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Will the teacher supply tax break disappear off the fiscal cliff for 2012?

By on December 11, 2012 in General, Governments, Tax

Here or Gone for 2012?

Through 2011, if you were a teacher paying for classroom supplies and other materials out of your own pocket you claimed up to $250 of those expenses as a direct tax deduction.

This is just one of the many deductions identified by Sandersen Knox & Company that may fail to be renewed and fall off of the fiscal cliff for 2012. In this case, teachers are the losers.

If Renewed – Here is how it has worked. As of now it has gone off the fiscal cliff.

Qualifications: You are a teacher, aide, instructor, counselor, or principal, and worked in a school at least 900 hours during the school year. Only grade school and high school educators qualify (K through 12th grade). A “school” includes any school which provides elementary education or secondary education (kindergarten through 12th grade), as determined under state law.

Background:  School teachers often pay for classroom materials out of their own pockets. If you qualify as an “eligible educator,” you will be allowed a “classroom expense deduction” of up to $250 for expenses you paid in 2011 in connection with books, certain supplies, computer equipment (including related software and services), other equipment, and supplementary materials you use in the classroom. (Additional requirements, discussed further below, must also be satisfied.)

The Mechanics:  The classroom expense deduction is allowed whether or not you itemize deductions. Without this special break, you could get a deduction only if you itemized, by treating the expenses as unreimbursed employee business expenses. However, unreimbursed expenses are among the “miscellaneous itemized deductions” that are deductible only to the extent your total “miscellaneous itemized deductions” exceed 2% of your adjusted gross income (AGI). (The 2%-of-AGI limit means that a teacher earning, say, $45,000, would get no deduction unless total miscellaneous itemized deductions exceed $900.)

To be deductible—under both the classroom expense deduction rule and the unreimbursed employee business expense rule—expenses must be “ordinary and necessary expenses” that you pay in connection with doing your job as a teacher. This means that the expenses must be customary and usual for teachers in your type of school located in your area, and must be appropriate or helpful (but not necessarily essential) to doing your job properly. In other words, if you’re a public elementary school teacher, and if it’s not out of the ordinary for public elementary school teachers in your area to buy books, supplies and materials for their classes, and if the things you actually buy are useful and helpful in performing your job as a teacher, the expenses pass this “ordinary and necessary” test.

In addition, the expenses must not be reimbursable. This means that if you have a right or expectation of reimbursement from your employer for these expenses, you can’t deduct them.

For example, say that you’re a qualified 2nd grade teacher. You spend $200 on chalk, crayons, paints, paper and various other supplies for use by your pupils in the classroom. You can’t get reimbursed by your school, and many public elementary school teachers in your area pay for these types of supplies for their pupils out of their own pockets. You’re entitled to deduct that $200 under the classroom expense deduction rule. If you spent $400 instead of $200, you could deduct $250 of the $400 under the classroom expense deduction rule. But the remaining $150 could only be deducted as an unreimbursed employee business expense. And note that if you took your pupils to a local museum and spent $56 in the museum cafeteria for snacks for them, you couldn’t deduct the $56 under the classroom expense deduction rule, because you spent that money for an activity outside the classroom, rather than for classroom books, supplies or materials.

Backing it up.  In order to claim a deduction for classroom expenses—either under the classroom expense deduction rule or the unreimbursed employee business expense rule—you must be able to prove that you paid the expenses, when you paid them, and what the expenses were for. Receipts for the items purchased showing the date and amount of the purchase, and identifying the specific items purchased, will usually do the trick. A note on the receipt (or in some “classroom expense” log) indicating the classroom activities for which the items will be used is also helpful. Make these notes (or keep up the log entries) at or near the time you make the purchase. If your purchase includes both items you’re buying for your classroom and items for your (or your family’s) personal use, you should identify the classroom items on the receipt. And if the classroom items can be used for both classroom and personal purposes—for example, children’s books when you yourself have children, or general purpose computer software—you should be able to prove that you bought those items for classroom use. Photographs of the items in the classroom would be helpful in this regard.

There is one other little known requirement that may limit the amounts otherwise deducted.  Whether or not this is retained for 2012 is yet to be determined.

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Are you taking advantage of all the tax breaks available to you?  It pays to stay informed.

