The American Wind Energy Association (AWEA) posted a blog titled “Getting the scoop on wind at Michigan supply chain meeting” written by Chris Madison. This article provides a brief summary of the projects that have been announced and the jobs that this industry now supports in Michigan.

To read the rest of article click the following link AWEA Into the Wind Blog.

This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.

Employers will be required to report the value of your health insurance coverage on your W-2.

What does this mean to you?

Well technically nothing since insurance coverage won’t be subject to an excise tax until 2018. Furthermore the excise tax of 40% would only apply to the employer-sponsored health insurance coverage amount that exceeds $10,200 for individuals and $27,500 for family coverage.

However once politicians start to see how much revenue could be generated from employer sponsored health insurance coverage, they may decide to apply the excise tax sooner rather than later to help pay for the deficit.

Effective January 1, 2011 only doctor prescribed medicines and insulin will be eligible for tax free reimbursement from one of the following plans.

Under current law insulin, prescribed and over the counter medicinal expenses qualify for tax free reimbursement from Flexible Spending Accounts (FSA), Health Reimbursement Accounts (HRA), Health Savings Accounts (HSA) and Archer Medical Savings Accounts (MSA)

If you are enrolled in one of the preceding plans you may want to consider stocking up on over the counter medicines this year.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

President Obama’s goal of “spending this country’s way to wealth” has failed miserably and can only add to the “EU effect” here in the United States. Locally we can expect a similar effect as our soon to be Ex Governor’s management style has been equally irresponsible.

Taking this to the private sector for a minute, when a client of ours leverages by borrowing so that they can continue to invest in the business, if the return on investment which is driven by sales isn’t there, the client must cut costs, including payroll and related benefits, in order to survive. The client simply cannot “deficit spend its way to prosperity” forever. Its bank, at some point, will stop “papering over” the deficits with more money and the client will ultimately be bankrupt. When there is no longer an adequate return on investment and as a result positive cash flow, the private sector does what it must to survive; manage the expense side of the equation. Our clients understand “The only way they can take you out of the game is if you run out of cash.” State of Michigan under its current leadership has been more about taxing and spending versus cutting.

In addition to the federal government funding which has been used to feed the insatiable appetite of the unions in this state, the other source of funding which is drying up is debt sold by the State and its Municipalities. More and more, sophisticated investors are less and less inclined to buy what is quickly becoming regarded as junk bonds from either source. Case in point: Two months ago we were charged with investing one million dollars for a client in Michigan Municipals. However, the market has become so fragile that the money remains in cash as we look to a safer venue.

Morris points out, just as Athens has turned to Berlin, bankrupt states like Michigan will turn to the federal government to guarantee their debt. That my friends will be a pivotal point in this great country’s future in that it will determine whether we become financially responsible going forward by just saying NO or continue as we have recklessly “spending our way to wealth.”

Morris is literally on the money on his analysis and recommendations regarding what the next steps should be and what they mean to the United States of America. This is an excellent piece well worth the read.

To read the entire article please click the following link The Next Big Economic Crisis.

This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.

The IRS has an excellent list of things you should know about when receiving a notice in IRS Summer Tax Tip 2009-22.

Item 8 from the list is extremely important. In practice there have been numerous times that clients have had to send in the requested items two or even three times due to paperwork being misplaced at the IRS, a different agent being assigned or that the case has been transferred to a different office.

You should also send any response to a notice via certified mail to prove that you have submitted your response by the specified timeline in the notice.

To access the list please click the following link from the IRS’ website. IRS Tax Tip 2009-22

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

Clearly the criminal mind, whether operating on Wall Street, inside the worlds largest commercial banks, or at a local level all have the same purpose in mind;  separate you from your money. Case in point, a headline on yesterday morning’s Detroit News read “Mortgage fraud ring hit $100m, FBI says.” This of course reminds me of a very old quote (the original version of which is supposedly linked to a Mr. T. Tusser in the year 1573) “A fool and his money are soon parted.”

The News Digest does a very nice job of summarizing the “abusive marketing practices” being used to prey on unsuspecting small business owners. Beware!

To read the entire article please click the following link Small Business

This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.

]]> http://www.detroitbusinesslaw.com/2010/06/small-business-administration-scams/feed/ 0 http://www.detroitbusinesslaw.com/2010/06/when-cash-is-tight/ http://www.detroitbusinesslaw.com/2010/06/when-cash-is-tight/#comments Fri, 11 Jun 2010 18:50:42 +0000 Editor http://www.detroitbusinesslaw.com/?p=987

I recently found an interesting article on Open Forum form Laura Rich titled “Paying Your Small Business Bills”

Her article provided a wide range of ideas between renegotiating trade terms, contacting your vendors, to squeezing your customers for payment.

