July 29. 2010 | Rebecca Kehoe
Government Contractors, Do You Want to Continue to Be Paid on Your Federal Contract?
As of June 18, 2010, President Obama issued a Presidential Memorandum to the heads of executive departments and agencies directing them to review current pre-payment and pre-award procedures and ensure that a thorough review of available databases with relevant information on eligibility occurs before the release of any Federal funds, to the extent permitted by law. Agencies will now have to start checking existing databases before payment and/or reward to verify eligibility.
What does this mean for you? Make sure you are not in any of the databases as a party or person who is ineligible for payment from the Federal Government or you may not get paid on your current Federal contract. The Government will soon consolidate its databases to create a “do not pay list” I believe will cause Prime Contractors to ensure that their 1st Tier Subcontractors are not on the list as well.
Within 90 days, each agency is to submit a plan to its OMB including information on its current pre-payment and pre-award procedures as well as a list of databases that the agency checks pursuant to those procedures. Within 180 days, the Director of the OMB is to issue guidance, to be developed in consultation with affected agencies and taking into account current agency pre-payment and pre-award practices. The guidance will clarify that the head of each agency is responsible for ensuring an efficient and accurate process to determine whether the information provided by the “do not pay list” is sufficient to stop payment, consistent with applicable laws and regulations, and, if so, whether a payment should be stopped under the circumstances. Best practices will also be implemented. If I were a Government Contractor, I would be doing my best to stay off the “do not pay list.”
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July 26. 2010 | Elizabeth Dunseith
Capitol Hill Makes Changes to SOX
As stated in my last blog, the Sarbanes-Oxley Act has received a lot of attention during the month of June.
Another important vote occurred within the Legislative Branch. When the Sarbanes-Oxley Act was enacted in 2002, it included several new reporting requirements under Section 404(b), requiring independent auditor attestation of the organization’s internal control over financial reporting (ICFR). Accelerated filers (public float greater than $75M) have been required to comply since 2004, but the Smaller Reporting Companies have yet to file their first 10-Ks with the auditor attestations. In early October 2009, the SEC issued its last and final extension for Smaller Reporting Companies; 10-Ks filed after June 15, 2010, would be required to fully comply with 404(b).
However, Congress has changed that. The Financial Reform Bill passed on June 30, 2010, includes the 404(b) exemption for smaller publicly traded companies, superseding the SEC’s final rule regarding the auditor’s attestation of ICFR. It is interesting that in a time when there is an increased demand for transparency, regulations are being relaxed. The external auditors may no longer be required to attest; however, Chief Financial Officers of all public companies, regardless of size, must still certify to the effectiveness of the ICFR as part of the 10-K filing.
Companies that are close to going over the current $75M cap should monitor their compliance requirements in the event they reach the Accelerated filer status and need to obtain the auditor’s attestation. For purposes of this law,public float is measured as of the last day of the second quarter of a company’s fiscal year. If your company may be close to the threshold, it is recommended to work with your external auditors early to avoid potential issues.
The Executive Branch was also included in the recent SOX changes as President Obama signed the bill into law on Wednesday, July 21, 2010.
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July 21. 2010 | Elizabeth Dunseith
Supreme Court Makes Changes to SOX
Never a dull moment when it comes to the world of oversight, and the end of June was no exception with some big decisions from two of the three branches of government.
Let’s start with the Judicial Branch. As a result of several accounting issues creating a lack of credibility within the profession, the Sarbanes-Oxley Act of 2002 was passed to help improve accountability and oversight regarding financial reporting. Among several other things, the Public Company Accounting Oversight Board (PCAOB) was created. The PCAOB was established as a private nonprofit organization intended to monitor external auditors of publicly held companies in the interest of protecting investors from fraudulent financial statements. It gets a little complicated in that, while the PCAOB is a private organization, it is controlled by the Securities Exchange Commission (SEC or Commission), a government agency. The Commission is responsible for appointment of PCAOB Officers and oversight of the Board; however, the Commission may only remove those appointed officers with good cause. Last fall, the PCAOB was sued by the Free Enterprise Fund, a nonprofit organization, who argued the structure around the removal of officers in the PCAOB was unconstitutional. The issue raised in the case of Free Enterprise Fund v. PCAOB is that the President’s removal power is twice removed. The President has the authority to appoint SEC Commissioners; however, again, good cause is required in order to remove an appointed Commissioner. Bottom line, if the President feels an Officer in the PCAOB is not doing his/her job adequately, he does not have the authority to remove that individual; rather, he is restricted by two levels of ‘good cause’ red tape.
The Free Enterprise Fund argued the constitutionality of this formation to the Supreme Court, and in a 5-4 decision on June 28, 2010, the Court affirmed the structure of the PCAOB to be unconstitutional. However, the ruling doesn’t mean the PCAOB will be dissolved. The decision now allows the SEC to remove members of the PCAOB at will rather than requiring good cause. The PCAOB will continue to monitor the audit profession, and although the formation of the PCAOB may have been deemed unconstitutional, its purpose was not. The Sarbanes-Oxley Act was not only reviewed in the Judicial Branch; I will review the vote that occurred within the Legislative Branch next.
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July 15. 2010 | Anne Sesso
Combine Efforts for a Winning Team
Over the last month, World Cup Mania has taken the Nation (and most others) by storm! Even if you are not a soccer fan it is hard to ignore the excitement surrounding this event. Fans enjoy watching players work together to achieve success. Everyone wants to be part of a winning organization. At Watkins Meegan we have a talented team that is continually trying to find ways to assist our clients achieve their goals.
The key to achieving your goals is assembling the right combination of players/talent. Each player offers a different skill set. These complimentary skills are critical for achieving winning results. Our staff accountants bring enhanced technical skills to our team, and our seasoned veterans provide valuable insight to the young staff. Together Watkins Meegan has been assisting our clients achieve winning results for over 35 years. Just like a soccer team, every company needs key elements, which are critical to achieving corporate success. If success is a corporate goal, mediocrity should not be rewarded or encouraged. Management should strive to assemble a cohesive team that is focused on finding, building and exploiting the key elements of its industry, while avoiding employees whose tendency is to think “me” instead of “team”. Players participating in the World Cup focus on the larger team objectives and work together for a common goal; companies should strive to do the same. Watkins Meegan has and will continue to play a key role for our clients in assisting, finding, developing and exploiting winning strategies.
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July 8. 2010 | Andrea Contres
Get on the Social Media Train - It's Time!
A little over six months ago, Watkins Meegan published its second blog, Accounting in the World of Web 2.0 World. Although some people were reluctant or apprehensive about embracing this technology, we have clearly seen the importance of social media and are now venturing into other avenues, such as youTube and multiple Twitter pages.
Watkins Meegan uses social media (Twitter, Facebook, blogging--WatkinsWire, youTube, LinkedIn) as an additional resource: to educate, enhance our brand as a thought leader and to expand our presence on the Web. We are not alone; 81% of all firms use social media for marketing activities. Like us, these firms are not stopping at just marketing; social media extends way beyond the realm of marketing. It is a great tool for recruiting, following your competition, business development, education and more.
When creating a social media strategy/plan you must be patient; it is not something that will develop or change your firm’s Web presence over night. However, you will see a change if you use the resources correctly. There are many details companies must think about beforehand, such as: policies, guidelines, maintaining the voice of your brand, and education. Watkins Meegan began its planning 10 months prior to actually launching the Web 2.0 campaign, and we continue to evaluate our strategy, learn new tools and embrace new ideas. Educating your firm on social media and continued education for both the firm and yourself are something I highly encourage! You cannot attend a conference or event today without social media being discussed. This means you should jump aboard and continue learning because social media is constantly changing. Also be creative – the options are endless!
As a marketing manager working in the professional services industry (CPA Firm), I found this great article published in the VA Society of CPA’s (VSCPA) magazine. It is targeted specifically to accountants. Share it! http://www.vscpa.com/content/Resources/Career_Development/career01011002.aspx
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June 30. 2010 | Sean Roddy
Secret accounts are no longer secret.
The New York Times reported that the Swiss Parliament and the IRS have reached an understanding whereby the Swiss will reveal the names of more than 4,400 Americans who have accounts at the Swiss Bank, UBS. Places like Switzerland, Singapore and Luxembourg are now entering into bi-lateral agreements that will provide information that will assist in the enforcement of tax laws.
These treaties have assisted the U.S. in getting 15,000 Americans to take advantage of a temporary amnesty last year. Starting in 2013, foreign banks, trusts, passive foreign investment companies and corporations will have to start reporting to the U.S. on accounts and ownership interests held by Americans. In March 2010, Congress passed the Foreign Account Tax Compliance Act (FATCA), which is part of the Hiring Incentives to Restore Employment (HIRE) Act. The FATCA enables a withholding agent to deduct or withhold a 30% tax on interest, dividends, rents, salaries, wages, other fixed or determinable periodic gains, profits, etc., that are made to a foreign financial institution or to a non-financial foreign entity unless specific reporting requirements are met.
