Executive's Tax & Management Report articles from March 2003

Executive's Tax & Management Report archives from March 2003

Company execs in a sweat over tax shelter schemes.
March 7, 2003... The corporate world continues to be rocked by financial shenanigans--this time by scandals surrounding questionable tax shelters promoted to corporate chieftains and the self-employed. The IRS has KO'd some of the tax shelters that were...

Swiss bank accounts: end of an era?(tax information exchange )(Brief Article)
March 7, 2003... The infamous Swiss bank account has long been a fixture in the world of finance--or is it the "underworld" of finance? Long regarded as the quintessential way to hide funds from the prying eyes of the government or ex-spouses, the Swiss bank...

Final tax shelter disclosure regs on tap.(Brief Article)
March 7, 2003... The IRS and the Treasury Department are working like mad to finalize regulations on the registration and disclosure of abusive tax avoidance transactions. Under the proposed and temporary rules [REG-103735-00, T.D. 9017; REG-103736-00,...

Court OKs escape hatch from overtime pay trap. (Compensation & Benefits).(KFC restaurants )
March 7, 2003... If a company docks the pay of salaried employees who are exempt from overtime, it could do away with their exempt status. That is, the employees now become eligible for overtime pay. However, a court has granted a "do over" to a company that...

Real investment purpose must be behind real estate loss deduction. (Personal Taxes).
March 7, 2003... Relocation can mean the start of a brand-new life--new job, new responsibilities, new social circle, and new home. However, the sale of a home is subject to the whims of the marketplace, and relocated taxpayers can find themselves paying...

How to protect your company's deduction for pay you deserve. (Compensation & Benefits).(dividends versus wages and compensation )
March 7, 2003... It makes a big difference whether you withdraw profits from your company as salary or dividends. The difference, of course, is the double tax on dividends. If your company pays out earnings as dividends, the earnings are depleted by both a...

Tax question.(head of household tax policy after spouse dies )(Brief Article)(Column)
March 7, 2003... Q My wife passed away in 2002. I'm still living in the home we shared together. When I file my tax return for 2002, do I have to file as single or can I file as head of household? A Actually, you may be able to continue to file a joint...

Time to brush up on your company's compliance with USERRA. (Managing Your Business).(Uniformed Services Employment and Reemployment Rights Act of 1994)
March 7, 2003... As war with Iraq looms on the horizon, employers now face the strong probability that they will lose some workers to military service. That means complying with the military leave law known as the Uniformed Services Employment and Reemployment...

What are companies' top benefit concerns for the rest of 2003? (Employee Benefits).
March 7, 2003... Employers are most concerned with two specific issues regarding employee benefits: reining in double-digit increases in health care costs and making permanent the pension-related provisions contained in the 2001 tax law. This is the main...

Tax being collected for online sales--regardless of Nexus. (Executive's Briefcase).(Brief Article)
March 7, 2003... A number of large retailers are now voluntarily collecting sales taxes for online transactions even in states where they have no nexus (i.e., physical presence). On the Web sites of Wal-Mart, Marshall Fields, Target, and Toys R Us is a notice...

Watch for new breed of FASB directives. (Executive's Briefcase).(Financial Accounting Standards Board )(Brief Article)
March 7, 2003... The Financial Accounting Standards Board (FASB) will begin to issue a new type of guidance, known as FASB Staff Positions (FSPs). When a new FSP is drafted, FASB will make an announcement and post it on its Web site for a 30-day comment period....

No need to accrue income related to billing errors. (Executive's Briefcase).(Brief Article)
March 7, 2003... A company that uses the accrual method of accounting should not recognize income for the excess amount resulting from overbilling a customer for shipped goods. Instead, the company should report income for the correct amount. If the billing...

AICPA updates revenue recognition rules for software sales. (Executive's Briefcase).(American Institute of Certified Public Accountants)(Brief Article)
March 7, 2003... The American Institute of Certified Public Accountants (AICPA) has issued technical guidance on how to record revenue related to sales, installation, maintenance, updating, and service of computer software. The new guidance has been folded into...

Proposed law would subject state and local governments to OSHA. (Executive's Briefcase).(Occupational Safety and Health Act)(Brief Article)
March 7, 2003... The Occupational Safety and Health Act (OSHA) does not provide protection for state and local government employees. Several states have their own job safety enforcement programs that cover public employees, but OSHA does not apply. Proposed...