In practice I have found that it is always better to communicate with your vendors when your business is having cash flow problems before they contact you. They are more willing to work with you if you contact them first. After all they want your business for the long-term.

Contacting them first not only shows that you are interested in a long-term relationship with your vendor, but it also lets them know that you take seriously your responsibility to pay your bills.

To read the rest of her article click the following link Paying Your (Small Business) Bills.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

Many accounting firms are reporting a doubling or tripling of the frequency of audits within their client bases. To prepare for the likelihood of an audit, it’s helpful to review the audit process.

In general, the IRS only has three years to audit a tax return. However, the IRS can ask that the company voluntarily extend the audit period. Therefore, the first step in the audit process is deciding whether or not to give the IRS more time when statutes are about to expire.

If the company refuses to extend the audit period when statutes are about to expire, the IRS may get very picky in auditing the return, disallowing all questionable items on the return. A better strategy would be to offer the IRS a limited extension period, say of 6 months. If a limited extension can be secured, and it usually can, it will force the IRS to get things done more rapidly and minimizes the time they have to scrutinize the return in great detail. In addition, to limiting the time frame of the extension, it is advisable to limit the extension to specific items on the return, rather than extending the audit to cover the entire return

After the extension step, if any, the audit process continues with a meeting between the IRS examiner and your tax adviser. Many times the IRS will require the taxpayer, or its representative, to be present at the initial meeting. The meeting can be used to lay the ground rules for the audit and give the tax adviser a clear idea of what items the examiner is interested in. During this meeting, a good tax adviser will ask for a target date of completion, designated one person in the firm to act as liaison with the IRS, and create a rapport with the examiner.

The IRS examiners will agree to just about anything that will make their work easier and speed the process, without sacrificing the integrity of the audit. For example, Numerico offers to send information to the examiner before the actual meeting to expedite resolving the items the IRS will be looking at and to reduce the amount of time the examiner needs to spend on-site. The pro-active stance helps to reduce auditors’ mistakes and misunderstandings, as well as the tax assessments the company being audited would face as a result of those mistakes. Also, it is more difficult to correct an auditor’s mistake once it has been written up.

Now that the meeting has been set, let’s look at basic audit defense strategy. For the most part, the groundwork has already been laid and the key issues are clear. It’s important to settle these key issues right away, to avoid wasting time. When settling the issues, approach them directly. This is the part where your tax advisor is most effective. IRS examiners are not in the habit of making trades, i.e., overlook item A and we’ll concede items B and C. Therefore, all “gray areas” that the IRS will be focusing on must have proper documentation and it must be presented properly to the examiner to get them to pass on it. A tax adviser with a good reputation and experience in the auditing process can save a company thousands of tax dollars by handling your case pro-actively.

Tax problems are discussed with the adviser before being written up in the audit report. Once the details have been ironed out and the audit is over, the examiner must deliver a written report. From this point, the company has 30 days to bring the case to the IRS Appeals Office, if necessary. The difference between the audit and the appeals is the element of negotiation. You can make deals with the IRS during the appeal process.

Once a case is taken to Appeals, all tax disputes must be resolved. The Appeals Officers judge each case on its technical merits and the risks vs. cost of litigation. This is why Appeals officers are able to negotiate; to avoid costly litigation and the setting of legal precedents. About 85% of all appeals cases end in voluntary settlements.

The appeals process is fairly simple, but requires thorough preparation. A detailed, persuasive presentation of your case should be written up; you won’t meet the person who reviews your case beforehand. Be sure that the Appeals officer understands your position on all issues before attempting to negotiate. Also, as this is a negotiation process, you should only present reasonable arguments to the Appeals Office. Disputing every detail of your case, especially if your argument is weak, is a poor way to begin a negotiation.

To survive the audit process, present a strong case, a good set of books, and retain quality representation. IRS agents are like commissioned-salespeople in that careers are made (and broken) on the amount of revenue (tax assessments) the individual agents produce. If you understand this and pro-actively move through the audit, process, the agent will realize that you’re no “easy sale” and that they should look elsewhere.

This article was written by Gary Field, CPA at Numerico, PC. Click here to view Numerico’s website.

To access this tax tip click the following link from the IRS website Here’s What Happens After You File IRS Tax Tip 2010-74.

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

Her article provides a list of 11 different ways to generate referrals without spending money.

I find item 2 from her list to be extremely important in any service business, since a good portion of our work is dependent upon deadlines imposed by either clients or regulatory agencies. It is always better to under promise and over deliver than to make aggressive commitments that can’t be met thus resulting in a dissatisfied client.

To read the rest of her list click the following link 11 Ways to Generate Referrals

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.

This article provides a good summary of the various tax code changes that you will see between 2010 and 2018.

To view the article please click the following link Health Care Reform Reshapes Tax Code

This article was written by Jay Kossen, CPA at Numerico, PC. Click here to view Numerico’s website.