Readers of International Tidbits in the Houston area may have seen UHY LLP’s billboards around town including the one proclaiming, “No Lack of Energy from our CPAs.” That message was underscored in recent events geared to the energy industry and focusing on tax issues critical to success for companies engaged in cross-border business activities.

Tax Principal Barbara Hale, like many UHY professionals, has a litany of three initials that follow her name to denote her significant education and professional experience. Yet despite all her professional recognition, none of the other three letter designations are as meaningful as MOM. “Being the mother of three boys has been the learning experience equivalent to a second MBA,” she said in a recent interview. "In fact, my sister-in-law noted after my youngest son was born, that she would remember their birth order as my second MBA degree since I had named my children Marty, Brian, and Andrew. This was not intentional." But there is no doubt which MBA was the most challenging. Raising children takes a lot longer, and there’s thankfully not a formal graduation day,” she added.

Nonqualifed deferred compensation plans are subject to the complexities of § 409A of the Internal Revenue Code ("IRC"). Failure to comply with the requirements of IRC § 409A can result in significant adverse federal income tax consequences for the participants. A recent decision in one of the first cases considering IRC § 409A shows just how tough the IRS can be on these plans.

Were it not for the controversy stirred up by the IRS's recent disclosure that it has been subjecting various “Tea Party” groups to special scrutiny, May would probably go down as a fairly quiet month for federal tax developments. But more on that below. Before discussing the “Tea Party” dust-up, however, we want to bring your attention to some other more mundane developments in the world of federal taxation.

The Marketplace Fairness Act of 2013 (referred to by the media as the Internet retailer bill) has been slowing winding its way through Congress. The bill has the support of large Internet retailers such as Amazon as well as many states. The states seek the extra revenue and the Internet retailers (at least the large ones) seek simplicity.

Rick David, Chief Operating Officer at UHY Advisors, Inc., was honored by the American Arab Professionals Network (AAPN) of the American Arab Chamber of Commerce as the 2013 American Arab Professional of the Year in Finance Award at their Eighth Annual Celebrating Success Banquet on Wednesday, May 15, 2012 at the Bint Jebail Cultural Center in Dearborn, MI.

BLACKLINE AT THE FINISH LINE
HOW COMPANIES IMPROVED THEIR FINANCIAL CLOSE

WHEN:
Wednesday, June 19, 2013
12:00 PM - 5:00 PM
(Lunch will be served. Happy Hour Reception
immediately following the program.)

WHERE:
UHY LLP offices
2929 Allen Parkway, 20th Floor, Houston, Texas
 

JENNIFER SIMS VU: FAIR. MARKET. VALUES.

During the interview for this article, almost before I’d settled into my chair, Jennifer launched into a very self-revealing and self-aware conversation about what makes her tick as a person and as a UHY Advisors’ Valuation professional.  “One thing that’s very important to me is being ‘fair’ and how people will react to situations,” she said.  “That belief means that I don’t prejudge people or situations, which, I’ve come to discover during my career, is a valuable asset as a business valuation professional,” Jennifer added.

On April 10, 2013, President Obama released his 2014 Fiscal Year "Budget Proposal" (i.e., for the federal government's Fiscal Year beginning October 1, 2013 and ending September 30, 2014). According to the White House, the Budget Proposal should achieve a $1.8 trillion deficit reduction. The Budget Proposal represents a mixture of tax increases and cuts in various federal entitlement programs. Thus far, his proposal has drawn criticism from Republicans for the proposed tax increases and from Democrats for the proposed cuts to entitlement programs. The Budget Proposal is quite lengthy and "The General Explanations of the Administration's Fiscal Year 2014 Revenue Proposals" (the Green Book) published by the Department of the Treasury is itself 246 pages long. Read more for a brief summary of some of the more significant tax provisions in the Budget Proposal.

Is “Internet Retailer” Legislation the End of
Nexus for Sales Taxes as We Know It?

Over the last number of years, Internet retailers have been under pressure by the states to collect and remit sales taxes from their customers. As a result, there has been an assortment of statutes enacted and agreements reached with the retailers, especially Amazon, to satisfy the need of the states for additional revenues and the retailers need for simplicity and consistency.

“Know before you go” has long-been a tag-line for various U.S. government publications and programs aimed at international travelers for everything from understanding restrictions on taking liquids through security at airports to how much alcohol a traveler can bring back to the U.S. duty-free.  For companies in the energy services sector, “know before you go” can be a critical part of bidding a job and completing a project on-budget.

On the tax side, the list is extensive but can be summed up based on three key areas.

 Between the last three quarters of 2012 and first quarter of 2013, UHY LLP's Michigan offices added 41 employees to their team and its growth is far from over. This top accounting firm is always scouting seasoned financial professionals who seek to take charge of their careers.

 UHY LLP, a leading national certified public accounting firm, recently announced a series of promotions; one senior manager, seven managers, three senior accountants, ten senior staff accountants and one client service associate.

Midway has named UHY Advisors the recipient of the 2012 Moran Legacy Award, given annually to the company or individual serving the real estate industry that best embodies the qualities and values of Midway founder and real estate Hall of Famer Jim Moran.

Now that the Budget Sequester brouhaha is behind us, Congress and President Obama are rattling their tax reform sabers. And, if that is not enough to get the attention of taxpayers, the U.S. Tax Court recently issued two decisions in favor of the IRS's denial of a federal income tax charitable deduction solely because of a charity's failure to technically comply with the requirements on substantiating a charitable contribution. These developments and more are summarized below.

Texas business owners do not expect an economic downturn to occur in 2013, and more than four-in-ten foresee increased hiring and investment in their companies, according to UHY  LLP.

As a youngster growing up in South Dakota, Maurice Liddell developed the capacity – and some might say the audacity – to see over the prairie scrub and through ruddy peaks to things bigger than the neighboring Black Hills. Maurice’s unique ability to take a long view of situations is a skill that he brings to the Management & Technology practice of UHY Advisors today.