The withholding agent is indemnified against any claims and demands from anyone for the amounts withheld. Penalties for those who don’t report foreign accounts/assets start at $10,000 and go up to $50,000 for each tax period in question. For trusts, they can go as high as 35% of the amount that should have been reported. Also, a 40% accuracy penalty can also be imposed for underpayment of tax that is related to a foreign financial asset. All of this comes with a six-year statute of limitations. This is effective for all returns required to be filed after December 31, 2009. So, it would appear that the Swiss account has lost its luster.
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June 23. 2010 | Bob Hambrecht
Are You Looking for a New Way to Fundraise?
Are you a non-profit organization looking for a new, easy, relatively inexpensive way to fundraise? Are you tired of sending out direct mail solicitations, dealing with fundraising clearing houses, or making phone calls to ask for donations? Perhaps there is a non-profit organization that you wish you could help, but just aren’t sure how to go about it?
As many of you are aware, social media such as Facebook, MySpace and Twitter, are a few of the ways non-profits are spreading the word about their organizations and important news related to their mission. Well, why not connect with the other non-profit organizations that have joined the social media movement and fundraise online? There are various websites online including www.firstgiving.org, www.justgive.org, and www.giveforward.org, to name a few. On these sites you can create your own fundraising page just as you would create an event on Facebook or MySpace.
If you are a non-profit organization, using an online website to raise funds will help you focus on what matters the most; the mission of the organization. Before committing to a particular website, be sure to review the terms and conditions of the website. The sites normally charge a nominal fee based on the amount of donations received and some sites only accept certain methods of payment (i.e. Paypal or credit cards). By creating a page on an online website, you can easily spread the word via your website, email, Facebook, Twitter, etc., to potential donors, colleagues, family, and friends all over the world.
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June 16. 2010 | Rebecca Kehoe
Another FAR Update: Case 2009-031, Termination for Convenience
The Federal Government is proposing to modify the FAR to clarify when contracting officers are to use FAR Clause 52.249-1 for Fixed Price Contracts that do not exceed the simplified acquisition threshold (short form).
What does this mean for the Prime Contractors?
FAR Clauses 52.212-4 Contract Terms and Conditions – Commercial Items, and 52.213-4 Terms and Conditions – Simplified Acquisitions (Other than Commercial Items) will still be used for the majority of simplified acquisitions. These clauses allow the Contractor to be paid a percentage of the contract price based on the percentage of work completed prior to the notice of termination for convenience. In addition, reasonable charges resulting from the termination (which the Contractor must demonstrate using its standard record keeping system) must be paid.
However, if the contracting officer does not feel that 52.212-4 or 52.213-4 applies, they may use 52.249-1 Termination for Convenience of the Government (Fixed-Price) (Short Form). This will require the Contractor to follow FAR Part 49, which requires the Contractor to use the Inventory Basis or Total Cost Basis for its settlement proposal.
Restrictions - Use of 52-249-1 is not to be used if use of 52.249-4 is appropriate, the contract is for research and development work, educational or nonprofit (on a no profit basis), the Contract is for architect-engineer services, one of the clauses prescribed or cited at 49.505(a) or (c) is appropriate; or when 52.212-4 or 52.213-4 is used.
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June 10. 2010 | Rebecca Kehoe
FAR Update: Case 2009-027, Personal Identity Verification of Contractor Personnel
The Federal Government is proposing to modify the FAR to ensure that all agencies have procedures requiring Government contractors to account for all forms of Government provided identification issued to Government Contractors (and their subcontractors) under a Government Contract.
What does this mean for the Prime Contractor?
You must now track how Personal Identity Verification (PIV) cards have been issued to you and your subcontractors. You must also retrieve these PIVs when they are no longer needed for Contract performance, upon completion of the contractor’s (employee) employment (including subcontractor employee employment), or upon contract completion/termination.
Additionally, you must pass through the substance of the clause to all subcontractors and require them to pass it through when the subcontractor is required to have routine physical access to a Federally-controlled facility or routine access to a Federally-controlled information system.
What if the Prime Contractor or Subcontract fails to comply with the clause? The Contracting Officer (or Prime Contractor to the subcontractor) may delay final payment under a contract.
Submit your comments by July 23rd electronically at
www.regulations.gov, search for FAR Case 2009-027, by fax 202.501.4067, or by mail to General Services Administration, Regulatory Secretariat (MVCB), 1800 F Street, N.W., Room 4041, Washington, DC 20405.
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June 8. 2010 | Rebecca Kehoe
FAR Update: Unallowable Costs - Labor Relations
The Federal Government is proposing to make the costs of any activities undertaken by a Federal Contractor (including recipients of federal disbursements) to persuade employees to exercise or not to exercise the right to organize and bargain collectively through representatives of the employees’ own choosing unallowable.
All activity costs related to collective bargaining will be unallowable, such as: preparing and distributing material, hiring or consulting legal counsel or consultants, meetings (including paying the salaries of the attendees at meetings held for this purpose), and planning or conducting activities by managers, supervisors, or union representatives during work hours.
What activity costs will remain allowable? Costs incurred in maintaining satisfactory relations between the Federal Contractor and its employees, such as: costs of shop stewards, labor management committees, and employee publications.
What can you do? Submit your comments on the proposed rule by June 14, 2010 by searching for FAR Case 2009-006 at www.regulations.gov, fax your comments to (202) 501-4067 or mail them to General Services Administration, Regulatory Secretariat (MVCB), 1800 F Street, NW, Room 4041, Washington, DC 20405.
http://www.regulations.gov/search/Regs/home.html#documentDetail?R=0900006480ad71d3
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June 4. 2010 | Rick Westerman
The Perfect Storm Part II
New Federal Acquisition Regulations on Ethics
As stated in my previous posting, “The economy has created a fraud-rich environment and the government is poised to punish government contractors who violate the rules.” Read on to learn about the rules.
FAR Code 52.203-13, Contractor Code of Business Ethics and Conduct, should be familiar to all government contractors. In December 2007, FAR rules went into effect regarding the establishment of a Code of Ethics, Internal Control System, and Hotline Posters. The rules were closely scrutinized by contractors, government officials, and professionals to obtain clarification regarding what is required. On December 12, 2008, the FAR published the final Contractor Code of Business Ethics and Conduct.
As expected, the original rules were altered and expanded with certain exceptions related to size of the contract, small business representation, and commercial item exclusion. These rules may require establishment of internal control systems, criminal conduct monitoring, and performance evaluations of ethics programs and internal control systems. The responsibility for internal control systems, business ethics, and compliance programs must be assigned at a sufficiently high level in the organization. Where does responsibility for these programs lie in your organization?
Further, contractors are required to utilize reasonable efforts to ensure that principals (i.e., officers, directors, owners, partners, or any person with primary management responsibility) have not engaged in conduct which violates the contractor’s code of ethics. To avoid concerns of possible debarment or suspension, contractor’s principals are required to disclose to the agency Office of Inspector General and Contracting Officer any instance of fraud, conflict of interest, bribery, or other criminal acts under USC Title 18 or the False Claims Act.
Expanded Federal False Claims Act
The Fraud Enforcement and Recovery Act added more teeth to the growing regulatory jaws. Signed into law in May 2009, the act altered a number of false claim statutes. More specifically, the act broadens the definition of what represents a fraudulent false claim by adding: 1) “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim,” and 2) “Knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government.”
Effectively, a claim no longer has to be paid or approved; it just has to be submitted. In addition, liabilities or amounts owed to the government, such as overpayments, are now included as false claims.
Awareness of possible risks (increased fraud) and compliance with new laws and regulations should be of paramount concern to contractors. In order to meet the challenge of new regulations, contractors can ready themselves by becoming more aware of the new rules and, if necessary, performing a fraud risk assessment.
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June 1. 2010 | Rick Westerman
The Perfect Storm…Increased Economic Concerns
The economy has created a fraud-rich environment and the government is poised to punish government contractors who violate the rules.
History has proven that fraudulent acts increase in a depressed economy for three main reasons. One, the combination of reduced income and rising bills increases pressure to commit fraud. Two, layoffs and cutbacks in staff reduce internal controls, creating opportunities to commit fraud. And three, the overwhelming publicity of greed promotes rationalization, or the “me too” attitude.
In order to curtail fraudulent activity and foster public confidence, the Federal Government recently modified several laws and regulations applicable to government contractors. First, the Federal Acquisition Regulations have been expanded to require that certain contractors have a minimum set of business practices focused specifically on prevention and detection of criminal conduct or fraud. Second, the Fraud Enforcement and Recovery Act of 2009 significantly expanded the coverage of the False Claims Act.