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Public School Teachers Involved in Testing Fraud

By on December 11, 2012 in General, Governments

A recent scandal in three Southern states has suggested that ambitious students are not the only ones capable of cheating and fraud when it comes to test-taking. According to ABC News, certain public school teachers have been implicated in fraudulent actions of their own. Authorities have accused more than a dozen public school teachers of paying Clarence Mumford Sr. between $1,500 and $3,000 to create false identification and send in “test ringers” to take the Praxis exam for them. In return for their payment, the aspiring teachers received a passing grade on the exam and could go on to work in the public education system, cheating hundreds, if not thousands of students, out of receiving an education from a qualified professional.

Clarence Mumford Sr. (an educator himself) has been charged of 60 counts of conspiracy and fraud. His actions spanned a period of fifteen years (from 1995 to 2010) in Arkansas, Tennessee, and Mississippi. If convicted, Mumford will receive two to twenty years in prison for each count. The teachers implicated in the scandal will also receive two to twenty years in prison for each count.

This scandal has raised considerable concern when it comes to test-taking, technology, and the lengths individuals will go ensure their success.

 

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Keep Business Ethics Front and Center

By on November 28, 2012 in General, Governments
Sandersen Knox & Company LLP, CPA, Tax Accountants, Auditors

Keep Business Ethics Front and Center

With high-profile wrongdoing at Enron, WorldCom, Tyco International, and others still in recent memory — many wonder if ethics still has a role in the business world.

The question is even more relevant today, given the languishing economy. It doesn’t require much resolve to do the right things, such as paying suppliers on time and adhering to top-notch quality, when times are booming. But, if you’re short on cash, it can be easy to extend payables past their due date or skimp on quality. It’s in such times that emphasis on business ethics or “the principles of conduct governing an individual or group” is most important. With that in mind, Sandersen Knox & Company would like to share some thoughts on keeping business ethics front and center.

Setting the tone at the top

The phrase “tone at the top” is often used to describe both the attitude and actions of a business’s owners and executive management. If top managers emphasize the need to act with integrity, but don’t follow through with their actions, employees will notice. For instance, a company president who stresses honesty, yet asks an employee to backdate a check so it doesn’t clear right away, conveys the message that doing the right thing is less important than achieving a particular result.

Such actions can, in turn, prompt employees to act unethically. Consider this: The Ethics Resource Center’s asked participants in a recent study if they’d observed at least one form of a specific misconduct in the previous year. When it came to falsifying time or expense reports, 4% of respondents working in organizations with strong ethical cultures reported such an incident, compared with 19% in companies with weak ethical cultures.

Examining candidates’ values

To maintain a culture that values ethics, hire employees who also place a premium on an ethical work environment. A job candidate who values moving up at any cost may come across as an ambitious go-getter. However, if a worker starts cutting corners and fudging results — say, by recording sales before they’re actually completed — he or she will undermine your efforts to foster an ethical corporate culture.

Implementing formal policies

Owners and managers should regularly discuss workplace ethics with both employees and business partners. There should also be a written policy that outlines the approach to doing business. Putting the policy in black-and-white and making it easily available can help prevent misunderstandings, and emphasize the point that integrity comes first. An ethics policy might include provisions that state expectations for employees regarding the proper use of the business’s assets and their duty to avoid situations that would constitute a conflict of interest, such as hiring a family member.

Harnessing strong internal controls

Internal controls are processes designed to provide a reasonable assurance that your financial statements are credible and accurate, that your company complies with applicable laws, and that its operations are efficient.

A strong system of internal controls might seem most applicable in larger businesses, but it’s critical to smaller companies, which often are less able to withstand a fraudulent or criminal act. Internal controls help safeguard the company’s assets and ensure that decisions made by management, lenders and investors are based on accurate information.

A fundamental element of strong internal controls is to segregate duties within financial operations and reporting. While this won’t eliminate the possibility of fraud, having two people involved in an operation makes it more difficult to pull off. An employee who issues checks or payments, for example, shouldn’t also be responsible for recording those transactions. When checks arrive via mail, one employee should log them and another deposit them.

It’s also critical that management take a keen interest in the business’s financials. Employees should know that management regularly — and, ideally, randomly — looks in financial reports for transactions that raise a red flag, such as an unexplained spike in expenses.

Sustaining an ethical workplace

SKC suggests setting a tone at the top that stresses integrity, a written ethics policy, a commitment to hiring employees who take ethics seriously and a system of strong internal controls will help you develop and sustain an ethical workplace environment. Work with a business consultant and CPA to ensure that your ethics policies and internal controls are operating as intended.

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Looking the Other Way: Managers’ rationalization of possible frauds

By on August 21, 2012 in General, Governments

In a company fraud there are often two people involved even if only one is taking the money. Managers often look the other way because of their own sets of rationalizations. Examining the manager’s role can shine light on important clues to the nature and extent of employee fraud during an examination.