The decision by the Sixth Circuit Court of Appeals in Quality Stores, Inc., et al., 110 AFTR 2d 2012-5827 (6th Cir., 2012), has opened the door to file a claim for refund for employers who have paid and withheld FICA taxes on "supplemental unemployment compensation benefits" ("SUB") which are a type of severance payments made as a result of an employee's involuntary separation. An employer can file a claim for refund on Form 941-X of all FICA taxes paid relating to SUB payments for years still open under the statute of limitations. The statute of limitations for a Form 941 expires on April 15 after the third calendar year. So for FICA taxes paid in 2009, the refund claims for each quarter in 2009 must be filed on a separate Form 941-X by April 15, 2013.

Respondents to the UHY LLP NLS Express Reader survey expressed general optimism about the Texas business outlook, according to the top-line results of the study. More than 40% of the respondents indicated they expected the overall economy to grow in 2013; an additional 44.8% expected the economy to remain about the same as 2012.

This data reflects the National Association for Business Economics report reported on earlier this week, indicating an anticipated 2% growth in US GDP in 2013.

UHY LLP is in the process of compiling the results and will issue a full report later this month. For a copy, please contact us at info@uhy-us.com.

With the Budget Sequester still set to take effect on March 1, 2013, unless Congress acts to again "kick it down the road", both Republicans and Democrats are trying to position themselves as the voice of reason. The Democrats are proposing a new bill calling for an equal amount of tax increases and spending cuts. The Republicans are threatening to allow the Sequester to go into effect unless the President scraps his desire to further raise taxes and agrees instead to substantial spending cuts.  The following will detail these maneuverings and other legislative developments. Also, with this edition, we will begin to explore some 2013 tax planning ideas presented by Obama Care and the recently enacted  American Taxpayer Relief Act of 2012 ("ATRA").

As mentioned in a previous SALT Alert, the 2011 Regular Session of the Texas Legislature passed House Bill 257, which changed the dormancy periods for certain property types and changed the state’s reporting timeline.

It's little known that the origin of “pay it forward” was actually based on debits and credits, which is why that concept is particularly appropriate to ascribe to UHY LLP Principal Danny Zambrano. Like most auditors, Danny's professional life is comprised of reconciliation of financial accounts. What makes him unique among his peers, however, is his passion for imparting knowledge to others — just as his high school and university teachers did for him.

On February 13, UHY LLP participated in a seminar hosted by U.S.-Russia Chamber of Commerce and the U.S. Department of Commerce’ U.S. Commercial Service on Doing Business in Russia (After the Reset – A New Era in U.S.-Russian Business Relations).  I was privileged to speak about U.S. tax planning for investment in Russia, including information on Russian taxes provided by Nikolay Litvinov of UHY-Yans Audit in Moscow.

The Internal Revenue Service (“IRS”) and the Department of Labor (“DOL”) continue to issue guidance to employers regarding those provisions of the Patient Protection and Affordable Care Act of 2010 (“ACA”) which are scheduled to become effective for 2013 and 2014. This recent guidance includes Proposed Treasury Regulations (the "Proposed Regulations”) interpreting Section 4980H of the Internal Revenue Code (“IRC”) issued by the IRS and the latest edition of Frequently Asked Questions (“FAQs”) issued by the DOL concerning the implementation of ACA. Listed below are four recent developments of note from the Proposed Regulations and FAQs that warrant special attention by employers, as well as some recent statistics released by Gallup which hint at some troubling health care trends.

Since the enactment of the Economic Growth and Tax Relief and Reconciliation Act of 2001 ("EGTRRA") up until the enactment in December 2012 of the American Taxpayer Relief Act of 2012 ("ATRA"), estate planners have had to plan around tax provisions that were expressly stated to be temporary in nature. ATRA has now provided rules governing the estate tax, the gift tax, and the generation skipping transfer tax ("transfer taxes") that are,  at least according to ATRA, permanent (i.e., not subject to "sunsetting" at some fixed date in the future). In view of this presumed new-found  certainty in the tax rules governing estate planning, estate planners should be mindful of the need to review and revise, if necessary, the estate plans structured under the pre-ATRA "temporary" estate planning rules. Some of the more significant estate planning that should at least be considered post-ATRA by estate planners are discussed below.

An Integrated Approach to Financial Fraud Prevention, Detection, Investigation and Remediation

UHY Advisors has launched Guardian Services, one of the first comprehensive and scalable fraud management solutions to incorporate leading practices of internal audit, fraud investigation, electronic discovery, and process improvement. Guardian is comprised of four integrated phases: prevention, detection, investigation, and remediation. The process is a virtuous circle which can start at any point in the solution set.

Businesses faced turbulent times in 2012 with the Presidential election and related tax uncertainties.  The New Year appears to bring more challenges and continued uncertainty for businesses with the enactment of the American Taxpayer Relief Act of 2012 (ATRA).  In addition in 2013, we anticipate that businesses will continue to struggle with significant employee benefits compliance issues. The following is a list of top employee benefit issues for businesses to consider in 2013.

If you peruse the biographies of UHY professionals, you’d undoubtedly be impressed by the plethora of professional certifications, scholastic degrees, and other formal and informal learning of our people. But Tara Silver-Malyska may take the cake (and the pie and the scones) when it comes to the number of professional certifications and degrees. But her most impressive quality, according to her co-workers, is how she puts her knowledge and experience to good use helping her clients solve complex employee benefits tax issues.

By enacting the American Taxpayer Relief Act of 2012, Congress managed to avert, at the last minute, the "Fiscal Cliff". Unfortunately, this legislation left many issues unresolved. Congressional Republicans did not get the spending cuts they wanted, and soon the nation will be faced with being unable to continue to borrow more money to pay for the cost of government (the "debt ceiling" issue). Accordingly, this issue will pay special attention to where we go now as a nation in addressing our mounting budgetary deficits.

