Executive's Tax & Management Report articles from April 2003

Executive's Tax & Management Report archives from April 2003

Company can cut extra pension benefits for retirees.
April 21, 2003... When companies are searching for places to cut costs, pension plan benefits are often viewed as untouchable. That's because the tax law contains an "anti-cutback" rule that prevents employers from pulling the rug out from under plan...

FASB working on new disclosure rules for pension accounting.(Financial Accounting Standards Board )
April 21, 2003... The Financial Accounting Standards Board (FASB) will begin work on new rules designed to improve corporate disclosures about pension plans. A draft of the new rules is expected in about six months. BAD ACCOUNTING * Current rules allow...

Self-employment tax for the limited liability company member. (Payroll Taxes).
April 21, 2003... With the popularity of limited liability companies (LLCs) growing, one might think that the taxation of these entities for self-employment tax purposes might be old hat by now. However, there is still a great deal of uncertainty in this area....

Generate cash with change of accounting method. (Tax Procedures).
April 21, 2003... Changing a tax return accounting method can create a current year "catch up" adjustment that significantly reduces taxable income. This translates to refunds or lower estimated tax payments and cash. The IRS has issued new procedures...

Use tax-free employee perks to stretch compensation budgets. (Employee Benefits).
April 21, 2003... The use of tax-free fringe benefits is an excellent and low-cost way to add to employees' salaries. That's because one dollar of tax-free compensation is worth much more than one dollar of compensation that's subject to federal and state...

Tax question.
April 21, 2003... Q Over the years, I've accumulated a good deal of money in U.S. savings bonds. I want to cash in the bonds and put the money into an IRA so I can continue to defer interest. Is there any way I can do this without paying tax on the interest...

Financial model helps solve human capital ROI puzzle. (Managing Your Business).
April 21, 2003... If you asked your company's CFO to quantify the company's return on investment in human capital, you'll probably get a blank stare. That's because fewer than one in rive CFOs recently polled said they significantly understood the return they...

Flurry of court rulings stings S corps over worker status. (Payroll Taxes).
April 21, 2003... The IRS is constantly on the lookout for companies that misclassify employees as independent contractors. When this happens, the company faces back taxes and stiff penalties. Companies that use independent contractors do not generally...

IRS toughens corporate tax shelter disclosures. (Executive's Briefcase).
April 21, 2003... The IRS has released final regulations [T.D. 9046] on the disclosure and registration of abusive tax shelters, boosting fines for not reporting investments in deals the IRS has flagged as potentially abusive. The final regulations also narrow...

Car dealers that expand get a break on tax-free spin-offs. (Executive's Briefcase).
April 21, 2003... Under new rules from the IRS, automobile dealers get a new break that makes it easier for them to take advantage of the tax-free "spin-off" technique. Under this setup, a company separates, or spins off, a subsidiary into a separate company....

IRS says certain rotable spare parts can be capitalized. (Executive's Briefcase).
April 21, 2003... The IRS has reversed its stance and says that companies can capitalize rotable spare parts under certain circumstances ]Rev. Rul. 2003-37]. The IRS will follow the rulings in two cases in which the courts ruled that a pool of rotable spare...

Best business analysis software packages rated. (Executive's Briefcase).
April 21, 2003... By 2006, most global organizations will have deployed a relatively cohesive business performance management (BPM) software package consisting of financial reporting, consolidations, and enterprise business planning platforms that will be...

Recession triggers corporate spending on cost-cutting EMA tools. (Executive's Briefcase).
April 21, 2003... In the past couple of years, corporate IT spending was funneled to e-commerce projects and other Web-based activities. The use of technology to control employee expenses was neglected. Since the recession, companies have been looking at...

New case reveals tax trap for creative estate planning tool.(self-canceling installment notes must be structured carefully to save on taxes)
April 7, 2003... A self-canceling installment note is a creative way to pass property to heirs and save on estate taxes. However, if it is not structured properly, the IRS can challenge this setup. Also, there's a tax trap that may surprise users of this...

