October 2014,
Vol. IV | The Tax Planning Issue
How to Win Friends and Plan Taxes Kevin Simister, CPA
Examining FBAR Compliance Understanding the Who, How and When of Foreign Bank Account Reporting
www.uacpa.org
Mission,Vision,Values
ExecutiveBoard
Mission
president................................................. Paul O. Skeen president-elect..................................... Jonyce Bullock vice president..................................... Hollie S. Andrus secretary................................................... Mark Palmer treasurer................................................. Kyle J. Pexton member-at-large....................................Larry A. Deppe immediate past president.................. Kent L. Thomas AICPA Council..........................................Dan Griffiths ceo......................................................... Susan A. Speirs editorial staff........................................ Amy Spencer
The UACPA Leadership supports and challenges members through advocacy, professional education, leadership development, networking, and community service, to help them succeed in a competitive and changing world.
Vision At the UACPA, our vision is to be a world-class professional association essential to our members. We unite a vibrant community of CPAs to enhance the success of our members and champion the values of the profession; Integrity, Competency, and Objectivity.
Values Advocacy The UACPA represents the profession at the legislature and other regulatory bodies and promotes the value of the CPA to employers, the business community, and the public at large.
The Journal Entry is published quarterly, by the UACPA 1240 E. 2100 South, Suite 500 Salt Lake City, UT 84106 tel: 801-466-8022 toll-free in Utah: 1-800-676-2776 e-mail: mail@uacpa.org or log on to www.uacpa.org
Professional Development
Send address changes to UACPA 1240 E. 2100 South, Suite 500 Salt Lake City, UT 84106 email: membership@uacpa.org or log on to www.uacpa.org to update your address and member profile online
The UACPA supports and encourages continuing education and leadership development.
Cover photo - Kristan Jacobsen, kristanjacobsen.com
Leadership & Service The UACPA provides leadership and service within the profession, within the UACPA and within the community.
Professional Community The UACPA reinforces peer accountability to encourage members to maintain integrity and high ethical standards. We ​​ provide member to member networking opportunities and networking opportunities with other professions. We value belonging to a distinguished organization and believe that we serve as the primary resource and point of contact for Utah CPAs.
UACPA Statement of Policy CPAs have common problems and interests. This magazine has been created to share information relating to the practice of accounting. The opinions, views and articles expressed in this magazine are not necessarily those of the Utah Association of Certified Public Accountants. This magazine should not be deemed an endorsement by the UACPA or its committees or editorial staff of any views, opinions or
Diverse Population Outreach
positions contained herein. Because of the complexity of tax laws and
The UACPA believes in reaching out to under-represented populations, those returning to the profession or choosing it as a second career, and other professions.
accounting transactions and the changing status of the law, as well as variations in practices and procedures among accountants, information in the magazine should not be used, acted or relied upon, as a substitute for independent accounting or legal research and advice.
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in this issue | October 2014
feature story
Kevin Simister Gets Personal with Tax Planning
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New Members............................................................................................4 Movers & Shakers......................................................................................5 President's Message ..................................................................................6 Message from the CEO............................................................................. 7 Cover Story: Getting Personal with Tax Planning................................8 Making Changes With Tax Planning.................................................... 13
Applying for Tax-Exempt Status Made Easy
By the Numbers: Tax Facts..................................................................... 15 Examination Into FBAR Compliance................................................... 16 Applying for Tax-Exempt Status ........................................................... 21 Accounting Careers and the Boiled Frog.............................................25 Women in Accounting — Stacey Porter, CPA.....................................28 Social Security for Women.....................................................................30
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Meet 2014's UACPA Award Winners
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Saving for College and on Taxes with UESP .......................................32 2014 UACPA Awards Winners..............................................................34 Meet a Member: Shayne Miller.............................................................37 Quarterly Question: Executive Board...................................................38 Board Bullets: An Update from the UACPA .......................................39 Quarterly Question: UACPA Staff.........................................................39 UACPA Photos......................................................................................... 41
Get to Know the UACPA Board
38
Education..................................................................................................42 the journal entry | October 2014
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New Members
NewMembers Congratulations to the following individuals/CPAs who were approved for membership or affiliate status in the UACPA as of August 21, 2014.
Fellows
Ryan Alexander Grant Thornton LLP Rebecca Balaich Carver Florek & James LLC Timothy Ballantyne Salt Lake City Jocelyn Barnes Cedar City Nancy Bradbury Hubbard Radio, LLC Annalynn Colvin Wisan, Smith, Racker & Prescott, LLP Celeina Cullum Clyde Companies, Inc. Bryant Dirkmaat Layton Matt Dorius Fruit Heights Brent Fry Deseret Management Corporation Shaylynn Fuller Tanner LLC Joseph Guttenplan Grant Thornton LLP
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Tara Henne The Leverich Group
Brady Ramsay Leavitt Group Enterprises
David Johnson Lehi
Mindy Siddoway Eide Bailly, LLP
Kelli Jones HintonBurdick CPAs & Advisors
Collin Snow PricewaterhouseCoopers LLP
Jason Lund Carver Florek & James LLC
Tad Tuttle HintonBurdick CPAs & Advisors
Jeremy McAdams The Leverich Group
Becky Vinberg Wisan, Smith, Racker & Prescott, LLP
Alison Mueller South Jordan Oxana Nichitin Eide Bailly Philip Noble Jones Simkins LLC David Ollmann Ernst & Young LLP Benjamin Peeler Eide Bailly Charlotte Petersen Cook Martin Poulson, PC Jordan Peterson Harman Music Group, Inc. Tamra Petty PricewaterhouseCoopers LLP
L. Cameron Williamsen Energy Solutions, LLC Christopher Winsley Eide Bailly, LLP Douglas Woodbury Ernst & Young LLP
Student Affiliates
Brigham Young University – 1 Southern Utah University – 1 University of Utah – 2 Utah Valley University – 3 Westminster – 3
Movers & Shakers
Movers&Shakers Shaun D. Olsen, CPA was recently named partner at Hawkins Cloward & Simister, LC. Olsen is accomplished in Merger and Acquisition tax structuring across many industries including hospitality, MOLM, and assisted living living facilities. The BYU graduate is a past president of Shaun D. Olsen the Utah Valley Estate Planning Council and currently sits on the UACPA's Tax Issues Committee. The Salt Lake City office of Ernst & Young LLP recently promoted Howard Stoker and Mark Peterson. Stoker was promoted from senior manager to partner. A member of Ernst & Young LLP's assurance, Stoker received a Bachelor's in Accounting from Howard Stoker Weber State University and a Master's in Accountancy from the University of Utah. Mark Peterson was promoted from senior manager to executive director. As part of Ernst & Young's assurance practice, Peterson serves clients in a technology, home security, solar energy, manufacturing, utilities, business consulting and life sciences. Peterson has a Bachelor's in Accounting from Weber State University and a Master's in Business Administration from the University of Utah. Greg Kyte, CPA has been named one of the "Top 100 Influential People" in Accounting Today's annual list. The founder of Comedy CPE and Controller at Utah Valley Medical Offices moonlights as a stand-up comedian. Kyte received a Bachelor's in Accounting from Utah Valley University and an MBA from Utah State University. Vernal firm Caldwell, Coombs & Foley CPAs has merged with Child Van Wagoner and Associates. The merger took place on April 1, 2014. Boyce W. Coombs, CPA and Robert L. Foley, CPA and all of the professional
and clerical staff of Caldwell, Cooms & Foley, LLP are continuing with the new firm. The AICPA awarded Utah State University graduate student Lucien Butler the Beta Alpha Psi's Medal of Inspiration award at the Beta Alpha Psi Annual Meeting on August 8 in Atlanta, GA. The award, which comes with a $5,000 cash stipend, is given to a student who has overcome extreme hardship. In Butler's situation, he was prevented from receiving an education and worked at home until he was 14-years-old, when a court order was issued allowing him to receive an education. At 16, Butler moved in with a family who eventually adopted him. After graduating high school, Butler joined the National Guard and went on combat missions for Afghanistan and was later awarded a Purple Heart, an award that commemorates the sacrifices of soldiers wounded in battle. Butler acquired an accounting degree at USU after completing his National Guard service. He also worked with Grant Thornton on a tax internship and performed volunteer work in his Beta Alpha Psi chapter all while excelling in the classroom. Butler is currently pursuing a Master of Accounting at USU and is the incoming Vice President for the USU Delta Omega Chapter of Beta Alpha Psi. Steven R. Smith, CPA has been elected Managing Partner of Wisan, Smith, Racker & Prescott, LLP. He is replacing Bruce R. Wisan, an original founder of the firm and driving force of its growth and development, who retired in August. Smith co-founded WSRP and managed the firm's audit practice prior to becoming Managing Partner. He specializes in auditing, strategic planning, mergers and acquisitions, and systems consulting. Smith, an active member of several professional accounting associations, received a degree in accounting from Utah State University. Tanner LLC has been named to INSIDE Public Accounting's "Best of the Best Accounting Firms" for 2014. IPA's annual recognition honors 50 CPA firms across the country for their overall superior performance on more than 70 IPA criteria. Tanner was selected among 540 firms that participated in the survey. Tanner is recognized in the September issue of INSIDE Public Accounting. the journal entry | October 2014
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President's Message
President's Message
Paul Skeen, CPA Living as a peacock in the land of penguins
W
e are hearing more and more about diversity and inclusion within our industry and in general. The topic evokes all types of emotions and responses. If we peel it back to its most basic definition, diversity is the state or fact of being different, varied and unlike the rest. Inclusion is finding ways to involve and be part of the whole; and if we take it further, it can lead to embracing and even leveraging differences for the benefit of a group. In the book “A Peacock in the Land of Penguins,” the author tells the story of Perry the Peacock. Perry is the only peacock in the Land of Penguins. The story details Perry’s struggles as he tries to fit in with the penguins and mold himself to conform to their rules. As the story unfolds, Perry discovers that his true value, and the reason he was brought to the Land of Penguins, was because he was not a penguin. He was a contributor of a different form and his perspective as a peacock was valuable to the penguins. This story illustrates the challenges that all entities face when trying to bring people of different backgrounds, genders, ethnicities, etc. together. I think it’s safe to say that those in the accounting profession tend to be very like-minded. The story of Perry the Peacock is an important reminder for any individual or organization looking to create a work environment where diversity and inclusion are sought after and valued. Studies show that our workforce is shrinking and as baby-boomers continue to retire, competition for their replacements will be fierce. Employers will need to elevate how they develop and retain their teams in competitive markets. I think this can be done with diversity in mind.
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We can make a more conscious effort to hire, develop, support and retain a team where each member’s unique attributes and backgrounds are not only accepted, but valued and leveraged on behalf of the organization. As I mentioned in my last message, this topic is of great interest to me and I’d like to encourage all of you to look within your own circles (work and/or personal) and take inventory of your surroundings. Are they inclusive? Would you say they’re diverse? If not, what can you do today to change this? Taking notice and making small efforts to embrace diversity will lead to big improvements.