Ad valorem, or according to value, is the basis of property tax administration.  Property tax is the only tax which is based on an opinion.  

Assessors have much more leeway, authority and inclination to change their opinion of values and assessments on a pre-notice of value basis than they do on an appeal basis.  Property tax assessors are also more likely to make an adjustment under appeal than later with a correction motion for a requested refund of tax.

– A Soft Landing for Two Key International Provisions

International investors and the tax practitioners who advise them had among their top concerns two expiring provisions, including one that had expired at the end of 2011 but for which hope was kept alive in various “extender” initiatives.  Both have been addressed in the American Taxpayer Relief Act of 2012 (“ATRA”) and are summarized as follows.

As the United States was leaning over the edge of the "Fiscal Cliff", the Senate and the House passed the American Taxpayer Relief Act of 2012 (H.R. 8) on January 1, 2013, with President Obama signing the legislation into law on January 2, 2013.  The Act permanently extends many of the Bush tax cuts from 2001 and 2003, while delivering upon President Obama's campaign promises to raise taxes on the upper income taxpayers.  Below is a summary of the key tax provisions of the Act.

As we get closer to January 1, 2013 and the looming "Fiscal Cliff”, Congress and President Obama are stepping up their negotiations in an attempt to reach some sort of agreement. As of the date of this article, there is still no agreement. However, Congress has already decided to work through the week of December 17 in an effort to hammer out an agreement on the pressing tax and spending issues.

As the Panel discussed at last month's UHY Fall Tax Forum, an aspect getting little attention when it comes to going over the so-called fiscal cliff is the end of dividends from foreign corporations being taxed at capital gains rate.  For investors in foreign corporations, especially where a deferral strategy was implemented, the expiration of the Bush-era tax cuts may have significant consequences.

The passage of the Patient Protection and Affordable Care Act (also known as Obamacare) in 2010 instituted a number of far reaching changes in taxes and fees to be paid by individuals and companies. One of these new taxes for companies is the excise tax on medical devices, effective January 1, 2013.

The "Professor" Next Door

Only a few minutes after meeting Chris Lozier for the first time, it becomes abundantly evident that he’s a really smart guy.   And it doesn’t require many more minutes to realize that Chris is the kind of accessible person that you’d actually like sharing a cup of coffee or a meaningful conversation about a range of topics from global travel to corporate compliance to raising his four year old son to the Texans’ offensive line.

Managing Director Frank Fenello’s interview on the implications of the Fiscal Cliff on WSB radio in Atlanta.

UHY Advisors’ Managing Director Frank Fenello was recently interviewed by Rob Stadler on Star94 in Atlanta, and provided some clarity about the realities of the fiscal cliff and what it could mean for individuals and businesses in the near future.

UHY LLP, a leading certified public accounting firm, is hosting its annual Accounting & Regulatory Update at the MSU Management Education Center in Troy on Wednesday, December 5.

UHY LLP, a leading certified public accounting firm, is hosting its annual Tax forum at the MSU Management Education Center in Troy on Wednesday, December 5.

President Obama's re-election signals the likelihood of up-coming difficult negotiations between Democrats and Republicans over (1) the fate of the Bush-era tax cuts, (2) nearly $100 billion in automatic spending cuts for the Government's fiscal year beginning October 1, 2013, and (3) whether a long list of recently enacted, but now expiring tax benefits and exclusions, including the AMT patch for 2012 and beyond, will be extended again. Despite the present level of uncertainty over what is ahead, the one thing that is fairly certain is that year-end tax strategies for 2012 will demand more than normal attention from "higher income" taxpayers and will involve more than the traditional year-end planning advice to defer income from, and accelerate deductions into, the current year.

UHY's 2012 Fall Tax Forum was held on November 8, just two days after the election. While much of the focus was on the Fiscal Cliff and the scheduled expiration of tax cuts, the discussion of international tax zeroed in on various proposals to shift the U.S. from a worldwide to a territorial system of taxation.

Had the 1988 best seller, All I Really Need to Know I Learned in Kindergarten, been about our formative years as ‘tweens instead of kindergarten, UHY State & Local Tax leader Ted Clark could have been the inspiration for the book about the values we learn at a young age that later form our positive adult qualities.

Ted’s family, UHY co-workers and clients will attest that his dedication, drive, and human touch are all rooted in his formative years in Central Texas, where he started as a ‘tween entrepreneur and grew to become one of the leading property tax professionals in the country.

What does an award won not far from the Strait of Gibraltar in southern Spain translate into for an audit senior manager in a Greenway Plaza office?

“It reinforced for me that, even though people may be from different countries and have different experiences, we are all working on similar issues,” says Lily Wang, UHY LLP Audit Senior Manager, who won the “Best Participant Award” at the UHY International Forum in Sierra de Grazalema, Spain, last month.

UHY, the international accounting and consultancy network, of which our firm UHY  LLP has been a member since 2001, has launched a radical update of their international branding and online presence, to ensure that it is instantly recognizable to clients and business partners wherever they are in the world.

On behalf of everyone at UHY LLP, thank you for attending Manufacturing Outlook 2013 – An American Renaissance, on November 1, 2012. 

As we roll into the final weeks before the Presidential election, talk of how best to deal with the "Fiscal Cliff" facing the nation on January 1, 2013 has heated up. In addition, as we come closer to the complete implementation of the Affordable Care Act (the "ACA" or "Obama Care") in 2014, predictions of its impact on employers and their employees are becoming more frequent. The search for new tax revenues is also becoming more intense. With these trends in mind, the following discussion is a snap shot of Congressional and IRS activities for October, 2012.

There are several popular employee benefits as well as the current payroll tax holiday that will expire as of January 1, 2013 unless Congress acts to defer the sunset of these provisions for yet another year. The following summary of these expiring employee benefits is intended to help both employers and their employees to prepare for these changes.