Sarbanes Oxley before and after
The ramped-up regulations and liabilities resulting from the Sarbanes Oxley Act changed the way public companies approach fraud prevention. Controls improved, education and monitoring methods tightened, and audit committees increased scrutiny of company processes. But the act has not put fraud examiners out of business. “Public companies are tremendously improved because of SOX, but I still see fraud perpetrated at private and not-for-profit companies,” says Leon A. La Rosa, Jr., CFE, CPA, MST, chair of litigation support services, Gocial Gerstein, LLC, in Jenkintown, Penn. “I’m constantly surprised that nonpublic and even smaller public companies haven’t taken up better prevention given all the limelight in the press about fraud.”

Where gaps exist, managers – the monitors of both people and controls – often are the stopgaps. But their rationalization quirks can widely affect their job performances. SOX changed the regulations but the culture of fraud prevention is still in transition. Pre-SOX, many organizations unofficially encouraged a “don’t ask, don’t tell” type of culture. “The belief used to be ‘if it ain’t broke, don’t fix it’,” says Yormark.

Where fraud begins

The first step to preventing fraud is understanding when and how it begins. The video below illuminates how even employees with honorable intentions can find themselves in a web of deceit and fraud.

How Fraud Hurts You and Your Governmental Organization

I see nothing

Managers looking the other way in hopes of not seeing the frauds provides an oppertunity for fraud to both begin and flourish. A manager with his head in the sand might be a sign for a fraud examiner to spend some time in that department. Donald L. Cameron, CFE, of Fraud Examination Services, LLC, in Overland Park, Kan., tells of a recent phone call from the manager of a large nonprofit in his area. The caller inquired how he could know that some of the projects his organization funded might not be fraudulent like the Kansas City Head Start program that was grabbing local headlines. Called the “poster child for government fraud,” local newspapers focused on the fact that the salary for the head of the local program topped that of the federal secretary of education. The Department of Health and Human Services questioned $814,142 in compensation to Dwayne Crompton over the three fiscal years that ended June 30, 2002 . Crompton is executive director of the KCMC Child Development Corp, whose agency oversees 11 Head Start centers in the Kansas City area. KCMC officials also said Head Start funds had been used in the past to pay part of a $600-a-month lease for a Mercedes sport-utility vehicle for Crompton.

Cameron, who spent 22 years in mechanical contracting before creating his firm, simply answered that the caller wouldn’t know unless he looked into it. “He promptly thanked me for my time and hung up,” says Cameron. “After several more headlines of the Head Start investigation he called back for a proposal.”

This manager ascribed to the denial school. If he didn’t know about it perhaps it didn’t exist. In the not-for-profit world the belief that good people are getting the grant money to do good things also supports looking the other way. “Funders still have to answer the question of how to do proper examinations of grant recipients while not believing that everyone is a crook,” says Cameron.

When the manager is the problem

Managers become part of the problem for several reasons. One of the greatest incentives is financial. “Some of the worst cases are when the manager looks the other way because they are part of the problem,” says Cameron.

A review of the compensation structure of the department might reveal that managers receive bonuses and other rewards based on meeting certain sales or revenue benchmarks. Karl Kasca, CFE, encountered one particularly memorable case from his 16 years as internal auditor for a Fortune 500. One of the company’s divisions consistently ranked at the top with accident-free truck drivers. Division managers happily received their regular rewards and honors for a job well done. “When we audited we found the accident reports in the supervisor’s desk drawer,” says Kasca, now of Kasca & Associates in Pasadena, Calif. Kasca’s firm helps fraud examiners to effectively access information and conduct research.

Sometimes the corporate culture supports managers in looking the other way just to keep their jobs. SOX and the whistleblower protections change this somewhat. An analysis of the company’s acceptance of fraud found on a manager’s watch might yield clues in an examination. “Someone might have to evaluate whether a certain finding is weighty enough to put their entire career on the line,” says Kasca.

The willingness to look the other way might be supporting smaller frauds. A purchasing employee certainly knows that she should be dealing with the vendor at the lowest price for equal quality but is getting some personal payback or gift from a higher-priced vendor. “This manager might rationalize that the difference in amounts is not significant in the company’s overall expenses,” says LaRosa. “If the expensive contract doesn’t go over budget the manager has an additionally comfortable rationalization.”