CEO’s message
CEO's Message
Susan Speirs, CPA
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ow time flies! We’re almost through another tax filing season and moving on to forecasts, budgets, tax planning and best practice follow-up. We all understand that the budgeting and tax planning aspects of our companies and practices need to be ongoing for financial and business success. However, implementation or understanding the “why” seems to get in the way. Proper tax planning and budgeting can help our businesses and clients with: • Accomplishing personal and business financial goals • Mapping out steps to be taken to grow a business while keeping tax burdens low • Reducing our tax bills and budgeting our tax bills before we receive the final tax return • Timing purchases and growth in an advantageous manner • Defer income or expense to a later tax period • Consideration of how revenue fluctuations affect overall tax scenarios • Can be continuously updated to reflect market conditions • Worst case scenarios — budgetary and tax-wise There are some great conversations in the above ideas as we meet with clients on year-end wrap-ups and prepare to launch into next year. Our clients and businesses want to have these conversations and there is satisfaction with successful implementation. We often talk about best practice and benchmarking, but many of us struggle with implementation. Like baking a cake, you need ingredients and a recipe to create the taste you desire. As a business, you need to know what results you
desire and how to achieve those results. Below are some key ingredients for best practice as you explore implementation. • Think about execution before you begin • Identify a business process or service to improve • Look for one metric to measure • Find competitors and companies within your industry and outside your industry to compare • Collect information on the successful best practices or the process you would like to improve • Modify the best practice for your particular situation and understand that the marketplace will change and the ability to adapt is necessary • Implement the process and measure the results Borrowing best practices from other businesses and industries can produce dramatic results in a short period of time. As CPAs, if we take the time to collaborate within our own CPA community, we will find that we can share or own best practice recipes which, in turn, will raise our bar of performance and set new standards of excellence. This year will be over before we realize! Our hope for you is that between finalizing budgets and forecasts and last minute changes to year-end tax plans, you will be able to enjoy time with your loved ones!
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President's Message
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Tax Planning Is Never Just Business, It's Personal Improve your Business with clients by getting to know them By Kevin L. Simister, CPA/ABV/CFF
Feature story
O
ne April morning early in my career, I met with a client to go over his tax return, which was due in less than a week. He was cheerful because the previous year had been very good for him. After a few minutes of chit chat, I handed him the return and told him he owed $30,000 in income tax. The look of shock and disbelief on his face is something I will never forget. Stunned, he stammered a few questions. We went through the return carefully and I explained all the technical reasons for the resulting tax. His financial situation was far more fragile than I realized. By the time we finished discussing the return and he was ready to leave, this grown man was in tears. About that same time, I served a young couple who were anxious for their refund. They called several times about the progress on their return. The return was finally drafted by a staff member and on my desk for review one Friday when the wife called again. Not wanting to put her off any further, I quickly glanced at the return, told her they had about a $5,000 refund, and she could pick it up Monday. She was delighted. As you might guess, I reviewed the return the next day and found several errors. The corrected return had a small amount due. I called my client on Monday and delivered the bad news. After a few moments, she began to cry. It turned out that after hearing they had a refund, they had quickly gone to the furniture store and bought $5,000 of furniture on credit. These two very emotional examples prove what we do is never “just business,� it is always very personal. I resolved to never again to allow my action or inaction to put a grown man or a young mother into tears. Tax planning is essential to assure your clients do not get themselves into a financial bind through error or ignorance. We all have enough experience with AMT surprises, recapture traps, and collapsed 1031 exchanges to know that one cannot safely guess at the outcome of a particular event. If any practitioner wants to truly serve his or her client and protect them from unnecessary heartburn, planning must be discussed and implemented. Clients expect this from you.
Identify Your Client It is important to understand exactly who you serve. At our the journal entry | October 2014
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Tax Planning is Never Just Business, It's Personal
Handling IRS Audits Most IRS queries today are handled by mail. Documentation for specific items is requested in a letter and when supplied, the examination is concluded quickly. Occasionally, a telephone conversation may be required. It is extremely important that you fully document every phone call with IRS in a log. Always write down the name and identification number of the IRS representative as well as the date and time. Make careful notes of the call, especially commitments to process something or delay collections. Whenever an IRS query is received, do two things immediately: 1) Obtain a Power of Attorney (form 2848) from your client, and 2) Instruct your client not to discuss anything with IRS nor sign any document without your approval. Educate your client to politely inform the agent that their CPA has all the information and IRS should contact you. In most cases, your client should never meet with the agent. Field audits are less frequent, but often involve much more complicated issues and can take months or even years. IRS field agents are generally knowledgeable and professional. Most disagreements can be resolved with the field agent. However, in some instances, agents may be inexperienced in your client’s business. These situations require more patience and clarity from a professional standpoint. An inexperienced agent may misunderstand or be suspicious of routine business operations. Do not hesitate to contact the agent’s group manager if you feel the audit has become unproductive or contentious. During the course of a field audit, communicate with the agent about her conclusion on each issue raised during the examination. For example, when an agent says, “I have what I need,” ask the agent to clarify what she means. Have her concerns been addressed? Does she believe that the documentation provided will lead to a favorable or unfavorable audit outcome from the client’s perspective? In recent years, IRS has been aggressive assessing preparer penalties. This is a serious threat which you must consider. Be careful of statements you make during the examination. Preparer penalty issues are never raised during the taxpayer audit. You may successfully conclude an audit only to learn later the agent has opened a case against you. If this happens to you, seriously consider seeking legal representation immediately. Allyn J. Judd, CPA contributed to this article 10
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firm, we sometimes say we have 6,000 clients, but no corporations. Of course, that is not really true. We prepare hundreds of corporate and hundreds of partnership returns, but we never forget that underneath all those 1120s and 1065s are thousands of 1040s — people. If one of your tax returns is LKR Manufacturing, Inc., remember LKR Manufacturing, Inc. is not really your client. Your client is the L and the K and the R.
Be the Focal Point My three very best friends started out as clients. Over years of working together, our lives became enmeshed. Because of our professional relationship I cared about them. They responded by caring about me and we became friends. Now, can you get that result because you really like numbers? No. You get that result because you care about people.
Understand Your Client The key to serving any client in the most thorough way is to understand them by knowing as much as possible about them. Sometimes their finances are as tough as walnuts; some are as fragile as eggs. It is the responsibility of the professional they have chosen to trust (you), to determine their true resilience. Prepare a client profile that goes into great depth. Go beyond names and addresses. Who are their children and grandchildren? What are their names and ages? Are there any special medical or education needs for anyone? Any special talents? What is their lifestyle? How do they have fun? Are they spenders or savers? What is their plan for the future?
Feature Story
For a business, go beyond the owners. Identify the key players and their long-term plans. Have a complete list of advisors including attorney, broker, insurance agent, and banker. If your client is missing any of these advisors, have a ready list of trusted professionals you can recommend. Do they have a business plan and have you read it? How about projections? Do they have one and did you review it? Do you attend their board meetings? What is their exit strategy?
Fill the Need Once all the information is gathered, evaluate the specific needs of your client. Can the client articulate short-, midand long-term goals? If not, their CPA is in the best position to educate them and help prepare a plan. Involve other professionals in this process. There is not a single CPA who can act as an accountant, attorney, financial planner, and
banker. Even if these resources are available within your own firm, it may be the client’s best long-term interest to form strategic alliances with other professionals in serving your client. Sharing clients has a way of making everyone perform at the top of their game.
Structure Properly Does the current business structure meet all the discovered needs? If not, more discussion is necessary to explain the pros and cons of other approaches. With the proper information, you can make an appropriate recommendation and the client can make an informed decision. Don’t be surprised if the client is not fully served by their current business structure and financial plan at present. It does not mean their plan was wrong in the beginning. Things change over time. We recommend a thorough review of business structure, personal financial plans, and estate plans the journal entry | October 2014
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Tax Planning is Never Just Business, It's Personal every 5 years. The structure may need to be enhanced, or simplified. There is a natural trajectory for business and estate structuring that resembles a bell curve. It begins simply, reaches its greatest complexity in peak earning years, and then subsides to less complexity as one enters retirement. It is just as important to unwind unnecessary or obsolete entities as it is to create necessary entities.
Have a Plan Whether your client is a business or a family, a strategic plan should be put into place. The plan should focus on the principles and goals most important to your client. Ultimately, those principles and goals will be selected by the client, but through guidance and information you provide, they will be better enabled to make an informed decision. Once the principles and goals are defined, all future decisions will be measured on whether these fundamentals are served.
Make It a Formal Process It seems an accountant’s life is controlled by checklists, and this area is no different. Use a list of all your tax returns as a starting point. Identify the clients who will likely need planning and estimate of how extensive it might be. Your clients will likely fall into three categories: 1) Stable Circumstances: Most of these clients need only a phone call. Ask how this year compares to last and whether anything significant has changed. This call can even be made by an experienced staff member. Remind your client to notify you if something financially significant happens to them. Make this call in the early fall so there is time for adjustments if necessary. 2) Mature businesses with which you have regular contact: These are fairly easy to serve. They have good accounting records and income can be predicted with a high degree of accuracy. In the last quarter, you should have a specific schedule of when you will make the year-end income analysis, project taxes, and compare tax deposits. A phone call to the client will reveal any other information.
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Have your projection and recommendation prepared ahead of the phone call. You can easily adjust if new information makes it necessary. 3) Movers and Shakers: You know the type. They always have some deal going or they have unpredictable cash flows. Their finances are always in flux and they need multiple projections during the year. The final projection is rarely useful if done before December. This type of client is interesting and enjoyable, but tends to ruin Christmas vacation.
Bring on the Magic Once you know the data and have calculated a probable result, it is time to show your worth. Demonstrate your value. Consider possible planning steps. Add a retirement plan, make a contribution. Delay a payment — or accelerate one! Run scenarios to illustrate the tax difference between the starting point and your recommendations. Share these with your client and let them choose their own course. You can always find some way to reduce or defer taxes. Sometimes these savings are hundreds of thousands of dollars. Regular and systematic planning is the fundamental difference between a plain tax preparer and a trusted advisor (who gets referrals from his happy clients).
Forewarning or Apologies — Your Choice Fast forward to September 2014. I just sent one of my clients two very large estimated tax vouchers and informed him that he will still owe an additional $2,700,000 on April 15, 2015. He thanked me. No more tears. n Kevin L. Simister, CPA, ABV is a partner at Hawkins Cloward & Simister where he specializes in tax reduction strategies, start-ups, business management and medical practice management. The BYU graduate has been active with the UACPA including a term as President in 1994-95
It's All About Change When It Comes to Tax Planning Ken Oveson, CPA
E
very year I get the same question all of you get when I deliver a client’s tax return: "What can I do to decrease the amount of tax I am paying?" This even comes from those in the low brackets and those paying low capital gains rates. The surprising thing to me is that they do not want to change anything they are doing currently, they just want their taxes to go down. I have been practicing for 43 years and I am still looking for that magic wand that clients think we have to just make taxes go away. If any of you have that magic wand, you can stop reading now. I have found that to help a client decrease their tax liability, they need to be willing to change something they are doing. Years ago I read an article that though I no longer have, I still remember. It said that almost all tax planning can be condensed into changing three things:
Change the taxpayer
Change the year the income is taxable
Change the type of income
To properly help a client, we need to talk to our clients and find out what they are willing to change in order to reduce their taxes. We also need to know our clients well enough to suggest things they could change or know what they could change. Years ago, I had a conversation with a client about ways to reduce his taxes and as a parting comment I said something like, “It’s too bad you don’t have some land somewhere that you bought cheap and is worth a lot now that we could donate to charity.” He said, “I do. What good will that do?” I then explained the benefit of donating appreciated property to charity and for the next three years he donated several acres of land to his church. I was sitting in the office of one of my partner’s last week when he took a call from a client that he knew well enough to suggest converting her IRAs from traditional to Roth. He knew that she had huge charitable contribution carryovers that would offset much of the income on the conversion and that she would not be able the journal entry | October 2014
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It's All About Change When It Comes to Tax Planning to use those carryovers. Every year, companies publish lists of suggested tax reduction strategies, but how many of those apply to your clients? Or do you know if they could apply to your client?
some taxpayers and again the net investment income tax becomes effective.