IRS probes newfangled tax ploy.(deferred subscription agreements compared to domestic reverse hybrid entities)(Brief Article)
April 7, 2003... The IRS is scrutinizing so-called deferred subscription agreements--a new type of structure that taxpayers may be using to avoid tax on U.S.-source income. SIMILAR TO DRH SETUPS * The government is concerned that some of these...

Supreme Court KOs company's tax scheme for R&D allocations. (Business Deductions).
April 7, 2003... In a ruling that will affect scores of companies, the Supreme Court ruled against the Boeing Company's method of allocating research and development costs among corporate units. Boeing wanted to shift R&D costs--and the accompanying...

Single-member LLCs--the invisible entity: planning opportunities and cautions. (Tax Strategies).
April 7, 2003... Limited liability companies, or LLCs, have been around for a long time. However, prior to 1997 they were rarely the entity of choice for business owners because of the questions concerning their taxation. The IRS generally held that an LLC,...

How to revamp your capital budget to cut costs and boost value. (Management Strategies).(Interview)
April 7, 2003... If your company does not want to dole out any more pink slips to cut costs, consider looking to your company's capital budget for help. You may be able to create greater long-term value by rigorously evaluating the small-ticket capital items...

Tax question.(options for taxpayer not having sufficient funds to pay the taxes owed)(Brief Article)
April 7, 2003... Q Do I have any options if I owe the IRS taxes that I can't afford to pay? A If you owe the IRS taxes you can't afford to pay, you have several options. You can use one or more of the following tactics: * Submit an Offer in...

Court addresses dependency deductions after divorce. (Personal Taxes).
April 7, 2003... When a couple divorces and there is a child involved, the question comes up: Which spouse gets the dependency exemption for the child? BASIC RULE * The basic rule is that the exemption goes to the custodial parent. The custodial parent is...

How companies plan to overhaul their boards in post-Enron world. (Management Strategies).
April 7, 2003... In the wake of accounting scandals and regulatory crackdowns, companies are planning big changes to their board of director programs, plans, and policies. Hewitt Associates recently polled 70 large public U.S. companies for its survey,...

Almost Two-Thirds of 2002 Tax Returns were E-Filed. (Executive's Briefcase).(Brief Article)
April 7, 2003... Taxpayers have electronically filed 30.7 million, or 65 percent, of the 47 million individual tax returns filed for 2002, said the IRS. More than 6 million individuals prepared their own returns and filed them electronically, an increase of...

E-filing for employment taxes now available. (Executive's Brief case).(Brief Article)
April 7, 2003... Companies using payroll service providers can begin to file electronically two major employment tax forms: Form 940, Employer's Annual Federal Unemployment Tax Return, and Form 941, Employer's Quarterly Federal Tax Return. The new system also...

New reporting edict for money service businesses. (Executive's Brief case).(Brief Article)
April 7, 2003... Businesses issuing or redeeming money orders or travelers checks are now required to use a new form (TD F 90-22.56) to report suspicious activities to the IRS. Money service businesses (MSBs) required to use the new form also include...

IRS wants $6 million from homeless man. (Executive's Brief case).(Brief Article)
April 7, 2003... What happened to the kinder and gentler IRS? The agency handed John Ramer, who is homeless, a bill claiming he needed to pay nearly $6 million, according to the New York State Society of CPAs. To owe that much, Ramer would have to have earned...

FASB nixes use of blockage discounts in accounting for marketable securities. (Executive's Brief case).(Brief Article)
April 7, 2003... In a reverse of its prior stance, the Financial Accounting Standards Board voted to disallow the use of blockage discounts in accounting for the value of certain marketable securities. The vote was taken as part of the FASB's project on fair...

Workers with fears of job-related cancer can recover damages. (Executive's Brief case).(Brief Article)
April 7, 2003... The Supreme Court have ruled that railroad workers who show "genuine and serious" fear of developing cancer from job-related asbestosis may recover mental anguish damages under FELA, the Federal Employers' Liability Act [Norfolk & Western...