July/August, 2010 Newsletter
The New Financial Reform Legislation – Historic and Game-Changing
Written by Mike Bromelkamp, CPA, MBA, CIA on August 11, 2010
The passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) will have a sweeping impact on the delivery of financial services in the United States. It will affect the operations of every bank/bank holding company, securities firm, insurance company and other providers of financial services in the United States and around the world.
The proponent’s objectives of the legislation include restoring public confidence in the financial system, preventing a future financial crisis, and allowing any future asset bubble to be detected and deflated before another financial crisis occurs. The coming months and years will reveal the effectiveness of this increased regulation. Read the rest of this entry »
Moving? A Notification to IRS May Be Necessary
Written by Mark Angell, CPA on August 11, 2010
If you move during the year, it may be a good idea to notify the IRS of your new address at the same time you notify Olsen Thielen. The IRS uses “the last known address” of record for various notices and documents that require the taxpayer’s response. A notice or document sent to a taxpayer’s “last known address” is legally effective even if the taxpayer never receives it.
The IRS will usually use the address on the most recently filed return as the address of record. However, it will automatically update the taxpayer’s records if the taxpayer notifies the U.S. Postal Service of the new address. To avoid a possible lapse in IRS recordkeeping, it is recommended the taxpayer notify the IRS directly of an address change.
In a Revenue Procedure effective June 1, 2010, the IRS outlines a number of ways a taxpayer can change their address of record. Electronic, written, and oral notification to the proper IRS authorities can all be used, as long as the communication is “clear and concise” as to the change of address. Form 8822, Change of Address, can also be used to provide notification.
The Minnesota Department of Revenue accepts change of address requests over the phone and through email. The taxpayer must provide the department with their full name, social security number, and current and former mailing addresses. Please contact us for assistance in notifying the authorities of your change of address.
Health Reform and W-2′s
Written by Alan Holz, Human Resources Manager on August 11, 2010
Beginning in 2011, employers sponsoring health insurance plans face new W-2 reporting rules. The cost of employer-provided health insurance will need to be reported and while most will see this on their 2011 W-2, employees who terminate during the year are entitled to receive their W-2s early.Plans to be reported include medical, prescription, executive physicals, on-site clinics, Medicare supplemental policies and employee assistance programs. Coverage under dental and vision plans is also included unless they are stand-alone plans. FSA’s or flexible spending accounts are not included.
Cost of the plans will need to include COBRA minus the 2% administrative fee employers are able to charge, which means the Government will have to issue guidelines on how to value COBRA coverage.
SOX 404(b) – Small Public Companies are Exempt
Written by Brett Olsen, CPA on August 11, 2010
The waiting period is finally over. SEC registered Companies with market capitalization under $75 million are now officially exempt from compliance with Section 404(b) of the Sarbanes-Oxley Act. On July 21, 2010 President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act, which included the provision to exempt non-accelerated filers.
This is welcome news for many non-accelerated filers who will no longer be required to go through the requirements of SOX. The Act also requires the SEC to conduct a study on how to “reduce the burden of” SOX 404(b) compliance for companies with market capitalizations between $75 million and $250 million. The result of this study could bring about further exemptions for companies that fit this range.
IRS Announces Filing Relief Program for Small Charities
Written by Linda Nelson, CPA on August 11, 2010
The IRS announced that small nonprofits originally scheduled to lose their tax-exempt status on May 15, for failing to file returns for the three prior years, can now keep their tax-exempt status if they file returns by October 15, 2010. The IRS says this is a one-time relief program, so organizations that don’t comply by filing a return by October 15 will lose their exempt status.
Most small organizations can comply with the program by simply filing a Form 990-N Electronic Notice online, providing eight items of information for the organization. Organizations whose annual income is over $25,000 should have been filing a Form 990-EZ for these years, and can come into compliance by filing all three prior returns and paying a compliance fee, which ranges from $100 to $500, depending on the gross receipts reported on their 2009 return. Details of the IRS announcement are on the IRS website at: http://www.irs.gov/charities.
Health Reform’s Early Retiree Reinsurance Program
Written by Alan Holz, Human Resources Manager on August 11, 2010
The Affordable Care Act will provide employers with financial assistance in funding insurance and medical claims for early retirees including their spouses and dependents and applies to those employees who have retired at age 55 or older and are not yet eligible for Medicare.
Employer applications are now available at http://www.hhs.gov/ociio/ including more information regarding the program and FAQ’s. The basics include reimbursement to employers of up to 80% of medical claim costs for health benefits between $15,000 and $90,000. Medical claims after June 1, 2010 are eligible for reimbursement.
The program officially ends January 1, 2014 when the health insurance exchanges are expected to be available. Employers including unions, state and local governments, nonprofits, religious organizations and private companies are eligible.
Homebuyer Assistance Act of 2010 Extends Deadline for Homebuyer Tax Credit
Written by Mark Angell, CPA on August 11, 2010
The Homebuyer Assistance Act of 2010 was signed into law on Friday, July 2, 2010. The new legislation gives homebuyers under contract until September 30, 2010 to complete their home purchase and still be eligible for the homebuyer tax credit. Prior to this legislation, the Homebuyer Tax Credit was available to eligible taxpayers who either purchased a home before May 1, 2010 or entered into a contract for a home before May 1, 2010 and finalized the purchase by June 30, 2010.
The House Ways and Means Committee estimated 180,000 taxpayers were under contract and had not been able to close on their homes by the June 30, 2010 deadline due to delays in the financial sector. Taxpayers who are building a new home now have until September 30, 2010 to complete the construction and remain eligible for the tax credit.
The Homebuyer Assistance Act only extends the required closing date to September 30, 2010; contracts must have been entered into prior to May 1, 2010.
Health Care Reform: Patient’s Bill of Rights
Written by Linda Nelson, CPA on August 11, 2010
As a part of Health Care Reform, the Patient’s Bill of Rights addresses the ban on annual and lifetime benefit limits, pre-existing condition exclusions and other consumer protections in primary care provider choice and access to emergency rooms. While under the new law it is permissible to impose limitations on “essential benefits”, the term “essential benefits” has yet to be defined.
The regulations establish a transition period for annual benefit limits:
- $750,000 for plan years between September 2010 and September 2011;
- $1,250,000 for plan years between September 2011 and September 2012; and
- $2,000,000 for plan years between September 2012 and January 1, 2014.
As of now, beginning in 2014 the no annual limit will apply to all health plans as will a ban on pre-existing condition limitations.
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July/August, 2010 Newsletter
