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11.17.08 Personal Use of Business Vehicle
In a recent survey we conducted, over a quarter (28 percent) of organizations allow employees to use employer-provided vehicles for personal reasons. This means an extra year-end T&E-related task AP needs to handle. That’s because a worker's personal use of an employer-provided vehicle is a taxable fringe benefit in most cases. So employers that allow workers to make personal use of company cars generally are required to determine the value of this personal use and inform payroll so that it can be included in employees' wages. The value of a worker's personal use of a company car generally is treated as taxable compensation — i.e., subject to federal income taxes, as well as social security and unemployment taxes.
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11.10.08 New Deadline for Certain 1099s
The Internal Revenue Service has posted to its Web site a notice on the new due date for furnishing certain information returns to recipients enacted under recent federal bailout legislation (Public Law 110-343). It said that, under Division B, Section 403, the due date for providing recipients with Copy B of certain information returns filed after 2008 is Feb. 15 of the year following the calendar year for which the return is required to be filed.
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10.27.08 New Bill Targets Worker Misclassification
Legislation intended to prevent employers from improperly classifying employees as independent contractors to avoid paying for benefits was recently introduced in the Senate.
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10.20.08 More Whistleblower Protection Needed
There are laws designed to protect employees who report instances of corporate malfeasance. Unfortunately, these protections have not been fully realized—even under the Sarbanes-Oxley Act, which has specific provisions about protecting whistleblowers. Employees have faced retaliation for blowing the whistle due to aggressive tactics from corporate attorneys, a cascade of bad judicial decisions for whistleblowers seeking protection, and broad confusion among judges over the intent of the various statutes. And this will go on--unless all of the whistleblower laws are overhauled, according to a new report by the Government Accountability Project.
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10.17.08 Test Your AP IQ: Board Fees and Form 1099
In what box on Form 1099 should you report payments of fees to members of your organization’s Board of Directors? more...
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10.13.08 Small Biz Lags in SOX Controls
If your AP department is up to speed on getting its internal controls in shape under the Sarbanes-Oxley Act, you’re probably ahead of the rest of your organization—especially if it’s a small organization. That’s because on an overall basis, small public companies have made little progress in developing their internal controls over financial reporting. And this is the case despite being given an extra four years to comply with SOX Section 404, which requires public companies to assert the strength of such controls, Lord & Benoit, a consulting firm on SOX issues for small companies, said in a recent report.
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10.10.08 Test Your AP IQ:OFAC List
AP is prohibited from making payments to individuals or entities on a special list issued by the Office of Foreign Assets Control (OFAC), which is part of the U.S. Treasury Department. What is the name of this list? more...
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10.07.08 OK OKs Sales Tax Amnesty
From time to time, states announce a period of amnesty for various delinquent taxes. If you pay what’s due, you will not be charged interest or penalties. Oklahoma has such a program underway now. The state will waive any penalties, interest, or other collection fees due on certain delinquent tax debts—including sales and use tax-- that are paid between Sept. 15 and Nov. 14. more...
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09.29.08 IRS Issues New “High-Low” Per Diems
The Internal Revenue Service has issued new “high-low” per diems for lodging, meals & incidentals. Under this method, there’s a list of localities that are classified as "high-cost" areas—all other localities are deemed "low-cost" areas. There’s one per diem rate for high-cost areas and another for low-cost areas. These simplified rates can be used in lieu of the hundreds of city-by-city rates.
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09.22.08 Baker’s Dozen of 1099 Tasks to Start Now
Now’s the time to start preparing to file Form 1099. Here are 13 things you can do right now to get things started to make this task go easier. more...
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09.19.08 Test Your AP IQ: TIN Types
What are the acronyms for the five different types of Taxpayer Identification Numbers (TINs)?
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09.15.08 Congress, IRS Step Up Crackdowns
Worker classification and employee tool reimbursement plans are two areas getting more attention from the Internal Revenue Service and Congress, an IRS official said at a recent conference.
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09.08.08 IRS to Widen Scrutiny of NRA Payments
Long-awaited guidance to Internal Revenue Service agents on how to audit reporting of U.S. payments to foreign persons signals an increased audit focus and aims to clarify precisely what agents are seeking.
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08.29.08 Test Your AP IQ: W-8s and W-9s
When soliciting Forms W-8 and W-9 from payees, what is the rule concerning whether you can accept copies instead of signed originals?
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08.25.08 SIFL Rates Increase for 2H08
All the Standard Industry Fare Level (SIFL) formula rates have increased for the second half of 2008 (July 1 through December 31).
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08.22.08 Test Your AP IQ: Form 1099 Penalties
For each Form 1099 you file with a missing or incorrect Taxpayer ID Number (TIN), what is the penalty the IRS can impose on your organization?