Change the Taxpayer
Change the Type of Income
Because the tax brackets are progressive, the more you make the more you pay. So, the plan is to spread the income between taxpayers to use the lower tax brackets as much as possible. This will generally involve a gifting program which includes estate as well as income tax planning.
Again, we usually think of trying to get capital gains treatment for what would otherwise be ordinary income. But we should also consider tax-exempt income, especially for those who are hit with the additional 3.8% net investment income tax. Another consideration is a conversion to a Roth IRA from a traditional. That is especially exciting in a year where there may be a net operating loss or a low income tax rate. As mentioned previously, it may also be a year when there is a charitable contribution carryover that is about to expire that can be used to decrease the tax. And remember that a Roth does not have to be done all at once. A series of Roth conversion can be done over several years.
Big companies are also changing the taxpayer to achieve lower tax liabilities. As reported by BNA in their Weekly Report dated August 4, 2014: The shares of the biggest U.S. phone companies, including AT&T Inc. and Verizon Communications Inc., rose on July 29 amid prospects the Internal Revenue Service will allow them to pursue another tactic: Placing some operations in tax-advantaged vehicles known as real estate investment trusts (REITs). Last week, shares of containerboard makers such as International Paper Co. soared on speculation they will use another tax-free structure known as a master limited partnership. Family limited partnership and LLCs with family members are still a good tax planning technique, however, they are best used in the early stages of an income producing activity when values are low. Ask you client when he starts a new venture if he wants to share this with family members. A small part at the beginning of the activity may yield big savings later on.
Change the Year Income is Taxable Typically we think of pension and profit-sharing plans, IRAs and other types of deferred compensation. But let’s not forget installment sales, like-kind exchanges, and other deferral techniques. With the 3.8% net investment income tax, installment sales have taken on more importance. Also, like-kind exchanges have become more popular as the capital gain rate has increased for
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This article is not intended as an exhaustive list of tax planning ideas. It is intended to hopefully inspire you to get to know your clients better. Find out what their long and short term plans are. What are their plans for exiting their business? Who do they want to take over for them? What about retirement? What do they need and how are they going to get it? What are their family plans? Do they want to help their children and to what extent? hat are they willing or able to change? Also, remember that there is life after taxes. Some planning ideas may not save tax but they may be very good for the family. When you know these things, you can begin to make suggestions to them of the many things you have learned and experienced with other clients of your firm. n Ken Oveson is a partner and former head of the tax department at Mantyla McReynolds. Ken graduated from the University of Utah with a Bachelor's in Accounting in 1973 and became a CPA in 1976. Ken was an adjunct professor of taxation at Westminster College for 16 years. Before joining Mantyla McReynolds, Ken was a sole proprietor for 13 years and partner in another CPA firm for 7 years.
by the
Numbers
Tax Facts
3.8
million words make up the length of the tax code
4,428
These numbers were compiled by the Tax Foundation based on the Internal Revenue Service data for tax year 2010 and the IRS National Taxpayer Advocate's 2011 Report to Congress
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billion hours is how long the IRS estimates it takes to comply to the tax code each year
the number of changes to the tax code over the last ten years
143 27 26
million tax returns were filed with the IRS in 2010, some of which respresent households and married couples
percentage of tax filers who took the charitable donations deducation, which reduced taxable income by $158 billion million filers took the refundable earned income tax credit and they received $56 billion from the IRS despite having paid no income tax the journal entry | October 2014
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Examination Into Foreign Bank Account Reporting and Compliance By Michael R. Criddle, CPA
U
.S. taxpayers are expanding their businesses and revenue sources globally to keep up with competitive markets. And as they do so, ownership of financial accounts in foreign countries by U.S. persons have also expanded significantly. The U.S. government has a direct interest in foreign accounts held by U.S. taxpayers as they want to ensure taxpayers are not avoiding their U.S. tax obligations on the income from these accounts. In 1970, Congress passed The Bank Secrecy Act resulting in a new reporting requirement commonly referred to as “FBAR� or Foreign Bank Account Report, which requires certain U.S. taxpayers to report their foreign accounts annually. The IRS has assessed both criminal and civil penalties for taxpayers who have failed to comply with this law. Currently, the U.S. government is more active in enforcing the criminal and civil penalties and has gone to great lengths to make U.S. taxpayers aware of these annual filing obligations. Due to this increased awareness and enforcement of FBAR
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filings, it’s important to understand the rules and laws around this filing obligation. Below is valuable information to be aware of:
Who Must File The general FBAR filing requirement is defined as any U.S. person having a financial interest in or signature or other authority over any financial accounts in a foreign country that in aggregate exceed $10,000 at any point during the preceding calendar year. A U.S. person includes U.S. citizens, green-card holders and resident aliens. A U.S. person also includes any entity created, organized or formed under the laws of the U.S.
How and When to File This filing was once completed by printing and mailing a Form TD F 90-22.1 to the Treasury Department. However,
FBAR Compliance the IRS has since changed the process. These reports are now being filed electronically through the Treasury Department’s FinCENs BSA E-Filing System using Form 114 (FBAR report). The FBAR filing is a separate filing from the annual tax return, as the IRS has a separate form (Form 8938) that is used to reporting foreign bank account information. The FBAR report is filed on a calendar year basis and is required to be received electronically by June 30 of each year for the prior calendar year. The FBAR filing is an informational reporting obligation and does not result in any additional tax due for the year.
Information Required The FBAR filing requires the following information to be reported for each foreign financial account. 1 – Taxpayer ID Number 2 – Date of birth (if an individual) 3 – Taxpayer’s Name 4 – Taxpayer’s Address
Since 2011, the U.S. government requires U.S. taxpayers to report specified foreign financial assets on their individual US returns on Form 8398 based on meeting certain thresholds in value. The information required for these forms is substantially similar to the information reported on Form 114 to the U.S. Treasury. The threshold for filing this form is: • If not married, assets valued at more than $50,000 on the last day of the tax year or $75,000 at any time during the tax year. • If married and file a joint return, the threshold values increase to more than $100,000 on the last day of the year or $150,000 at any time during the year. • There are additional increases to the filing thresholds if the taxpayer is living outside the U.S. The new form 8938 filing requirement does not replace the taxpayer’s obligation to file FinCEN Form 114. Individuals should file both forms if they meet each relevant filing threshold.
5 – Maximum Account Value (per account) 6 – Name of the Financial Institution 7 – Account number 8 – Address of the Financial Institution 9 – Joint Owner Information (if applicable)
Other Considerations Foreign Account Tax Compliance Act (FATCA) is one of the many ways the U.S. government is increasing enforcement of foreign bank account reporting. FATCA enforces the reporting by U.S. persons of certain foreign financial accounts and other offshore assets by requiring foreign financial institutions and in some cases foreign governments to release information related to the ownership of foreign accounts by such U.S. persons. With this information the IRS will be in a position to pursue and penalize U.S. citizens that are not compliant with their FBAR filing obligations.
Foreign Account Tax Compliance Act (FATCA) is one of the many ways the U.S. Government is increasing enforcement of foreign bank account reporting. Fatca enforces the reporting by U.S. persons of certain foreign financial accounts and other offshore assets by requiring foreign financial institutions and in some cases foreign governments to release information related to the ownership of foreign accounts by such U.S. persons.
Penalties For Not Filing As mentioned earlier, the IRS is actively enforcing penalties for non-compliance of FBAR and Form 8938 filings. Compliance is very important as penalties can be substantial and willful violations of FBAR filings can be subject to criminal prosecution. the journal entry | October 2014
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Examination Into Foreign Bank Account Reporting and Compliance Disclosure Program (OVDP) or Streamlined Voluntary • FBAR Penalties Disclosure Program (SVDP) in order to disclose any o A person who is required to file an FBAR offshore delinquent reporting issues to the IRS. and non-willfully fails to properly file may be subject to a civil penalty not to exceed $10,000 per violation (per account per The IRS has created a mechanism for U.S. year). Taxpayers with undisclosed foreign o A person who willfully fails to report an account or account identifying information may be subject to: Civil monetary penalty equal to the greater of $100,000 or 50 percent of the balance in the account at the time of the violation. o If there is a reasonable cause for the failure and the balance in the account is properly reported, no penalty will be imposed. o Willful violations may also be subject to criminal penalties and/or prosecution. -
Form 8938 Penalties o Failure to file – Up to a $10,000 penalty. o Continued failure to file – If a notice is issued and the taxpayer fails to comply with the request for filing, the penalty is $10,000 for each 30-day period. The maximum penalty is $50,000.
Non-Compliance Taxpayers The IRS has created a mechanism for U.S. taxpayers with undisclosed foreign accounts to become compliant. Taxpayers with such undisclosed foreign accounts or entities should consider making a voluntary disclosure to enable them to become compliant, avoid substantial civil penalties, and generally eliminate the risk of criminal prosecution. A voluntary disclosure provides the opportunity to calculate, with a reasonable degree of certainty, the total cost of resolving all offshore tax issues with the IRS. If the taxpayer meets certain qualifications, the taxpayers can enter either the Offshore Voluntary 18
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accounts to become compliant. taxpayers with such undisclosed foreign accounts or entities should consider making a voluntary disclosure to enable them to become compliant, avoid substantial civial penalties, and generally eliminate the risk of criminal prosecution. A voluntary disclosure provides the opportunity to calculate, with a reasonable degree of certainty, the total cost of resolving all offshore tax issues with the IRS.
U.S. taxpayers need to be aware of required foreign financial account reporting. Failure to comply with the reporting requirements for foreign financial accounts carries a significant risk. Tax professionals should seek to assist their clients in complying with these reporting requirements, and if it is determined that a U.S. person has delinquent foreign account reporting, consideration should be given in participating in an offshore voluntary disclosure program offered by the IRS. Reporting of foreign accounts can be difficult, but failure to do so carries an even greater risk given the efforts by the IRS and US government to track down and bring into compliance the owners of undisclosed foreign financial accounts. n Mike Criddle, CPA is a Senior Tax Manager at Eide Bailly LLP. With more than 13 years of experience, Criddle specializes in international taxation as it relates to individauls as well as expatriate and inpatriate taxation. The University of Utah graduate previously spend six years at a "Big 4" firm. He can be reached at mcriddle@ eidebailly.com.