Awareness of possible risks (increased fraud) and compliance with new laws and regulations should be of paramount concern to contractors.
In order to meet the challenge of new regulations, contractors can ready themselves by becoming more aware of the new rules and, if necessary, performing a fraud risk assessment. Such a review is designed to ensure that particular components of the FAR rules are addressed. Furthermore, certain fraud prevention techniques should be incorporated into the contractor’s business policies and procedures. These and other proven mechanisms can prepare contractors for closer scrutiny by the Defense Contract Audit Agency (DCAA) and other auditors. Stay tuned for my next blog to read about the requirements.
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May 26. 2010 | Jim Wagenmann
Is Your Return Preparer Able to Serve Your Needs?
In today’s increasingly complex world of taxes, financial planning, insurance and estate and trust matters you need to determine if your tax advisors can adequately serve your needs.
In many cases, people view a tax return as a commodity that anyone can prepare. They look to pay the least possible amount to complete this task. For the simplest returns (those that show only wages, interest, and a standard deduction) most accountants can prepare them, and it makes sense that you should be seeking the lowest cost to accomplish this task.
However, once you add a business interest such as a schedule C, partnership or an S-corporation you start to add complexity. At this point, you need a tax return preparer that has experience dealing with these matters. There are many planning opportunities and elections that need to be considered in order to prepare a return that is not only accurate but arrives at the lowest supportable liability. At this level of complexity, cost is still a concern but since you are moving out of the realm of a commodity and into a world of opportunity, the expertise of your tax preparer becomes more important.
When you are at the point where you are adding different investment vehicles, more numerous business interests, rental properties, retirement concerns, trusts and estate planning, you have reached a level where the landscape is populated by fewer qualified tax advisors. Your needs can only be served by individuals who have a working knowledge of the many types of tax returns that will be involved in order to keep you straight with the various taxing authorities to whom you are reporting.
At this level just knowing how to prepare a 1040, a 1041, a 1065 or an 1120 is just not good enough. It is imperative that the advisor not only knows how to prepare the various returns, but also how all of the various pieces fit together. You should be able to expect an advisor to counsel you on the inter-relationship of all of your financial transactions and related matters. It is possible that you can do one thing in one area of your financial life and have it be totally wrong in another area.
Whether you are looking to engage an advisor or are considering making a change you need to determine during your evaluation process, if the person or firm you are considering have the breadth of knowledge and experience you will need to meet the complexities of the financial, tax, and business world of today.
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May 21. 2010 | Daniel O'Shea
990-N Update: IRS Will Work with Small NFP’s Facing Revocation of Exempt Status
We’ve all heard the punch line “I’m from the IRS and I’m here to help you.” It now appears that may actually be true. IRS Commissioner Doug Shulman released a statement May 18, 2010 saying the IRS will work with small nonprofits that missed the 990-N filing deadline of May 17, to help them avoid having their exempt status revoked. The Commissioner also urged organizations to still proceed with filing the 990-N.
It has been estimated that 300,000 small nonprofits were approaching the May 17 deadline and facing potential loss of exemption if they did not file the 990-N. It is too early to tell how many nonprofits filed the 990-N and preserved their exempt status, but the number of non-filers must still be a substantial number. This statement by the IRS shows not only their willingness to work with these organizations, but also their recognition of the importance of these organizations to our communities and society.
The IRS indicates it will provide more guidance on this issue in the future. For more information on the announcement, go to
www.irs.gov/newsroom. For more information on the significance of the 990-N filing requirement, see my April 28, 2010 blog. Stay tuned to Watkins Wire for more developments.
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May 19. 2010 | Jill Winnacott
Watkins Meegan Young Professional's Initiative
Watkins Meegan has organized a Young Professional's Initiative, with the purpose of establishing a support network that caters directly to the wants and needs of the individuals within the firm who are still in the early stages of building their professional careers. Please do not be offended if you have not been included on the email distribution list. This does not mean that you are not "young" — it means that you have already made great strides in building your professional career!
The Young Professionals Committee is developing ideas that will help foster professional growth through networking, CPE, and WatkinsNet. The Committee is developing a site on the WatkinsNet Initiatives portal that will provide access to a conversational forum. This forum will be a place where members can voice their ideas and opinions on just about anything, such as CPE suggestions, tips on passing the CPA exam, and positive recommendations of changes the firm can make to foster the growth of young professionals. This site will also provide access to a calendar of networking and social events that pertain directly to young professionals in this area. The Committee plans to use this calendar to announce informal monthly events to bring together the young professionals from other offices. We are hoping that these informal gatherings will help us to learn more about each other's roles within the firm, so that we can make better use of our resources and knowledge base. In time, we would like to expand these monthly gatherings to include young professionals from outside firms and companies as a way to expand our networking skills.
Although the ideas mentioned above are still in the planning stages, we hope to have the site up and running by the end of May, after which we look forward to hearing more ideas from members about what they would like to see from this initiative. I think we can all look forward to many exciting things to come from the Young Professional's Initiative!
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May 13. 2010 | Seth Cohen
What Are You Paying in Managment Fees for your Company's 401(k) Plan?
The Employee Retirement Income Security Act of 1974 (ERISA) requires employee benefit plan fiduciaries to act solely in the interests of, and for the exclusive benefit of, plan participants and beneficiaries. As part of that obligation plan, fiduciaries should consider the costs associated with the benefit plan, among other things, when choosing investment options for their plan and selecting service providers. Recently, plan providers have found new ways to hide fees from fiduciaries that are ultimately charged to the plan and its participants. These fees generally fall into several categories: (1) plan administration fees for day-to-day operations of the plan such as recordkeeping and trustee fees, (2) investment fees for managing the plan’s investments, (3) individual service fees such as loan or distribution fees, (4) annuity fees charged by insurance carriers and (5) sales fees paid by some funds to the plan providers.
Investment fees are the most difficult to ascertain and can be analyzed by reviewing the prospectus of each fund the plan invests in (and that’s assuming a simple investor can decipher a prospectus). These fees are often charged through an expense ratio which is deducted from the income or losses of the overall fund before allocating fund returns to the participant, and can range from zero to one and a half percent per year. Therefore, if a plan has $20 million in assets, fees could be as high as $300,000 on an annual basis. The worst part is that because these fees aren’t directly shown as being deducted from a participant’s account, participants and fiduciaries most often don’t even know they exist!
It’s important to know that these fees are “in the hands” of the plan fiduciary and the greater the assets and number of participants a plan has, the more control the plan’s fiduciary has to renegotiate these fees. It’s vital (and required) that your plan’s fiduciary sit down with a professional who understands your plan (say, your accountant!) and analyze what fees are being charged to the plan to determine whether or not they can be reduced. Options include renegotiating with your current plan providers or shopping plan assets to different providers to get the best deal for the plan and its participants, to name a couple. Keep in mind that if you as fiduciary can reduce fees being charged to participants, you are not only performing your fiduciary duties, but you’re putting cash back into the pockets of participants who have confidence in you!
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May 10. 2010 | John Seek
Watkins Meegan Compares its Talent to the "American Idol" Selection Process
American Idol is nearing its 2010 conclusion. The remaining contestants are vying for the top spot. The judges are providing constructive criticism, which hopefully will have an impact on the remaining performances. The last four competitors all have bright futures and have probably succeeded beyond expectation, regardless of who wins. The show has enjoyed huge ratings, but it is declining in popularity in the face of increased competition (Dancing with the Stars, etc.). The producers are trying to adjust with the addition of judges, the replacement of judges, and the introduction of viewer-friendly contestant mentors.
Watkins Meegan and the businesses we serve are not much different from American Idol in many respects. We recruit, interview, and select the best talent available. We teach, mentor, and promote those who excel. Not all of our contestants agree with the judges and some contestants work harder and are better than others, which is life. We are constantly replacing retired judges, bringing in new judges along with experienced mentors to allow the firm to thrive and continue its growth and popularity. In this highly competitive and challenging economic environment, successful businesses need to adapt and change. Focus and determination are the keys to a winning performance, no matter what the arena as stage. Anything we can do to help those we serve understand this is a great service in itself. When we “get to Hollywood” and do well, we will all succeed. Hopefully, America has voted for us. Stay tuned-in for the results.
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May 6. 2010 | Sean Roddy
The SBA’s “ARC”…
During the past two years, a lot of small businesses have become stressed and pushed towards the brink of failure due to the “great recession.” For many of them, a little relief from fixed expenses, such as interest on debt, would be very helpful. As firms began to feel the pressure from their backlog drying up and their fixed expenses remaining constant, the Small Business Administration (SBA) took action and created the America’s Recovery Capital (ARC) loan. This loan program has some limitations (like all loans), but its intended purpose is to assist small businesses that are facing immediate financial hardship.