As the economy has stalled and slowly recovered, Texas has become more aggressive in auditing taxes in general and sales and use taxes in particular. The need for additional money to fund even the basic services has become apparent and Texas is doing all it can to maximize the amount received. In doing so, documentation acceptable in prior audits to support tax treatment of transactions may not be sufficient in the current atmosphere.

This past week marked the Annual Meeting of UHY International, hosted by the U.S. firm. The Annual Meeting, held this year in Chicago, includes the opportunity for tax practitioners from all over the world (currently 255 offices in 87 countries) to devote an afternoon to sharing updates on cross-border planning, exchanging ideas on various technical specialties, and stoking their passion for serving clients around the globe. As Chair of the Tax Special Interest Group, it was my responsibility and privilege to chair the Tax Session.

On behalf of everyone at UHY Advisors, thank you for attending our UHY AND BLACKLINE ROUNDTABLE on September 26, 2012. We hope you found the presentation to be informative and helpful.

John Wolfgang, one of the founding members of UHY International (UHYI), today concluded his term as Chairman of the global organization he helped establish more than a quarter of a century ago and which today links nearly 260 cities across 87 member nations. Wolfgang, managing director of UHY Advisors NY and a partner in UHY LLP, served as board chair of the global network of independent accounting and consulting firms since 2007. During his tenure, UHYI increased its geographical reach by more than 40 percent with member firms in 87 countries.

UHY Advisors has been designated a Common Security Framework (CSF) Assessor by the Health Information Trust Alliance (HITRUST), authorizing the firm to perform the healthcare industry data security assessments most widely recognized by HIPAA, HITECH, states, and healthcare industry participants.

Please join us for this quick hitting, early morning interactive discussion Aimed at business owners with 25 or more employees. 

It is usually a good idea for a company to save money for a rainy day. Unfortunately, business owners can run into serious tax trouble if they sock away too much cash. The tax trouble comes from the Accumulated Earnings Tax which is a tax on corporations buried in a little noticed Subchapter of the Internal Revenue Code. Although many businesses have tended to ignore this tax, the IRS is fully aware of it and is not shy about trying to impose it whenever it feels that "excessive" funds are being accumulated by a corporation.

With Congress only now coming back in the week of September 10, 2012 from its traditional August recess, there is not too much to report for September 2012. Consequently, with the 2012 Presidential election almost here, it seems appropriate to compare and contrast in general terms the tax policies being advanced by President Obama and former Governor Romney. It is likely that the policies being advanced now by the winner of the November 6, 2012 election will impact not only 2013, but also 2014 and beyond.

Shakespeare may not have had taxpayers in mind when he gave Juliet the line, "What's in a name?" But a name, in the sense of what label international parties affix to their cross-border agreements may cause unintended and expensive tax consequences, depending on which countries are involved. The U.S. has long taken the approach that the substance of an arrangement, rather than what the parties name it, will govern its tax treatment. Other countries may place greater emphasis on how an agreement is titled, which can result in pitfalls as well as opportunities for tax planning, such as those examined here.

States have been active in the unclaimed property area over the last few months. Delaware, Iowa, and Minnesota have all either recently enacted or currently offer unclaimed property voluntary compliance/disclosure programs or amnesties.

UHY Advisors, a full‐service national tax and consulting firm, will host an exclusive networking breakfast along with BlackLine Systems from 8:00 a.m. to 10:30 a.m. on Wednesday, September 26 in their Farmington Hills office training facility. 

Join us to learn more about the latest industry trends and rebirth of American manufacturing. 

Join us to learn more about the latest industry trends and rebirth of American manufacturing.

Join us to learn more about the latest industry trends and rebirth of American manufacturing.

Topics will include industry trends, bonding update and the latest financial and tax developments. 

Please join us as we convene a panel of experts to discuss inbound investments into the BRIC countries including a general overview of the business climate and economic conditions, opportunities and potential threats of doing business in the country, tax issues and considerations, pitfalls when starting a business in the country, employment considerations, entity structure and tax planning considerations.

Please join BlackLine Systems and UHY for an exclusive networking breakfast discussing the challenges organizations currently face in creating an efficient and effective record to report process and how new Finance Governance Technology tools help address these challenges. We are also pleased to have Henry Wagner, a Senior Manager in the Accounting & Financial Reporting function at Chrysler, discuss how Chrysler has been successful in addressing these challenges.

The complications and limitations of a national energy policy were aptly illustrated with the recently released Advancing Technology for America's Transportation Future report from the National Petroleum Council, representing two years of work by 300 industry and government participants.

Many employers who sponsor insured group health plans have started receiving rebates of insurance premiums paid during 2011 which their insurance carriers are required to start mailing beginning August 1. According to officials with the Texas Department of Insurance, over $38.2 billion of insurance premiums were paid by employers and individuals during 2011 in Texas alone.

Since at least 1974, the IRS has sought to rein in attempts by S corporations to minimize the FICA tax responsibilities of both the corporation and its shareholder-employees. S corporations have typically attempted to do this by paying minimal salaries to their shareholder-employees, and, if the shareholder-employee needs access to additional corporate funds, letting them pull money out of the corporation in the form of a distribution. The IRS has, however, recently scored an important victory in this struggle with taxpayers in a case out of the Eighth Circuit U.S. Court of Appeals.

We have written several times concerning individuals’ responsibility to report about foreign financial accounts and assets. The deadline has already passed for TD F 90-22.1 (Report of Foreign Bank and Financial Accounts) or “FBAR,” which should have been delivered to U.S. Treasury by June 30, 2012 to report on accounts with respect to the 2011 calendar year.

There is not too much to report for August 2012. Republicans in the House of Representatives continue to push forward bills that reflect their vision of tax reform while the Democrats in the Senate try to advance their own vision, one diametrically opposed to that of the Republicans. And neither side is budging.

