and 2017. We are providing this service at no cost to your business by working with First Capitol Consulting.

To see how this program can benefit your company, please contact us at info@cpa-wfy.com or 949-910-2727

WFY Continues to Grow Firm with New Hires

Wright Ford Young continues to grow the firm with four new hires: Marisa Alvarado, Nicholas Valdez, Collin Sidler, and Cameron Bauer.  Marisa and Nicholas are the newest additions to WFY’s Estates & Trusts Department while Collin and Cameron are the newest additions to the Audit Department.  WFY is pleased to welcome these new hires to the WFY team.

Marisa Alvarado

Wright For Young & Co. welcomed Marisa Alvarado as its Estates & Trusts Tax Partner in June. Marisa has over 30 years of experience in public accounting with the last 20 years in High Net Worth Advanced Estate Planning. She has worked as management at a few of the leading accounting firms including RSM LLP and KPMG LLP. Her specialties consist of tax planning for high net worth clients as well as successful strategies in tax, estate, gift, and succession planning.

Nicholas Valdez

This month, Nicholas Valdez joined Wright Ford Young & Co. as a Family Office Accountant. For the past twelve years, he’s been a family office bookkeeper for high net worth clients. While pursuing his degree in business administration with an emphasis on accounting at Cal Stat University Fullerton, Nicholas worked as a Manager in Golf Services at Shady Canyon Golf Club in Irvine.

Collin Sidler

Collin Sidler joined the Wright Ford Young & Co. team as Audit Staff in May. After achieving his Bachelor’s degree in accounting at Cal State Fullerton, his first job out of college was an Audit Staff at Deloitte. Collin is also a co-founder of a small internet-based start-up company.

Cameron Bauer

This month, we had the pleasure of adding Cameron Bauer to Wright Ford Young & Co. Cameron is a member of the Audit Staff and will be working in Wright Ford Young’s audit department.   He recently graduated from Biola University Crowell School of Business where he played golf for 4 years.

Avoid Scammers: How the IRS Does and Does Not Contact Taxpayers

In order to help taxpayers avoid scams in which criminals impersonate IRS employees, IRS has issued a Fact Sheet in which it sets out the ways that it does and does not contact taxpayers.  The IRS has been publishing this sheet for years to help taxpayers protect themselves from scammers and the warning signs.

Below are the legitimate ways the IRS employees will contact taxpayers:

IRS initiates most contacts with taxpayers through regular mail delivered by the U.S. Postal Service. However, there are special circumstances in which IRS will call or come to a home or business. Even then, taxpayers will generally first receive a letter or sometimes more than one letter, often called notices, from IRS in the mail.

Reasons the IRS will call or come to a home or business:

  • When a taxpayer has an overdue tax bill,
  • To secure a delinquent tax return or a delinquent employment tax payment, or
  • To tour a business, for example, as part of an audit or during criminal investigations.

Note: All IRS representatives will always provide their official credentials, called a pocket commission and a HSPD-12 card. The HSPD-12 card is a government-wide standard form of reliable identification for federal employees and contractors. Taxpayers have the right to see these credentials. IRS employees can provide an additional method to verify their identification. Upon request, they’re able to provide a toll-free employee verification telephone number.

Below are the legitimate ways the IRS employees will not contact taxpayers:

  • Demand that people use a specific payment method, such as a prepaid debit card, gift card or wire transfer. IRS will not ask for debit or credit card numbers over the phone. People who owe taxes should make payments to the U.S. Treasury or review IRS.gov/payments for IRS online options.
  • Demand immediate tax payment. Normal correspondence begins with a letter in the mail and taxpayers can appeal or question what they owe. All taxpayers are advised to know their rights as a taxpayer.
  • Threaten to bring in local police, immigration officers or other law enforcement agencies to arrest people for not paying. IRS also cannot revoke a license or immigration status. Threats like these are common tactics scam artists use to trick victims into believing their schemes.

Collection employees won’t demand immediate payment to a source other than “U.S. Treasury”.

IRS employees conducting criminal investigations are federal law enforcement agents and will never demand money.

Scammers may, but IRS will not, ask taxpayers about refunds or filing status or ask them to confirm personal information, order transcripts, or verify personal identification numbers.

