BMSS News

Tax Increase Prevention Act of 2014 Passed: Act Now to Take Advantage of Extensions

During the late hours of Tuesday, December 16, 2014, Congress passed the Tax Increase Prevention Act of 2014. President Obama has indicated that he will sign the bill as soon as it reaches his desk. This bill extends through 2014 many tax incentives that expired on December 31, 2013.

Taxpayers will have to act quickly and may need to revisit year-end tax planning discussions that have already taken place.

Some of the more popular tax extenders affecting individuals and businesses are below.

Business Tax Extenders:

  • Bonus depreciation (50% bonus depreciation on qualified property)
  • Enhanced Code Section 179 expensing ($500,000 dollar limit with a $2 million overall investment limit)
  • Research Tax Credit
  • Work Opportunity Tax Credit
  • 100% Exclusion for gain on qualified small business stock

Individual Tax Extenders:

  • State and local sales tax deduction
  • Higher education deduction
  • Teacher’s classroom expense deduction
  • Mortgage debt exclusion
  • Mortgage insurance premium deduction
  • Charitable distributions from IRAs

Please also see the attached Tax Briefing for a more in-depth look at this bill.

Contact your BMSS CPA or call (205) 982-5500 if you have any questions regarding the opportunities presented in this letter or would like a more customized analysis of steps you or your business may take to minimize taxes and maximize overall tax opportunities. At BMSS, we also take this opportunity to provide a holistic planning/strategy session for you and your business beyond just tax planning.

Beyond the Bottom Line December 2014

Tax Increase Prevention Act of 2014: Act Now to Take Advantage of Extensions

During the late hours of Tuesday, December 16, 2014, Congress passed the Tax Increase Prevention Act of 2014. President Obama has indicated that he will sign the bill as soon as it reaches his desk. This bill extends through 2014 many tax incentives that expired on December 31, 2013.  Taxpayers will have to act quickly and may need to revisit year-end tax planning discussions that have already taken place.

Some of the more popular tax extenders affecting individuals and businesses are below.

Business Tax Extenders:

  • Bonus depreciation (50% bonus depreciation on qualified property)
  • Enhanced Code Section 179 expensing ($500,000 dollar limit with a $2 million overall investment limit)
  • Research Tax Credit
  • Work Opportunity Tax Credit
  • 100% Exclusion for gain on qualified small business stock

Individual Tax Extenders:

  • State and local sales tax deduction
  • Higher education deduction
  • Teacher’s classroom expense deduction
  • Mortgage debt exclusion
  • Mortgage insurance premium deduction
  • Charitable distributions from IRAs

Please also see the attached Tax Briefing for a more in-depth look at this bill.

Contact your BMSS CPA or call (205) 982-5500 if you have any questions regarding the opportunities presented or would like a more customized analysis of steps you or your business may take to minimize taxes and maximize overall tax opportunities. At BMSS, we also take this opportunity to provide a holistic planning/strategy session for you and your business beyond just tax planning.

New Taxpayer Identification Program from Department of Revenue

The Alabama Department of Revenue (ADOR) has implemented a new program to protect taxpayers from criminals who use stolen information to file fraudulent tax returns. In 2013, over 1.6 million Alabamians were victims of identity theft and tax refund crimes.

Selected taxpayers will receive a letter from the ADOR asking them to complete a short confirmation quiz (either online or by phone). The request does not mean the individual is suspected of identity theft but is used to confirm the person's identity. Once the quiz has been completed, the tax return will be processed.

If you receive a letter from the ADOR, please do not hesitate to contact your BMSS CPA or one of our State & Local Tax professionals. Read a sample letter from the ADOR...

2015 Mileage Rates

The IRS 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile are:

  • 57.5 cents for business (increase from 56 cents in 2014)
  • 23 cents for medical or moving purposes (decrease from 23.5 cents in 2014)
  • 14 cents for service of charitable organizations

Taxpayers always have the option to claim deductions based on the actual costs of using a vehicle rather than using the standard mileage rates. A taxpayer may not use the business standard mileage rate for a vehicle after claiming accelerated depreciation, including the Section 179 expense deduction, on that vehicle. Likewise, the standard rate is not available to fleet owners (more than four vehicles used simultaneously).

BMSS Tax Professionals will be happy to discuss how this might apply to your specific situation.

