New Energy Articles Blog

It’s important to remember that you should Find An Accountant well before you actually need one. There are two main reasons for this. Firstly, accountancy is so important to your business, that leaving it until the last minute could very well leave you scrabbling around the very worst of the bunch when you need a good accountant the most. Secondly, there is a good possibility that your accountant will be able to inform you of any changes to accounting practices, meaning that what you thought was the most applicable way to run your business might actually not be. Find An Accountant early and save money and time.

Remember that accountancy is a well regulated and qualified business, meaning you should find it too hard to Find An Accountant. It’s amongst the oldest in the world, and has a good degree of tradition to it. That said, to Find An Accountant, or a good one at least, means one with little pomp, as they will treat you in a very down to earth way. Bad accountants will try to bamboozle you at every turn, adding mumbo-jumbo terminologywherever possible to confuse you into thinking their work is more complex than it is.

Far and away the best way to Find An Accountant is to go via two methods. First off, the personal recommendation route. This is the favoured route for many when looking to Find An Accountant, as your business accounts are not something you wish to put in the hands of someone you don’t know at least through a couple of handshakes anyway. The huge amount of associations of accountants gives you another route into the selection of an accountant. This may not be as personal as a recommendation, but it is as reliable, and offers you a body to complain through if your work is not dealt with appropriately.

There are a good few things to consider when looking to Find An Accountant. You should also consider the relative scale of your business. Then you soul think abotu. Perhaps here, your specialist trade association can offer specific advice on how to Find An Accountant. Does the accountant provide all the services you might require? This is a very important point. Having two accountants can sometimes be worse than none at all.

Checking the specific qualifications is a must. Anyone can call themselves an accountant, but remember that some qualification many not be qualifications at all. Find An Accountant with good qualifications, and you start on the right foot. If you Find An Accountant who sets you down a wrong or illegal path, remember it’s you not they who suffer the consequences. With this in mind, it may be worth trying to Find An Accountant with personal indemnity insurance. This means that if he or she has done any bad work, they will be liable and insured for it. If you Find An Accountant with this, you will be able to make any losses back from their mistakes.

Tags: business accounting, Find an accountant, tax, trade associations
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Reporting on Those Who Are Engaging In Illegal Tax Activity  

Until recently, whistleblowers have never been thrust as far forward into the public eye. The case of Brad Birkenfeld, who has been sentenced to 40 months in prison after reporting on Swiss bank UBS to the IRS, has thrust the whistleblower act of the IRS and all that surrounds it directly into the public spotlight. This case potentially exposed thousands of US taxpayers that may have been disguising assets by using the Swiss bank.  Essentially, the IRS has a program which rewards people who report on those that are engaging in illegal tax activity. The reward is based on a percentage (up to 30% in some extreme cases) of the owed money which is collected by the IRS.

Some people think that the laws about whistleblowers are simply an internal matter for events that take place within the United States and that only involve the IRS. However, whistleblower lawyers are now being forced to examine the international tax implications, and possibilities, that have become implicit after the events in the UBS and Birkenfeld case.

One thing that whistleblower lawyers need to learn about is how foreign governments can use tax treaties to obtain information that they would not otherwise be able to obtain due to lack of foreign jurisdiction.  Although the UBS problem has been the largest example of how the whistleblower act can apply to international situations, there are smaller examples which may become more and more common closer to home as more people attempt to claim their rewards as part of the whistleblower act. For instance, much business is done between the US and Canada, and the CRA and IRS can request information from each other to enforce their own tax laws. This is one possible site of expansion for those looking to profit from the whistleblower laws.

Part of the reason the program has also been getting such increased attention is because of the changes that the IRS implemented to it several years ago.  This resulted in larger rewards being paid on reporting of larger amounts owing. This potential for huge rewards has certainly brought out more people that are interested in finding ways to profit from the revised laws. As more becomes established as to how these laws apply to matters of international tax evasion, it is a sure thing that we will see more reports coming from international sources, although most probably won’t be on the scale of the Birkenfeld and UBS case.

Tags: Brad Birkenfeld, irs, tax, tax fraud, taxes, UBS, whistleblowers
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Many people have by now become aware of the newly improved whistleblowers program that the IRS has put into place. They have a reward system which has been created to profit individuals that may provide them within information that results in the prosecution of someone for income tax fraud, or collection of fees owed through tax evasion. By encouraging people to report tax fraud, the IRS hope to increase overall levels of honesty within the tax system, as well as to install a system that is going to enable them much more thoroughly to root out those who are trying to avoid paying what they owe.

However, there are some details about this program that CPA’s really need to find out about. There are actually a couple of reasons that a CPA should know the details of this system used to report tax fraud. The increases that came as a result of the revamp to the system has also increased the number of people coming forward within information. While many go straight to attorneys in order to help them process the tip and submit it to the IRS, there are cases where they may be benefitted more by visiting with a CPA first, who could easily by taking the time to research the program let them know what the appropriate action should be.