For the good of the company

The ACFE’s Report to the Nation on Occupational Fraud and Abuse shows that large frauds occur at the highest levels in the organization; upper management in public companies might rationalize that it’s good for the company because the fraud, if it’s an overstatement, might cause the stock price to appreciate. Obviously, any quarter in which earnings might miss analysts’ targets, management has a significant reason to report desired results rather than true economic results. In private companies, managers might report fraudulent financials to prove compliance with debt covenants. “The issue always gets back to the integrity of the people,” says La Rosa. “If senior managers tell middle managers that moving expenses forward one quarter is okay because they’ll recover it the next, then the middle managers take on that attitude with simple things like travel expense reports.”

Gauging the tipping point of a manager could be useful information for fraud examiners. Each person brings a certain degree of ethical training and cultural experience to the job. “Managers don’t sit down and make a list of the advantages and disadvantages of overriding (employee) policies,” says Kasca. “But I’ll bet that one could almost make a grid of all the factors and each decision to step over the line would fall within a common set of patterns.”

In certain countries and locales, fraud is expected as an essential way of doing business. Managers in these settings must make distinctions but to choose to look the other way is often for the good of the company and not personal gain. “I don’t care how good the controls are, fraud is important in certain areas on both an individual and political perspective,” says Yormark. “The big multinationals have to spend to educate and monitor, but in some cases they just pull out because in the end the company can’t ensure compliance with the U.S. rules.”

Managers looking the other way on one thing might reveal that too many other things are sliding by. In other words, where there’s smoke there just may be a raging fire.

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Beware – Public Projects and Prevailing Wages

By on August 13, 2012 in Construction, General, Governments

Sandersen Knox & Associates LLP, CPA, Tax Accountants, AuditorsUnderstand prevailing wage laws before you bid on public works projects

As the economy continues to struggle, many contractors are adding public works projects to their repertoires just to stay profitable. Public projects can be a lucrative source of new work, but they’re also subject to complex federal and state requirements fraught with traps for the uninitiated. Prevailing wage laws are among the most treacherous.

What’s required?

Most federal projects are subject to the Davis-Bacon Act, which requires federal contractors to pay a “prevailing wage.” That is, Davis-Bacon — along with its state counterparts — requires you to pay wages on a public project that are comparable to wages for similar work in the same geographic area.

What’s more, a majority of states impose similar requirements on state-funded projects. If a project is financed by both federal and state funds, the higher wage usually applies.

How are wages determined?

On federal projects, the U.S. Department of Labor (DOL) sets prevailing wage rates. On state projects, the equivalent state agency sets the rates. One of the biggest challenges for contractors bidding on public projects is worker classification. Prevailing wages may vary among different classifications, so it’s critical to get them right.

Complicating matters further, the DOL and state agencies may restrict the types of work that can be performed by workers in certain classifications. For example, a worker classified as a laborer may not be permitted to perform tasks traditionally associated with members of a particular trade or craft, such as plumbers or electricians.

Cash or fringe benefits?

Generally, prevailing wage rates consist of a base rate paid in cash and a fringe benefit amount. Contractors have the option of paying fringe benefits in cash or applying fringe benefit credits for contributions to “bona fide” benefit plans, such as health and life insurance, long-term disability plans, retirement plans, and vacation days or other paid time off.

Computing fringe benefit credits is complex, so you might be tempted to simply pay the fringe benefit amount in cash. But satisfying the fringe benefit obligation using bona fide benefit plans can be more cost-effective. Moreover, cash wages are subject to Social Security, Medicare and other payroll taxes, while contributions to benefit plans are generally exempt from these taxes.

Your advisors can help you determine which approach would be better for your bottom line in light of your existing compensation and benefit programs.

What record-keeping is needed?

Compliance with prevailing wage laws demands timely, accurate record-keeping. You’ll need to submit certified payroll reports periodically and keep accurate internal payroll records on file. It’s particularly important that you document the classification of workers and the tasks they perform.

In addition, general contractors and upper-tier subcontractors are responsible for prevailing wage violations by lower-tier subcontractors. So it’s important to gather records from these subcontractors to ensure they’re in compliance.

What are the penalties for noncompliance?

The penalties for prevailing wage violations can be severe. Under the Davis-Bacon Act, for example, they may include fines, contract termination or even “debarment” from future federal contracts for up to three years. And that’s not all — contract payments may be withheld to cover the violator’s liabilities for unpaid wages and certain other damages.

Contractors or subcontractors that falsify payroll records or demand kickbacks of wages are subject to civil and even criminal prosecution.

