Michigan legislature recently passed changes to the statute affecting the Essential Services Assessment (ESA). Most importantly, the deadline for eligible taxpayers that failed to file, or filed an incomplete form 5278 with their local assessor to claim the Eligible Manufacturing Personal Property (EMPP) exemption for 2016 has been extended to Tuesday, May 31, 2016.

Forms must be completely filled out and received by the local assessor by the May 31, 2016 deadline. Postmarks by the due date will not be accepted.

No changes to due dates for future filing periods have been made, but this is a second chance for many taxpayers to take advantage of the savings of the new ESA.

To read the full announcement, click here.

Author: Donny Baird

Learn more about our manufacturing services.

To all prospective CPA examinees: You can pass the CPA exam!

Everyone’s experience with the CPA exam is going to be different; and, it’s important to keep in mind, that what works for some, may not work for others.  I was no Elijah Watt Sells Award candidate (not even close, actually), but I did pass all of the exams on my first try. I want to point out some things about studying for and taking the exam that I believe apply to every candidate, and some things that applied to me personally.

For all candidate

• Keep a positive attitude.
  According to the AICPA, about 25,000 people pass their fourth exam section each year. You can be one of them.
• Put in the time.
  Studying is never fun… but it needs to be done. Were you really going to do something productive otherwise? Get back to studying!
• Take the exam as soon as you are eligible.
  Right out of school, the information is still fresh. It would be counterproductive to forget what you learned in school and have to relearn it while studying.  Ideally, your study time should be reviewing the material.
• Stick to a schedule.
  You should have the days you are going to take the exams and the time you plan on studying planned out ahead of time. Having a schedule keeps you committed and focused on your goal.

What worked for me

• Ease into the first exam.
  I studied for about three and a half months for the first exam. For the rest, I studied 2 months. This format worked well for me to avoid burnout. The first exam, I did not have to study as intensely. I knew once I actually took my first exam, the 18-month clock would be ticking for me to get the other three finished.

• Start with the easiest.
  Start with the exam you believe you are most capable of passing. That way, if you do fail your first exam, the 18-month clock isn’t running. It is also important to remember the whole examination process is more of a marathon than a sprint.

• The most expensive study material is not always the best.
  Just because it may cost the most, doesn’t mean it’s the most effective. Success on the exams is a function of the time and effort you put into studying, not the review materials you use.

• Study efficiently.
  For my first exam (FAR), I watched all of the video lectures and read all of my textbooks in depth.  I also took all the pretests and practiced all the simulation problems for every chapter. However, I noticed I was becoming easily distracted during the lectures. I wasn’t actually getting as much out of them as I should have.  For my fourth exam, I didn’t watch any of the video lectures or do any of the simulation practice problems. Instead, I spent a lot more time focusing on the multiple choice questions, which I found to be much more effective at drilling the concepts into my brain. Find what works for you. Don’t trick yourself into thinking that just because you have your study materials in front of you that you’re being productive or efficient with your time.

If I had to do it over:

• Study the topics most likely to be tested.
  I seemed to think that if a certain subject was part of my review materials, I needed to understand it 100%. Thinking back on taking the exams, I probably spent lots of hours studying topics that I was never tested on. I could have spent that time better understanding the more commonly tested areas.

If you’re considering starting the CPA examination process yourself, know that it is a manageable process.  Have confidence, come up with a plan that works for you, and get started. Taking the first steps are the hardest, but once you do, it’ll be over before you know it.

Author: Bryan Jacques

A recent article by Kelly Phillips Erb, published in Forbes, discusses the latest trend in identity theft, new account fraud. The article cites a report from Javelin Strategy and Research which states that identity thieves have stolen $112 billion over the past six years. Broken down, this equals $35,600 stolen each minute. Fraud is ever-evolving. This makes it difficult for law enforcement to fix the problem. Data suggests that new account fraud increased by 113% last year.

What is new account fraud?

The author states that new account fraud is when thieves use your personal information, such as a Social Security Number (SSN), to open new credit cards or apply for mortgages. New account fraud leads to a delay in reporting, since you will not find out right away if a new account has been created in your name, compared to when someone steals your credit card information.

Personal Identifiable Information

When data hacks and security breaches happen, taxpayers’ personal identifiable information (PII) becomes compromised. PIIs are used by fraudsters and many times can be purchased or sold on the black market. PIIs can be used to steal your tax refund.

How to protect you identity during tax season?

The author offers seven tips to help protect you identity, which are:

• Guard your SSN
• Remain alert to announcements regarding security threats
• Avoid phishing emails and scams
• Use a legitimate tax preparer
• Pay attention to passwords and security features
• Take data breach notifications seriously
• File early and plan ahead

To read the full referenced article, click here. For more information on combating or recovering from identity theft, please contact Brian McFarren at (231) 726-5815 or bmcfarren@brickleydelong.com.

Learn about our individual tax services.

Alistar Nevius, in a recent article published in the Journal of Accountancy, discusses how taxpayers can resolve an IRS dispute through audit reconsideration.

What is audit reconsideration?

According to the IRS, audit reconsideration is “the process the IRS uses to reevaluate the results of a prior audit where additional tax was assessed and remains unpaid, or a tax credit was reversed.”

Nevius articulates that the goals of audit reconsideration are to ensure:

1. The amount of assessed tax is correct;
2. The collection process is suspended while the reconsideration request is being considered;
3. That procedures support the abatement of assessments in appropriate situations; and
4. That cases are handled in a consistent manner.