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Join a UACPA Committee or Task Force Volunteer online at uacpa.org — keyword search "committee" ✓ I would like to volunteer to serve on a UACPA committe or task force ❑ Committee/Task Force descriptions can be found online at uacpa.org, under Member Connection, Committee & Task Force where you can also volunteer. Identify the committee or task forces below. Check all that you would like to serve on (maximum 3). We will make every effort to assign you to the committee(s) of your choice. Send completed form to: UACPA, 1240 E. 2100 South, Suite 500, Salt Lake City, UT 84106; email: volunteer@uacpa.org. ❑ Accounting Issues/Conference Task Force ❑ Business Valuation Conference Task Force ❑ CPAs in Business & Management (BAM) Conference Task Force ❑ CPE Approval ❑ Editorial Committee ❑ Event Planning Committee ❑ Federal Key Person
❑ Financial Literacy Task Force ❑ Financial Ready Utah ❑ Golf Tournament Task Force ❑ Non-Profit ❑ ProNet Council Sub-committees ❑ K-12 Committee ❑ K-12 Volunteers ❑ ProNet Campus Ambassadors (Collegiate)
❑ ProNet Communications ❑ ProNet CPA Inauguration ❑ ProNet Leadership Development ❑ ProNet New Professionals
❑ State & Local Government Task Force ❑ Tax Issues ❑ Tax Symposium ❑ Winter Conference Task Force
Name: ___________________________________________________________ UACPA #: __________________________________ Firm/Company: __________________________________________________ Phone: _____________________________________ Address: _____________________________________________________________________________________________________ City/State/Zip: ___________________________________________________ Email: _______________________________________ 20
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Applying for Tax-Exempt Status — Streamlined and Simplified By Joanna L. Johnston, CPA, MBA
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ithin the last year, the IRS has taken several steps to assist organizations that want to be recognized as tax-exempt. Previously, filling out the 12-page initial Form 1023 and the additional eight supplemental schedules manually was the only way to apply for tax-exempt status. It is a daunting task for any group, but especially for small organizations. As a result of the Advisory Committee of Tax Exempt/ Government Entities 2012 report, the IRS concluded that the Form 1023 should be redesigned to be more effective, consistent, simple and educational. This recommendation included an interactive Form 1023. In September of 2013, the i1023 (http://www.stayexempt.irs.gov/StartingOut/ InteractiveForm1023Application.aspx), which has stepby-step instructions and special tools to assist the user, was launched. Key features of the i1023 interactive form include prerequisite questions, auto-calculating fields, supplemental pages for requested information, help buttons and links to relevant information. The 1023
checklist is an invaluable tool to complete and use to gather necessary information prior to completing the Form 1023, regardless of whether it is completed online or on paper. The checklist includes the following items: 1) Employer Identification Number “EIN”: If the organization does not have an EIN, there are links and instructions on how to obtain one. 2) Organizing Documents: The application requires copies of either Articles of Incorporation, Trust Agreements, Articles of Association, Constitution, or Bylaws including amendments. Each document needs to be dated and signed by at least two officers. 3) Exempt Purpose: In order to be recognized as exempt, the organization needs an exempt purpose. Sample wording is available to assist the
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Applying for Tax-Exempt Status — Streamlined and Simplified preparer. 4) Power of Attorney: Useful tool to have on file with the IRS to in case specific confidential questions arise.
After reviewing the checklist of required items, the preparer can use the i1023 online application to fill out and print the form. The checklist details the order the documents need to be attached for the submission to be considered complete. If the application is incomplete, it may be returned resulting in significant delay.
3) Do you have assets in excess of $250,000? 4) Were you formed under the laws of a foreign country? 5) Is your mailing address in a foreign country? 6) Are you a successor to, or controlled by, and entity suspended under §501(p)(suspension of taxexempt status of terrorist organizations)? 7) Are you a limited liability company (LLC)? 8) Are you a successor to a for-profit entity? 9) Were you previously revoked or are you a successor to a previously revoked organization?
Only groups that are applying for 501(c)(3) status and are not churches, schools, universities, hospitals, or requesting classification as a support organization can qualify to use After reviewing the checklist of required items, the preparer the Form 1023-EZ. Additional restrictions are listed in the can use the i1023 online application to fill out and print the instructions for Form-1023-EZ. form. The checklist details the order the documents need to be attached for the submission to be considered complete. If the application is incomplete, it may be returned resulting in significant delay. The online tools are designed to reduce Only groups that are applying for 501 (c) errors and help in filling out the required schedules. In addition to the i1023, a new Form 1023-EZ was released in July 2014 with a minor revision issued in August 2014. The 1023-EZ was designed to streamline the application process in two ways. First, the form is only three pages long, so organizations that qualify to use the form will require less review time. Second, the IRS anticipates that the processing backlog will decrease due to fewer organizations submitting the full Form 1023. The filing fee for the 1023-EZ is $400 and is required to be paid online through www.pay.gov. In order to qualify to use the Form 1023-EZ, the IRS has designed an Eligibility Worksheet. The preparer must answer “no” to all the questions below to use the 1023-EZ. 1) Do you project that your annual gross receipts will exceed $50,000 in any of the next 3 years? 2) Have your gross receipts exceeded $50,000 in any of the past 3 years?
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(3) status and are not churches, schools, universities, hospitals, or requesting classification as a support organization can qualify to use the Form 1023-EZ. Additional restrictions are listed in the instructions for Form-1023-EZ.
The form is organized into three parts. Part I is the Identification of the Applicant. This section includes the name, address, EIN, tax year, contact information, and a list of officers-including names, titles, and mailing addresses. A revision of the instructions in August 2014 changed the requirement for the officers’ addresses from their personal mailing addresses to the address of the organization. Part II of the application includes the entity type, organizing documents, formation date, state of organization, and exempt purpose. The exempt purpose must be within the limits of §501(c)(3) including charitable, religious, educational, scientific, literary, testing for public safety, fostering amateur sports competitions,
nonprofit and preventing cruelty to animals. Part III details the organization’s specific activities, including a detailed exempt purpose statement. Explicit restrictions on activities prohibited under §501(c)(3) must be attested to in this section including support of political campaigns and lobbying, allowing earnings to inure to the benefit of private shareholders or individuals, or engaging in illegal activities. Part IV includes questions of whether the organization will be classified as a public charity or a private foundation. The primary difference between a public charity and private foundation is whether the group will primarily receive support through donations, fees, and grants to directly support its mission or whether one or several primary donors provide the funding that is then distributed to other organizations to fulfil its mission. After completion of the forms and submission of the required documents and user fee, the IRS will issue an Acknowledgement Letter within fourteen days after the application is received. After initial review, if more information is necessary, a specialist will be assigned. Applications and cases are reviewed in the order they are received unless expedited handling is requested. The IRS has also introduced a feature called “Where’s My Application?” which contains information about current timelines. Don’t forget that while you are waiting for the official letter and confirmation of tax-exempt status, make sure to complete the correct annual non-profit compliance form. Filing requirements for the 990-N (e-Postcard), Form 990-EZ or Form 990 are available on the IRS website. By implementing these new forms and processes, the IRS anticipates that more organizations will be able to file for tax-exempt status successfully with fewer errors and attain their status within a more reasonable timeline. n
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Joanna L. Johnston is a Senior Tax Accountant at Mantyla McReynolds, LLC. She is a Board Member and Treasurer for Repertory Dance Theater, and Utah Wind Symphony in Salt Lake City. She has been a member of the NonProfit Committee and the UACPA since 2007. She can be reached at jjohnston@mmacpa.com
www.facebook.com/Utahassociationofcpas
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OPP R TUNITY It’s what the CGMA designation stands for ®
Officially, it’s Chartered Global Management Accountant . Established by AICPA and CIMA, two of the world’s most prestigious accounting bodies, the CGMA designation represents accomplished professionals who drive and deliver business success, worldwide. ®
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Find out more at cgma.org
Accounting Careers and the Boiled Frog By Dan Griffiths, CPA, CGMA
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ost of us are familiar with the story of the frog that was dropped into a pot of boiling water and immediately jumped out to save itself. The same frog later found himself in a pot of water at room temperature. The temperature was gradually increased and the poor frog, not noticing the danger, remained in the pot to suffer an untimely demise. Although not scientifically accurate, the anecdote serves as a metaphor for one’s inability to notice gradual change. In our careers, we can all feel like we are that frog at times. Just like temperatures, careers can change for the worse, often gradually and without notice. However, if we pay close attention to the red flags in our careers, we can know when to jump long before the water starts to boil. I would like to share a few thoughts from my own experiences that may help you — whether on a partner or CFO track — detect the warning signs along your career path and keep yourself out of hot water.
Determine whether your position continues to meet your goals and expectations. We accept job offers for a number of reasons, such as the opportunity to gain skills or a better salary. However, time can change the organization and your position could plateau and even erode, causing you to miss out on vital career experience and advancement opportunities. If you’re not continually learning from your job, growing your skills and experience, and building a strong professional network, then perhaps it’s time to take a temperature check. Commit to an organization that both understands and is true to its mission. When we first begin our careers, we are less concerned with how well the organization we work for understands their strategy, builds well-defined target markets and lives up to their value proposition. Yet, as we are promoted through the ranks, those issues have a stronger influence on our careers. Before investing your talent and time in an organization, determine whether it clearly articulates, and is committed to, its
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Accounting Careers and the Boiled Frog mission — and that the mission offers the opportunities you need to reach your career potential.
Get Involved! The Utah CPA PAC works to enhance the image of the profession and increase the incluence of the Association with decision makers in Utah.
With support from members of the UACPA, our goals are to: 1) Improve the quality of our community through good government 2) Assure that the UACPA is invited to the table on taxation, business policy and other relevant community issues 3) Have access to the decision makers in State
Look to the top when making long-term leadership plans. Many new employees have high aspirations of one day becoming a CFO or a partner at a public accounting firm. First, ask yourself whether you would choose to work or socialize with the current and soon-to-be senior executives. A second, and equally important, question is whether you trust the leadership enough to sign partnership or other executive agreements that can commit you financially and professionally to them and the organization for many years to come. If you answered “yes” to these two questions, then congratulations, you have chosen an organization where you will likely be able to build your career. Otherwise, you may need to check the temperature at other organizations. It can be difficult to pass up a career opportunity when you’re unemployed and desperate for your next job. Sometimes, circumstances dictate that we stay in a less than ideal job longer than we would like. However, if you can recognize the telltale signs that the organization may not be a long-term fit for you and create a vision for your own professional path, you will be prepared to act when the right opportunity comes along, and leap from the pot before the water heats up. What are some of the warning signs you watch for when deciding whether to make the jump? n
Government when needed
Learn more by searching "PAC" at uacpa.org
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Dan Griffiths, CPA, CGMA is the Director of Strategic Planning at Tanner, LLC. Dan is a graduate of the 2010 AICPA Leadership Academy and in 2011-2012 served as the chair of the Young CPA Network Committee for the AICPA. Dan has been active with the UACPA and in 2011 was recognized as the Outstanding CPA in Business and Management. He was serves as Utah's elected member of the AICPA Governing Council.