The loans are interest free, they are for amounts up to $35,000 per approved applicant, they are 100% guaranteed by the SBA to the lender, and they have no required fees to the SBA. The funds are dispersed over a six-month period to the borrower. The principal repayments are deferred for 12 months after the last installment is received from the lender. Repayment can be extended for up to five years. In order to be classified as “viable,” a small business must be a for-profit enterprise that is experiencing immediate financial hardship. The business must have financial statements that show it was profitable in one of the past two years and projections that depict sufficient cash flow to meet current and future loan payments over the subsequent two years.
The real purpose behind the loans was for the proceeds to be used to pay principal and interest payments on qualifying small business loans. This would free up some operating capital to reinvest in the operations and future growth of the business. Qualifying loans include, secured and unsecured loans (revolving lines of credit and term loans), capital leases, and notes payable to vendors/suppliers/utilities. Also, ARC loans can be used to pay mortgages, home equity lines of credit, and credit card debt obligations if the debt was incurred for business purposes. If you are looking for more information on ARC loans, contact your local banker or go to
www.sba.gov.
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April 28. 2010 | Daniel O'Shea
May 15 and the Form 990-N Filing Requirement-Don’t Risk Losing your Exemption
For taxpayers and CPA’s, April 15 has come and gone. It’s hard to tell whether that collective sigh was relief, frustration, or a combination of the two. However, for many not-for-profits and those serving the industry, May 15 is the big tax day. Many not-for-profits are performing one last review of their 990 before filing on May 15, or perhaps they are filing a three-month extension if it is available. However, my guess is a certain segment of the not-for-profit industry is approaching May 15 without any knowledge of the significance of this looming deadline and its ramifications. Specifically, I am referring to small tax-exempt organizations whose gross receipts average less than $25,000 per year, and that, prior to 2007, did not have a filing requirement.
You may recall that the Pension Protection Act of 2006 had a few provisions that pertained to not-for-profits. One of these was the requirement that beginning in 2007, organizations that do not have a 990 or 990-EZ filing requirement must file a 990-N (e-Postcard) with the IRS by the 15th day of the 5th month after year-end. Any organization that fails to file a 990-N for three consecutive years will have its exemption revoked. Thus, May 15, 2010 will be the first time this “third year” exemption revocation can be triggered. An organization that loses its exemption will have to file an application for exemption as if it was a new organization, and pay the filing fee.
The 990-N filing requirement is relatively easy. It is filed online at
http://epostcard.form990.org. The following items must be reported on the 990-N:
-Employer ID number
-Tax Year
-Organization legal name and address
-Other names used
-Website address
-Name and Address of Principal Officer
-Confirmation that gross receipts are usually $25,000 or less
While the IRS continues its efforts to better track all tax-exempt organizations and to push for transparency in reporting, one must wonder whether automatic revocation of exempt status is an effective way of accomplishing the IRS’s goal. Most small nonprofits have a mission of serving the local community, and rely on local support and contributions. It is important that these organizations be registered and monitored. The 990-N is an effective tool for doing so, and can prove exceptionally helpful to donors and the community at large when dealing with small nonprofits, but the penalty for noncompliance is severe.
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April 21. 2010 | Sean Roddy
IFRS and GAAP Convergence
The
FASB and the
IASB published a
Memorandum of Understanding on March 31, 2010. The memo states that the two bodies have reached substantially all of the milestone targets they established for the first quarter of 2010. Later this summer the two boards are set to publish exposure drafts for five major projects that would approve and achieve substantial convergence of
U.S. GAAP and IFRS.
Last November the two boards had committed to a redoubling of efforts to come to agreements on the major differences between the two sets of standards in order to establish one set by June 2011. So, as opposed to joint meetings every four months, they have met for over
100 hours at 10 separate meetings since November 2009. The
SEC has once again affirmed support of a single international standard, but has not re-approved the IFRS roadmap issued by former SEC Chairman
Christopher Cox. The SEC will decide in 2011 if it will incorporate the IFRS into financial reporting in the United States; however, it wouldn’t be mandatory until approximately 2015.
There are two major issues relating to financial instruments and insurance contracts where the two boards have reached different conclusions. These issues could affect the June 2011 timetable. However, considering the efforts expended between November 2009 and March 2010, these two boards could still meet their deadline if they keep up their current pace. In the second quarter of 2010, look for joint publications from the
IASB and the
FASB on Financial Statement Presentation, Financial Instruments with Characteristics of Equity, Revenue Recognition, Leases, and Insurance Contracts.
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April 14. 2010 | Christine Williamson
Watkins Meegan to present at the Deltek Insight 2010 Conference
Are you ready for the biggest skill training and networking event of the year? Deltek Insight 2010 will be held May 17-20 in Washington, D.C., and with
Watkins Meegan returning as an alumni sponsor and presenter, the event is sure to be a huge success.
Our affiliate
W J Technologies, a Deltek Reseller and partner, is also participating with knowledge sessions and the “Celebrate Insight” event on May 19 that you can’t afford to miss!
This year, our staff will be presenting over
10 breakout sessions throughout the conference. Our experts will be covering best practices and some great tips and tricks for maximizing the potential of Costpoint and GCS Premier, as well as other Deltek solutions. For instance, if you’re interested in learning how to maintain and track leave, be sure to check out “Don’t Stop BeLEAVEin!” with Kristen Soles and Jason LeMaire. And don’t miss other cross-track knowledge sessions such as “Do You Know Your FAR and CAS Standards?” with
Christine Williamson and Stephanie Widzinski. This session will cover details on individual standards, clauses, and regulations that are sure to help attendees better understand their impact.
Be sure to stop by our kiosk (# 29b) in the Expo hall and meet our presenters. If you would like further information, please contact Christine Williamson at 703-761-4848.
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April 7. 2010 | Kristin Drozdowski
Policies and Procedures - A Necessary Evil or Just Good Business Sense?
Are you constantly being pestered by auditors about policies and procedures? When asked to see them, do you have to go to the top shelf of the bookcase, pull down stacks of documentation almost too heavy to carry, and brush off dust an inch thick? If so, you are not alone. Many companies have volumes of policies and procedures that are outdated and almost never used. Other companies have none at all and try to whip up a few brief paragraphs each year to provide auditors. So why are policies and procedures always at the top of the auditor’s list? Believe it or not, it’s because policies and procedures actually do have a purpose. Unfortunately, many companies today don't seem to understand or appreciate the value of policies and procedures.
Rather than documenting policies and procedures to satisfy a regulatory or audit requirement, companies should be documenting policies and procedures for the good of the company. After all, this is the main reason why these requirements exist. Policies and procedures are important to maintaining consistency within the organization, particularly as companies grow. They also allow companies to see potential areas for improvement and enhanced efficiency. And what company wouldn’t benefit from increased efficiency, especially these days?
The first thing to consider is how these documents are going to be used and who are the end users. Make sure you understand how your company will benefit from these documents. Many companies pay big bucks for consultants to draft policy documents that are so long and cumbersome that it takes a full-time job just to read through once, let alone be able to reference a specific topic when needed. I generally take the ‘less is more’ approach when documenting policies. While it’s good to consider all standard policy topics, smaller companies aren’t going to need the same depth and length of policy that larger companies may require.
Once companies go through the effort of documenting policies and procedures, something I see all too often is letting all that effort go to waste by not keeping the documentation current. When employees take responsibility for updating procedures as they change, there isn’t the need for an expensive and time consuming overhaul and it will even help reinforce the procedures with employees. In addition to holding employees responsible for real-time updates, I generally suggest a semiannual or annual review to catch updates that may have been overlooked.
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March 31. 2010 | Kevin Jones
Marginal Tax Rates and Phaseouts – Enough Already!
Most people understand the meaning of the term “marginal tax rate.” It is the rate of tax paid on the last dollar of income. The impact of the marginal rate cannot be overstated because it determines how much a taxpayer gets to keep when making decisions about whether to work more and harder. For example, in deciding to work overtime, accept a freelance job, or to accept a higher-paying job, the financial impact is directly determined by the marginal tax rate. Obviously, higher rates reduce the after-tax rewards of earning more so that it is less worthwhile to do so. Marginal rates also impact other choices we make such as whether to save and invest, how much to give to charity, whether to receive taxable wages or fringe benefits, and how much to borrow in purchasing a home. Lots of research exists indicating that marginal tax rates impact all of these decisions.
