Tax and Finance Management

8 Things You Need to Know about the New Lease Accounting Rules

After 10 years in the making, the Financial Accounting Standards Board (FASB) issued new rules regarding the financial reporting of leases. The amendments included in this guidance are intended to address criticisms of existing accounting and reporting rules and increase overall transparency and comparability of financial statements.  OMA Connections Partner, Clark Schafer Hackett, discusses 8 things you need to know regarding the new rules.  9/1/2016

IRS Addresses Procedural Issues for New R&D Tax Credit Provisions

OMA Connections Partner, Tax Credits Group, provides an update about forms and procedures for claiming the new research & development tax credit incentive that offsets payroll taxes:  “… the IRS issued draft versions of the 2017 Form 941, Employer’s Quarterly Tax Return and the 2016 Form 6765, Credit for Increasing Research Activities, reflecting the provision in the … (PATH Act) that allows a “qualified small business” to elect to claim a portion of its research credit as a tax credit against its employer FICA tax liability.”

Read more here.  8/25/2016 

Getting Employees To Join The Fight Against Fraud

OMA Connections Partner, MCM, posts this: “… The manufacturing sector is especially vulnerable to fraud schemes involving billing, corruption and noncash assets, such as theft of inventory and equipment. Research suggests that businesses that provide a convenient and confidential way for employees to report unethical behavior are more likely to unearth embezzlement and other wrongdoing sooner and suffer smaller losses than those without established “whistleblower” policies.”

And “… the Association of Certified Fraud Examiners (ACFE) has consistently found that tips are the most common method of detecting fraud by a significant margin. … the ACFE found that more than 42% of frauds were detected by tips. About half of these tips came from employees, and the rest were reported by vendors, customers and anonymous sources. The second most common method of detection was management review, which unearthed fraud in only 16% of the cases in the study.”

Read more from MCM here.  8/24/2016

Come Hear Congressman Renacci Discuss Federal Tax Reform

Congressman Jim Renacci (R-16th Congressional District) will discuss concepts for federal tax reform at the OMA Government Affairs Committee meeting on Wednesday, August 31.

The meeting will be held at Eaton Corporation, 1000 Eaton Blvd., Cleveland, OH 44122 from 9:30 a.m. until 1:00 p.m.; includes lunch.

Additional topics on the agenda include:

• 2016 election updates
• Ohio energy issues: 1) Utility proposals for unjustified subsidies; 2) Potential utility re-regulation legislation
• Pending state legislation, including:
  • Unemployment compensation system reform
  • Elimination of tax on temporary employment services & employees
  • Preview of 2017 state budget concerns – will business tax increases be on the table?

Register here.

IRS Proposed Regulations Target Gift and Estate Tax Planning Strategies

According to OMA Connections Partner, Clark Schafer Hackett, the IRS has recently released proposed regulations that would eliminate valuation discounts for gifts of family-controlled, closely held business interests to family members.  Read more here.

Business Tax Giveaway to Hollywood Hits State Revenue

This week the Ohio Office of Budget and Management (OBM) made another deposit to the state’s rainy day fund, now topping $2 billion, a little more than 6% of the biennial state budget held in reserve.

With the deposit, the OBM director Tim Keen issued a revised revenue estimate including revising commercial activity tax (CAT) collections downward by more than $10 million due to the recently approved state legislation that extends a CAT credit to movie making enterprises.

Hailed for job creation and economic development, an amendment to SB 390 to exempt movie production enterprises from the state’s business was approved earlier this year by lawmakers.  The OMA opposed the credit that erodes the tax base and puts pressure on remaining taxpayers including manufacturers.  Aren’t you glad to be subsidizing Hollywood producers like George Clooney?

Ohio Attorney General Defends Manufacturers

Just prior to the Independence Day holiday, Ohio Attorney General Mike DeWine filed an amicus brief requesting certiorari from the U. S. Supreme Court in the case of Gillette Co. v. Franchise Tax Board.  The case involves whether member states may ignore provisions of the Multistate Tax Compact, in this case to the detriment of taxpayers.

The Attorney General focuses the state’s arguments on the compact/contract issue and its importance to states in general.  The precedent the case could set for other state compacts could be detrimental to both manufacturers and states.

OMA appreciates the Attorney General’s willingness to engage the U.S. Supreme Court on this critical matter.

State Ends Fiscal Year in Good Shape

Unlike some other states that are experiencing budget shortfalls (look east to Pennsylvania and west to Illinois), Ohio ended FY16 in good shape.  Revenues were a little down for the fiscal year ending June 30, but so were expenditures, by a lot more.

Revenues fell just 1 percent below estimates: a total of $21.8 billion came in compared to the $22.0 billion predicted.  Compared to FY15, the state brought in $415.7 million more in FY16.

Spending was below estimates for FY16 by about $1.2 billion.  Medicaid accounted for nearly $925.9 million of that amount. Primary and second education spending was below estimates by $74.5 million while health and human services spending is down $59.7 million.

Medicaid spending was up $2.1 billion in state and federal funds from FY15.  Through June of 2015, nearly $14.9 billion was spent on Medicaid; through June 2016, a total of nearly $17.0 billion was spent.

Overview of Presidential Candidates’ Tax Plans

From OMA Connections Partner, GBQ Partners:  “Now that the races are down to a manageable number of candidates, we want to provide some information on their tax proposals (as of May 17th). No political commentary, just an overview to help keep you informed. Although many of these proposals may never become law, they nonetheless provide valuable insight into the underlying principles that will guide tax reform efforts from the next president.”

New Tax Filing Deadlines for Business

OMA Connections Partner, Clark Schaefer Hackett (CSH), posted this:  “While your individual tax return is still due on April 15th, many other filing deadlines were just changed by Congress that businesses need to be aware of. The IRS recently issued new tax filing deadlines for C corporations, S corporations and partnerships.”

To help you stay in compliance, CSH provides this summary of due dates and extended due dates.