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08.18.08 New Per Diems Effective Oct. 1
Effective Oct. 1, 2008, the standard per diem rate for business travel within the continental United States will remain at $109 ($70 for lodging, $39 for meals and incidental expenses), the General Services Administration has announced. For specifically listed localities, the lodging rate will range from a low of $70 to a high of $360, depending on locality. The rates for meals and incidental expenses will remain the same, ranging from $39 to $64. There are about 400 locations in the continental United States with a lodging per diem that is higher than the national standard rate.
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08.11.08 Reducing Escheatment Efforts
Watch for states to get more aggressive in targeting companies for unclaimed property they might have to make sure it’s all turned over to the state. With state budget gaps growing, they will look to this source of revenue to help them out of their economic crises.
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08.05.08 Sample Forms for NRA Payments
Most organizations use a questionnaire or data collection form for individuals to fill out to determine his or her U.S. residency for tax purposes. Among other things, the form should ask for the individual’s social security or ITN, current immigration category (e.g., visa type), and a worksheet for the substantial presence test. The results of this test determine whether the individual is a nonresident alien or a resident alien for tax purposes. Here are a few samples of this form. more...
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08.04.08 1099 Reporting of Options Delayed
The Internal Revenue Service is delaying Form 1099 reporting for stock transfers on the exercise of incentive stock options, according to a report in the Kiplinger Tax Letter. Organizations were supposed to start sending the IRS 1099 forms in 2009 for transfers pursuant to options that were exercised in 2008, but the IRS is suspending that rule for one year to give firms time to get their automated systems ready. This means organizations will have to start sending the 1099s in 2010 for options exercised during 2009.
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07.28.08 Call to Ease Tough Biz Cell Phone Rules
More than 30 companies and associations signed a July 10 letter to Senate Finance Committee Chairman Max Baucus (D-Mont.) and ranking member Charles Grassley (R-Iowa) supporting proposed legislation that would eliminate the requirement that employees track and substantiate the use of employer-provided cell phones in order for their value to be excluded from income.
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07.25.08 Test Your AP IQ: Accounting for Travel Advances
If an employee does not account for a travel advance within a “reasonable period of time” after the expense has been paid or incurred, the amount must be included on the employee’s W-2 form as taxable income. What is this “reasonable period of time?”
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07.21.08 Tool Reimbursements Taxable, Says the IRS
After years of scrutiny and enforcement of the issue, the Internal Revenue Service said in formal guidance that amounts paid to employees under motor vehicle industry specialized tool and equipment plans are subject to employment taxes.
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07.14.08 SEC OKs SOX Delay for Small Biz
The Securities and Exchange Commission has approved a one-year extension of the compliance date for smaller public companies to meet the Section 404(b) auditor attestation requirements of the Sarbanes-Oxley Act. In a news release, the SEC said that with this extension, "smaller companies will now be required to provide the attestation reports in their annual reports for fiscal years ending on or after Dec. 15, 2009."
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07.11.08 Test Your AP IQ: Business Mileage Rate
The standard business mileage rate can be used to reimburse employees for using their personal vehicles for business purposes. Which of these costs is not embodied in the standard mileage rate? more...
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07.07.08 Mileage Reimbursement Tax Trap
The Internal Revenue Service recently increased the optional business standard mileage rates from 50.5 cents per mile to 58.5 cents per mile effective July 1. This is the rate you can reimburse employees on a tax-free basis for the business use of their personal cars. But employees may have a tax issue if employers reimburse for less than the standard rate.
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06.30.08 Congress Enters 1099 Worker Fray
Legislation aimed at stopping employers from improperly classifying employees as independent contractors to avoid minimum wage and overtime obligations, employment taxes, and benefit contributions has been introduced in the House of Representatives.
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06.24.08 FLASH: IRS Ups Mileage Rates Effective July 1
The Internal Revenue Service announced yesterday an increase in the optional standard mileage rates for the final six months of 2008, according to a news release [IR-2008-82] and an accompanying announcement [Announcement 2008-63].
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06.23.08 New Proposed Regs on Biz Car Usage
When employees use business cars for personal use, the value of the personal use is generally considered taxable income to the employees. However, there’s no tax if the vehicle is a so-called “qualified nonpersonal use vehicle.” Under new proposed regulations from the Internal Revenue Service, "clearly marked" public safety officer vehicles would be added as a new type of qualified nonpersonal use vehicle. That means, for example, that public safety officers and other first responders would be able to take their vehicles home tax-free. What’s more, they don’t even have to be employed by a police or fire department to qualify for the tax-free treatment—as long as the vehicles are clearly marked. more...
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06.16.08 New IRS Worker Classification Initiative
The Internal Revenue Service is undertaking new employment tax enforcement initiatives, including closer attention to worker classification issues, Kathy Petronchak, IRS commissioner for the Small Business/Self-Employed Division, told attendees at the recent American Payroll Association 26th Annual Congress.
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