CPA’s should become familiar with the laws around this program because informants may come to them looking for information. A good example is that the program will attempt to protect the identity of someone providing information in one of these cases. If the program goes to any kind of judicial proceeding though, there is no protection against being called as a witness, at which point their identity will become exposed. It is also important to let prospective informants know that any misinformation they provide could leave them open to prosecutions for perjury in particular situations.

Whistle blowers have another reason to contact CPA’s as well, and this is one that doesn’t relate as directly to income tax fraud. If an informant should be paid out a benefit under the new program for reporting whistleblowers, the reward that they receive could be considerable. As such, they may need to contact their CPA regarding the tax considerations of their windfall, and accountants need to be familiar with these. Full reporting and withholding applies to rewards paid out under the IRS Whistle Blower Program

Tags: CPA's, irs, report tax fraud, tax, tax fraud, taxes, whistle blowers program
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In a recent email news item I made the distinction that the Haiti disaster is now a qualified disaster according to the IRS (http://www.irs.gov/newsroom/article/0,,id=218615,00.html).

And I mentioned in that email, there are rumors that said people would be able to take a deduction for donations to Haiti on the current year’s (2009) tax return - instead of having to wait until you do your 2010 tax return. Obviously this could be a huge incentive for people who desired to give a part of their wealth to the victims of disaster in Haiti to assist them in getting back on their feet! Are you feeling the pressure of today’s taxes? Right now you can get $100 off your tax return for Cary NC Tax Preparation needs!

As it turns out, the rumors I was hearing and that you possibly have heard are TRUE! On January 22nd, the IRS created a special tax relief policy that allows contributions for the Haiti disaster made after January 11, 2010 and before March 1, 2010, will be taken from your 2009 tax return. Or, you can choose to put the deduction to your 2010 tax return instead, on the chance that in case you did not desire to take advantage of the great incentive to assist those in need.

The people of Haiti are hurting quite a bit. These kinds of disasters are totally unavoidable, and are well, devastating. Earthquakes and other types of natural disaster create huge levels of carnage and widespread loss of homes. Entire families are without food or clean water. In most cases these families do not even have any sort of stable living environment without the help of relief organizations (funded by donators like you!). Do your part right now and donate whatever you can to help the people of Haiti. I would certainly appreciate the extended donations, and I’m positive all of the struggling people in Haiti would appreciate it to!

Stay tuned for more articles and information regarding tax season, taxes, and Haiti!

http://www.marccpa.com

Tags: accountant, bookkeeping, cpa, income tax, marc gilfillan, NC, raleigh, tax, tax preparation, tax return, taxes
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Many people have heard of whistleblowing, but it can be hard to find specific information that lets you know how to do this in concrete terms that are understandable by someone who is not a lawyer or a CPA.  Luckily, reporting tax fraud is becoming much more defined as the government and the IRS attempts to find ways to clarify the laws. They also have been trying consistently to come up with ways to protect people that come forward as an IRS whistleblower, and it is important to understand these changes to get an idea of how the program really works.

In some whistleblower cases in the past, it was extremely dangerous to a person to come forward and report their employer of tax evasion. An IRS whistleblower was just as likely to be fired as anyone else for coming forward and reporting tax fraud. However, experience has taught the government much in this regard and there now exist several federal and state laws that attempt to protect the rights of whistleblowers, and which do not allow for termination of an employee based on providing this kind of information in most cases.

There are still some gaps in the laws which provide protection to someone reporting tax fraud. Attention has been drawn to this by whistleblower cases which involve not for profit organizations. The federal law known as SOX (Sarbanes-Oxley Act) protects workers for non-profits against retaliation in such cases. There has not been as much development at the State level in this regard however, and although there is some protection afforded to non-profit employees, it is not yet something that is ironclad. This can and has resulted in lawsuits for wrongful termination when an employee of a non-profit organization feels he or she was let go as a result of reporting on wrongful activities on the part of their employer.

It is also interesting to note that along with increased protection for those who provide information about tax wrongdoings, the IRS has actually gone further to offer actual rewards to those who provide information which can result in the IRS collecting funds owed to them. This program has existed for some time, but has been expanded in the last several years to help compensate informants better, and with bigger rewards in cases of large scale tax evasion. The dynamics of whistleblowing have shifted, putting the emphasis and the reward on reporting tax evasion rather than on burying knowledge of it for fear of employment related consequences.