Estate Tax Filing Deadline to Elect Portability Approaches

Some taxpayers otherwise not required to file estate tax returns were unaware that Form 706 is required to elect portability when the value of the estate was below the filing threshold ($5 million for 2011, $5.12 million for 2012 and $5.25 million for 2013). The portability election allows the surviving spouse to use the decedent spouse's unused exclusion amount.

In January 2014, the IRS provided an automatic extension for certain taxpayers to elect portability of the deceased spousal unused exclusion if the decedent was a U.S. citizen or resident who died after December 31, 2010, and before January 1, 2014, and the value of the estate did not require filing Form 706. The IRS will allow late elections for estates created after 2010 and before 2014 if completed by December 31, 2014. After that, it will be too late to make the election for those estates.

Contact the BMSS Estate Planning Practice Group today to schedule a time to go over your estate plan needs.

Jack Knight to Retire December 31, 2014

Barfield, Murphy, Shank & Smith is both proud and saddened to announce that A. Jackson (Jack) Knight, CPA, CVA will be retiring on December 31, 2014.

Jack joined Barfield, Murphy, Shank & Smith in 2000 and has over 40 years of public accounting experience. He focused on providing assurance and consulting services to credit unions, community banks, insurance carriers, not-for-profits and churches. As a Certified Valuation Analyst (CVA), Jack performed business valuation services which are commonly required in conjunction with the purchase or sale of a business, succession planning, estate and gift taxes and initial public offerings.

Active in the community, Jack serves as Past-President for the Arc of Jefferson County and was named "2011 Volunteer of the Year" from the Arc of Alabama. He also serves as a Habitat for Humanity volunteer and participates in numerous ministries and global mission trips with Dawson Memorial Baptist Church.

Jack and his wife, Sallie, have two sons, David and John, and three grandchildren with a fourth grandchild being welcomed in early 2015.

Says Don Murphy, Managing Member, “Although we will all miss Jack’s friendly nature and smiling face around the office, this is a well-earned opportunity for Jack to devote more time to his family and personal interests.”

BMSS & Employee News

Our office will be closed Thursday, December 25th and Friday, December 26th, as well as Thursday, January 1, 2015. Please contact our office to schedule your year-end tax planning appointments if you have not done so already.

John Shank received his Chartered Global Management Accountant (CGMA) designation from the American Institute of Certified Public Accountants and the Chartered Institute of Management Accountants. The CGMA recognizes professionals who combine accounting and financial expertise with strategic insight to help management make informed decisions, manage uncertainty, protect assets and promote operational efficiency and effectiveness.

Welcome! Nick Vagner has joined BMSS sister company Abacus IT Solutions as a Network Technician.

BMSS was once again named to Accounting Today’s “Best Accounting Firms to Work For in the US” list. The list honors the top 100 best places of employment in the accounting industry in the United States. BMSS was the only firm in Alabama to make this list.

What does this mean for our clients? BMSS has a high level of employee satisfaction, low turnover and the ability to recruit topnotch professionals. We utilize our low turnover to minimize staff changes. Staff consistency allows us to reduce costs to clients and ensure long-term relationships.


 

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BMSS Named a Best Accounting Firm to Work For in the US

Barfield, Murphy, Shank & Smith was named as one of the “2014 Best Accounting Firms to Work For” in the United States by Accounting Today magazine. 

The “Best Accounting Firms to Work For” list honors the top 100 best places of employment in the accounting industry in the United States.

BMSS was the only firm in Alabama to make this list.

Company's workplace policies, practices, philosophy, systems and demographics were evaluated along with an employee survey to measure the employee experience. The combined scores determined the top companies and the final ranking.

What does this mean for our clients?  BMSS has a high level of employee satisfaction, low turnover and the ability to recruit topnotch professionals. We utilize our low turnover to minimize staff changes. Staff consistency allows us to reduce costs to clients and ensure long-term relationships.

Jack Knight to Retire December 31, 2014

Barfield, Murphy, Shank & Smith is both proud and saddened to announce that A. Jackson (Jack) Knight, CPA, CVA will be retiring on December 31, 2014. 

Jack joined Barfield, Murphy, Shank & Smith in 2000 and has over 40 years of public accounting experience. He served as the team leader for the Financial Services Practice Group focused on providing assurance and consulting services to credit unions, community banks and insurance carriers, as well as not-for-profit organizations and churches. 