On July 24, 2012, in a 3-0 decision, the California Court of Appeal issued its opinion in The Gillette Company, et al., v. California Franchise Tax Board (“Gillette”) holding that taxpayers must be allowed to elect to use the Multistate Tax Compact (“MTC”)'s equally-weighted three-factor apportionment formula even though California amended its statutory provisions to require the use of a double-weighted sales factor apportionment formula applicable to most taxpayers.

Rick David, Executive Vice President and Chief Operating Officer of UHY Advisors, Inc., has been appointed to the Board of Directors of UHY International. UHY International is one of the world’s leading business advisory, consulting and accounting networks, with teams operating across nearly 250 offices in 81 countries worldwide.

UHY Advisors, a financial and business advisory firm with offices located throughout the U.S., recently announced that Lucy Marshall has been promoted from senior staff accountant to forensic accountant in the Forensic, Litigation and Valuation Services Group (FLVS) of UHY Advisors, Farmington Hills.

UHY Advisors NY, Inc. today announced it is teaming up with CFO Alliance to address the needs of middle market company executives who are seeking innovate ways to support corporate decision-making against the backdrop of unsettled market conditions. The new partnership between UHY and CFO Alliance provides a national, collaborative platform for finance leaders and experts to openly discuss, debate, and dissect critical opportunities.

Casey Ballard has been promoted to Principal at UHY Advisors in the Forensic, Litigation & Valuation Services (FLVS) department. As Principal, Ballard’s primary responsibility will be the preparation and presentation of expert witness information and testimony in support of international arbitration and energy litigation cases. She joined the firm in 2010.

Maurice J. Liddell has joined UHY Advisors as a Principal in the Technology Assurance & Advisory Services (TAAS) department. Liddell will lead the firm’s Infrastructure Services line of business, and participate in Flexible Staffing activities for technology-related projects.

As the temperatures start to rise in July 2012, so does Congressional posturing over the future of federal tax policy. Both the Democrats and the Republicans are on record as being in favor of tax reform, but they remain far apart on just what type of reform is best for the country. This issue will highlight some of the present differences in their respective tax reform visions as demonstrated by the bills they have most recently introduced.

On June 28, 2012, the U.S. Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act, as modified by the Health Care and Education Reconciliation Act (collectively, referred to herein as the "Act"), with one exception. Namely, the Court held unconstitutional a provision in the Act that would have allowed the federal government to withhold federal funding for a state's Medicaid program, as is currently provided, should the state fail to implement the expansion of Medicaid provided for under the Act.

International Tidbits have highlighted, on several occasions, the importance of double taxation treaties or “conventions” in planning for the income tax implications of cross-border investments and operations. These useful tools are agreements between sovereign states as to how they will address situations in which a resident (including individuals and business entities) of one state incurs income tax in the other state while still being taxed in the country of residence.

UHY Advisors' David Barton, an expert on information security issues, talks with Atlanta's WBS Fox 5 News about the DNSChanger virus.

June 26, 2012 – UHY Advisors' principal David Barton talks with WSB Radio's Pete Combs about data mining and online marketing in relation to the news that Orbitz directs users on Macs to higher-pricing hotels than PC users.

June 2012 was another relatively quiet month on the Tax front. The principal developments involved (1) an unexpected, but welcomed, relaxation of the rules that the IRS follows in evaluating Offers in Compromise, (2) ASPPA's opinion that any fundamental tax reform, or even tax reform aimed at taxing tax-qualified retirement contributions, will probably not happen in 2012, and (3) a proposal by the Republicans to make Health Care Flexible Spending Accounts more taxpayer friendly.

2012 is almost half over, and the fate of the present regime of the Federal Estate, Gift and Generation Skipping Transfer (“GST”) Taxes is uncertain. If no Congressional action is taken by December 31, 2012, individuals will see a dramatic increase in the Federal Estate, Gift, and GST Taxes (referred to below as the “Federal Transfer Taxes”). How did we get here and what should we be doing, if anything, before January 1, 2013?

Dating back to the 1970s, when the U.S. Congress passed legislation including the addition of §999 to the Internal Revenue Code, the International Boycott Report (Form 5713) is included with a U.S. federal income tax return. These laws remain in place and include oversight by the Office of Antiboycott Compliance within the Department of Commerce for reporting requests made of U.S. persons or their controlled affiliates outside the U.S. to participate in the Arab League Boycott of Israel.

Texas businesses have “kept their power dry” while waiting for a U.S. Supreme Court ruling on the federal Affordable Care Act, but many expect to see higher deductibles and reduced coverage for their employees, according to a survey of Texas businesses by UHY Advisors (UHY) and the Texas Association of Business (TAB).

May 2012 was relatively quiet on the Tax front. There were, however, some important developments worth noting, specifically regarding (1) the new health care law, (2) distributions from IRAs, (3) the new 3.8% Medicare Tax, (4) the Republicans stated intention of extending for at least another year the “Bush Tax Cuts, and (5) proposed legislation restricting the ability of states to subject non-residents to their state income tax . . .

Understanding the management of the property tax process from the assessor, consultant, and taxpayer/industry view point is essential. Although there are commonalities and similar issues between the groups, there are also significant differences which must be overcome in order for each to achieve their distinct goals.

An issue that may arise in IRS audits involving a U.S. subsidiary (“USCO”) of a foreign parent company (“FORCO”) is whether FORCO is doing business in the U.S. and should be filing a U.S. tax return to report its income effectively connected with a U.S. trade or business, to report it is exempt from tax under a double taxation treaty, or to protect its right to deductions and credits if it is ever subject to U.S. federal income tax. Most commonly, this issue arises when FORCO is selling products to USCO and USCO acts as a distributor or agent in the U.S. It can also arise when FORCO performs services and subcontracts work to USCO.

