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December 12, 2013

News last week that two major U.S. companies had violated export control statutes should be warning enough to any business that the U.S. government is serious about enforcing cross-border trade laws and regulations.

In the first case, Weatherford International, a major energy industry company, and four of its subsidiaries were fined $100 million for export control and sanctions violations. The government found that executives, managers, or employees on multiple occasions participated in, directed, approved, and facilitated prohibited transactions and the conduct of its various subsidiaries. Specifically, the businesses had exported or re-exported oil and gas drilling equipment to, and conducted business operations in, sanctioned countries without the required U.S. Government authorizations between 1998 and 2007.

This news arrived almost simultaneously to that of another major company's export control problems. The former export compliance officer at Honeywell International, Inc. was administratively debarred from participating in any activities that are subject to the International Traffic in Arms Regulations (ITAR) for violations of the Arms Export Controls Act (AECA) and the ITAR. The company itself avoided sanctions by voluntarily disclosing the violations to the U.S. State Department’s Office of Defense Trade Controls Compliance. According to the government, the employee falsified export license authorizations which resulted in the company exporting defense articles, including technical data, and provided defense services to various foreign persons without Department approval in violation of the AECA and ITAR.

As these two cases demonstrate, the "we've got someone on top of that" and "it's not broke, so no need to fix" arguments do little to advance understanding and transparency in what is becoming an increasingly significant source of revenue for many U.S. companies: international operations. Understanding the obligations with which your company must comply under international trade and customs laws and regulations can be a burdensome task. If your company is involved in interactional sourcing, manufacturing and/or distribution activities, we’d be pleased to help. A few of our value-added services include export control compliance program development, reviews or assessments, and staff & management training.

For more information, please contact Mark Ludwig of Variant Advisors* at mludwig@variantadvisors.com or tel. 305-213-8775, or John Archer of CBIZ MHM LLC at jarcher@cbiz.com or tel. 305.503.4229. *Outside of the Big Four, and through its relationship with Variant Advisors, CBIZ is unique among other major national professional services firm by offering these value-added solutions.




November 21, 2013
Managing Director, Eustis Corrigan, in the Memphis office has co-authored a new whitepaper on Tangible Property Regulations, taking the complex final tangible property regulations and distilling them down to the key issues most likely to impact or benefit your business.
"The tangible property regulations (TPRs) are the most dramatic changes in tax law to affect businesses since the overhaul of the Internal Revenue Code in 1986. The TPRs apply to all forms of business, whether a "C" corporation, an "S" corporation, a partnership, an LLC, a sole proprietorship (Schedule C on individual return), or a rental (Schedule E on individual return)."
It's important to note that the tangible property regulations become effective January 1, 2014. Find out the issues that require immediate action by taxpayers and view a checklist of questions that highlight tax opportunities your business may be missing in this helpful guide: Capturing Tax Opportunities Within the Final Tangible Property Regulations. If you have any questions on these complex rules and related tasks, feel free to contact Eustis Corrigan at ecorrigan@cbiz.com or 901.685.5575.



September 17, 2013

Today's post is co-authored by Managing Directors, Eustis Corrigan and Lloyd Grissinger. Together, they offer insight into the captive insurance segment of the insurance industry. Learn more about structuring your own risk financing, including the reasons companies choose to establish captive and the effects captive will have on your taxes. 

Organizations today have a wide variety of choices when structuring their risk financing arrangements. In the past 60 years, a significant portion of all U.S. commercial insurance premiums have moved from the traditional insurance market into the captive insurance segment of the insurance industry. From purchasing first dollar insurance to joining, or creating, a captive insurance company arrangement, the options available tend to favor a financially efficient model that matches the risk appetite.

What is a captive insurance company?

A captive insurance company is an organization formed to provide insurance coverage to their owners or affiliates (policyholders). Captives are established in specific geographic locations (both domestic and foreign) to take advantage of resident services and favorable regulations. It provides mid-sized companies the potential to create significant savings in its costs of insurance.

What are the reasons companies choose to establish a captive?

Choosing Captive

What are the typical captive programs?

  • Workers' Compensation
  • General Liability
  • Property
  • Professional Liability
  • Directors' & Officers' Liability
  • Credit Risk
  • Warranty
  • Other Enterprise Risks

What are the potential drawbacks of a captive?

  • Initial capital requirements and upfront fees
  • Underwriting losses
  • Reduced diversification

How does a captive affect my taxes?

For federal tax purposes a captive is oftentimes classified as a "C" corporation. The taxability of the earnings and profits of the captive for federal tax purposes will depend on the amount of premium income and investment income generated on an annual basis.

Clearly, deciding whether or not to utilize a captive is tricky. Becoming a captive participant may be profitable or fraught with an unacceptable degree of risk. Our National Captive Practice Group can help walk plan sponsors through the analytics so they can make an informed decision regarding whether or not to make the move to a captive. To read more about the risks and rewards of health care captives click here.

Learn more about how using captive structures can help you manage risk, reduce insurance costs and achieve your estate or succession planning goals. View the CBIZ SlideShare Presentation.