Plan before you bid

Compliance with prevailing wage laws is complex, so be sure you understand your obligations before you bid on a public works project. Because miscalculations can quickly wipe out any expected profits on a job, seek professional advice before you venture into this territory.

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Is Your Immigration Program Up to Date?

By on April 23, 2012 in Construction, General, Governments

Sandersen Knox & Associates LLP, CPA, Tax Accountants, Auditors In recent months, U.S. Immigration and Customs Enforcement (ICE) has shifted its focus from employees working in the United States illegally to the employers who hire them.

To protect your company and its management against civil fines and possible criminal charges associated with undocumented workers, it’s important to have an immigration compliance program that’s up to date as part of your business planning process.

Reviewing your program

Here are some questions to ask:

1. Do you have a written immigration policy? Whether it’s part of an employee handbook or a separate document, you should have a written policy that states your company’s intention to comply with the Immigration Reform and Control Act of 1986 and sets forth procedures for ensuring compliance. You also should have employees acknowledge in writing that they understand the policy and will adhere to it.

2. Do you provide training? Training your human resources staff and other employees on your immigration policies and procedures is critical. It minimizes the risk of fines for hiring unauthorized employees and demonstrates to ICE that you’ve made a good-faith effort to comply with the law.Employees should be trained on completing and storing Form I-9 — “Employment Eligibility Verification.” For example, it’s advisable to store I-9 forms and supporting documentation in files separate from ordinary personnel files so that ICE auditors don’t have access to unrelated personnel information. Training also should include how to inspect documents presented to establish identity and employment eligibility, as well as how to respond to ICE visits or subpoenas.

3. Are you using the latest forms? Form I-9 is revised periodically, so be sure you’re using the latest version. At press time, the current version had a revision date of Aug. 7, 2009 (Rev. 08/07/09) printed in the lower right-hand corner. Immigration authorities will also accept the 02/02/09 version. You can download the form from “Most Searched Forms” at http://www.uscis.gov/portal/site/uscis.

Form I-9 Interactive Form I-9 to fill out or save to your PC.

 

 

 

 

 

 

4. Are you required to use E-Verify?Most construction firms with federal contracts are now required to participate in the E-Verify program. In addition, an increasing number of states require contractors doing government work to use E-Verify, and a few states even require large, private-sector contractors to use the program.E-Verify is a free, Web-based system that electronically verifies the employment eligibility of newly hired employees by comparing I-9 information against the Social Security Administration’s database. Even if you’re not required to use E-Verify, voluntary participation can be an easy, effective way to demonstrate good-faith compliance.

 

 

 

Getting Legal Advice

Given the serious consequences of noncompliance, it’s a good idea to consult your legal counsel to make sure your immigration program meets government standards.

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FAR-reaching Rules for Government Contractors

By on April 9, 2012 in Construction, General, Governments

If your company performs work for the federal government, it’s critical for you to become familiar with the recently revised Federal Acquisition Regulation (FAR). All federal contractors are now required to disclose certain overpayments and legal violations. And contractors involved with larger projects must implement rigorous business ethics programs and internal control systems. Sandersen Knox & Company LLP suggests that government  contractors pay special attention to all changes included these highlighted ones as part of their business planning.

Mandatory disclosure

The new rules impose mandatory disclosure requirements in place of the previous voluntary disclosure system. Certain disclosure requirements are limited to contracts or subcontracts in excess of $5 million with a performance period of 120 days or more. But one provision makes nondisclosure by any prime contractor grounds for suspension or debarment.

To comply, you must disclose to the government certain procurement-related criminal offenses — including fraud and bribery, violations of the civil False Claims Act and significant overpayments. Because disclosure is required for three years after final payment is received, you should look back at contracts completed in the last three years for any credible evidence of such violations.

Ethics and internal controls

With limited exceptions, the revised FAR imposes stricter ethics and internal control requirements for contracts or subcontracts in excess of $5 million with a performance period of 120 days or more. In addition to having a written code of business conduct, you must “exercise due diligence to prevent and detect criminal conduct” and promote an ethical culture. You also should have an ethics awareness and compliance program that includes effective training and periodic communication.

In addition, the revised rules spell out several “minimum” internal control requirements, including assignment of responsibility, periodic reviews, a hotline or similar reporting mechanism for suspected fraud or embezzlement, disciplinary action for improper conduct, and exclusion of violators from management.

Meeting the standards

If you’re currently under contract with the federal government or you plan to bid on federal projects in the future, make sure you’re in compliance with FAR disclosure requirements and that you have in place an ethics program and internal controls that meet the new standards.