IRS does not use email, text messages, or social media to discuss tax debts or refunds with taxpayers.

If you have questions about any contact with the IRS, do not hesitate to contact a Wright Ford Young tax specialist.

Earn Money from California’s Training Subsidy Program

It’s Free Money, and We Can Help You Get Your Share

Do you provide formal training for your employees? Exciting news: The government wants to chip in. Yes, really. In fact, for the past 35 years the State of California has provided over $1.5 billion in training subsidies to California businesses. Smaller companies can receive up to $50,000 per year and larger companies can receive up to $375,000 per year. Never heard of this program? You’re not alone.

The funding comes from a tax that every for-profit company in the state pays, the Employment Training Tax. This tax generates over $100 million a year that is then given back to companies that successfully apply for the funds.

This is not a tax credit. It’s “free money,” given in the form of a check. The money goes to help companies cover the cost of providing training for their employees so they can more efficiently and profitably do their jobs. Almost any type of training is covered, and there are very few restrictions on who can do the training. Typically most recipient companies simply have their own in-house personnel lead the training sessions.

Examples of eligible training include:

  • Business Skills, such as Leadership, Team Building, Communication, Sales, Marketing or Customer Relations
  • Computer Skills, such as Accounting Software, ERP, MRP, CRM, Scheduling, MS Office and other software needed to run a business
  • Manufacturing Skills, which includes almost anything necessary to produce the product or service

Virtually any for-profit company with a physical location in California can take advantage of this program. And once the state cuts the check they have no hold on how the money is used.

Of course, being that this is a government program there is a lot of paperwork involved, and the learning curve for getting this paperwork figured out is fairly steep. Luckily, we’ve already cracked the code. Because of our experience we can handle over 90% of the work required to receive the funds, thus freeing you to do what you do best—run your company.

To see how this program can benefit your company please contact Jeff Myers at JMYERS@CPA-WFY.com or call 949-910-0122

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Is This Your Situation: Wondering If An Audit Can Benefit You

Your privately owned business may not need a financial statement audit according to law, but that doesn’t mean you should skip it. Read through to learn why an audit can be a smart move.

With the vicissitudes of change combined with technological advances, we’re living in an age of transparency where businesses are required to disclose more information about their taxes, financial records, operations and executive salaries.  While private companies are spared the intense scrutiny of professional auditors and not required to provide an external review of their financial statements, there are advantages to having an external audit many business heads rarely consider.

Seven reasons why an external audit is smart business

  1. Audits improve functioning of the business. Objective scrutiny of a business’s operations leads to creative improvements and controls, which result in better products and services and a fatter bottom line.Just as regular tuneups improve an automobile engine’s functioning, the external audit achieves similar results by improving a company’s performance by  reinforcing and strengthening what works and eliminating what’s slowing a business down.  Internal controls are scrutinized to make sure they’re achieving their goals and whether timetables and stakeholders’ interests and goals are being achieved.
  2. All companies, regardless of size and industry, can benefit from an external audit.A common misconception is small companies don’t need to be audited. Auditors can identify and address potential problems that may be holding you back.
  3. Audited financial statements are considered more reliable. Investing in an external audit is considered a proactive strategy that improves and enhances the image of the business in the public eye.  It circumvents potential mistrust that comes when information is revealed after the fact.  It also gives customers or clients (existing and potential) and investors a sense of security, knowing that your company’s financial statements have gone through the audit process.
  4. The audit process encourages transparency.  Financial statements that have been verified by an external auditor are considered more reliable in the business marketplace.  External auditors are trained specifically to focus on tightening and improving business processes to reduce the amount of risk of misreporting financial data.
  5. External auditors have no agenda other than the truth.
  6. Audits help foster a culture that encourages change and growth. Rather than view an external audit as a bureaucratic annoyance, managers ought to embrace the audit concept as a conduit to a stronger business, new systems and processes, all of which open the door to innovation.
  7. Audits lead to better hiring decisions.A company’s employees (human capital) are as valuable as its products or services and business operations.After all, their expertise, motivation and attitude affect and define the company’s culture.A careful external audit evaluates every variable in a company’s machinery.

Do you want to know about the advantages of an audit for your business, and what it would involve? Give us a call today.