I’m a little embarrassed to admit this, but about six months ago, a client first told me about Benefit Corporations. I didn’t learn about their existence at any of my continuing education classes. In fact, we were all at a tax conference about two weeks ago and asked if there would be a discussion of the growth of Benefit Corporations, and all we got was a blank stare. No one seems to know about them. But we think that will change.

In a nutshell, a Benefit Corporation is a relatively new type of for-profit corporate entity, legislated in 28 U.S. states (California ushered in the B Corp in 2012), that includes positive impact on society and the environment in addition to profit as its legally defined goals. B corps differ from traditional corporations in purpose, accountability, and transparency, but not in taxation.

Huh?!? Ok, let’s watch the video instead. Allow me…

Michael here. Just got off the phone with a new client, who happens to be a freelance creative type. He couldn’t stop singing the praises for Expensify. https://www.expensify.com/

It’s an application that helps tracks your business expenses by downloading your bank and/or credit card information.  A client who has accurate expense reports prepared when I meet with them? That makes me a happy CPA.

The IRS has declared tax season will officially kick off on January 20, 2015. Please read below for more details.

http://www.accountingtoday.com/news/irs-watch/tax-season-to-start-january-20-73151-1.html?utm_campaign=daily-dec%2030%202014&utm_medium=email&utm_source=newsletter&ET=webcpa%3Ae3570730%3A2510786a%3A&st=email

Congress got off their behinds and passed tax extender legislation before the end of the year. This means good news for taxpayers (less tax), the IRS (more time to prep for tax season), and Congress (better approval rating?)

Please read for more information:

http://www.journalofaccountancy.com/news/2014/dec/tax-extender-legislation-201411490.html

If something sounds too good to be true, it probably is. Beware of those who can settle your tax debt for pennies on the dollar – read on for more information:

Tax Relief Company Agrees to Turn over $16 Million to Bilked Consumers

The Federal Trade Commission said it is mailing more than $16 million in refund checks to 18,571 consumers who had paid money to American Tax Relief, a company that allegedly bilked financially distressed consumers by falsely claiming it could reduce their tax debts.

Under a settlement that the FTC reached last year, American Tax Relief turned over millions of dollars in assets the court had frozen, including bank accounts, jewelry and a Ferrari. The parents of one of the defendants also turned over bank accounts, jewelry, a Beverly Hills residence and a Los Angeles condominium.

The FTC said last week that affected consumers would receive, on average, 16 percent of the amount they lost. Those who receive checks from the FTC’s refund administrator should cash them within 60 days of the mailing date. The FTC never requires consumers to pay money or to provide information before refund checks can be cashed. Those with questions should call the refund administrator, Gilardi & Co., LLC, at 1-(877) 430-3699, or visit www.FTC.gov/refunds for more general information.

Under last year’s settlement order, American Tax Relief LLC and its leader, Alexander Seung Hahn, were banned from telemarketing, and they and Hahn’s wife, Joo Hyun Park, were permanently prohibited from selling debt relief services. As part of the FTC’s ongoing efforts to protect consumers in financial distress, this was the agency’s first action against a tax relief company.

A number of other tax relief companies have also run afoul of regulators and state attorney generals in recent years after advertising their IRS tax resolution services to consumers and been forced to shut down, including TaxMasters, JK Harris and “Tax Lady” Roni Deutch (see TaxMasters Goes Bankrupt, JK Harris Goes Out of Business and ‘Tax Lady’ Roni Deutch Pleads Guilty).

The FTC originally filed charges against American Tax Relief, Hahn, and Park in September 2010.  A court subsequently halted the allegedly illegal practices, froze the defendants’ assets, and appointed a receiver to manage the company pending resolution of the case.

In August 2012, the court entered partial summary judgment in favor of the FTC, finding that the defendants falsely claimed they already had significantly reduced the tax debts of thousands of people and falsely told individual consumers they qualified for tax relief programs that would significantly reduce their tax debts.  The court found Hahn personally liable for the challenged practices.