The federal income tax consequences which attach to a partnership’s grant of an interest in the partnership in exchange for the performance of services to the partnership has a checkered past and an uncertain future. Fortunately, at least for the time being, the IRS has set forth some fairly straight forward guidelines on the topic. The following discussion describes how certain of these rules operate.

Mergers & Acquisitions

Wednesday, May 30, 2012
12:00 PM – 1:00 PM EST

Please join us for this quick hitting lunch hour geared towards petroleum and c-store business owners, chief executives and chief financial officers. Tune in as our experts address current trends in M&A activity affecting the industry and you. Webinar will conclude with an open discussion.

UHY Advisors Inc. today announced the appointment of Beth Bissell as Marketing Manager for the Southeast practice. Bissell will be based in the Sandy Springs office, serving clients nationwide. She brings expertise in proposal writing, as well as design, process improvement and project management and will report to UHY Advisors’ Managing Director in the southeast, Frank Fenello.

UHY strengthens presence in EMEA as firm in Tunisia joins the network

UHY LLP welcomes new member in Tunisia, CNBA, to the global accountancy network UHY, of which our firm has been a member since 2001.

A recent court ruling against the State Comptroller's office has opened the door to a multibillion dollar sales tax refund for oil and gas companies. But companies will need to act fast to have any chance of collecting.

Dallas (April 19, 2012) – Tara Silver-Malyska has joined as a principal in the Tax Department at UHY Advisors, a tax and business consulting firm.

With the addition of the United Kingdom to the lengthening roster of countries offering tax-advantaged ways to exploit intellectual property (“IP”) – the so-called patent box – it is an opportune time to explore some of these arrangements and how they might be treated from a U.S. tax perspective.

April 2012 saw a dramatic decline in any meaningful discussion of fundamental tax reform. Congress was nevertheless active in attempting to enact incremental tax law changes. First up were efforts to curtail various tax breaks now enjoyed by the oil industry. Next on the Congressional agenda was consideration of Representative Eric Cantor's (R-VA) "Small Business Tax Cut Act", discussed in last month's Newsletter.

The Texas Comptroller of Public Accounts has announced a new amnesty period for any tax that is administered by her office. Dubbed Project Fresh Start, the amnesty applies to such taxes as franchise tax, sales and use tax, motor fuels tax, alcohol beverage tax, and severance tax. The Public Utility Gross Receipts Tax is not included in the amnesty. The program applies to all tax periods for which the original tax return was due before April 1, 2012.

Over $40 Million in Potential Recoveries Could Be Lost Each Month

Houston (April 18, 2012) – Houston’s largest sales and local tax advisory firm is recommending that its clients and others in the oil and gas industry consider filing sales tax refund claims covering the past four years as soon as possible, based on a Travis County District Court ruling last week in Southwest Royalties Inc. vs. Combs that machinery used to extract oil and gas is exempt from the Texas sales tax.

FARMINGTON HILLS, Mich., (April 13, 2012) – Crain’s Detroit Business in partnership with the Association for Corporate Growth has named UHY Advisors as a finalist for Dealmaker Adviser of 2011. UHY Advisors, along with the other winners, will be recognized at an award ceremony on Thursday, April 19 at the Somerset Inn in Troy, Mich.

Houston (April 9, 2012) – UHY Advisors eDiscovery and Digital Forensics Practice Group announced it has partnered with Zapproved® to resell its Legal Hold Pro™ software to help corporate and law firm clients identify, notify, and track documents, electronically stored information (ESI) and other media in response to a legal hold notice or trigger event.

Sterling Heights, MI (March 29, 2012) – The increase in new business startups is now on average 40 times faster in BRIC nations than other countries, according to UHY, the international accounting and consultancy network. The research shows that BRIC nations are, on average, creating 18% more new businesses per annum compared to non-BRIC nations, which are, on average, creating just 0.4% more new businesses per annum.

Economic obsolescence can be caused by a variety of factors. Just a few of these factors to be considered may include national economic conditions, restrictions in income, operating under capacity (inutility), neighborhood or area decline, changes in the highest and best use of a property due to market shifts or governmental actions, zoning, lack of property demand, and other influence to the financial status of a property.

The last part of February 2012 and March 2012 was a busy time for both Congress and the Obama Administration. On the tax reform front, President Obama led off with his plan for business tax reform. The House Republicans, on March 20, 2012, countered with their own Fiscal Year 2013 budget blueprint ("The Path to Prosperity") which, among other things, proposed a dramatically simpler income tax code including the repeal of the often-patched alternative minimum tax.

Last month, the U.S. Supreme Court issued its opinion in Kawashima v Holder, upholding the convictions of long-term residents of the U.S. for filing a false tax return, leading to deportation for commission of an aggravated felony under U.S. immigration law.  While the case apparently did not involve failure to file Form TD F 90-22.1 Report of Foreign Bank and Financial Accounts (“FBAR”) or address the provisions of the Foreign Account Tax Compliance Act (“FATCA”) enacted as part of the Hiring Incentives to Restore Emplayment (“Hire”) Act of 2010, it is a strong signal that the government has upped the ante for U.S. residents who have filed a U.S. tax return but failed to report all their income, including income related to foreign financial assets.

UHY Advisors eDiscovery and Digital Forensics Practice Group today announced it has joined the Guidance Software Global Partner Program and will resell the company’s full line of EnCase® digital investigation software.

Listen to Tony Frabotta by clicking here.

Houston (March 6, 2012) - Justin Lamanna recently joined UHY Advisors, a tax and business consulting firm, as a business development manager in the eDiscovery and Digital Forensics Practice Group.

Reporting on a decision by the Permanent Court of Arbitration at The Hague that it has jurisdiction in a case Involving environmental damage suits filed against Chevron by plaintiffs lawyers representing residents of Ecuador's Amazon region, WSJ reporter Isabel Ordonez wrote . . .

Please join us for this quick hitting lunch hour geared towards PEO business owners, chief executives and chief financial officers. Topics will include PEO benchmarking, hot tax topics and a financial accounting update. The webinar will conclude with an open discussion.