July 26, 2013

Anna Howell, State and Local Tax (SALT) expert and segment leader in the Memphis office of CBIZ MHM, weighs in on the highly anticipated Marketplace Fairness Act and what it means for online shoppers. 

A significant piece to the proposed Marketplace Fairness Act, or S. 743, is Section 2(c) also known as the 'Small Seller Exception.' As we discussed in our last blog post on the topic, "Marketplace Fairness Act Gains Momentum - Part 1," the legislation requires all “remote sellers” (including online stores) earning $1 million in revenue or more to collect taxes for every state and jurisdiction where they have customers. Moreover, the Small Seller Exception exempts remote sellers who earn less than $1 million in out-of-state sales. This rule may be just a small note included in one of the six sections of the act, however it arguably has created the most discussion among small to mid-size business owners. 

Who qualifies for the 'Small Seller Exception'? 

According to Section 2(c), remote sellers that have less than $1 million in gross annual receipts from remote sales will qualify under the 'Small Seller Exception.' Independent vendors who use third-party sites, such as Etsy or Amazon, may view the cut-off of $1 million negatively because in order to use these sites they must pay transaction fees. Right now these fees are not being incorporated in the annual calculation.

How does a state choose their 'certified' software provider and do businesses have any say in the matter? 

Every state will be required to provide remote sellers with free software that calculates all taxes due. Under the Streamlined Sales and Use Tax Agreement (SSUTA), adopted by a total of 24 states, only 5 software providers are 'certified' to provide such a program. Those states that choose not to join the SSUTA will be provided an alternative process within the act. This option will contain five mandates which must be followed and implemented into the state's tax plan. One issue is that the software each state chooses will not be subject to a list of requirements, therefore creating multiple forms of software that collect tax. The lack of uniformity could become a logistical problem for small businesses if each state differs in their process of collection. 

If the law is passed, how much time separates enactment and enforcement?

If the bill is passed by the House and later becomes law, each state under the SSUTA will have to let their citizens know that it is going to begin enforcing this collection process. The state then must wait 180 days and start collection on the first day of the financial quarter. If a state is not listed under the SSUTA, it must provide legislation which meets all five mandate requirements under the second option of the act and begin enforcing this act after the 180 day period on the first day of the financial quarter. 

What are some of the revisions being discussed? 

Several lawmakers and companies have publicly voiced their opinion on the Marketplace Fairness Act. Some discussions around the act include making revisions to the current law before any further action is taken. One major concern is the administrative burden this tax would place on small businesses. Opponents to this rule, including eBay, argue that the exemption level is too low and propose $10 million should be the cut-off.




July 18, 2013

Anna Howell, State and Local Tax (SALT) expert and segment leader in the Memphis office of CBIZ MHM, weighs in on the highly anticipated Marketplace Fairness Act and what it means for online shoppers.

The tax man cometh, and he is heading for the Internet.

As we await a final decision from the House on the Marketplace Fairness Act, it is important to understand its significance for employers as well as individuals. The Marketplace Fairness Act, or S. 743, is a piece of legislation which passed the Senate in early May and is currently under consideration in the House of Representatives. It requires all "remote sellers" (including online stores) earning $1 million in revenue or more to collect taxes for every state and jurisdiction where they have customers.

Its movement to law will mean thousands of dollars in new revenue for each state, collecting sales tax from Internet shoppers who once avoided the additional fee by ordering online. As expected, the law is facing more opposition at this level and more discussion surrounding its contents has become prevalent not only to the lawmakers themselves, but also to the general public.

The bill would force shoppers to pay sales tax for the state to which they are having their items shipped. Currently, most online shoppers are subject to a self-reported Use Tax, which is typically the same rate of tax. As Tennessee Governor Bill Haslam has said, according to the Memphis Commercial Appeal, "It’s not a new tax; it’s a tax that is owed right now but that people aren’t paying.”

So, what does the Marketplace Fairness Act mean for you? Stay tuned as there is much more to come on this significant piece of legislation.




June 6, 2013

We are excited to announce the addition of J. Eustis Corrigan, Jr. to our tax services division as a Managing Director. Eustis has more than 25 years of comprehensive tax, accounting, and strategic business consulting experience. Eustis joins us with extensive experience advising publicly-traded and privately-held companies regarding complex tax and financial issues.

His major areas of expertise include federal and state corporate taxation, entity planning and structuring, mergers & acquisitions, and accounting methods. He has served clients in a variety of industries including financial services, energy, manufacturing, mortgage banking, telecommunications, distribution, transportation and real estate. Eustis' role within CBIZ will be in the coordination and delivery of high-quality services to corporate clients via a focused multi-disciplinary approach. He will serve in a client service role as well as a subject matter expert in certain areas ofcorporate taxation.