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Closing the Gaap — Women in Accounting
Stacey Porter, CPA By Caroline Klein, CPA
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tacey Porter, CPA, is a tax manager at EY. She is currently serving on the Women’s CPA Summit, a joint task force with the UACPA and AWSCPA. Learn more about this travel and fitness guru that isn’t your typical accountant. Tell us about yourself and your background. I have worked in the accounting profession since I graduated from Weber State University with my Masters in 2002. Prior to EY I have worked at the Utah State Tax Commission and the IRS as an income tax auditor. I have been with EY for the past 9 years and have enjoyed the experiences and opportunities I have had. I love to travel and have been able to go to some fun places for work, as well as personally, which I love! What led you to a career as a CPA? I remember applying for college my senior year of high school and trying to decide what I wanted to be when I grew up. I was going
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to either be a nurse or an accountant. I applied for the nursing program at Weber State and was accepted. I was shocked because I was told freshmen don’t get accepted to the program. This made things complicated as I would have had to take several classes the summer after graduation in order to start the program on time. This wouldn’t work for me as I needed to work full-time that summer to save for college. As a result, I didn’t enter the nursing program and instead chose accounting! Lucky for me, I never looked back. What do you enjoy outside of work? I love to travel and be able to experience other parts of the country and world. I have enjoyed visiting India as I learned more about a culture that is steeped in tradition. I have also visited Bali where I was able to walk through the Monkey Forest, snorkel in Lembongan and enjoy the amazing Indonesian food. Aside from traveling I enjoy home improvement projects and following home improvement blogs; it is my guilty pleasure. I dabble in wood working,
Closing the GAAP — Women in Accounting furniture repair and any other DIY project that I can find time for. What are some highlights in your life? This year I have started to run half marathons. I have never been a runner, and in fact despised running the mile in Jr. High and High School. However, this year, with a lot of encouragement I ran my first half marathon in January and have since done two more and by the end of the year will have completed six half marathons. Although I still do not call myself a runner I have learned to enjoy the long runs and the sense of accomplishment.
Becoming
Super Women The Annual Summit for Professional Women in Utah
Do you have a mentor? How have mentors helped you in your career? I am fortunate to have several mentors both professionally and personally. Since I began at EY I have had the opportunity to work with some amazing people, both my peers and my superiors. Early in my career I began working on a client that had a team of strong performers and individuals that I looked up to. Throughout the years some of these individuals have become my mentors. They have helped me focus on what is important to progress in my career, how to find balance in life and work and how to make myself a better manager for my teams. What advice do you live by? Choose Joy! No matter the circumstances or what life decides to throw your way it is up to you how you react. What advice would you have for other women professionals? Don’t limit yourself based on what you think might happen in life. Work hard, work smart and reach for that promotion or next step. Through hard work and dedication anything is possible! n Caroline Klein, CPA, a tax manager with Anderson Bradshaw, PLLC, specializes in tax planning and tax preparation, payroll services, and QuickBooks consulting. She is on the planning committee for the Women’s Summit and mentors accounting students at the University of Utah.
This exclusive conference from the Utah chapter of the AWSCPA and the UACPA is designed to bridge the gender gap in the accounting profession while educating and empowering women. Speakers will discuss support for leaning in, personal branding to advance your career, being a woman of influence, body language and communication, mentoring programs, education and more. Thursday, Oct. 2 Time: 8 a.m. - 4 p.m. Location: Pierpont Place, 163 W. Pierpont Ave. Cost: $75 for members before Sept. 19; $100 for members after Sept. 19 $115 for nonmembers CPE: Eight (8) hours Register: uacpa.org or call 801.466.8022
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Social Security — A Female Issue by Sarah Nitta
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ou’ve heard the statistics before, 10,000 baby boomers are retiring every day for the next 15 years. More and more of your clients will be turning to your expertise as they begin to imagine their lives shifting into the next phase. Strategies concerning social security benefits will be essential as you discuss options with your clients, especially your female clients.
When working with a married couple, where both spouses are eligible for full benefits, multiple strategies are at play in maximizing the amount received over the course of the couple’s life and the wife’s lifetime. Using tactics such as filing a restricted application, earning delayed credits, and suspending payments can reveal thousands of dollars of benefits.
In 2012, women represented 56% of the Social Security beneficiaries age 62 and older and approximately 66.7% of beneficiaries age 85 and older. For unmarried women, including widows, age 65 and older, Social Security comprises 50.4% of their total income. In contrast, Social Security benefits comprise 30.2% of elderly couples’ income. According to www.socialsecurity.gov/ women, 49.6% of all elderly unmarried females receiving Social Security benefits relied on Social Security for 90% or more of their income.
Let’s take a look at Preston and Mary. As they approach the age of 62, this couple needs to make a filing decision about Social Security. They are inclined to file at their full retirement age of 66, however, they would like to know more about other possible options. They know what their benefits will be at their full retirement age, and based upon their family history, they have a fairly good estimate of their chances of living long lives. If they take the simple route and file for benefits at age 62, they will begin to receive checks. The amount will be 25% less than the benefit they would have received at their full retirement age. This will have a significant effect on their cumulative lifetime benefits. Consider another approach. If Preston files for Social Security benefits at full retirement age and immediately suspends payments, he will earn delayed retirement credits of 8% each year. By waiting until age 70 to begin receiving payments, Preston’s benefit increases by 32%. At full retirement age,
In the state of Utah, a woman will live on average, six years longer than her spouse. With medical and living costs, these years can be the most expensive time of her life. By taking into account her own and her spouse’s social security benefits, as well as when and how to file, she can be assured that she isn’t leaving any money in the government’s purse. 30
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Female Clients Mary files a restricted application for spousal benefits and immediately begins to receive monthly payments of 50% of Preston’s benefit. She earns delayed retirement credits on her own record and at age 70, stops receiving spousal benefits and files to receive her own benefits. Like Preston, her benefit increases by 32% due to her delayed retirement credits. If both spouses live to age 85, the difference in cumulative lifetime benefits is approximately 25%. If Mary lives six years beyond Preston’s death to age 91, the percentage of cumulative lifetime benefits is increased by 32%.
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You may have female clients who haven’t earned enough social security credits to receive their own benefit. Look at your client’s employment history. Showing her what it would require to earn her full credit and how the benefits can affect her future income, allows her to make an informed decision. Strategies for clients who are divorced and eligible for benefits drawn on a former spouse’s record can deliver an increased amount. Assure your client that her ex-husband will not be notified or involved in the options available to her. The Social Security Website (www.ssa.gov) has a section focused on women. You can find a 24-page document titled, “What Every Woman Should Know.” You may consider providing copies of this document to your female clients. Paying attention to these issues and providing information to the women you work with will be a valuable service in your practice. This female focused service will ensure she continues to work with you well into her twilight years. n Sarah Nitta is the founder of the Women's Financial Center. She specializes in educating women on financial subjects with a unique approach to addressing the emotional and personal issues surrounding money. Sarah also assists families with children with special needs and individuals with disabilities.
http://twitter.com/UACPA The 38th Annual @PartnersUSU Accounting Conference is coming Oct. 23 & UACPA members get a discount (see CPE Connect) http://partners.usu. edu/htm/conferences/articleID=23513 … Preparation For Effective Leadership Begins with 5 Simple Rules via @Forbes @Forbes http://www. forbes.com/sites/glennllopis/ … The @AICPA invites you to Comment on Maintaining the Relevance of the Uniform CPA Examination. http://www.aicpa.org/BecomeACPA/… Accounting Tops List of Most Profitable Industries http://www.accountingtoday.com/news/managingpractice/accounting-tops-list-of-most-profitableindustries-71581-1.html …
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Save for College, Save on Taxes with Utah Educational Savings Plan Provided by UESP
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aving for college is an important component of financial planning for many families. You can strengthen client relationships by helping those who want to save for college realize the federal and state tax advantages of the Utah Educational Savings Plan (UESP), Utah’s official nonprofit 529 college savings program. Utah and non-Utah resident account owners are eligible for tax benefits, including a Utah state income tax credit for Utah taxpayers.
About UESP The Utah State Legislature established UESP in 1996 as a tax-advantaged investment vehicle designed to serve as a qualified tuition program under Section 529 of the Internal Revenue Code of 1986, as amended, and to encourage individuals to save for future higher education costs. One of four 529 plans rated Gold by Morningstar* for its flexibility and low fees, UESP holds $7.4 billion in assets under management. Account owners may choose from 14 investment options that include a variety of funds offered
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by Vanguard®, Dimensional Fund Advisors®, the Utah Public Treasurers’ Investment Fund, and FDIC-insured accounts. UESP requires no minimum contribution to open an account; the maximum aggregate account balance is $397,000. *Morningstar Analyst Ratings for 529 College-Savings Plans, 2013.
Tax Benefits Tax-Deferred Growth Earnings on UESP accounts grow tax deferred, and withdrawals are exempt from federal and Utah state income taxes if the money is used for qualified higher education expenses (tuition and fees; required books, supplies, and equipment; and certain room and board costs). The funds may be used at any college, university, or technical school in the United States or abroad that participates in federal financial aid programs for students.
UESP
Utah State Income Tax Credit/Deduction Utah individual taxpayers/residents and Utah-based trusts may claim a 5% Utah state income tax credit on contributions to their accounts up to $1,860, or $93, per qualified beneficiary. For married taxpayers filing jointly, the 5 percent credit may be claimed for contributions up to $3,720, or $186, per qualified beneficiary. Even Utahbased corporations that own UESP accounts may benefit from a $1,860 tax deduction per qualified beneficiary. To qualify for the tax benefits, an account owner must designate the account beneficiary before the beneficiary’s 19th birthday. As long as this requirement is met, the account owner may claim tax benefits for annual contributions for the life of the account.
2014 YEAR-END CONTRIBUTION DEADLINES ONLINE CONTRIBUTIONS MUST BE COMPLETED AT UESP.ORG BEFORE 11:59 P.M. (MT), WEDNESDAY, DECEMBER 31, 2014. MAILED AND FAXED CONTRIBUTIONS MUST BE RECEIVED AT THE UESP OFFICE BEFORE 5:00 P.M. (MT), WEDNESDAY, DECEMBER 31, 2014.
Gift and Estate Planning Advantages A unique feature of 529 plans allows an individual to make a gift that is in excess of the annual gift tax exclusion. An individual can contribute up to $70,000 ($140,000 if filing jointly) to a UESP account in one year without incurring any gift tax if the individual makes an election on IRS Form 709 to treat the entire gift as a series of equal annual gifts spread over five years.
Tools for You Depending on the level of authorization granted by a UESP account owner through limited power of attorney, you may manage a UESP account on the account owner’s behalf. UESP also offers special features to help manage your clients’ investments, including data integration solutions. Visit uesp.org/For-Financial-Advisers/DataIntegration-Solutions.aspx, or call 888.529.1886 for details about available data services.