So…what is your marginal tax rate? If you are in the highest tax bracket, you might think you can simply look at the tax tables and find it is the highest rate of 35 percent. Unfortunately, that is only half the story. The other half is “phaseouts.” Phaseouts are those pesky reductions in certain tax deductions and other benefits that occur as income rises. Phaseouts take numerous forms but most commonly include such things as the reductions in personal exemptions, itemized deductions, dependent care credits, and other limits. A complete listing is too voluminous. Many taxpayers have multiple phaseouts working at the same time. Some phaseouts act not only to increase marginal rates, but can have more impact for 2-earner married taxpayers. For example, the phaseout of personal exemptions begins for married taxpayers at 1.5 times (not twice) the income level for single taxpayers.
The reality is that phaseouts accomplish two things…they increase the marginal tax rates and they complicate the tax. Regarding complexity, due in large part to the interaction of the many phaseouts, it is virtually impossible for a reasonably intelligent person to accurately complete a tax return by hand without the aid of a tax preparation software program. More importantly, regarding marginal tax rates, studies show (depending on which ones you read) that phaseouts can increase marginal tax rates from the 35 percent maximum marginal rate in the tax tables to over 50 percent. Additionally, current proposals such as limiting the benefit of charitable contributions to 28 percent for taxpayers in the 35 percent bracket will only increase marginal rates further.
Where it will end is anyone’s guess, but if marginal rates continue to increase, people will, at some point, simply decide not to work harder. That cannot be a good result. So, to higher marginal tax rates and phaseouts, I say…ENOUGH ALREADY!
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March 24. 2010 | Jason Fleetwood, and Katie Madden
Tax Season Madness
Jason: Each January I am asked by family and friends if I am ready for the madness that is tax season. And each time my answer is the same – about as ready as one can be. Only if you are (or were) a CPA who is (or was) in public accounting can you understand the extreme highs and lows that January 15th through April 15th of each year brings. There are the highs of meeting deadlines and earning praise from your clients, from coming up with a tax strategy that saves your client a lot of money, or impressing your boss by working 80-plus hours in a given week to get a job done. Then there are the lows of not meeting a deadline and having your client remind you of the fact in not so pleasant terms, of calling a client in early April and making them aware that they owe the IRS a lot of money, or working 80-plus hours in a given week to get a job done (yep, the 80-hour workweek is a high and a low all wrapped in one!).
There is another madness that occurs this time of year - March Madness - and it, too, is full of extreme highs and lows. The highs of buzzer beating three-pointers and remarkable comebacks, combined with the lows of calling a timeout when you don’t have one (sorry, Michigan fans) or being left out on the bubble (sorry, Katie and all you Hokie fans out there). Anyway, I could not escape this month’s blog without talking about what is on everyone’s mind - the NCAA men’s college basketball tournament. So here is the way I see: Ohio State, Kentucky, Kansas State, and the Duke Blue Devils will make it to the Final Four, with Kentucky beating Ohio State to win the National Championship. Now Katie can share her thoughts with you (but I wouldn’t rely on her pick).
Katie: For me, a high of tax season is when a Member of the firm asks you to help write a blog because he believes in your writing ability; yet a low is when I work hard all day and have to stay up all night trying to think of what to blog about instead of getting some much needed rest! Another low of tax season (March) madness is when your team is the first ACC team with 10 regular season conference wins to be left out of the field of 64 (plus one) in 25 years (Jason, thanks for pointing that out above). Ohio State, Syracuse, Duke, and West Virginia are my final four. I see a Big East matchup in the final game, with the Orangemen bringing home the title in a close battle against the mighty Mountaineers (sorry, Heather – WVU’s run of winning every game by three points or less at the buzzer is bound to end in the championship game). But Jason is right - you should probably put more faith in his picks because we know he hasn’t been watching too much Fighting Blue Hen basketball (a team that should be congratulated on the three wins they have earned in 2010, for a total record of 7-24 overall). I’m sure he has had more prep time than most of us to analyze the brackets.
So if you are brave enough to get your picks on record or even share a tax season memory, please respond and let us know…and let the madness begin!!
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March 18. 2010 | Gary Robinson
Why Millions of Americans Now Fall Subject to the Alternative Minimum Tax
Congress created the Alternative Minimum Tax (AMT) in 1969, targeting high-income taxpayers who could claim so many deductions they owed little or no tax. The AMT was originally designed to ensure that wealthy taxpayers could not use popular deductions and credits to completely eliminate their tax liability. Today millions of middle-income taxpayers who were not target of the tax when it was enacted now fall subject to the tax each year.
The number of individual tax returns subject to AMT has increased from approximately 132 thousand in 1990 to over 4 million in 2007. Over the same period, the amount of AMT has increased from approximately $830 million in 1990 to over $24 billion in 2007. These are staggering increases.
Despite the fact that millions of taxpayers are subject to the tax, the AMT represents one of the more difficult and complex tax calculations to understand. As a result, most taxpayers who owe AMT do not have an actual understanding as to why they are subject to the tax – much less how to calculate it.
Individual taxpayers are required to calculate their federal income tax using both the conventional method of determining their income tax liability as well as their tax under AMT. When the alternative minimum tax exceeds the tax liability calculated using conventional methods, you pay the higher AMT amount.
The most common difference between regular and AMT taxable income involves the add-back of the deduction for taxes paid. That’s right. The itemized deduction normally allowed on Schedule A of Form 1040 for state income taxes and real estate taxes paid during the year are not deductible in arriving at your alternative minimum taxable income. In addition, the combination of states increasing their income tax rates to meet budget shortfalls and the huge run-up in real estate values over the years (even with the recent downturn) has resulted in these items representing two of the larger itemized tax deductions for most taxpayers. Unfortunately, neither is deductible in the calculation of alternative minimum taxable income.
While a specified amount of AMT income is exempt from tax, too much has been made of the so-called “AMT Patch” which increases the allowable exemption under AMT for changes in the consumer price index. Unfortunately, this exemption is phased-out for taxpayers whose alternative minimum taxable income exceeds certain limits. Guess what? Those phase-out limitations have not been indexed for inflation and, as a result, many taxpayers find themselves partially or fully phased-out of the exemption. Therefore, an ever increasing number of middle class Americans will fall subject to the tax in the future unless legislative changes are made.
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March 16. 2010 | James Kanuch
Endowments
Recently, not-for-profits with endowments have been feeling the pressure from governmental and accounting oversight agencies, including both the Internal Revenue Service (IRS) and the Financial Accounting Standards Board (FASB). The IRS completely overhauled the informational returns filed by non-profits, Form 990, and last October began surveying 400 colleges and universities concerning, among a host of items, how the organizations invest and use their endowment funds. Also, recently adopted endowment guidance by the FASB created additional accounting and disclosure requirements for non-profits with endowments; and new guidance issued by the National Conference of Commissioners on Uniform State Laws approved the Uniform Prudent Management of Institutional Funds Act (UPMIFA), which placed added responsibilities on Boards and investment committees with endowment funds regarding the “prudent” spending of such funds.
So how should non-profits respond to all these new rules and regulations? Perhaps by taking advantage of the opportunities that result from the additional oversight. Yes, there will be increased administration costs to comply with the requirements; yes, Boards and non-profits will be required to report information that previously was not made public; and yes, there will be other costs associated with the new requirements; but for those organizations already in compliance with the additional requirements, the benefits can greatly outweigh the costs.
The biggest benefit will be a change in the perception of the public and potential third party donors. Now is the time for not-for-profits to demonstrate how, with the oversight of their Boards and investment committees, the monitoring and spending of their endowments is being conducted prudently. Further public disclosure can also be demonstrated through their audited financial statements, annual reports, website, and the publicly available Form 990. As a means to another potential benefit, not-for-profits should be communicating with past donors to restructure ambiguous gift instruments to be more advantageous to both the donor and their organization and revising promises to give agreements for future donors to clear up potential ambiguities and make them more beneficial to both parties.
With all the increased oversight and new guidance, I would recommend an approach that results in few complaints and has a proactive stance designed to take advantage of this increased oversight to demonstrate to the public, including potential donors, that your organization should be the one donors can trust with their contributions.
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March 3. 2010 | Stephanie Kelly
Infidelity...sometimes it's financial
With the economy still feeling the effects of the recession, the number of divorces and shareholder disputes has soared. Unlike what you read in the Hollywood gossip magazines, typical cases do not involve physical infidelity. Oftentimes it is one spouse or shareholder stealing money from the other. In some cases, the disgruntled person has been quietly pocketing money in an undisclosed bank or investment account. Other hiding places are safety deposit boxes where cash or hard commodities (e.g., gold bars) can be placed. Account balances can easily grow to over $1 million. A strategy used to deceive a business partner is to create separate company records to hide receivables so the other partner won’t discover the assets.