He has experience with detailed aspects of state and local tax compliance and planning matters. Eustis' client experience includes the following:

  • Developing and implementing proactive tax planning for corporations
  • Assisting companies with ASC 740 (formerly FAS 109) & ASC 740-10 (formerly FIN 48)
  • Tax accounting methods
  • Tax controversy
  • Executive compensation
  • Due diligence
  • Mergers & acquisitions

“Eustis’ extensive tax and industry experience will continue to add to the depth of tax and consulting services we already offer,” said Steve Dunavant, Senior Managing Director.  “His addition showcases our commitment to delivering superior tax and consulting services to the Greater Memphis market.”

Eustis is a graduate of Louisiana State University where he received his Bachelors of Science in Accounting. He also is a Certified Public Accountant, a past Editorial Advisory Board Member of the Journal of Accountancy, a tax section member of the American Institute of Certified Public Accountants (AICPA), and a member of both the Mississippi and the Louisiana Society of Certified Public Accountants. Outside of work Eustis enjoys cooking, reading, running, college sports, and spending time with his family.




May 28, 2013

New tangible property regulations were issued in late December 2011 by the IRS to guide taxpayers on how to account for amounts paid to acquire, produce or improve tangible property. Originally scheduled to be effective for tax years beginning on, or after, January 1, 2012, mandatory compliance with the new regulations has been delayed to tax years beginning on, or after, January 1, 2014.

The new tangible property regulations are designed to change the way each taxpayer treats capital assets. The regulations are also intended to provide guidance for taxpayers when deciding to expense versus capitalize an item. Some of the more likely changes in the way taxpayers do business relate to:

  • Repairs & Maintenance/De Minimus Rule
  • Materials & Supplies
  • Depreciation/Unit of Property
  • General Asset Accounts

Here are 5 questions to determine whether early adoption is right for your company:

1. Own a building?

2. Have any recently completed renovation or expansion projects to your buildings?

3. Acquire many small dollar fixed assets on an annual basis?

4. Accumulate large expenditures to maintain equipment?

5. Incur a large annual cost for materials and supplies?

If you would like more information regarding the Tangible Property Regulations contact Mark Baricos: 
(901) 685.5575 | mbaricos@cbiz.com

Mark has more than 10 years of public accounting experience. He specializes in tax engagements for large privately-held and publicly-held companies. These engagements include planning tax strategies, accounting for income taxes (ASC 740), supervising the preparation of federal and state income tax returns and coordinating federal and state examinations. His industry experience includes distribution, manufacturing and service companies.





May 2, 2013
Ice Cream SundaeWith the final April 30th deadline past us, it is officially post-busy season at the CBIZ MHM Memphis office. An accountant's job is quite taxing during the first quarter, but we thought we'd share a small glimpse into what keeps our staff alert and moving during a time typically spent at an office desk. 

 

1. Food- The ultimate necessity for any office during busy season. Our weekly fruit deliveries were balanced with a chips & dip snack day, ice cream sundae bar and fun holiday goodies. 

We like to switch things up at our office and bring unique snack options as well. A fan favorite was our Smoothie Bar courtesy of Panini Catering

Smoothie Bar 2. Raffles - Our 'Tuesday Giveaways' included giftcards to favorite restuarants and shops around town. A true 'luck of the draw' competition is easy and allows each employee a chance at winning without having to participate in a set activity. 

3. Competitions - A new competition added to our office this year was our Busy Season Pedometer Challenge. Pedometers were given out free of cost to those wanting to participate in the 10-week step challenge. Prizes including health magazine subscriptions, a spa day and personal training lessons served as incentives to get people moving during a usually static time of year. Other competitions included a March Madness bracket challenge and an Oscar's ballot challenge. 

Massage on the Go4. Massages- Sometimes you just need a little R & R. We scheduled ten minute massage breaks through Massage on the Go for our staff working through the weekend.  

What does your office do during busy season? How do you stay active while busy at work? Leave us a comment below and let us know!





March 26, 2013

You may be wondering where our blog has been for the past year, and we are happy to report that we are re-entering the Blog-o-Sphere bigger and better than ever! Formerly known as Thompson Dunavant PLC, we have been a part of the local business community since 1997.  Since we have joined forces with CBIZ, one of the leading financial services providers in the country, and Mayer Hoffman McCann P.C., an independent CPA firm, we are confident in our national resources. Currently, we have access to a multitude of service lines with over 130 locations nationwide.

So, what can you expect from our local blog? We hope to ensure that we are the same firm, full of a tremendous amount of Memphis pride, but with a much larger reach in regards to our service capabilities. We also hope that this blog serves as a place for you to get to know our CBIZ Memphis team on a more personal level. Discover our experts through their passions; whether it is Employee Benefit Plan Audits, Affordable Care Act Consulting, or Sales Tax Compliance, we will bring you a variety of different subject matter.

Keep in mind, we are not all work and no play. We boast our social and community involvement committees, and the efforts they take to get us out of the office, whether it be a trip to a Grizzlies game or a chance to volunteer at the St. Jude Marathon. Our blog will serve as a glimpse into our ‘work hard, play hard’ mantra, as we will post about these events as well.

We want you to be a part of the conversation! Feel free to share our posts and/or leave a comment.




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