As a Certified Valuation Analyst (CVA), Jack performed business valuation services which are commonly required in conjunction with the purchase or sale of a business, succession planning, estate and gift taxes and initial public offerings.  He was a frequent speaker to credit unions and not-for-profit organizations on accounting and fraud prevention topics and was actively involved with the League of Southeastern Credit Unions.

Active in the community, Jack serves as Past-President for the Arc of Jefferson County and was named "2011 Volunteer of the Year" from the Arc of Alabama. He also serves as a Habitat for Humanity volunteer and participates in numerous ministries and global mission trips with Dawson Memorial Baptist Church.

Jack and his wife, Sallie, have two sons, David and John, and three grandchildren with a fourth grandchild being welcomed in early 2015.

“Jack will be greatly missed at BMSS,” said Don Murphy, Managing Member. “He developed our firm’s Financial Services Practice Group and fostered the development of younger accountants. Although we will all miss Jack’s friendly nature and smiling face around the office, this is a well-earned opportunity for Jack to devote more time to his family and personal interests.”


 

John Shank Receives Certified Global Management Accountant (CGMA) Designation

John Shank, one of the founders of Barfield, Murphy, Shank & Smith, has received his Chartered Global Management Accountant designation from the American Institute of Certified Public Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA).

The Certified Global Management Accountant (CGMA) is a global management accounting designation that recognizes the unique role played by professionals around the world who combine accounting and financial expertise with strategic insight to guide better business decisions. It demonstrates management accounting expertise in such areas as leading strategically with management to make more informed decisions, helping organizations manage change, risk and uncertainty, protecting corporate assets and promoting operational efficiency and effectiveness.

Management accountants understand both financial and non-financial data and continually integrate information from across an enterprise to help a business achieve their objectives.  Their understanding and experience of business goes well beyond financial accounting - management accountants are business professionals at the heart of decision-making, who “connect the dots” and recognize how the different parts of the business need to come together to create value.

2014 Year-End Tax Planning Letter

As 2014 draws to a close, year-end tax planning considerations should be starting to take shape.

BMSS can help you navigate through the uncertainties of changing legislation and plan a year-end strategy that incorporates traditional and newer strategies to possibly help minimize your federal tax liability. We understand that the complexity of the law can make year-end tax planning overwhelming, but it is a necessity.

This letter covered some of the year-end planning opportunities and challenges for individuals and businesses regarding federal tax, but there are many more strategies that can possibly help reduce your tax liability over a period of time.  Also, state taxes should also be considered since the tax laws of many states do not follow the federal tax laws.

Most businesses and individuals can benefit from a fresh assessment of how year-end tax planning can help reduce their overall tax liability for 2014.

Contact your BMSS CPA or call (205) 982-5500 if you have any questions regarding the opportunities presented in this letter or would like a more customized analysis of steps you or your business may take to minimize taxes and maximize overall tax opportunities. At BMSS, we also take this opportunity to provide a holistic planning/strategy session for you and your business beyond just tax planning.

We look forward to serving you in the future and discussing your year-end planning.

Read the 2014 Year-End Tax Planning Letter...

***Update 12/17/14 - During the late hours of Tuesday, December 16, 2014, Congress passed the Tax Increase Prevention Act of 2014. President Obama has indicated that he will sign the bill as soon as it reaches his desk. This bill extends through 2014 many tax incentives that expired on December 31, 2013.

Taxpayers will have to act quickly and may need to revisit year-end tax planning discussions that have already taken place.

Some of the more popular tax extenders affecting individuals and businesses are below.

Business Tax Extenders:

  • Bonus depreciation (50% bonus depreciation on qualified property)
  • Enhanced Code Section 179 expensing ($500,000 dollar limit with a $2 million overall investment limit)
  • Research Tax Credit
  • Work Opportunity Tax Credit
  • 100% Exclusion for gain on qualified small business stock

Individual Tax Extenders:

  • State and local sales tax deduction
  • Higher education deduction
  • Teacher’s classroom expense deduction
  • Mortgage debt exclusion
  • Mortgage insurance premium deduction
  • Charitable distributions from IRAs

Please also see the attached Tax Briefing for a more in-depth look at this bill.