In domestic disputes, there are instances of distribution checks coming in from a prior employer that get endorsed over to a third party. In any situation, the assets can go undetected unless you hire a forensic accountant or just get lucky. Your problems may become even worse once you discover the hidden assets and realize you filed a joint tax return with the other person and failed to record the income on your tax return – whether as an individual, a partner, or a corporation. And then what seemed like a simple, uncomplicated dispute has turned into a money laundering, tax fraud, white collar crime nightmare.
We often think we have seen and heard it all. However, just the opposite is true. Each one of our cases in the Forensic Accounting and Dispute Services (FADS) group is different, yet the motive remains the same: greed. Fortunately for our clients, our team consists of a diverse group of former IRS agents, corporate controllers, and fraud specialists. We assist clients in asset discovery, IRS workouts, and innocent spouse defenses. So as we celebrate the month of love, February, and are reminded to eat well and get regular cardiac checkups, it is also a reminder to follow your heart (and gut). If someone you love and/or trust is being deceptive, it might be a good time to hire an investigator.
Happy Belated Valentine’s Day!
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February 24. 2010 | David Wright
More SBA and SDB Proposed Changes from the Obama Administration
Last month we
covered a few new proposed changes in the Small Business Administration (SBA) and Small Disadvantaged Business (SDB) programs. Since then, the Obama Administration has announced two more lending plans. These temporary initiatives aim to create new jobs and improve access to loans for small businesses.
The first initiative is a commercial real-estate program which will allow small businesses to refinance existing, qualified, owner-occupied, small business commercial mortgages into SBA’s 504 program. The SBA announcement
fact sheet specifies that borrowers can finance up to 90% of existing property values through this program.
Temporary expansion of working capital loans is the second initiative. The SBA has received feedback from borrowers and lenders and decided to increase the limit on SBA 7(a) working capital loans from $350,000 to $1 million. These increases will help address liquidity needs.
Will we see even more new SBA initiatives this year? Keep your mouse pointed here for the latest!
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February 17. 2010 | Elizabeth Dunseith
XBRL - Are You Ready?
By now, you’ve probably heard the term XBRL in at least one conversation with your external or internal auditors, CFO, Controllers, or other financial personnel. XBRL, eXtensible Business Reporting Language, is the new wave in financial reporting. In short, XBRL uses taxonomies to tag information in the financials to enhance the reporting and communication of information. It is important to note that XBRL filing does not affect the US GAAP or SEC financial reporting requirements, but is an additional format for submitting financial information. When companies hear the term “XBRL,” they generally have 3 questions: 1) Does this affect me? 2) When does it affect me? and 3) How much will it cost?
Hopefully Watkins Meegan can answer some of those questions. It affects you if your company is publicly traded. Also, mutual fund companies will be required to report their risk and return summary information using XBRL. There are some additional requirements as to the specific reports that must be filed using XBRL, but these are the general guidelines. When is the next concern for most companies. Certain large accelerated filers have already begun reporting in XBRL. Over the next two years, the remaining filers and mutual fund companies will be required to use XBRL. So if XBRL does affect you, it should be something you are thinking about it now. Just as the deadlines for compliance can vary, so can the cost depending on the software and resources used for implementing.
There are many software applications designed to help with the implementation. They vary in cost and capabilities. Depending on your company needs, one application may be a better fit over another. I recommend you take the time now to review the XBRL software options and get your questions answered earlier rather than later. This can save time and resources down the road. If you need help in your analysis, Watkins Meegan has explored different applications and is available to answer any questions you may have.
XBRL facilitates the comparability of financial information and will probably be used by government agencies (IRS, Treasury), lenders, investors, and others in the future. So non-public companies should stay tuned.
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February 10. 2010 | Kevin Jones
How Well Do You Know Your Return Preparer
Currently, anyone may prepare a federal tax return for anyone else and charge a fee. While some preparers are currently licensed by their states or are enrolled to practice before the IRS, many do not have to meet any government or professionally mandated competency requirements before preparing a federal tax return for a fee.
As a result, a few weeks ago the IRS issued proposed new registration, testing, and continuing education requirements for tax return preparers. The proposal recommends a number of steps that the IRS plans to implement for future filing seasons, including:
• Requiring all paid tax return preparers who must sign a federal tax return to register with the IRS and obtain a preparer tax identification number (PTIN).
• Requiring competency tests and continuing education for all paid tax return preparers except attorneys, CPAs, and enrolled agents who are active and in good standing with their respective licensing agencies and subject to mandatory continuing education.
• Extending the ethical rules found in Treasury Department Circular 230 to all paid preparers- not just attorneys, CPAs, and enrolled agents.
The initiative will take several years to fully implement and will not be in effect for the current 2010 tax season. Nevertheless, the IRS also announced a new outreach effort to help make sure taxpayers choose a reputable preparer this filing season. That’s particularly important because taxpayers are legally responsible for what is on their tax returns -- even if those returns are prepared by someone else. In order to help taxpayers, the IRS offers the following points for taxpayers to keep in mind when selecting a tax return preparer:
• Be wary of tax preparers who claim they can obtain larger refunds than others.
• Avoid tax preparers who base their fees on a percentage of the refund.
• Use a reputable tax professional who signs the tax return and provides a copy.
Consider whether the individual or firm will be around months or years after the return has been filed to answer questions about the preparation of the tax return.
• Check the person’s credentials. Only attorneys, CPAs, and enrolled agents can represent taxpayers before the IRS in all matters, including audits, collection, and appeals. Other return preparers may only represent taxpayers for audits of returns they actually prepared.
• Find out if the return preparer is affiliated with a professional organization that provides its members with continuing education and other resources and holds them to a code of ethics.
At Watkins Meegan, we fully support efforts to increase the competency and integrity of professional tax return preparers. More information about choosing a tax return preparer and avoiding fraud can be found at the IRS website in IRS Fact Sheet 2010-03, How to Choose a Tax Preparer and Avoid Tax Fraud.
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February 4. 2010 | Jason Fleetwood, and Katie Madden
Accountant's New Year's Resolutions
Each year we all make at least one New Year’s resolution. Whether it is one resolution, five, or even ten, we make a list and promise ourselves that we will stick to it. This year we thought we would share our New Year’s resolutions with you while incorporating some helpful tax advice. Posting them on WaktinsWire will be added incentive for us to follow through on them.
1. Eat Healthier – The next time you are eating a meal, choose a salad instead of the burger and fries, drink water instead of soda, and go organic when possible. (And for you business owners, don’t forget that the amount allowable as a deduction for meal and entertainment expenses is generally limited to 50 percent of such expenses. However, there are exceptions to the 50-Percent limitation rule.)
2. Be More Charitable –Encourage yourself to give a when possible. Whether it is clothing, household items, food, or cash, there are several organizations that can take your donations and help out those in need. (And for you individual taxpayers, don’t forget that you report your charitable contributions on Form 1040, Schedule A when filing your tax return. Don’t forget to keep records of donations and contributions.)
3. Get Out of Debt – It won’t happen overnight, but it is possible to climb out of the $683 billion in revolving credit card debt. Make a list of what you owe and try to pay more than the minimum monthly payment. Create a realistic monthly budget for your expenses and make it a rule that if you can’t pay for it today, you can’t afford it. It is also a good idea to review a copy of your credit report and credit score. (And for you accountants, remember that under current GAAP, the principal amount of long-term debt scheduled to be repaid within the next year should be classified as a current liability on a classified balance sheet. Consequently, the principal balance not scheduled to be repaid within the next year should be classified as a non-current liability. Remember also to disclose the future principal maturities over the next five years.)
4. Learn Something New – Ever wanted to learn how to play the harmonica? Yeah, neither have we. But if we did, we can learn how to, along with just about anything else, visiting
utube. The website isn’t just for funny videos of stupid pet tricks or creative wedding dances…it also includes thousands of instructional videos, ranging from cooking lessons to saying hello in Mandarin and some from the IRS. (And for you accountants, don’t forget to read up on how the new International Financial Reporting Standards (IFRS) are going to affect your client’s financial statements in the near future. Because implementation of the standards is expected to be a challenging transition, firms should start preparing now for these “new” standards.)
5. Spend More Time with Family – Chances are that we have all had bad days at the office or in the classroom. Sometimes the best cure for a day like that is an afternoon at the park with your family. Resolve to be home in time for dinner when possible, or schedule a “family night” once a week for group activities such as board games or a movie. (And for you employees out there, remember that, under the Family and Medical Leave Act (FMLA), you may be entitled to up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons, including the birth and care of a newborn child, care for an immediate family member with a serious health condition, and when the employee is unable to work because of a serious health condition.)