The 2013 settlement order imposed a $103.3 million judgment against ATR, Hahn, and Joo Hyun Park.  It also imposed judgments of $18 million and $595,000, respectively, against relief defendants Young Soon Park and Il Kon Park, Joo Park’s parents, who were not charged with participating in the scheme but were found by the court to have received significant sums. At the time, the FTC said the judgments would be suspended once the defendants and relief defendants have surrendered assets that total more than $15 million, including cash, a home in Beverly Hills and a condo in Los Angeles, jewelry and gold items, and a 2005 Ferrari. The order also prohibited ATR, Hahn, and Park from misrepresenting material facts about any products or services, collecting payments from the scheme’s customers, selling or otherwise benefitting from customers’ personal information, and failing to properly dispose of customer information.

The FTC vote to approve the proposed stipulated final judgment was 5-0.  The stipulated final judgment was entered by the U.S. District Court for the Central District of California on Jan 29, 2013.

Meet the new IRS Commissioner, John Koskinen. In this video message he asks US taxpayers to use the IRS website because they will be too busy for all the calls they are expecting. Try not to fall asleep during the video.

Beginning in March of every year, we start getting emails and calls from clients asking where their IRS refunds are. In order to find out that information, we have to prepare a Power of Attorney, send it to the client for signing and then call the IRS, usually with substantial wait times.  Fortunately, anyone with a smartphone can access that same information with the help of the IRS2GO app.

Here is a link for more details:

http://www.irs.gov/uac/Newsroom/Updated-IRS-Smartphone-App-IRS2Go-Version-4.0-Now-Available

SHAW,  Margaret (nee Graham) October 26 1939 – December 12 2013.

Margaret Shaw, 74, passed peacefully on December 12, 2013, surrounded by her husband, her four children, and her beloved dog, Buddy at her home in San Anselmo, California.

Margaret was born October 26, 1939 in Bangor, County Down, N. Ireland  to William and Margaret Graham. She was an alum of Glenlola Collegiate in Bangor (class of 1958) and worked at Lyle & Kinahan in Belfast, Deloitte Haskins & Sells in London, and Shaw & Shaw CPAs in Mill Valley, California.

Margaret lived life to the fullest every day. She will always be remembered for her joyful spirit, her immense love for all of her family and friends all over the world and, most of all, her laughter. She truly was the star of the County Down.

Margaret is survived by her husband, William Henry Donald Shaw; her children, Sonya Murphy, Michael Shaw, Paul Shaw and Graham Shaw; her son-in-law Noel Murphy; her daughters-in-law Adriana Divizich Shaw and Jamie Shaw; her two grandchildren, Devon and Tyler Murphy; her brother William Graham; and her faithful companion, Buddy. She was predeceased by her parents and her brother, George Graham.

The family thanks Marin Hospice by the Bay and Professional Healthcare at Home for their great kindness and loving care. Memorial services will be held in California and Northern Ireland – details will be shared at www.caringbridge.org (margaretshaw) when available.  Photos, memories and condolences may also be shared with Margaret’s family through Margaret’s caringbridge site. Memorial contributions may be made to the National Brain Tumor Society at www.braintumor.org or Hopalong & Second Chance Animal Rescue in Oakland at www.hopalong.org

Because of Congress’s inability to pass legislation in a timely manner, the IRS has been frantically revising forms and updating their systems, and is now ready to receive and process all 2012 tax returns.

For more information:

http://www.journalofaccountancy.com/News/20137500.htm

On November 6, 2012, Proposition 30 was passed in the state of California. Proposition 30 contains two tax provisions, one which may affect you and one which will definitely affect you.

Additional income tax rates for 2012

Yes, you read that correctly, Proposition 30 adds additional income tax rates retroactive to January 1, 2012. However, if you are affected by this provision, it’s important to understand that the proposition also contains a waiver of underpayment penalties for this retroactive assessment.
If your California taxable income for 2012 is less than $250,000 ($500,000 for a married couple filing jointly) you are not affected by the increased rates under Proposition 30. The marginal rates for all taxpayers up to the previous highest rate, 9.3%, were not changed by this new law. If your California taxable income for 2012 is over $250,000 ($500,000 for MFJ) your marginal rates on income over the thresholds will be:

Increased statewide sales tax rate for 2013
Proposition 30 also increases the statewide sales tax rate by 1/4% beginning January 1, 2013. If you are contemplating a purchase in the near future, you may want to complete the transaction before year-end in order to avoid the higher sales tax.