Please note our offices will be closed Thursday, December 25th and Friday, December 26th.

Careers at BMSS

At Barfield, Murphy, Shank & Smith we are always looking to create a better environment for our employees.

Barfield, Murphy, Shank & Smith is not like other accounting firms. Here, you can have a growing, fulfilling career - plus a life outside of work. We have created a workplace that encourages a LIFE / WORK balance.

Watch a video about what some of our Members have to say about the "Better Environment" we have at BMSS or check out some employee testimonials.

Read about our unique BMSS culture and the cool perks we offer employees beyond the standard benefits.  Two of our employees enjoy working at BMSS so much they created a rap video, "The History of BMSS".

CAREER OPPORTUNITY: BMSS is looking for accountants with 1-4 years of experience. 

Sound like your kind of place to work? If so, mail your resume to:

Emily Dunlap
Barfield, Murphy, Shank & Smith
1121 Riverchase Office Road
Birmingham, AL 35244
edunlap@bmss.com

Birmingham Business Journal Best Places to Work     Wall Street Journal Top Small Workplaces 

Wall Street Journal Top Small Workplace

Winning Workplaces Sloan Award for Business Excellence in Workplace Flexibility

 

Personal Use of Company Auto

According to IRS regulations, the personal usage of company cars by employees must be treated as taxable compensation income (and is subject to normal payroll taxes).

In valuing this compensation, the general rule is that the employee's income is equal to what it would cost in a regular transaction to lease a comparable vehicle for the time used for personal purposes.

If you would like for BMSS to prepare this calculation for the dates of January 1, 2014 through December 31, 2014, please sign this letter and fill out the attached form for each employee who had personal use of an automobile owned by the business.

Fax the completed forms to the attention of James McGriff at (205) 982-5528 or e-mail it to jmcgriff@bmss.com.

In order for the calculations to be timely completed, all information must be returned no later than Friday, December 12, 2014.

If you have any questions, please give us a call at (205) 982-5528.

 

 

BMSS Habitat for Humanity Service Project

For the 9th year in a row, Barfield, Murphy, Shank & Smith is sponsoring and building a Habitat for Humanity home.

Employees from Barfield, Murphy, Shank & Smith, and sister companies Abacus IT Solutions and Payroll & Benefit Solutions, joined together for 8 weeks to donate over 600 hours to build the new Habitat for Humanity home.

The home is expected to be completed on December 18th, 2014.

Habitat for Humanity

View progress of the project in the Habitat for Humanity photo gallery.

 

Business Personal Property Tax Returns (Ad Valorems) Due 12/31

We would like to take this opportunity to remind you that 2015 Alabama county business personal property tax returns (ad valorems) are due December 31, 2014. 

Business personal property owned as of October 1, 2014 must be reported to the county where the property is located on October 1, 2014.

Personal property assets or equipment necessary to operate your business include:

  • Furniture
  • Fixtures
  • Computer Equipment
  • Machinery & Equipment
  • Software
  • Vehicles or trailers which do NOT have tags

BMSS provides this service for a fee of $520 per filing per Alabama county and/or $200 for each "zero return". 

If you have business property located outside of Alabama and would like assistance filing in states other than Alabama, please make a specific inquiry at BMSS regarding this situation. The assessment dates and filing deadlines may vary by state, but we can help you determine those details.

If you have not been contacted previously and would like for us to provide this service for you, please contact Brad Brown at (205) 271-5472 or bbrown@bmss.com by November 14, 2014.  You will need to sign and complete this attached letter and worksheet and include the preprinted form provided by the county taxing official.

Alabama Taxpayer Identification Protection Program

The Alabama Department of Revenue (ADOR) has implemented a new identity protection program to protect taxpayers from criminals who use stolen information to file fraudulent tax returns.  In 2013, over 1.6 million Alabamians were victims of identity theft and tax refund crimes.

When ADOR receives a tax return it will be processed using new tools intended to detect possible fraud.

Selected taxpayers will receive a letter from ADOR asking them to complete a short confirmation quiz (either online or by phone) used to confirm identity. The request does not mean the individual is suspected of identity theft or has done anything wrong but is used to confirm the person's identity has not been stolen and used to file a false return.

Once the quiz has been completed, the return will be processed.

If you receive a letter from the ADOR, please do not hesitate to contact your BMSS CPA.