Learn More For complete program details, including how to open and manage an account, download the UESP Program Description at uesp.org. To speak to a UESP representative, call 888.529.1886 or email adviserinfo@ uesp.org. n
Important Legal Notice The Utah Educational Savings Plan (UESP) is a Section 529 plan administered and managed by the Utah State Board of Regents and the Utah Higher Education Assistance Authority (UHEAA). Read the Program Description for more information and consider all investment objectives, risks, charges, and expenses before investing. Call 800.418.2551 for a copy of the Program Description or visit uesp.org. Investments are not guaranteed by UESP, the Utah State Board of Regents, UHEAA, or any other state or federal agency. However, Federal Deposit Insurance Corporation (FDIC) insurance is provided for the FDIC-insured accounts. Please read the Program Description to learn about the FDIC-insured accounts. Your investment could lose value. Non-Utah taxpayers and residents: You should determine whether the state in which you or your beneficiary pays taxes or lives offers a 529 plan that provides state tax or other benefits not otherwise available to you by investing in UESP. You should consider such state tax treatment and benefits, if any, before investing in UESP. the journal entry | October 2014
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2014 Awards Honoring those who have demonstrated exceptional service to the UACPA, the CPA profession and the community
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he Member Summit & Awards Banquet was held Friday, Sept. 26 at the Marriott Salt Lake City Center Guests received an update on the profession from AICPA Chairman Bill E. Balhoff, CPA and Carrie Mayne, Director and Chief Economist for the Department of Workforce Services provided an economic update. Sen. John Valentine gave a legislative update. The meeting was followed by the Awards Banquet where distinguished members of the profession were honored for their service to the UACPA and the community. The 2014 award recipients are as follows:
Outstanding CPA in Public Practice Jay C. Niederhauser, CPA
Jay C. Niderhauser began his career with Ernst & Ernst. He has worked for firms in Houston, Texas and in 1990, went to work as the Director of the Tax Department of First American Bank in Bryan, Texas. He served as President of several real estate subsidiaries and, eventually, as Treasurer of the bank. He returned to Public Accounting in 1997 and worked for JCCS in Great Falls, Montana. In 1999 he moved to Park City and founded Niederhauser & Davis, which he continues to manage. The firm performs audit, accounting, tax and consulting services for clients. He has served in many roles for the UACPA's committees including President of the Mountain Chapter for five years. 34
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Distinguished Service Ray O. Westergard
Ray Westergard started in public accounting with Fox & Company in 1967 which became Grant Thornton LLP in 1985. Ray is now retired after 40 years of public practice and service. He has served the UACPA through various committees and served as president for 2005-06. Ray was a member of the original UACPA Financial Literacy Committee that started teaching financial literacy classes in 2006. Ray also has a long history of service to the Utah State Bar. He was appointed by the Utah Supreme Court as one of the first two non-lawyers to serve as a member of the Utah State Board of Bar Commissioners. He has been reappointed to serve for the last 15 years. The Bar has twice awarded Ray with the Distinguished Non-Lawyer for Service to the Profession Award. In addition, the Bar chose the Budget & Finance Committee to receive the Outstanding Committee of the Year award in 2013 and honored Ray with the award. Ray served as the president of the Salt Lake Chapter of the BYU Cougar Club in 1984-85, the year when BYU won the National Championship in football.
Outstanding CPA in Business & Management Jon E. Daich, CPA
Jon Daich serves as the Director of Finance for the SMG-managed properties in the Salt Lake City area, including the Salt Palace Convention Center, South Towne Expo Center and the Salt Lake County Equestrian Park. He has been with SMG for nearly 25 years developing and is one of seven directors for the local SMG properties where he provides critical financial vision, direction and oversight for short and long-term strategic roles. Jon completed his undergraduate work at Weber State University with a Bachelor of Science degree in accounting. He went on to obtain his MBA from Utah State University. In addition to serving on the BAM conference, Jon volunteers for the Distributive Education Clubs of America and is currently Board Chairman of the Repertory Dance Theatre of Salt Lake City. Jon and his wife enjoy ballroom dancing and riding their motorcycles around the country.
2014 UACPA Awards
Outstanding Educator Stanley E. Jenne, CPA
Stanley Earl Jenne is Chair of the Department of Accounting and former Dean of the Woodbury School of Business at Utah Valley University. Stanley earned his Ph.D. at the University of Illinois, M.S at Colorado State University, and B.S. at Weber State University. Professional credentials include a CPA certificate and the CFE (Certified Fraud Examiner) designation. Stan previously held faculty and department chair positions at The University of Montana, Illinois State University, and Weber State University. Before moving back to Utah, Stan was an organizer of a Montana community bank and still serves as a member of its board of directors and chairs the audit and compliance committee. Work experience includes positions as an independent auditor, internal auditor, and private consultant. Hobbies include snow skiing, fly fishing, and playing with his eight grandchildren. Recently he began running to stay in shape and in the last three years has completed two half marathons and one Wasatch Back Ragnar relay race.
Outstanding Leadership Council Member Gavin E. Hutchinson, CPA
Gavin Hutchinson hails from New England, where he worked as a paramedic/fire-fighter, funeral director, and volunteer clown in children’s hospitals and parades. In 2003, Gavin heard the call of the west and moved to Ogden with his wife, Anne, where he completed an MBA at Weber State University. He became a CPA and joined Schmitt Griffith Smith as a public auditor. In 2007, he was hired by Academica West, a charter school management company, where he works with school directors to implement best practices in finance and accounting. Gavin currently serves as a member of the Board of Directors of Enable Industries, a non-profit organization dedicated to helping disabled adults find employment, the Utah State Office of Education’s task force on Student Funding and as the board chair of the Utah State Charter School Revolving Loan Committee. Since becoming a Rocky Mountain transplant, Gavin enjoys downhill skiing, road biking, and mountain-biking; often with his wife and three young sons.
Rising Star Award Shayne Miller
Shayne Miller is the Director of Finance and Accounting for Out of the Woods Custom Cabinetry, Inc. in Layton. Previously, he worked at US Bank as a Client Manager in the retail business banking group. Shayne was also a controller for a real estate asset management and investment firm and as a financial analyst for a large manufacturing firm. He received his Bachelor’s in Economics from the University of Utah and holds an MBA and a Masters in Accountancy from Westminster College. Shayne serves on the Board of Directors for American Conservation Experience, a non-profit conservation services firm headquartered in Flagstaff, AZ.
Women to Watch: Emerging Leader Caroline Klein, CPA
Caroline Klein, CPA, graduated from the University of Utah in 2007 with her Bachelor’s of Accounting, and in May 2009 with her Masters of Accounting. She is a tax manager with Anderson Bradshaw, PLLC and specializes in tax planning and tax preparation services, payroll services, and QuickBooks consulting. Caroline is serving as a member of the planning committee of the UACPA Women’s Summit and is a mentor for accounting students at the University of Utah.
Women to Watch: Experienced Leader Nikki Thon, CPA
Nikki Thon, CPA is a Tax Partner for Eide Bailly. She has more than 25 years of public accounting experience and specializes in tax planning, from formation to liquidation, with flowthrough entity taxation, including partnerships, LLCs and S-Corporations. Nikki holds a wide range of industry experience with a special interest in financial institutions, manufacturing, construction and small business owners. She oversees the tax departments for the three Utah office locations and was recently recognized as a “30 Women to Watch” the journal entry | October 2014
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2014 UACPA Awards
Lifetime Member Award Keith Prescott, CPA David E. Bunker Ralph B. Larsen, CPA Jeffrey L. Shaw, CPA
Ralph B. Larsen graduated with a major in Accounting and minor in Economics from the University of Utah in 1965. He joined Coopers-Lybrand as a tax accountant and eventually left to join D. Spencer Nilson & Associates, Keith Prescott, CPA is a former CPAs where he was Vice President in partner at Wisan, Smith, Racker charge of auditing. After a short time & Prescott, LLP. He was partner as an accountant in industry, Ralph became a sole practitioin charge of the tax and valuation ner with his current firm, Ralph B. Larsen, CPA. Throughdepartments. Up until his retirement out his career, Ralph also served as part of the Coast Guard in April of 2013, the BYU graduate Reserve where he retired in 1989 as a Commander. Ralph held the designations of Accredited has taught at the University of Utah, LDS Business College in Business Valuation (ABV) and and has presented for the UACPA. He has volunteered and Certified in Financial Forensics (CFF) from the AICPA. served on committees for the Boy Scouts of America, the He was also a Certified Valuation Analyst (CVA) through Utah Committee and Employer Support of the Guard and the National ASsociation of Certified Valuation Analysts Reserve and for the Utah Chapter of Reserve Officers (NACVA). From 1990 to 1995, Keith chaired the Corporate Association of the USA. Tax Force of the Governor's Tax Review Commission which successfully rewrote the State corporate tax laws. He served Jeffery L. Shaw, CPA received his Bachas Chairman of the Tax Review Commission (TRC), which elor's in Accounting from University of advised the Governor of Utah and the Utah legislature on Utah. He has worked for large public State tax policy issues. Prescott was selected by Utah Govaccounting firms and spent 10 years in ernor Olene Walker to be one of the advisors charge dwith the automobile industry. 1988, Jeffery restructuring Utah tax laws. Keith also served on Governor started his own accounting firm and Jon Huntsman's transition team as a co-chair of the policy has continued to spend time working priority group. Prescott was named as one of the country's and consulting with auto dealerships. top tax practitioners by Money Magazine in 1997. David E. Bunker, CPA began his accounting career in 1968 as a bookkeeper for a local engineering company and a year later joined Bunker and Bunker, CPAs, a firm formed by his father and brother. Graduating in accounting from the University of Utah in 1970, David went on to get his CPA license in 1972. David established his own firm in 1981 and merged with Geersten & Associates, CPAs in 1998. Bunker has been active with the Financial Literacy Committee since 2008 and also served on the Sole Practitioners forum and the Sole-to-Sole network committees.