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January 29. 2010 | John Seek
Embracing Opportunity
Our communications meeting was by far the best ever. The day was a showcase for the Watkins Meegan talent. The theme “Come Grow With Us” was well conceived and is a motif that is important to our future. Hopefully, we all learned a lot about what the Watkins Meegan Group has to offer. Personally, I learned I am not going to Hollywood (for those of you who watch or know about American Idol), but all is not lost. Before the meeting, I happened to read an Alexander Graham Bell quote, which I will share with you. “When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us.” Yesterday, the Watkins Meegan door opened for all of us. Embrace the opportunity and don’t focus on any closed doors. We work in a great industry at a great firm with great people. Understanding our strengths, creating new strengths, and hard work will allow all of us to achieve our goals. The Watkins Meegan business development initiative starts with everyone at the firm through a commitment to work quality, development of expertise, and the demonstration of that expertise. Years ago, Watkins Meegan started with a handful of people and yesterday we filled a ballroom. I am certain next year we will be looking for a larger space for the meeting.
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January 26. 2010 | Lorraine Sexton
Cash Management- Survive and Thrive
Over the course of this past year, nearly all companies have scrutinized their expenditures and implemented cost cutting measures, in an effort to survive during the downturn in the economy. Having enough cash available for operations has been a challenge, as it has become increasingly difficult to qualify for loans. While most businesses have been in the survival mode, companies that properly position themselves and capitalize on shifting circumstances, including cash management opportunities, can emerge as growth companies and thrive despite the adverse economic conditions.
A traditional cash management strategy is to collect early (reduce the order to cash cycle), and minimize aging accounts receivable. However, many companies are not aware of bank services available to help with this process. Some banks offer a setup where a company can post its invoices to a secured site, with its customers being sent an automatic notification of the posting. The customers can then access the site and make payments electronically. The cost for the service is affordable, and may be less expensive than the postage, labor time, etc., the business has been paying internally for generating and mailing the invoices.
Another traditional cash management strategy has been paying late (increasing the procure to pay cycle), and keeping cash on hand as long as possible. However, some companies are finding it more beneficial to do the opposite and pay accounts payable balances timelier, minimizing late payment fees and lost discounts.
There are steps that can be taken to improve a company’s balance sheet and increase the chances of obtaining bank loans. For example, lines of credit are generally meant to be used for short-term cash needs. Many companies remain unaware that having a line of credit balance sitting on their balance sheet for an extended period of time without being paid down can prevent them from qualifying for a loan.
With the current credit crisis, cash management continues to be an issue of primary importance to companies, and these are just a few among numerous strategies worth considering. Watkins Meegan has experienced employees who can assist you with planning for your cash management needs.
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January 20. 2010 | Jennifer Mavrikes
What’s New with the Not So New TAG Program?
In October 2008, the FDIC announced a new program - the Transaction Account Guarantee (TAG) Program - and it became quite the talk. The reason this program became so popular? It provided full insurance coverage for non-interest bearing accounts, regardless of the dollar amount, as long as the bank participated in the program.
Over the past year, many of our not-for-profit clients have either considered switching, or have switched, to a fully insured account under this program. With the downturn in the economy, our clients wanted peace of mind that their money was safe and secure and decided the assurance of fully insured accounts takes precedence over higher rates of return.
Now for the new news … effective January 1, 2010, some of the major national banks, as well as other regional banks have announced that they will no longer participate in the TAG program. What this means is that if you have a non-interest bearing account with one of these banks, your account will now be subject to FDIC coverage of $250,000 per depositor, rather than being fully insured.
If you, like many others, decided to participate in the TAG program this past year, the first thing you should do is contact your bank to find out if is still participating in the TAG program. If it is not, talk with your bank and within your organization about your options, and always be aware of the financial condition of your bank. By doing so, you can maintain your peace of mind throughout the years to come.
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January 13. 2010 | Mary Lou Gervie
Employee Misclassification
Employee misclassification is a practice that is sometimes used intentionally by employers to reduce their tax burden. Both the Internal Revenue Service and many states are ramping up their investigations to insure that individuals who should be classified as employees are not being hired as independent contractors. This issue has been determined to be a serious threat to workers and also creates an unlevel playing field for businesses.
Statistics published by the Maryland Unemployment Insurance Division, which conducts random audits every year of about 2% of the state’s employers, found that approximately 20% of employers misclassify employees as independent contractors.
The misclassification of employees has significant lost revenue ramifications not only for the federal and state governments, but also to the workers themselves who lose out on potential benefits that are typically granted to employees, such as, minimum hourly wages, overtime pay, safety and health standards, medical leave, antidiscrimination laws and access to unemployment insurance and workers’ compensation. It puts honest employers at a competitive disadvantage due to the higher cost of doing business.
Starting in February 2010, the Internal Revenue Service will start its first Employment Tax National Research Project in 25 years. Examinations from this project will be used to collect data for future audits where it is determined that compliance issues exist. The IRS will randomly select 2,000 taxpayers for the next three years for this National Research Project. There is an underlying understanding that one of the primary issues will be the classification of employees.
Watkins Meegan has ex-IRS employees who are familiar with state and federal audits to assist with any business that is a target of these types of investigations.
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January 6. 2010 | Justin Reid
New proposals to the SBA and SDB Programs
If you’re a small business interested in obtaining a small business certification, you may find it worthwhile to hear of proposed changes affecting Small Business Administration (SBA) and Small Disadvantaged Business (SDB) programs. Changes have also been proposed to small business lending through the SBA and other entities.
Current regulations of joint ventures state that each of these entities may not submit more than three proposals over a two-year period. In some cases, this regulation has resulted in the creation of a second joint venture by small businesses, which is a costly undertaking. New proposed changes to the SBA adjust the limit to three contract awards, rather than proposal submissions over the two-year period. A proposed change for five awards is also pending.
Changes to financial statement reporting requirements have also been proposed. Under these revisions, financial statement reviews must be completed when receipts between $2 million and $10 million are collected. Current regulations require reviews when the concern has between $1 million and $5 million of receipts. Financial statement audits must also be completed when receipts of more than $10 million are received. Current regulations require audits when there are $5 million of receipts.
These are just two of the proposed changes and more are in store. Keep your eyes open for the new developments!
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December 29. 2009 | Bhavesh Vadhani
Increasing Need for Assurance - Why?
What do organizations that provide services like IT hosting, payroll, benefits processing, credit/debit card processing, automated clearing house, XBRL tagging, accounting, and financial support have in common? The need to provide assurance.
Along with an innovative business model and strong industry expertise, one of the key enablers of a company’s growth is the TRUST that is built with its customers, business partners, employees, and other stakeholders. Trust is an essential element of all successful business models, whether the business processes are online or traditional.
The new economy is changing the nature of the relationships we have with our customers, business partners, suppliers, and competitors. In person meetings are infrequent and new technologies can be both powerful and scary. The business world is not about risk avoidance anymore; it’s about risk exploitation and the opportunity that risk generates. With risk a central concept in the market, an organization’s need to provide assurances to its stakeholders is escalating every day. Companies need to demonstrate that they have good internal controls over processes and supporting systems and they are designed and operating effectively and consistently.
So how can you provide this kind of assurance? Start by making sure that you have the right controls in place to support the services you provide. Then you can seek an independent assessment performed by a third party. Some of the widely accepted and used attestation services are: AICPA’s Statement of Auditing Standards No. 70 (SAS 70), Trust Services (SysTrust and WebTrust), and Payment Card Industry (PCI) compliance. Depending on the services an organization offers to its clients, it should explore one of the above certifications and see which one is right for the company and its partners.
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December 22. 2009 | Kevin Jones
Using the Tax Code to Implement Social Policy
Oliver Wendell Holmes, the great Supreme Court Justice, once stated that, one way or another, “taxes are what we pay for a civilized society.” While we all recognize that taxes provide the government with the means to accomplish its mission, we see that, more and more, our system of taxation is used as an instrument to implement social policy.
Currently, the federal tax code provides billions of dollars each year in incentives to encourage socially valued activities. These include incentives to home ownership, charitable contributions, health insurance, education, going green, and countless others. These incentives take one of two forms. First, an incentive may take the form of a deduction from income. This type of incentive links the size of the tax break to the taxpayer’s marginal tax bracket. Second, an incentive may take the form of a tax credit, which may be either refundable or non-refundable. Refundable credits are much more appealing to those with little or no tax liability because they are available regardless of whether the taxpayer actually is required to pay any tax. The benefits of deductions compared with credits will not be resolved anytime soon, but in either case, the tax code is the vehicle used to implement social policy.
In case one wonders why the tax code is used for social policy initiatives, the answer is quite simple…politics. Incentives of this type are nothing more than another form of government spending program. This is not to indicate any agreement or disagreement with this method of financing government operations. That is for you to decide. Nevertheless, this type of program is often preferred by Congress to typical spending programs because spending programs are much more visible and, thus, more subject to public scrutiny. Tax preferences, on the other hand, can more easily be concealed within the complexity of the federal tax code.