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Payroll Year End 2011 – Are you Ready?

By on December 5, 2011 in Construction, Governments, Tax

With payroll tax year 2011 rapidly coming to an end, employers need to start planning the year end payroll closing process early to avoid problems during the crunch. Sandersen Knox & Company has some helpful suggestions for year end payroll close tasks that you can start to do do now to help you ease the year end payroll close process.

 2011 Payroll Close Reminders: 

  • Remind any employees who have had life changes, such as marriage, divorce, or a change in the number of dependents, to make the appropriate changes to their withholding on Form W-4.
  • Remind employees who wish to continue claiming exemption from withholding to submit a new Form W-4 by Feb. 15, 2012. Beginning Feb. 16, 2012, you must withhold based on a marital status of “single” with zero withholding allowances for employees who claimed exemption from withholding in 2011, but who have not submitted a 2012 Form W-4.
  • Collect benefit and payroll adjustment information and post to employees’ payroll records. This information should include relocation, educational assistance, group-term life insurance, third-party sick pay, company cars, manual checks, and void checks.
  • Order enough W-2 forms for all the employees who have worked for you this year, as well as some extras to allow for any mistakes. Consider preparing, printing, and filing W-2s online at the Social Security Administration (SSA) website, if you don’t do this already.
  • Verify employees’ names and Social Security Numbers (SSNs) at the SSA site under Information and Instructions to Verify Social Security Numbers Online.
  • Be sure to verify calculations for the 2% employee portion of social security tax holiday for 2011 prior to the final payroll of the year in case there are any adjustments necessary.
  • Run a special payroll, if necessary, to record all manual and voided checks issued between the last regular payroll and December 31st.
  • Conduct a final review of the general ledger for hidden wages (generally, taxable noncash fringe benefits).
  • Verify that the bank reconciliation is complete through November and ask the bank to prepare an early cutoff statement for December.
  • Make sure your payroll system will be updated by January 1 to take into account any changes in federal tax-free limitations and state unemployment taxable wage bases. Employers should receive notices from the IRS and State unemployment tax agencies in advance.

The tax free exclusion for the combined value of mass transit passes, reimbursement for mass transit expenses, and payment of vanpooling expenses is currently scheduled to decrease from $230 a month to $125 a month, effective Jan. 1, 2012, unless legislation is enacted that makes this exclusion equal to the exclusion for qualified parking expenses ($240 a month in 2012). A provision included in H.R. 1, The American Recovery and Reinvestment Act of 2009, made the exclusion for the combined value of mass transit passes, reimbursement for mass transit expenses, and payment of vanpooling expenses equal to the exclusion for qualified parking expenses from March 2009 to December 2011, but that legislation is no longer in effect in 2012.
  

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President Signs 3% Contractor Tax Repeal – HR 674

By on November 22, 2011 in Construction, Governments, Tax

President Obama has signed the repeal of 3% Contractor Withholding into law on November 21, 2011.

The bill repeals Sec. 3402(t), which requires withholding of 3% of payments by the federal or state governments or their instrumentalities or subdivisions (including multistate agencies) to any person for services or property.

The bill contains a handful of other provisions.

  1. It creates tax credits—called returning heroes and wounded warriors work opportunity tax credits—for employers who hire military veterans. The credits will be available for eligible individuals who begin work for the employer after the date of enactment.
  2. The bill also amends the definition of modified adjusted gross income under Sec. 36B(d)(2), which determines eligibility for certain health care benefits and insurance coverage provisions under the Patient Protection and Affordable Care Act of 2010, P.L. 111-148. This change will be effective on the date of enactment.
  3. Finally, the bill allows the IRS to impose a 100% levy against payment due to a vendor of property sold or leased to the federal government if the vendor has an unpaid federal tax liability. Under current law only vendors of goods or services are subject to the 100% levy. It also directs the Treasury Department to conduct a study on tax compliance by vendors to the federal government.

Senate Passes H.R. 674 Repealing 3% Contractor Withholding – With Amendments

House Passes H.R. 674 Repealing 3% Withholding Rule

House Moves Toward Repeal of 3% Contractor Withholding Rule

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General Contractors Could Suffer Disaster Under 3% Withholding Rules

By on November 11, 2011 in Construction, Governments, Tax

General Contractors could be bankrupted or severely hindered by provisions of the proposed 3% withholding rule because the withholding occurs at the general contractor level and not at the subcontractor level.  Continue Reading →

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