Read a sample letter from the ADOR...

 

Beyond the Bottom Line October 2014

New Services from Payroll & Benefit Solutions

Going beyond the role of your outsourced payroll provider, Payroll & Benefit Solutions (sister company to BMSS) now offers expanded benefits and HR services designed to help you save time and money with the ability to scale and customize the options to suit your specific needs.

HR Support Services

Do you spend valuable time researching employment laws? Want access to advanced HR knowledge? Would you like to offer customizable HR benefits?

With different levels of service, Payroll & Benefit Solutions (PBS) can provide you with HR services including:

  • HR Professional as a dedicated point of contact
  • Benefit liaison - health insurance options for Health Care Reform
  • Online access to HR knowledge management system
  • HR audit & review – Employee files, FLSA, handbook, etc.
  • Employee onboarding
  • Claims/charges assistance
  • Secure document storage in the cloud
  • Management training

Benefit Options

Would you like to offer retirement and insurance benefits to your employees at a low cost? Confused about health care insurance options?  PBS is here to help you navigate your benefit options.

Supplemental Benefits

  • Aflac (Short-Term Disability, Hospital Advantage,Accident Indemnity, Cancer Care, Whole & Term Life)
  • No cost to employer
  • PBS handles all deductions and invoicing
  • PBS dedicated customer service/claims line

Small Business 401(k)

  • Open Multiple Employer Plan (MEP) - each company has its own policy
  • No size limitations
  • Lower administrative fees than traditional plans
  • More investment options
  • Shifted fiduciary responsibility

Contact your BMSS CPA to schedule a free consultation with PBS or call (205) 271-5400.

Alabama Unclaimed Property Report Due November 1

The Alabama Unclaimed Property Report is due November 1, 2014.  If your company or organization holds unclaimed property with situs in Alabama, you must file an annual report with the State of Alabama Treasurer’s Office. This report covers property that is deemed to be unclaimed as of June 30, 2014.  You may also have unclaimed property filing requirements with other states. Filing requirements and due dates vary by state. Read more about unclaimed property...

Beware Fake IRS Phone Calls

Be alert for telephone scams of callers that claim to be with the IRS. The scammers often demand money to pay taxes. Some may try to con you by saying that you are due a refund. The refund is a fake lure so you will give them your banking or other private financial information.

These con artists can sound convincing and may even know personal information about you. They may alter the caller ID to make it look like the IRS is calling and use bogus IRS badge numbers. If you do not answer, they often leave an “urgent” callback request.

Here are five things the scammers often do but the IRS will not do and are a sign of a scam:

  1. Call you about taxes you owe without first mailing you an official notice;
  2. Demand that you pay taxes without giving you the chance to question or appeal the amount;
  3. Require you to use a certain payment method for your taxes, such as a prepaid debit card;
  4. Ask for credit or debit card numbers over the phone;
  5. Threaten to bring in local police or other law-enforcement to have you arrested for not paying.

If you get a phone call from someone claiming to be from the IRS and asking for money:

  • Contact your BMSS CPA.
  • If you know you owe taxes or think you might owe, call the IRS at 1-800-829-1040 to talk about payment options. You also may be able to set up a payment plan online at IRS.gov.
  • If you know you don’t owe taxes or have no reason to believe that you do, report the incident to Treasury Inspector General for Tax Administration at 1-800-366-4484.
  • If phone scammers target you, contact the Federal Trade Commission. Use their “FTC Complaint Assistant” to report the scam and add "IRS Telephone Scam" to the comments of your complaint.

Additionally, the IRS currently does not use unsolicited email, text messages or any social media to discuss your personal tax issues.  

October Holds Many Celebrations

BMSS serves clients across numerous industries and provides a wide-range of accounting, auditing, tax and consulting services.  During the month of October, there were many national celebrations and honors we recognized to show support for our clients.

Per Diem Rates Remain Unchanged

The per diem rates to reimburse employees for expenses incurred during business travel beginning October 1, 2014 until September 30, 2015 remain unchanged from the rates used in 2013 - 2014.  The standard lodging per diem rate remains at $83 and the meals and incidental expense tiers also remain unchanged range from $46 to $71. The rate for the incidental expenses only deduction also did not change and is $5 per day. Read more about per diem rates...