Tags: cpa, irs, IRS whistleblower, tax, tax fraud, taxes, whistleblower
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Until recently, whistleblowers have never been thrust as far forward into the public eye. The case of Brad Birkenfeld, who has been sentenced to 40 months in prison after reporting on Swiss bank UBS to the IRS, has thrust the whistleblower act of the IRS and all that surrounds it directly into the public spotlight. This case potentially exposed thousands of US taxpayers that may have been disguising assets by using the Swiss bank.  Essentially, the IRS has a program which rewards people who report on those that are engaging in illegal tax activity. The reward is based on a percentage (up to 30% in some extreme cases) of the owed money which is collected by the IRS.

Some people think that the laws about whistleblowers are simply an internal matter for events that take place within the United States and that only involve the IRS. However, whistleblower lawyers are now being forced to examine the international tax implications, and possibilities, that have become implicit after the events in the UBS and Birkenfeld case.

One thing that whistleblower lawyers need to learn about is how foreign governments can use tax treaties to obtain information that they would not otherwise be able to obtain due to lack of foreign jurisdiction.  Although the UBS problem has been the largest example of how the whistleblower act can apply to international situations, there are smaller examples which may become more and more common closer to home as more people attempt to claim their rewards as part of the whistleblower act. For instance, much business is done between the US and Canada, and the CRA and IRS can request information from each other to enforce their own tax laws. This is one possible site of expansion for those looking to profit from the whistleblower laws.

Part of the reason the program has also been getting such increased attention is because of the changes that the IRS implemented to it several years ago.  This resulted in larger rewards being paid on reporting of larger amounts owing. This potential for huge rewards has certainly brought out more people that are interested in finding ways to profit from the revised laws. As more becomes established as to how these laws apply to matters of international tax evasion, it is a sure thing that we will see more reports coming from international sources, although most probably won’t be on the scale of the Birkenfeld and UBS case.

Tags: Brad Birkenfeld, irs, tax, tax fraud, taxes, UBS, whistleblowers
Posted in Uncategorized | | No Comments »

Many people have heard of whistleblowing, but it can be hard to find specific information that lets you know how to do this in concrete terms that are understandable by someone who is not a lawyer or a CPA.  Luckily, reporting tax fraud is becoming much more defined as the government and the IRS attempts to find ways to clarify the laws. They also have been trying consistently to come up with ways to protect people that come forward as an IRS whistleblower, and it is important to understand these changes to get an idea of how the program really works.

In some whistleblower cases in the past, it was extremely dangerous to a person to come forward and report their employer of tax evasion. An IRS whistleblower was just as likely to be fired as anyone else for coming forward and reporting tax fraud. However, experience has taught the government much in this regard and there now exist several federal and state laws that attempt to protect the rights of whistleblowers, and which do not allow for termination of an employee based on providing this kind of information in most cases.

There are still some gaps in the laws which provide protection to someone reporting tax fraud. Attention has been drawn to this by whistleblower cases which involve not for profit organizations. The federal law known as SOX (Sarbanes-Oxley Act) protects workers for non-profits against retaliation in such cases. There has not been as much development at the State level in this regard however, and although there is some protection afforded to non-profit employees, it is not yet something that is ironclad. This can and has resulted in lawsuits for wrongful termination when an employee of a non-profit organization feels he or she was let go as a result of reporting on wrongful activities on the part of their employer.

It is also interesting to note that along with increased protection for those who provide information about tax wrongdoings, the IRS has actually gone further to offer actual rewards to those who provide information which can result in the IRS collecting funds owed to them. This program has existed for some time, but has been expanded in the last several years to help compensate informants better, and with bigger rewards in cases of large scale tax evasion. The dynamics of whistleblowing have shifted, putting the emphasis and the reward on reporting tax evasion rather than on burying knowledge of it for fear of employment related consequences.

Tags: cpa, irs, IRS whistleblower, tax, tax fraud, taxes, whistleblower
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Businesses need to ensure that their financial records are accurate, up-to-date, and in accordance with accepted accounting principles. They can achieve this objective by following the accounting cycle.

These are the steps that make up the accounting cycle…

1) Analysis

Analyzing all of the transactions from the past year, and locating all relevant documents and receipts, is the first step that needs to be taken.

2) Journalize

Next, it is necessary to create a central record of all of the transactions. This record is referred to as a General Journal.

3) Posting

Once a General Journal has been created, each transaction should then be posted to the ledger, which is a paper / electronic trail that is used to both verify accuracy and to refer to if balances do not tally later on.

4) The Unadjusted Trial Balance

The next step is to total up debit and credit balances to ensure that they are equal. Information from the ledger should also be compiled so that financial statements can be prepared.

5) Adjusting

Having recorded and verified external transactions (like utility payments and supply purchases), internal transactions (like unearned revenue and prepaid rent) must now be factored in.

6) The Adjusted Trial Balance

The trial balance, which now encompasses both external and internal transactions, is now checked for accuracy. Credit and debit sums should be equal, otherwise a mistake has been made in one of the earlier steps.

