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Recent Incidents Fuel Concerns over Breach Response

Breach

Every company needs to take precautions for a possible data breach.

Could your data be hacked? Unfortunately, every organization — including for-profit businesses, not-for-profits and government agencies — is vulnerable to cyberattacks today.

Examples abound. In September, Equifax reported a data breach that exposed the credit histories and other information of 145.5 million Americans. Shortly thereafter, the Securities and Exchange Commission (SEC) reported a hacking incident that occurred in 2016.

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How Can Contractors Best Mitigate Rising Prices?

By Jason Dudas

Contractors are often dependent on the price of materials and labor when planning and completing a project.  As the August Bureau of Labor Statistics (BLS) data showed signs of a general decrease in inflation rate, pricing for final demand construction has been deviating from that of the overall economy. The accelerating rate of construction inflation is evidenced not only in the overall trend of specific products and materials, but also in the producer price index (PPI) for completed building types.

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How the IRS Proves Fraud and Why It Can Be Devastating

Fraud

The IRS looks for ‘Badges of Fraud’ that may trigger an investigation.

In general, a tax assessment by the IRS is presumed to be correct. A taxpayer can overcome the presumption with proof. That situation is reversed when the IRS asserts fraud. In those instances, the IRS must prove, by clear and convincing evidence, that fraud exists. Read more

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K-1s & Passive Foreign Investment Companies

K-1s

PFICs are a serious tax matter and should be given a great deal of consideration when reporting elections.

By Bethany Bouw

The IRS allows certain entities to use a pass-through taxation via Form K-1. Essentially, this moves the income tax liability from those earning the income to those who benefit from it. Many individuals receive Form K-1, due to their investments in flow-through entities like partnerships and S-Corporations. Those K-1 forms will include additional supplementary information behind the K-1 itself. This supplementary information is often where information on passive foreign investment companies (PFICs) is located. PFICs are a serious matter and require great consideration with reporting and elections.

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Individual Retirement Accounts & Foreign Earned Income

Individual Retirement Accounts

Those saving for retirement while living abroad will need to be aware of the contribution limitations.

By Bethany Bouw

As US individuals look to save for retirement, it is important to note that those residing abroad may face some additional considerations. Many people seek to save for retirement via traditional and ROTH IRAs. Residing abroad doesn’t automatically preclude one from contributing to these types of accounts, but there may be limitations and other things to consider in making an investment.

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Consider an Alternate Metric to Value Your Small Business

Small business

The SDCF metric may be a more meaningful metric to value your small business.

Would you use a complicated discounted cash flow analysis to estimate the value of a mom-and-pop restaurant? How about using a price-to-earnings multiple derived from publicly traded restaurant chains? Neither method seems appropriate for a small family-operated eatery.

As this example illustrates, traditional valuation models don’t necessarily work for small businesses and professional practices. Instead, business appraisers and brokers typically recommend using an alternate metric for appraising small businesses known as “seller’s discretionary cash flow” (SDCF). Read more

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International Tax Alert- Registration-Required Obligation

Proposed Regulations Provide Guidance on the Definitions of Registration-Required Obligation and Registered Form

Summary

On September 19, 2017, the Department of the Treasury and the Internal Revenue Service (collectively, “Treasury”), published in the Federal Register proposed regulations (the “Proposed Regulations”) that provide guidance on the definitions of registration-required obligation and registered form, including guidance on the issuance of pass-through certificates and participation interests in registered form. The Proposed Regulations also withdraw a portion of previously proposed regulations regarding the definition of a registration-required obligation. The preamble to the Proposed Regulations (the “Preamble”) states that the Proposed Regulations are necessary to address changes in market practices as well as issues raised by the statutory repeal of the foreign-targeted bearer obligation exception to the registered form requirement.  Read more

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International Tax Alert – Country-by-Country Reports

Guidance Issued for Country-by-Country Reports for Early Reporting Periods

Summary

In Revenue Procedure 2017-23, the Internal Revenue Service (“IRS”) issued guidance for voluntarily filing Form 8975, Country-by-Country Report and accompanying Schedule A, Tax Jurisdiction and Constituent Entity Information (collectively, Form 8975), for early reporting periods. Read more

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Work Opportunity Tax Credit: What Business Owners Need to Know

Tax Credit

Work Opportunity Tax Credits are available to those who empolyee members of ‘targeted’ groups.

The Work Opportunity tax credit (WOTC) is a federal income tax credit that’s available to businesses that hire members of certain “targeted” groups. Here’s how your business may be able to benefit from this potentially lucrative tax break. Read more

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Coming Soon: Deadline to Reverse 2016 Roth Conversions

reverse 2016 roth conversions

The deadline to reverse 2016 roth conversions is October 16th, 2017.

Do you regret converting your traditional IRA into a Roth IRA? Fortunately, a taxpayer-friendly aspect of the Roth conversion rules is that you have until October 15 (adjusted for weekends) of the year following the year of a conversion to reverse it. In other words, the deadline for reversing any 2016 Roth conversions is October 16, 2017.

Why would you want to reverse your Roth IRA conversion? If the underlying assets held in your Roth IRA have performed poorly, causing the value of your account to plummet, you might want to reverse the account back to traditional IRA status. That way, you can avoid being taxed on account value that has disappeared since the conversion. Here’s how a reversal works. Read more