BMSS & Employee News

Welcome! BMSS welcomes Brad Brown, CPA as a Senior Accountant and Robby Lilly as Staff Accountant. Hannah Avery returns as a Staff Accountant after previously interning with BMSS.

Abacus IT Solutions, sister company to BMSS, welcomes Randy Clark, Michael Spradling and Lee Kennedy as Network Services Technicians.

Patrick Bowman, CPA was inducted into the Troy University Accounting Hall of Honor.  Patrick holds a Bachelor's and Master's degree in Accounting from Troy University

BMSS was designated as an INSIDE Public Accounting (IPA) 200 firm. The IPA 200 lists the largest accounting firms in the U.S. This is the second year in a row that BMSS was named to this list.
 

 

Questions about this newsletter or how BMSS can help you?           Back to top of page           More News & Alerts

Alabama Unclaimed Property Report Due November 1

The Alabama Unclaimed Property Report is due November 1, 2014.

If your company or organization holds unclaimed property with situs in Alabama, you must file an annual report with the State of Alabama Treasurer’s Office. This report covers property that is deemed to be unclaimed as of June 30, 2014.  Alabama does not require negative reporting; that is, if you hold no unclaimed property as of June 30, 2014, a report is not required. You may also have unclaimed property filing requirements with other states. Filing requirements and due dates vary by state.

How Do You Know If You Have Unclaimed Property?

The links below will help you to determine if your business has reportable unclaimed property:

How Do You File Your Unclaimed Property Reports?

If you have reportable unclaimed property, the second link, "Reporting Forms and Instructions" will assist you in filing and remitted monies electronically.

What Do I Do If I Want BMSS to Prepare My Unclaimed Property Reports?

If you have reportable unclaimed property and you would like us to prepare the annual report for you, please contact Ross Mendheim. If you request that we prepare your unclaimed property report(s), our fees will be based on the standard hourly rates for the actual time incurred. If engaged, we will email you a schedule for completion and the unclaimed property reports will be prepared based on the information provided to us by you.

If you have any questions, please contact Ross Mendheim, one of our State & Local Tax Services professionals or call our office at (205) 982-5500.

New Services from Payroll & Benefit Solutions

Going beyond the role of your outsourced payroll provider, Payroll & Benefit Solutions (sister company to BMSS) now offers expanded benefits and HR services designed to help you save time and money with the ability to scale and customize the options to suit your specific needs.

HR Support Services

Do you spend valuable time researching employment laws? Want access to advanced HR knowledge? Would you like to offer customizable HR benefits?

With different option levels of service, PBS can provide you with HR services including:

  • HR Professional as a dedicated point of contact
  • Benefit liaison - health insurance options for Health Care Reform
  • Online access to HR knowledge management system
  • HR audit & review – Employee files, FLSA, handbook, etc.
  • Employee onboarding
  • Claims/charges assistance
  • Secure document storage in the cloud
  • Management training
  • Develop HR tools

Benefit Options

Would you like to offer retirement and insurance benefits to your employees at a low cost? Confused about health care insurance options?

PBS is here to help you navigate your benefit options.

Supplemental Benefits

  • Aflac
    • Short-Term Disability
    • Hospital Advantage
    • Accident Indemnity
    • Cancer Care
    • Whole & Term Life
  • No cost to employer
  • PBS handles all deductions and invoicing
  • PBS dedicated customer service/claims line

Small Business 401(k)

  • Open Multiple Employer Plan (MEP) - each company has its own policy
  • No size limitations
  • Lower administrative fees than traditional plans
  • More investment options
  • Shifted fiduciary responsibility

Contact your BMSS CPA to schedule a free consultation with Payroll & Benefit Solutions or call (205) 271-5400.

Welcome New Employees and BMSS Employee Honors & Recognitions

BMSS welcomes Brad Brown, CPA as a Senior Accountant and Robby Lilly as Staff Accountant.  Hannah Avery returns as a Staff Accountant after previously interning with BMSS. 

Abacus IT Solutions, sister company to BMSS, welcomes Randy Clark as Network Services Technician.

Keith Barfield, CPA, CITP wrote an article for the ASCPA magazine giving his insights into the Gartner Group's Top Strategic Technology Trends for 2014.

Derrel Curry, CPA presented at the 2014 CPAs in Business and Industry Conference sponsored by South Carolina Association of CPAs on the new Financial Reporting Framework for Small and Midsized Entities.