7) Financial Statements

The Income Statement, Statement of Owner’s Equity and Balance Sheet are now created.

Closing Of The Trial Balance

Permanent accounts now have their balances carried into the next period, while temporary accounts are closed. The last entries made in those accounts are posted to the capital account of the business, after which all balances (expense, revenue, withdrawal, etc.) should be zero.

9) Post-Closing Trial Balance

The final step is to list the balances of non-closed accounts, such as assets and liabilities. This verifies that all permanent accounts balance i.e. that they have equal credit and debit sums.

—

This article was written by an experienced accountant. You can learn more about them, and also find further accounting advice, by visiting: Five Dock Accounting

Tags: accounting, accounting cycle, accounts, Business, finance, small business, tax
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W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

So the question remains, what went wrong with taxes in the US?

US tax makers have been reaping what they have sown for quite a while. Our honor system has been trumped by a monster in which all taxpayers are under watch because of the heavy inclination of evasion. Basically, consent has been replaced with compulsion. Honor has been replaced with spying on citizens. If you are feeling the pressure with today’s taxes, call a Cary NC CPA for all your tax-related needs!

In the 1950s, no bank told the IRS about customer affairs, interest rates went unreported, withdrawals of money were not reported, and not a thing that went through any account was photographed. Also, real estate transactions weren’t reported, stock transactions were not reported, dividends were not reported, income from other sources (Form 1099) was not reported, and US Customs didn’t require a declaration of the amount of money carried. Go here if you want help from a modern-day Tax Preparation in Cary, NC.

It was an honor system, and it worked. The deterioration that happened over the last fifty years to the present is that everything of any fiscal significance is now reported.

Adam Smith said that people will evade taxes and tax laws shown little respect when there is a general suspicion of much meaningless expense and great misspending of tax revenue. For example, $500 toliet seats, huge grants to study the sex lives of ants, etc.

Because the government wanted to catch a handful of tax resisters and evaders in the 1950s Congress made a tax monster of the US tax system that more and more taxpayers try to evade. As a general rule, mass tax evasion is a clear signal that a government’s tax system is bad. Citizens will pay taxes, even income taxes, if the rates are acceptable.

Thanks for reading! Stay tuned for more updates!

http://www.marccpa.com/

Tags: accountant, bookkeeping, cpa, income tax, marc gilfillan, NC, raleigh, tax, tax preparation, tax return, taxes
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W. Marc Gilfillan, CPA, NC, individual and business CPA and Tax expert, shares about the history of taxes…

1861 - After Lincoln’s election, the South walks out of Congress and form the Confederacy with a rewritten constitution to keep the newly formed government right to tax in check.

1862 - The beginning of US income taxes is created to help finance the sudden and massive costs of the Civil War. If you’re feeling the pressure with today’s taxes, call a CPA for Tax Preparation in Raleigh, NC for all your tax-related needs!

1872 - The income tax gets struck down.

1894 - Congress creates an income tax as a result of southerners complaining that excessive reliance on tariffs pushes up the costs of imports for farmers and consumers. Go here if you want help from a modern-day CPA firm in Raleigh, NC.

1895 - The US Supreme Court holds that the 1894 income tax law is in direct conflict with the US Constitution’s bars on insituting direct taxes.

1913 - Ratification of the 16th Amendment removes that bar and Congress establishes an income tax system.

1917 - World War I revenue requirements bump up tax rates, with the largest rate reaching 77% in 1918.

1924 - Publication of the names of taxpayers and the amount of taxes they owe fails to achieve the goal of forcing payments and the practice is given up.

1942 - Prior to World War II, the lowest income level for paying income tax excluded most wage earners. However, the cost of the war bumped the threshold down the income ladder and put the top rate to ninety-four percent before the war was over.

1943 - To force compliance from the sharply increased number of taxpayers, Congress institutes tax withholding from wages, effectively turning employers into tax collectors.

In the 1940s Justice Jackson of the Supreme Court, former chief counsel of IRS, gloated about how honest Americans were in turning in their income taxes. It was an honor system - there were very few informational returns. Tax resisters were few and the underground economy was of little significance.

1962 - IRS Commissioner Caplin stated “no other nation in the world has ever equaled this record of voluntary compliance. It is a tribute to our people, their tradition of honesty, and their high sense of responsibility in supporting our government.”

1982 - Chief Justice Neely said - “cheating on federal and state income tax is all pervasive in all classes of society; except among the compulsively honest, cheating usually occurs in direct proportion to opportunity.”

Stay tuned for Part 3 of the Timeline of US Tax Policy!

http://www.marccpa.com/

Tags: accountant, bookkeeping, cpa, income tax, marc gilfillan, NC, raleigh, tax, tax preparation, tax return, taxes
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