Although we have written about Form 1042 before, we continue to encounter companies that either have overlooked this filing requirement or may not have sufficient documentation to withstand an IRS audit. Form 1042 is used by a U.S. withholding agent to report payments of certain U.S. source income, under IRC §§1441 and 1142, to foreign persons on a calendar year basis. Its sister form, 1042-S, is used to report to those foreign persons the amount of U.S. source income paid to them and the amount of any U.S. tax withheld.

Houston (Feb. 16, 2012) - UHY Advisors eDiscovery and Digital Forensics Practice Group has selected Venio First Pass Review (FPR) software that gives clients a lowcost solution that allows for quick, comprehensive review of data as early as 24 hours from the start of a project.

UHY Advisors’ David Barton will address professional service organizations and their customers and lead a discussion on data center audit standards and assessments during a webinar Tuesday, February 14th from 2:00 – 3:00 p.m. ET. The session, “Making Sense of Service Organization Audits,” will discuss the differences between AICPA’s (American Institute of Certified Public Accountants) SOC (Service Organization Controls) audits and reports, other types of audits, and the difference between point-in-time, period of time, self-assessments and independent assessments.

The Hiring Incentives to Restore Employment (“HIRE”) Act, signed into law in 2010, included modified provisions of the previously proposed Foreign Account Tax Compliance Act of 2009 (“FATCA”). These provisions involve two broad categories of tax compliance: reporting by foreign financial institutions on accounts held by U.S. persons, and reporting by U.S. individuals on specified foreign financial assets. It is the latter category that led to the new Form 8938 Statement of Specified Foreign Financial Assets, to be filed in 2012 as part of an individual’s 2011 federal income tax return.

Listen to WDUN's interview with LeighAnn Costley about how to make your tax burden lighter for the New Year.

In an update story on an Ecuadorian appeals court decision in Chevron’s ongoing litigation and arbitration cases over the assignment of responsibility for alleged environmental damages, WSJ Houston bureau chief Angel Gonzalez wrote . . .

A little over a year ago, Google made headlines with news that its offshore tax rate was a mere 2.4% thanks to a complex structure involving jurisdictions such as Bermuda, Ireland, and the Netherlands. Can today’s technology start-ups hope for similar benefits from a global strategy by transferring non-U.S. rights for their valuable intellectual property to a foreign corporation? The answer, as with most things involving U.S. income tax, is an unequivocal “yes, but,” plus the admonition that planning for various alternatives will still be key.

Business & Individual • State & Local • International
Estate & Gifting • Mergers & Acquisitions

Keynote: Mr. David G. Sowerby, CFA, Loomis, Sayles Company

CPE credit will be offered. Formal invitation to follow.

Join us to learn more about the latest accounting, regulatory, legal and SEC updates. Topics to be announced shortly. Keynote Mr. David G. Sowerby, CFA, Loomis, Sayles Company.

CPE credit will be offered. Formal invitation to follow.

UHY Advisors TX, LLC is not the only one with a milestone birthday in 2011. Although not yet celebrating 40 years, such as UHY in Texas, UHY International as a network of Member Firms marks its 25th anniversary this year.

 UHY Advisors, a financial and business advisory firm with offices located throughout the U.S., recently announced that Mark Bealin has joined the firm as a managing director in its Sterling Heights office.
 

Join us on-site at UHY’s Farmington Hills office or on-line via webcast

TOPICS INCLUDING…
• Is now a good time to buy or sell a business?
• What are some of the key items you need to do to be prepared to sell?
• Which countries present the greatest business opportunities for US companies?
• Opportunities and threats for doing business abroad
• What are the key factors that auto suppliers need to do to be successful?
• Are you at risk due to industry consolidation?
• How will government cuts impact defense suppliers in 2012?

Keynote speaker soon to be announced. Formal invitation to follow.

Staff may take time off, but that doesn't mean your firm has to

For many workers, the holidays are a much-anticipated time of year, when they look forward to taking some much-needed r&r away from work. But for others it means stress, headaches and a managerial nightmare. Managing workloads and company productivity between Thanksgiving and new Year's is an annual challenge for management and employees.

UHY Advisors, a financial and business advisory firm with offices located throughout the U.S., is hosting its Tax Forum on Thursday, Dec. 1 from 12-6 p.m. EST. This annual conference takes place at the MSU Management Center located at 811 W. Square Lake Rd. in Troy, Mich.

UHY LLP, a leading certified public accounting firm providing professional services to domestic and international companies, is hosting its Accounting & Regulatory Update on Thursday, Dec. 1 from 8:30 a.m. to 6 p.m. EST. This annual conference takes place at the MSU Management Center located at 811 W. Square Lake Rd. in Troy, Mich.

Join us at UHY LLP Farmington Hills office

Seminar presented by UHY LLP with
special guest Tim Lueliette of FINNEA Group

This month we look at the importance of checking for special terms covering energy-related activities in double taxation treaties (“DTT”) between the U.S. and other countries so U.S. companies can gauge potential PE exposure before they submit a bid or sign a contract.

UHY LLP, a leading certified public accounting firm providing professional services to domestic and international companies, is hosting its annual Manufacturing Outlook 2012 on Thursday, November 10 from 8:15 a.m. to 11:30 a.m. EST at its Farmington Hills office, located at 27725 Stansbury Blvd., Suite 100 in Farmington Hills, Mich. Manufacturing Outlook 2012 will also be available via live webcast beginning at 8:35 a.m. EST. Attendees will learn how the current economic landscape impacts the outlook for manufacturing companies in a variety of key sectors.

UHY Advisors recently hosted its quarterly Financial Leaders Seminar, a half-day seminar delivering professional training and networking for high-level financial executives. Senior industry executives, including top-level executives from United Airlines, Shaw Industries Group, Inc. and Barclays Bank, provided C-Level insight on accounting efficiency and the impact of economic forces on business to the more than 300 attendees.