Patrick Bowman, CPA was inducted into the Troy University Accounting Hall of Honor.  Patrick holds a Bachelor's and Master's degree in Accounting from Troy University.

BMSS Named to IPA 200 List

BMSS was designated as an INSIDE Public Accounting (IPA) 200 firm. The IPA 200 lists the largest accounting firms in the U.S.  This is the second year in a row that BMSS was named to this list.

 

Beware Fake IRS Phone Calls

The IRS continues to warn the public to be alert for telephone scams and offers five tell-tale warning signs to tip you off if you get such a call.

These callers claim to be with the IRS. The scammers often demand money to pay taxes. Some may try to con you by saying that you’re due a refund. The refund is a fake lure so you’ll give them your banking or other private financial information.

These con artists can sound convincing when they call. They may even know a lot about you. They may alter the caller ID to make it look like the IRS is calling. They use fake names and bogus IRS badge numbers. If you don’t answer, they often leave an “urgent” callback request.

The IRS respects taxpayer rights when working out payment of your taxes. So, it’s pretty easy to tell when a supposed IRS caller is a fake. Here are five things the scammers often do but the IRS will not do. Any one of these five things is a sign of a scam.

The IRS will never:

  1. Call you about taxes you owe without first mailing you an official notice.
  2. Demand that you pay taxes without giving you the chance to question or appeal the amount they say you owe.
  3. Require you to use a certain payment method for your taxes, such as a prepaid debit card.
  4. Ask for credit or debit card numbers over the phone.
  5. Threaten to bring in local police or other law-enforcement to have you arrested for not paying.

If you get a phone call from someone claiming to be from the IRS and asking for money, here’s what to do:

  • Contact your BMSS CPA
  • If you know you owe taxes or think you might owe, call the IRS at 800-829-1040 to talk about payment options. You also may be able to set up a payment plan online at IRS.gov.
  • If you know you don’t owe taxes or have no reason to believe that you do, report the incident to TIGTA at 1.800.366.4484 or at www.tigta.gov.
  • If phone scammers target you, also contact the Federal Trade Commission at FTC.gov. Use their “FTC Complaint Assistant” to report the scam. Please add "IRS Telephone Scam" to the comments of your complaint.


Remember, the IRS currently does not use unsolicited email, text messages or any social media to discuss your personal tax issues.  
 

BMSS Staff Promotions 2014

BMSS is proud to announce recent staff promotions in our firm!

Kim TarnakowKim Tarnakow, CPA was promoted to Senior Manager. Kim joined BMSS in 2005 and works in all areas of taxation, but specializes in mergers and acquisitions, research & development (R&D) tax credits and state and local taxes.

Promoted to Supervisor was Kate Fluker and John Schenk. Kate Fluker, CPA began at BMSS as an intern in 2009 and provides tax compliance, planning and advisory services along with business consulting and accounting services. She is actively involved in employee recruitment and training new employees on tax practices, standards and software.  John Schenk, CPA, joined BMSS in 2012 after working with an international public accounting firm for 3 years and in a property and casualty insurance internal audit department. He specializes in providing accounting and auditing solutions to credit unions and financial institutions and currently serves as the Secretary for the Birmingham Young CPAs.

Caroline Cockrell and John Haggard were promoted to Senior Accountant and Luke Arnett and Jennifer Mayfield were promoted to Staff Accountant B.
 

New Revenue Recognition Standard

The Financial Accounting Standards Board and the International Accounting Standards Board issued Revenue from Contracts with Customers in late May 2014. The new revenue recognition standard is principles-based, which is a big shift from and eliminates the industry-specific guidance under U.S. Generally Accepted Auditing Principles (GAAP) we have today. The revenue standard’s core principle is built on the contract between a vendor and a customer for the provision of goods and services. It attempts to depict the exchange of rights and obligations between the parties in the pattern of revenue recognition based on the consideration to which the vendor is entitled.

To accomplish this objective, the standard requires five basic steps:

(i) identify the contract with the customer,
(ii) identify the performance obligations in the contract,
(iii) determine the transaction price,
(iv) allocate the transaction price to the performance obligations in the contract, and
(v) recognize revenue when (or as) the entity satisfies a performance obligation.