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Outstanding Accounting Student Awards Jonathan C. Medrano - Utah State University Janelle Young - Southern Utah University Jonathan Rad Clark - Utah Valley University Yan-Feng Zhou - Westminster Mariela Georgieva Zhivkova Jordan C. Theurer - Brigham Young University Jeremy Stout - Dixie State College Rebecca Beck - Weber State University
MEet a uacpa member
Five Minutes with Shayne Miller Shayne Miller is originally from Salt Lake City, but grew up in Chandler, Arizona. He moved back because he "prefers to enjoy four seasons in the year." With a Bachelors in Economics from the University of Utah and an MBA and Masters in Accountancy from Westminster, the UACPA's Leadership Academy Chair works as the director of finance and accounting at Out of the Woods Custom Cabinetry, Inc. in Layton. When he is not working he enjoys outdoor activities with his wife and three children. Shayne is still in the process of becoming a CPA. Tell us about your career history and becoming a CPA. I have always gravitated to finance/accounting regardless of the job title or position, I always looked to work with those parts of the companies I worked with. Finally, I came to a point where I had the ability to change the direction of my career. When I realized I wanted to become a CPA, I found out what I needed to do to achieve that goal. A week later I was enrolled in
intermediate accounting at the University of Utah and now I’m four test sections away from realizing that piece of my career plan. What would surprise people to know about you? My youngest daughter and I had an exotic praying mantis for a pet. I just ordered a couple more, because they are a fun pet; no barking and no peeing on the carpets. What would you be doing if you didn't work in finances? I’m not sure, to be honest. I’ve found that there are very few things others will pay me to do. I did find while working on my undergraduate degree that I really liked studying physics. What do you enjoy doing outside of work? Boating with my family at Flaming Gorge and Lake Powell and other outdoor activities. My son and I will be elk hunting in October What are some of your professional goals? I’m still relatively new to the
profession, but here is what I have at the moment: 1. Pass the CPA Exam! 2. Pass the CPA Exam! 3. Make a difference in my profession by: a. Continuing to be involved with the UACPA b. Take a leadership role in AICPA 4. Become a CFO of a $100 million revenue company What advice do you live by? There are two things I like to keep in mind. The first I heard when I was a young man; Winston Churchill’s advice, "Never, never, in nothing great or small, large or petty, never give in except to convictions of honour and good sense. Never yield to force; never yield to the apparently overwhelming might of the enemy.'' The second comes from my former regional sales manager at the bank, he loved to use motivational concepts in his coaching. It is: water boils at 212°, at 211° water is hot, it’s the one extra degree that changes everything. ■
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Meet the Executive Board
Q: What has been a rewarding experience as a CPA? Paul Skeen, CPA President
Jonyce Bullock, CPA President-Elect
The most rewarding part of being a CPA is using my education and experience to help others. Seeing a client succeed because of your contributions is a thrill. Every bit as exciting is to see our team members grow in ways that allow them to contribute to the success of others and achieve their personal goals.
One of the most rewards parts of being a CPA for me is being able to spend time with a client, get to know their business, and then seeing something I have helped them with have a positive impact on their business. I enjoy knowing that what I do makes a difference.
Hollie Andrus, CPA Vice President I especially enjoy clients calling with tough questions regarding the application of standards. My license instills a feeling of confidence in my capabilities. There is something invigorating about researching standards, applying them, and working with my clients to create a great work product.
Dan Griffiths, CPA AICPA Council Representative
As a CPA I “grew up” in Industry with many rewarding experiences: Creating tight budgets, counseling with department heads and helping with their business dilemmas, being involved in tough negotiations and creating “win-win” scenarios, volunteering time and making new friends. But one can’t forget passing the CPA Exam!
Susan Speirs, CPA, CEO
The most rewarding experience for me as a CPA has been facilitating leadership academies around the country for young CPAs. As I watch them learn more about themselves and begin to believe that they can lead and make a real contribution, it makes me proud to belong to this profession.
Many of my rewarding experiences being a CPA has been in growing ideas from tiny seedlings into companies that contribute to the economy by providing jobs and making a difference in our community. I love seeing the “light” come on as entrepreneurs’ are able to tell the story behind their numbers.
Larry Deppe, CPA Member at Large
Kent Thomas, CPA Immediate Past President
As a CPA in academia, I have reached the point in my career where I am seeing former students attain very responsible positions in public accounting and various other types of organizations. Although I cannot take credit for the success of these people, I derive great satisfaction from the possibility that I may have played at least a small role in preparing them for the positions they now hold.
(Not Pictured) Kyle Pexton, CPA - Treasurer 38
Mark Palmer, CPA Secretary
the journal entry | October 2014
Early in my career I was asked by my boss to falsify financial statements "just for the quarter" because the company was going to report a loss and he had promised investors, bankers and others that there would be a profit. I was young and the situation made me search the depth of my character before I decided that I could not comply. While that decision ultimately lead to the loss of my job, it was a pivotal point in my career and the experience taught me a valuable lesson about ethical behavior and life priorities. Understanding the Code of Professional Conduct and what was expected of me as a CPA was an important part of the decision to do the right thing — something that I have never regretted.
Board Bullets
News from the UACPA Board The Executive Board met in August and discussed the following: • Haynie & Company issued audited financial statements for the year ending March 31, 2014 with an unqualified opinion. A big thanks to Kathy Romero for her work to the Association and with Haynie & Company to ensure timely reporting. • Carey Woolsey and Michael Gregory have been appointed to the State Board of Accountancy. They will be sworn in at the next State Board of Accountancy meeting in October. • Leadership Academy has 18 participants from our young CPA membership. They are a robust group representing industry and public practice. Forty percent of the participants are women. • The UACPA would like to submit comments to the AICPA from a robust cross section of our membership on the Enhancing Audit Quality white paper from the AICPA. Emails will be sent out to firms who perform audits and peer reviews requesting responses on 5-7 questions that our Practice Advisory Council will compile and forward to the AICPA. • September 19 was the annual inauguration ceremony for new CPAs. More than 500 invitations were sent to newly-licensed CPAs for the event at Rice-Eccles Stadium. Olympic skier Heather McPhie was the keynote speaker. • Members were approved from the nominations committee for Leadership Council and Executive Board seats for the 2015-2016 year. New members will be announced in January 2015. Members nominated to sit on the Utah CPA Foundation were also approved.
Meet the UACPA Staff
Q: What is your favorite holiday and why? Tisha Smith Membership Coordinator It’s a three-way tie for Halloween, Thanksgiving, and Christmas. I absolutely love to decorate for each holiday. Halloween can be a lot of fun because you can decorate many different ways whether it’s scary or cute. Thanksgiving and Christmas are great holidays for spending time with my family which I also love to do.
Kathy Romero Finances and Admin Manager My favorite Holiday is Christmas because my favorite thing to do is go shopping and at Christmas I get to do lots of it! Also, everyone is usually more upbeat that time of year. It’s always a good time to spend several days wrapping presents.
April Deneault CPE Manager My favorite holiday is St. Patrick’s Day because it’s my birthday which means double celebration! There is a parade, everyone wears green (my favorite color) and when I was growing up my mom would put green food coloring in everything I ate/ drank that day!
Amy Spencer Marketing & Communications Manager Growing up, I was obsessed with Halloween. I plotted the details of multiple costumes for months and set up spook allys for the neighbood kids year round. I have (mostly) outgrown my Halloweenloving phase and now cherish the family traditions of Thanksgiving and Christmas.
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Photos, Golf Tournament 1
2
3 1) Brent Stratton, Scott Stratton, Lance Mercer, Nate Olsen 2) First place winners, Michael Bierwolf, Clark Fredrickson, Troy Nilson and Nephi Bierwolf 3) Brandon Keyes, Kyler Williams, Nate Davis and Scott Reams 4) UACPA staff April Deneault, Kathy Romero and Tisha Smith 5) Golf Tournament Sponsor ADP pass out treats to golfers Thanks to the 2014 golf tournament sponsors: hole sponsors, ADP, Azureity and Green Spout and lunch sponsor, Premier Computing View more photos on our Facebook Page: www.facebook.com/UtahAssociationofCPAs
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the journal entry | October 2014
UACPA Photos
Photos, CPA Inauguration 4
1
2
1) UACPA President Paul Skeen, Olympic skier and keynote speaker Heather McPhie, UACPA CEO Susan Speirs and ProNet Co-Chair Josh Turnbow 2) Newly-licensed CPAs received an award and certificate 3) Squire celebrates their new CPAs 4) Eric and Stacy Noble celebrate together 5) James and Sue Beaudoin honor Pinnock, Robbins, Posey & Richin's CPAs 6) Robert Huey is joined by his wife at the 2014 CPA Inauguration
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Thanks to the 2014 CPA Inauguration sponsors: Squire, Ernst & Young, Woodbury School of Business - UVU and the Utah CPA Foundation
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Education & Events
Technology Conference
This Conference is filled with 16 hours of fast-paced presentations designed to maximize your time and enhance your learning. Nationally recognized speakers have extensive expertise in numerous software applications. They will share their knowledge with you in order to help you do your job with efficiency and ease. Participants will receive helpful tips and advanced techniques, along with the tools and skills necessary to keep up with the ever-increasing pace of changes in computer technology. All sessions feature high quality, full-color computer projection systems for clear viewing. This conference is designed for CPAs in public practice or industry who want to take better advantage of technology to improve efficiency and effectiveness..
CPE Where You Want It,When You Want It! The UACPA offers some of our 4 and 8 hour programs as webinars. Webinars allow you to see the speaker live on your computer screen and follow along with the presentation, as if you were in the classroom. You can type in your questions or comments, and they will be relayed to the speaker throughout the program, to allow interaction. The UACPA will administer polling/ checkpoint questions throughout webinars to monitor and verify attendance. Find classes at www.uacpa.org.
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the journal entry | October 2014
Session Topics: • Tech Update • PivotTables 101 • Tech Cookbook – Plan Tech Talk for Your Office • Tech Tools for Budgeting and Forecasting • Mobile Device Management • Top Accounting Software Solutions • Excel Tables – Database Functionality Comes to Spreadsheets • Windows 8.1 Tips and Tricks • Security Tips to Protect Sensitive Data • Office 365: Solving the Puzzle • Top 10 Accounting Technology Articles • Power Up Your PivotTables • Gadgets and Gizmos – Internet of Things • Choosing the Best Tools for a CPA Practice • Consolidating Data in Excel • Outlook – The Killer App in Microsoft Office December 18-19, 2014 8 am – 4:15 pm South Towne Exposition Center, 9575 S. State Street, Sandy, UT CPE Credit: 16 hours UACPA Members Register by 12/5/14, $414 Member Standard Fee, $460 Nonmembers, $540
Business Valuation Conference
Probably the most widely recognized approach to valuing an interest in a privately-held business is the income approach. This conference will cover fundamentals of business valuation as we analyze together a business valuation case utilizing the income approach. The sessions will include an overall introduction to valuation theory and methodology and provide an overview of the case that we will be analyzing. This will be followed by a more in depth look at the income approach, including the review of historical financials, the use of ratio analysis to evaluate the business, and the examination and analysis of projected financials applicable to the valuation case. We will then have an economic update by Kelly Matthews, followed by a review of cost of capital, and conclude by discussing the development of the conclusion of value using the income approach for the case study.
Education & Events
Winter Conference December 11-12
Session Topics: • An Introduction to Valuation • Overview of the Case • Historical Financials and Ratios Analysis • Projected Financials in Valuations • Economic Update • Cost of Capital • Conclusion of Value Presenters: • Luke Huston, CPA • Charlotte Clark, CPA, CVA, ABAR • Lynn Hillstead, CPA • Jeff Pickett, CPA/ABV • Kelly Matthews, Ph.D. • Carl Steffen, CPA/ABV, CVA, ASA, CBA • Charlotte Clark, CPA, CVA, ABAR November 17, 2014 8 am - 4 pm Tanner Training Facility, 36 S. State St., suite 500 CPE Credit: 8 hours UACPA Members Register by 11/3/14, $243 UACPA Members, $270 Nonmembers, $330
Salt Palace, 100 S West Temple, SLC CPE Credit: 16 hours UACPA Members Register by Nov. 28, $337 UACPA Members after Nov. 28, $375 Nonmembers, $450
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CPECourseSchedule
Register online at uacpa.org, then Education & Events or call the UACPA office at (801) 466-8022.