New study reveals big flaws in most corporate financial operations. (Managing Your Business).
March 7, 2003... Most companies have significant weaknesses in their financial operations, according to new research. The average company today has little confidence in its ability to predict future financial performance, is using outdated and inefficient...

Exec wins deduction for commute to distant job.
March 21, 2003... Travel expenses to and from work are generally not tax-deductible business expenses. However, if you are on a temporary assignment out of town, you can write off the cost of your commute--unless the assignment is indefinite or permanent. In...

IRS Ups retirement plan audits.(Brief Article)
March 21, 2003... The IRS will increase its audits of retirement and profit-sharing plans for the rest of the year, according to the agency's 2003 work plan. The goal is to examine 8,000 plans by the end of the year--up from about 7,500 in 2002. Certain...

IRS issues new rules on ESOPs with S corp stock. (Compensation And Benefits).(employee stock ownership plans )
March 21, 2003... Not long ago, S corporations were not allowed to sponsor employee stock ownership plans (ESOPs). And when the rules were finally changed to permit them to do so, S corporation ESOPs were still not allowed all of the attractive tax features that...

Recent case reveals gift idea for stock in merger targets. (Charitable Deductions).
March 21, 2003... Executives who own stock in companies that are acquisition targets may prefer to give the stock to charity instead of handing it over to the acquiring company. Why? A recent court case reveals the tax benefits of this maneuver. NICE MOVE *...

Companies trip up over "hours worked" rules in paying employees. (Managing Your Business).(Honda case )
March 21, 2003... If your company requires its employees to perform some activity, it must pay the employees for their time. Sounds simple, right? Well, three companies recently got into hot water over this seemingly straightforward concept. BIG BUCKS *...

How to give out a low-cost, tax-free bonus. (Compensation And Benefits).(mileage reimbursement)(Brief Article)
March 21, 2003... You can set things up so that you put more dollars in an employee's pocket at no extra cost to your company. How? In lieu of a bonus or salary increase, give the employee a higher reimbursement for his or her business-connected car travel. ...

New valuation method emerges for employee stock options. (Compensation And Benefits).(Financial Accounting Standards Board to make a decision )
March 21, 2003... A debate is currently raging over whether companies should be required to expense the value of employee stock options. The Financial Accounting Standards Board (FASB) plans to decide soon whether to formally embark on a project to reconsider...

Help protect employees from identity theft. (New Legislation).(use of Social Security numbers)
March 21, 2003... Take a look at your benefits enrollment form, compensation records, and perhaps even medical benefits ID cards, and you'll probably find your employees' Social Security numbers (SSNs) listed as an identifying factor. Once used only by the...

Taxpayers flock to the Web to check refunds. (Executive's Briefcase).(Brief Article)
March 21, 2003... Three million taxpayers have used a new service available on the IRS Web site to check on their refunds. The "Where's My Refund?" service is the quickest way to check on a refund, especially for those who e-file their tax return. E-filers...

IRS dishes up easier way for day care operators to claim meal deductions. (Executives Briefcase).(Brief Article)
March 21, 2003... IRS Dishes Up Easier Way for Day Care Operators to Claim Meal Deductions. Family day care providers may now choose to use a standardized rate to claim the deduction for meals provided to children in their care instead of keeping detailed...

Internet retail sales up 28.2 percent. (Executive's Briefcase).(Brief Article)
March 21, 2003... Sales of goods and services via the Web increased 28.2 percent in the fourth quarter of 2002 from the fourth quarter of 2001, according to the Commerce Department. Internet sales accounted for 1.6 percent of total sales. On a quarterly basis,...

Keep FMLA certifications under wraps. (Executive's Briefcase).(Family and Medical Leave Act; U.S. Postal Service case)(Brief Article)
March 21, 2003... "John Doe," a postal worker, was out of work for several weeks when he faced disciplinary action by the U.S. Postal Service. He revealed to his employer that he was HIV-positive and submitted medical certification under the Family and Medical...

Don't eagles and golf go together? (Executive's Briefcase).(sport endangering eagles )(Brief Article)
March 21, 2003... Golfers are always stalking the elusive eagle (two strokes less than par on a hole). However, a citizen's group in Wyoming says golf is a threat to eagles--real eagles, that is. The group filed a lawsuit in district court alleging that the...