For more information on audit reconsideration or how to request audit reconsideration, please read the full referenced article, or contact Brian McFarren at (231) 726-5880 or bmcfarren@brickleydelong.com.

Learn more about our individual and business taxation services.

When choosing the right business structure, it is important to understand and weigh the pros and cons of your different options. There are many different factors to be aware of that could be costly if they are overlooked.

Keith Sellers and John Tripp, in a recent article published in the Journal of Accountancy, discuss in detail a costly consequence of converting your business from a C to S Corporation. The premise of the article discusses how, if a business owner plans to gift all or part of their business’s stock, the appraised fair market value (FMV) could increase by 50% or more if converted to an S-Corp. This being true, it is important for shareholders, if considering making a gift of stocks, to obtain an appraisal of their C-Corp and make the gift(s) before making an S-Corp election.

While there are certainly positives about changing from a C to S Corporation, this is one consequence that a business owner may not be aware of.

To read the full referenced article, click here. For assistance in business valuations or deciding on/changing a business structure, contact Thomas Vereecke, CPA, CVA (616) 608-8510 or tvereecke@brickleydelong.com.

Learn more about our business consulting and business valuation services.

It’s March, and it is likely that you have filed your tax returns already, or you are preparing to have them done. Many of our clients ask us how long they should keep copies of their returns or supporting documents.

Personal records to keep:

One year

• While it’s important to keep year-end mutual fund and IRA contribution statements forever, you don’t have to save monthly and quarterly statements once the year-end statement has arrived.

Three years

• Credit Card Statements
• Medical Bills (in case of insurance disputes)
• Utility Records
• Expired Insurance Policies

Six Years

• Supporting Documents For Tax Returns
• Accident Reports and Claims
• Medical Bills (if tax-related)
• Property Records / Improvement Receipts
• Sales Receipts
• Wage Garnishments
• Other Tax-Related Bills

Forever

• CPA Audit Reports
• Legal Records
• Important Correspondence
• Income Tax Returns
• Income Tax Payment Checks
• Investment Trade Confirmations
• Retirement and Pension Records

For more information on what tax papers (or other important documents) to keep, please contact our offices or visit our Record Retention Policy page on our website.

Author Ken Tysiac, in a recent article published in the Journal of Accountancy, cites seven strategic planning tips for not for profits articulated by Bob Mims, CPA, CGMA, controller and director of investments at Ducks Unlimited and Mary Legakis Engle of The Management Group. The seven tips are:

1. Pick a strategic-planning team.
   The team should represent the whole entity.
2. Choose a team leader.
   This person should be able to bring the group together, and everyone should be comfortable sharing with this person.
3. Build consensus on the team.
   Everyone’s thoughts must receive careful consideration with the goal to develop fundamental objectives.
4. Keep objectives simple.
   They should be understandable and achievable.
5. Move toward a business plan.
   Develop metrics for reaching successful objectives.  
6. Implement the plan.
   Everyone must be responsible for their roles. Communication is very important.
7. Establish accountability.
   Cooperation is necessary between different departments.

At Brickley DeLong, we work with a variety of non-profits. These seven tips, while simple, can be difficult to achieve, but are very important to the success of the non-profits goals and objectives.

At our Firm, we have internal committees, and I believe that these seven tips extend beyond non-profits. Following these seven steps help us achieve success in our different areas of the business as well.

To read the original article, click here.For more information on strategic planning for not-for-profits, please contact Eric Van Dop at (231) 726-5855 or evandop@brickleydelong.com.

Learn more about our non-profit services.

The IRS issued an alert to payroll and HR professionals to be aware of phishing e-mails in which fraudsters pose as company executives and ask for confidential employee information, such as W-2s or employee’s Social Security Numbers, date of birth, and salary information.

The information being stolen can be used to produce fraudulent returns or to steal an employee’s tax refund.

According to the alert, these “spoofing” e-mails will contain the actual name of the company’s CEO and may request a list of employees and their personal information, including SSNs.

A few of the instances reported contained the following statements in the e-mails:

• Kindly send me the individual 2015 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review.
• Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, Salary).
• I want you to send me the list of W-2 copy of employees wage and tax statement for 2015, I need them in PDF file type, you can send it as an attachment. Kindly prepare the lists and email them to me asap.

Tax fraud is ever-increasing and ever-evolving. This is just one way that certain cyber-criminals are using to steal personal information. It is important to continuously be alert and aware of these cases to protect yourself (and your employees). To read the full alert by the IRS, click here.

Learn more about our tax services and payroll services.

On February 25, 2016 FASB issued an Accounting Standard Update with the hopes of improving reporting related to lease transactions.  In addition the intent was to bring U.S. Generally Accepted Accounting Principles closer to the existing reporting treatment of lease transactions as set by International Accounting Standards Board.

Under this new guidance leases with terms of greater than 12 months will be required to be recognized as both an asset and liability of the company.   Previously only leases classified as capital leases required recognition of an asset and liability.

The standard takes effect for financial periods beginning after Dec. 15, 2018 for public companies and beginning after December 15, 2019 for other organizations.   Although these dates may seem to be far off in the future, many companies will need to be aware of how the lease transactions that they are currently engaged in (as well as the transactions they will enter into in the interim) will ultimately be reported in their financial statements.

To read the full referenced article, click here. For more information on financial reporting and the new standard issued by the FASB, please contact Ed Elsner at (231) 726-5848.