Every entity’s daily accounting and the way it executes contracts with customers might be affected. Entities will generally be required to make more estimates and use more judgment than under current guidance, which will be highlighted for users through increased disclosure requirements.

What is the timeframe for implementation? Non-public entities are required to apply the revenue recognition standard for annual reporting periods beginning December 15, 2017, and interim periods within annual periods beginning December 15, 2018. Non-public entities can early adopt for annual reporting periods beginning December 15, 2016.

Although the required implementation date for non-public entities is more than three years away, companies should start to prepare for this change soon to choose the most appropriate transition method.

Three basic transition methods are available:

  • Full retrospective
  • Retrospective with certain practical expedients
  • Cumulative effect approach

Under the third alternative, an entity would apply the new revenue standard only to contracts that are incomplete under legacy U.S. GAAP at the date of initial application (e.g., January 1, 2017) and recognize the cumulative effect of the new standard as an adjustment to the opening balance of retained earnings. That is, prior years would not be restated and additional disclosures would be required to enable users of the financial statements to understand the impact of adopting the new standard in the current year compared to prior years that are presented under legacy U.S. GAAP.

Each transition option has pros and cons. It might be beneficial for your business to move from U.S. GAAP to the new Financial Reporting Framework for Small & Medium-Sized Entities.

In preparation for this change, the American Institute for Certified Public Accountants (AICPA) has established multiple industry-based task forces to develop new accounting guides containing helpful tips and illustrative examples for applying the new revenue recognition standard across various industries.

The AICPA Construction Contractors Revenue Recognition Task Force is one of the first groups to discuss the implementation issues and concerns they foresee. Here are their top 12 concerns for contractors so far:

  1. Disclosures and More Disclosures: Many new and potentially complex disclosures, such as more disaggregation of revenue, remaining performance obligations (i.e., deliverables) and contract balances, will be necessary.
  2. Accounting for Contract Modifications: Significant judgments in the accounting for change orders and claims will increase over the existing prescriptive accounting guidance.
  3. Training: The amount of training and time required to embed the new standard in every facet of the business will be significant, especially for project managers and other non-financial personnel who know GAAP as “how the system works.”
  4. Transition: Companies will face costly transitions, from determining opening balances and dual tracking for retrospective adoption, to system changes and key stakeholder education.
  5. Contract Value vs. Transaction Price: The new standard introduces the term “Transaction Price” which will need to be reconciled both conceptually and in value to the current and well understood term of “Contract Value.” Consideration will also need to be given to how variable amounts (e.g., award fees, liquidated damages, etc.) are factored into the determination of the transaction price.
  6. Systems Modifications: Significant system modifications will be needed to capture the additional information required under the new standard, including disclosures, tracking performance obligations and contract balances.
  7. Redevelopment of specific company policies: Most companies have well established and documented accounting policies under current GAAP; those policies will have to be revisited and changed based on the new guidance.
  8. Accounts Receivable: Philosophical changes may be required from the current practice of transferring amounts from “unbilled accounts receivable” to “billed accounts receivable” when an invoice is submitted to a client, to transferring amounts from “contract assets” to “accounts receivable” when a right to payment occurs, which may be unrelated to the timing of the invoice.
  9. Audit Requirements: Enhanced audit requirements will be necessary around the use of estimates in a financial statement audit and to understand and validate changes in internal controls and related processes.
  10. Key Metrics: Changes will likely be made to key financial performance metrics. Compensation, benefit arrangements, pre-qualification requirements and bonding/surety capacity may be affected.
  11. Tax Accounting: New differences between book accounting and tax accounting are likely to result from implementation of the new standard, as corresponding changes to the tax laws are not expected.
  12. Uncertainty: Since this standard affects a wide array of stakeholders, we will have to wait and see how the views of other regulatory bodies impact the application of these principles.
     

Talk with your BMSS CPA about how these new standards will affect your company.

 

Welcome New BMSS Employees

Welcome!

Wendy Mason joined BMSS as an administrative assistant in our estate and trust area.

Meredith Payne returned to BMSS as a Senior Accountant after serving two years as an accountant for the International Missions Board. Meredith previously worked at BMSS from 2010 – 2012. 

Payroll & Benefit Solutions, BMSS sister company, welcomed Jane Barnett as a Business Development Representative and James Randall as a Payroll Specialist.