Join us at our Farmington Hills Office

Huge disparities now exist between countries on the amount of tax they take from businesses, according to UHY, the international accounting and consultancy network.

Global accountancy network UHY announces the release of the UHY “Global Transfer Pricing Guide 2011” to assist tax and finance professionals responsible for cross-border tax planning and compliance at multinational companies.

This month and next we focus on the risks of having a Permanent Establishment (“PE”) in a foreign country and accidentally becoming subject to the full panoply of taxes imposed there. Part I, this month, focuses on the general concept of a taxable Permanent Establishment (“PE”) as it is used in double taxation treaties between the U.S. and foreign countries, but does not rely upon any specific treaty.

UHY LLP, a leading certified public accounting firm providing professional services to domestic and international companies, is hosting China Investment—another installment of its complimentary international roundtable discussions from 7:30 a.m. to 9:30 a.m. on Wednesday, October 19. This interactive breakfast seminar highlights ways U.S. companies can take advantage of the increasing inbound investments by China-based businesses. Additionally, the roundtable will provide useful information for American businesses that seek to set up operations in China, which is the world’s No. 2 economy behind the U.S.

With a brief three months remaining in 2011 and a high degree of uncertainty surrounding any major tax changes, practitioners have begun stepping up the annual rite of year-end planning strategies for both their individual and business clients. Though strategies and client situations may differ, tax experts strive to reduce client tax liabilities both for the current and following year, and therefore avoid unpleasant - and often expensive - surprises via tax underpayments.

UHY LLP, a leading certified public accounting firm providing professional services to domestic and international companies, is hosting a complimentary international roundtable on October 5th. This interactive breakfast discussion will be hosted by Dennis J. Petri, International Liaison and Partner, UHY LLP, with special guest presenter, Jonathan Levy, Partner of UHY Victor in Montreal Canada. Please join us at UHY’s spacious, new Farmington Hills office for breakfast and networking at 7:30AM.

 UHY Advisors, a financial and business advisory firm with offices located throughout the U.S., has been named one of Metro Detroit’s 101 Best & Brightest Companies to Work For.

Getting the Equivalent of a Passport from the IRS for
Use Around the Globe

A U.S. citizen, traveling the world, proves his or her nationality with a passport. But what about a company? The State Department issues no similar document for a company to prove it is a U.S. corporation. Fortunately, the IRS can supply a corporation with a U.S. Residency Certification.

 UHY Advisors has expanded its presence in Asia by welcoming its newest member-- Shanghai ZhongHua Certified Public Accountants (CPAs), to the global accountancy network of UHY, of which UHY MI has been a member since 2001. This new Shanghai-based member gives UHY Advisors a second location in China, where it also has a member firm in Hong Kong.

 UHY Advisors, a financial and business advisory firm with offices located throughout the U.S. is introducing a no-cost, executive-level webinar series beginning on September 12th. The CORE Business Management webinar series will introduce a new topic every other week and is structured to provide busy executives with the understanding, business direction and recommended strategies to help address, achieve and maintain business profitability and viability. These 55-minute webinars begin at 8:05 a.m. and conclude by 9:00 a.m. (EST).

The Foreign Account Tax Compliance Act (“FATCA”) was enacted in 2010 as part of the Hiring Incentives to Restore Employment Act (“HIRE Act”). FATCA includes reporting requirements for foreign financial institutions about U.S. account holders, to begin in 2013. Of more immediate application are the provisions in IRC §6038D requiring individuals to include with their federal income tax returns a report about their foreign financial assets. The HIRE Act also created a new, six-year statute of limitations (IRC §6501) which is generally applicable to understatements of income attributable to the foreign financial assets whose reporting is specified in IRC §6038D. These provisions took effect for tax years beginning after March 18, 2010.

The United States has one of the lowest tax burdens for both high and low earners among the G8 countries, reveals new research by UHY, the international accounting and consultancy network.

Only Japan and Russia tax upper income earners less than the U.S., according to the UHY study. For lower income earners, only Japan levies lower taxes than the U.S. The study focused on comparable domestic and social security taxes for high earners defined as workers earning $200,000 per annum while low earners were defined as workers earning $25,000 per annum. Equivalent state and local taxes were not included in the study.

June 30, 2011 is the deadline for reporting to the IRS about Foreign Financial Accounts for the 2010 calendar year on TDF 90-22.1 (Report of Foreign Bank and Financial Accounts or “FBAR”).

Earlier this month, Houston played host to the Offshore Technology Conference (“OTC”), the world’s foremost energy-related event for the development of offshore resources in the fields of drilling, exploration, production, and environmental protection. Over 2000 companies, including a number of UHY Advisors’ clients, descended on Houston’s Reliant Stadium to show their wares and preview new technologies while looking for business opportunities and making new contacts.

For April 2011, we note several recent delopments in the area of federal income taxation that warrant close attention by taxpayers.

This article is the second in a series of articles intended to highlight some of the more significant changes in the Internal Revenue Code. The topic concerns the incentives provided to businesses to invest in business equipment by allowing for an accelerated deduction of the cost of these types of investments.

 Mike Santicchia, Partner at UHY LLP, was honored with the University of Michigan Club of Greater Detroit Distinguished Alumni Service Award during their annual Michigan Football Bust.

 Mike Santicchia, Partner at UHY LLP, was honored with the University of Michigan Club of Greater Detroit Distinguished Alumni Service Award during their annual Michigan Football Bust.

 Mike Santicchia, Partner at UHY LLP, was honored with the University of Michigan Club of Greater Detroit Distinguished Alumni Service Award during their annual Michigan Football Bust.

 Mike Santicchia, Partner at UHY LLP, was honored with the University of Michigan Club of Greater Detroit Distinguished Alumni Service Award during their annual Michigan Football Bust.