FIELD OF STUDY
CREDIT HOURS COURSE TITLE
INSTRUCTOR
VENDOR
EARLY MEMBER REGISTRATION
MEMBER FEE
NON MEMBER FEE
OCT 10/10/14
8
Annual Update for Controllers
John Cox
AICPA
$248*
$275**
$330**
10/14/14
8
10/16/14
16
Yellowbook: Government Auditing Standards
MacRay Curtis
AICPA
$248*
$275**
$330**
Slashing Taxes for Your Small Business Clients: Corporations, Partnerships & LLCs
Norman Soloman
AICPA
$248*
$275**
$275**
10/17/14
8
10/21/14
8
Advanced Tax Strategies for LLCs an Partnerships
Norman Soloman
AICPA
$248*
$275**
$275**
Form 1041: Income Taxation of Estates and Trusts
Michael Blackburn
AICPA
$248*
$275**
$330**
10/22/14
4
10/22/14
4
Capitalized Costs and Depreciation: Key Issues and Answers
Dennis Riley
AICPA
N/A
$155
$185
Cancellation of Debt for Individuals and Businesses
Dennis Riley
AICPA
N/A
$155
$185
10/23/14
8
Cut Your Client's Tax Bill: Individual Planning Tips and Strategies
Dennis Riley
AICPA
$248*
$275**
$330*
10/27/14
8
Advanced Tax Strategies for S Corporations
Peter Towle
AICPA
$248*
$275**
$330**
10/28/14
8
AICPA's Annual Federal Tax Update
Peter Towle
AICPA
N/A
$180
$330**
10/30/14
4
Health Care Reform Act: Critical Tax and Insurance Ramifications
Michael Blackburn
AICPA
N/A
$155
$185
10/30/14
4
Social Security and Medicare: Maximizing Retirement Benefits
Michael Blackburn
AICPA
N/A
$155
$185
10/31/14
8
Public Company Update: SEC, PCAOB and Other Developments
Marty Van Wagoner
AICPA
$248*
$275**
$330**
11/3/14
8
Audits of 401(k) Plans
Melissa Critcher
AICPA
$248*
$275**
$330**
11/4/14
8
Common Frauds and Internal Controls for Revenue, Purchasing and Cash Receipts
Melissa Critcher
AICPA
$248*
$275**
$330**
11/5/14
8
Advanced Controller and CFO Skills
Anthony LaRusso
AICPA
$248*
$275**
$330**
11/6/14
8
Financial Statement Analysis: Basis for Management Advice
Anthony LaRusso
AICPA
$248*
$275**
$330**
11/7/14
8
Toolkit of Best Practices for Today's Controller and Financial Manager
Anthony LaRusso
AICPA
$248*
$275**
$330**
11/10/14
8
Annual Tax Update: Corporations and Pass-Through Entities
Michael Blackburn
AICPA
$248*
$275**
$330**
11/11/14
8
Basis/Distributions for Pass-Through Entities: Simplifying the Complexities
Michael Blackburn
AICPA
$248*
$275**
$330**
11/17/14
16
Annual Accounting and Auditing Workshop
Marty Van Wagoner
AICPA
$405**
$450**
$540**
11/19/14
8
Financial Reporting Framework for SMEs
Marty Van Wagoner
AICPA
$248*
$275**
$330**
11/20/14
8
Tips and Tricks for Handling IRS Disputes
Michael Blackburn
AICPA
$248*
$275**
$330**
11/21/14
8
Annual Tax Update: Individuals and Sole Proprietors
Michael Blackburn
AICPA
$248*
$275**
$330**
11/24/14
8
Advanced Excel
TBD
K2 Enterprises
$248*
$275**
$330**
NOV
* UACPA Members receive a 10% early registration discount on these courses when registering at least TWO WEEKS before the date of the course. ** AICPA Members receive an additional $30 off the price of each 8 hour course, $50 for 16 hour courses.
Register for classes and conferences at www.uacpa.org or call 801.466.8022 44
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Tax
Education & Events
FALL
Conferences
Tax Practitioners Conference in St. George
Tax Symposium
Date:
November 6, 2014
Date:
Time:
8 a.m. - 4:30 p.m.
Location:
Salt Palace Convention Center 100 S. West Temple, Salt Lake City
Cost:
$243 Members Registered by 10/31/14; $270 UACPA Members Registered after 10/31/14; $330 Nonmembers
CPE:
8 Hours
Location:
Dixie College - Zion Room in the Holland Centennial Commons (HCC), St. George
Cost: $243 Members Registered by 10/23/2014; $270 UACPA Members Registered after 10/23/2014; $330 Nonmembers CPE:
8 Hours
Session Topics Tax Update Trusts & Estates – Ronda Gardner, CPA Year End Tax Planning – Nate Staheli, Ph.D., CPA UACPA Update – Paul Skeen, CPA Healthcare Update How to Cheat Your Way to the Highest Level of Professional Ethics – Gregory Kyte, CPA
November 14, 2014
Session Topics Tax Update – Jody Stamback Estate Planning – Randall Holmgren Social Security & Medicare – Sarah Nitta Net Investment Income Tax Foreign Bank Account Report (FBAR) Section 754 Elections Affordable Care Act – Susan Grassli
DEC 12/1/14
8
Annual Update for Accountants & Auditors
Marty Van Wagoner
AICPA
N/A
$180
$330**
12/2/14
8
Smart Strategies to Slash Taxes for Closely Held Businesses
Michael Frost
AICPA
$248*
$275**
$330**
12/3/14
8
Taxation for Individuals Living Abroad
Michael Frost
AICPA
$248*
$275**
$330**
12/4/14
8
Accounting and Reporting for Not-for-Profit Organizations
Brian Sheets
AICPA
$248*
$275**
$330**
12/8/14
8
Applying OMB Circular A-133 to Not-for-Profit and Governmental Organizations
Beth Stenberg
AICPA
$248*
$275**
$330**
12/9/14
8
Governmental Accounting and Reporting
Beth Stenberg
AICPA
$248*
$275**
$330**
12/15/14
8
Construction Contractors Advanced Issues
Bruce Shepard
AICPA
$248*
$275**
$330**
12/16/14
8
Audits of Banks and Other Financial Institutions
Bruce Shepard
AICPA
$248*
$275**
$330**
* UACPA Members receive a 10% early registration discount on these courses when registering at least TWO WEEKS before the date of the course. ** AICPA Members receive an additional $30 off the price of each 8 hour course, $50 for 16 hour courses.
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ContactList Accounting Issues
When UACPA members have questions about accounting issues, help is available from the UACPA Accounting Issues Committee. Each month, a member of the committee is assigned to answer accounting questions and help you interpret the rules as they apply to your particular situation. The following members may be contacted during the months listed. October
November
Ted Rokich 801-263-3090 trokich@fdic.gov
Larry Deppe 801-626-7838 ldeppe1@weber.edu
AICPA Ethics Hotline
The AICPA Ethics Hotline provides non-authoritative guidance to members on questions related to ethics including independence. Each year it responds to more than 4,000 inquiries. The Ethics Hotline is open from 9 a.m. to 5 p.m. ET on weekdays and a staff members may be reached by dialing either (888) 777-7077, menu option #5, followed by menu option #2, or by e-mail at ethics@aicpa.org.
CPE Where You Want It, When You Want It!
December Mark Anderson 801-532-2200 manderson@hbmcpas.com
CPE Approval – Does This Qualify?
When UACPA members have questions regarding CPE Approval and whether or not something may or may not qualify, they can turn to the UACPA CPE Approval Committee for answers. Each month, committee members are assigned to answer member questions related to CPE approval, and below are those members’ names that may be contacted with your questions. October - December Steve Avis 801-532-2200 savis@hbmcpas.com
Scott L. Robinson 801-990-5918 srobinson@tannerco.com
Tax Issues
The Tax Issues Committee focuses on legislative and regulatory issues and does not answer technical questions. For assistance with a technical matter, please refer to the UACPA referral tool at uacpa.org. Direct questions related to legislative or regulatory issues to taxissues@uacpa.org
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To view a list of upcoming webcasts log on to uacpa.org, Education & Events and click on “Webcasts,” keyword search “webinar.”
Classified Ads To place your classified advertisement and reach Utah CPAs, contact the UACPA at mail@uapca.org, Utah Practice For Sale: St. George Area CPA Practice - gross $200K. High-quality client base & strong cash flow; Tax (53%) Accnting Svs (47%); 70%+ of the total revenues are generated from business clients. For more information, please call 1-800-397-0249 or visit www.AccountingPracticeSales. com to see listing details and register for free email updates. THINKING OF SELLING YOUR PRACTICE? Accounting Practice Sales is the leading marketer of accounting and tax practices in North America. We have a large pool of buyers, both individuals and firms, looking for practices now. We also have the experience to help you find the right fit for your firm, negotiate the best price and terms and get the deal done. To learn more about our risk-free and confidential services, call Ryan Pannell with The Holmes Group at 1-800397-0249 or email ryan@accountingpracticesales.com.
Member Benefits
100% Membership
The UACPA's Affinity Partners help you get the most out of your membership
Congratulations to the firms curerently participating in the UACPA's 100% membership program. Firms with 10-or-more CPAs on staff are eligible for the inclusion of the 100% membership program. Learn more by talking to Tisha Smith, ts@uacpa.org or call 801.466.8022
Alamo
Alamo auto rentals provides discounts and upgrades to UACPA members & affiliates. Call 800-GO-ALAMO (800-462-5266) to make reservations (ID Number 706768)
• Mantyla McReynolds • PricewaterhouseCoopers
Hertz
UACPA members and affiliates are entitled to receive a variety of benefits from Hertz auto rentals. Take advantage of your member discount by calling 800-654-2210 and mention CDP #1884442
Jo S. A Bank Men's Clothing
• HJ & Associates • Pinnock, Robbins, Posey & Richins Is your firm eligible to be a part of the 100% membership program? Learn more by talking to Tisha Smith, ts@ uacpa.org or call 801.466.8022
The retailer offers UACPA members and affilicates 20% off all regularly priced merchandise
ADP
ADP Offers Free Payroll and Free 401k services to referring UACPA Members and its affiliates. Please reach out to Kenny McKenna directly at 801-956-7850 or email kenny.mckenna@adp.com for more information
Camico
The Mutual Insurance Company offers UACPA emmbers a variety of benefits. To learn more, call 800-652-1772 or email inquiry@camico.com
Save $698 on UACPA Conferences By simply joining the UACPA, you save money for every class, conference and event you attend with us. If you only come to conferences, you'll save almost seven Benjamins.
Office Depot
UACPA members can save up to 40% on office products, printing, technology and furniture. Visit uacpa.org to learn more.
That's just one of the many ways we make your UACPA membership count. Learn more about membership and benefits by talking to Tisha Smith, 801.466.8022 or ts@uacpa.org
the journal entry | October 2014
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Utah Association of CPAs 1240 E. 2100 South, Suite 500 Salt Lake City, UT 84106
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the journal entry | October 2014