In this sense, it is much more efficient for legislators and more palatable for the public to create a new incentive program rather than a new spending program. This is particularly true in these times of increased federal deficits. Is this smoke and mirrors? Maybe it is, but countering the benefits legislators enjoy by using the tax code in this manner is the clear fact that by using the tax code to achieve social goals beyond raising revenue for necessary government programs, it may be impossible to achieve true tax simplification.
My personal views notwithstanding, as a tax professional, I certainly don’t mind all the complexity. It may be true that the only things certain are death and taxes, but running closely behind are: (a) the ingenuity of governments in taxing their citizens, and (b) the creativity of the people in avoiding them. Because of that, there will always be a need for those that can find creative solutions to taxing problems.
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December 16. 2009 | Jason Fleetwood
Impaired or Not Impaired…That is the Question
You cannot open a newspaper, read online, or watch the evening news without hearing about the current recession and the troubles our economy is facing. This recent economic downturn has had a huge impact on the residential and commercial real estate markets. Businesses involved in these markets continue to post lackluster performances, as they have had to deal with impairment charges related to a variety of issues – the decline in home and land values, abandoned projects and developments, deals that have fallen through, etc.
Impairment is defined as “the condition that exists when the carrying amount of a long-lived asset (asset group) exceeds its fair value.” Events or changes can occur to a particular asset’s circumstances that raise doubt about the asset’s carrying amount being fully recoverable. Such events or changes may include significant adverse changes in business climate, decreases in an asset’s market value, use, or condition, and/or adverse legal factors. An asset is considered impaired when a company determines that the carrying amount of the asset is not fully recoverable. When this occurs, the asset should be written down to its fair value. To complicate matters, the accounting for asset impairment further depends on whether a company intends to hold and use the asset or dispose of it. (OK…you may be thinking -”How do you apply all this technical jargon to a real-life example?”…bear with me, I’ll get there.)
U.S. Generally Accepted Accounting Principles (GAAP) use a two-step test in determining impairment. The first step is to determine the undiscounted cash flows expected from the use and disposition of the asset. If the sum of these cash flows is less than the carrying amount of the asset, it is considered impaired. If there is impairment, the second step is to determine the impairment loss by taking the carrying amount of the asset and subtracting the fair value. Once an impairment loss is recognized, it may not be reversed in a following year. (So let’s get to the example…if you have lived in the DC area long enough, you don’t have to be a rabid sports fan to understand how impairment would be applied to the area’s sports franchises…the Washington Redskins = Impaired – losses continue to mount and fan frustration continues to grow; the Washington Capitals = Not Impaired – with the world’s best player surrounded by young talent, this team is on the cusp of great things; the Washington Wizards = Get out your cash flow models and run some scenarios because this team could go either way; the Washington Nationals = Fully written off in previous years...)
My example may not have been what you were looking for, but with another calendar year end approaching, it is prudent for businesses to assess asset impairment and ensure they are accurately reporting asset values on their financial statements. As a final note, I hope everyone has a wonderful holiday season and a happy and healthy 2010!
(Now you are thinking- “I thought this guy was done”…but I just wanted to point out that in an earlier blog written by Brian Linville on November 11, 2009, he talked about the convergence project with GAAP and IFRS (International Financial Reporting Standards). Asset Impairment is an issue where GAAP and IFRS differ, with a significant difference being how impairment losses are handled – IFRS allows for the reversal of an impairment loss if certain criteria are met.)
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December 9. 2009 | Bruce Hall
The Burden of Tax Compliance
It’s that time of year again. The holidays are looming, a chill is in the air… and your government is working hard to pass legislation before year end.
At the recent AICPA National Tax Conference, the Commissioner of the IRS and the IRS Taxpayer Advocate both admitted that the IRS is overwhelmed by routine activities. One of the metrics used to measure success is whether the phone is answered more than 70 percent of the time. We can only hope this is coupled with metrics measuring the resolution of taxpayer issues. The feeling that many taxpayers get is that stacks of correspondence go unanswered, while erroneous underpayment notices, often in duplicate and triplicate, get mailed.
In the midst of the most dramatic economic downturn in generations, the IRS is allocating significant resources to enforcement issues. Perhaps similar resources should be distributed to ensure that refunds are made timely and unnecessary underpayment notices, which can frighten taxpayers, are sent less frequently, thereby saving both time and money. It appears that the government is attacking on all fronts.
State tax departments are operating in a similar fashion to the IRS. Notice after notice is generated, responses by taxpayers or their representatives are sent multiple times by multiple modes of communication, and phone call after phone call results in mounting frustration. One common error I have encountered with some states involves the withholding tax that pass-through entities are required to pay on behalf of nonresident owners. When the owner later files their tax return properly claiming the withholding as a credit against their tax, the state is ignoring the withholding even when documentation is attached to the returns. Not only did the states hold the refunds, they actually issue bills even though the taxpayer is owed money. I wonder how many taxpayers are incorrectly paying these bills.
These problems have not stopped the wheels of our government from grinding along. There are at least four bills winding their way through Congress, all of which potentially have significant tax provisions, and some of which will affect the current year. Perhaps a little more attention to relieving the burdens of tax compliance should be the focus. Most Americans don’t mind paying their taxes as much as having to deal with the taxing authority.
No one is sure where we will end up, but the certainties of death and taxes are likely to be joined by increased regulation and more government oversight.
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December 2. 2009 | Ed Rodriguez
Budgets Are Increasing at the IRS - What Does That Mean For You?
The Obama administration has approved an increase of $400 million in the
Internal Revenue Service budget for 2010 and the IRS plans to use that
increased budget to hire about 4,500 additional employees for its enforcement division and to enhance its tax compliance/collections efforts. While this means job opportunities for some, what does it mean for the American public?
Allow me to break it down for you. The new IRS employees are likely to be more tech savvy and collections improvements will mean better technology and an increased number of audits. Already the IRS is looking at obtaining a database that collects public information on an international scale to combat the rise of
offshore tax evasion. Taxpayers should be more cautious and guard themselves against a potential IRS adjustment, which can trigger penalties that exceed 75 percent of the tax due.
Now let’s take a look inside the
Department of Justice’s Tax Division, which includes the attorneys who prosecute criminal tax activity. During FY 2009, criminal tax investigations and prosecutions ranged from 1,300 to 1,800. Improving voluntary compliance and maintaining fair and uniform enforcement of tax law are primary objectives of the DOJ Tax Division, as well as the
IRS’s Criminal Investigations (CI) team.
As such, both the IRS CI and the DOJ have been focused on stopping the spread of tax shelters and tracking down owners of unreported offshore bank accounts, as shown by cases like that against Swiss bank UBS. While you may think the IRS CI is only focusing on larger financial taxpayers, I’ve heard from inside sources that mom-and-pop foreign bank accounts are also being targeted. DOJ is negotiating a new income tax treaty with Malta and a new Tax Information Exchange Agreement (TIEA) with Liechtenstein.
One thing for sure is that taxpayers’ rights should not be violated. But taxpayers facing an IRS audit must make sure that the books and records they submit to the IRS auditor are in an organized fashion. These records can build credibility between the taxpayer and the auditor. Credibility can go a long way in the relationship and may limit the audit from expanding into other years. However, if there is a serious issue with the tax return, such as unsubstantiated expenses or unreported income, it might be time to hire an accountant to navigate through the audit and to help ensure a referral is not made to the IRS CI.
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November 24. 2009 | Daniel O'Shea
Thanks-Giving is Upon Us
Notice the hyphen above? No, it is not a typo, but rather a theme. In a couple days, turkey, football, and family will be here. It is truly a time for giving thanks. It should also be a time for giving.
As I write this, we are halfway through the fourth quarter of the calendar year - typically the strongest time of the year for charities to receive contributions. To almost no one’s surprise, the economy, while it has stopped declining, has not yet turned upward. As a result, many charities are simply trying to hold on through this fourth quarter in the hopes that 2010 will again see contribution patterns return to some degree of normalcy.
Several national surveys have shown contributions are down 10 percent for the year. Based on my observations and inquiries of clients and other charity leaders here in the Washington area, the decline locally appears to be closer to 15 percent. I have the privilege of working with many of the best charities in the Washington area, and one thing is clear - it doesn’t seem to matter what the charity’s mission is, funding is down.
As funding from federal, state, and local government has declined, charities have been left with some difficult decisions as they scramble to maintain their programs. Charities shouldn’t be looking for government funding to increase any time soon. Tax revenues, which provide the basis for government funding, are way down. Thus, it is up to the public to make a difference.
Give what you can to your favorite charities this holiday season. Giving does not have to be financial. Giving includes volunteering or donating clothing and food. Every bit can make a difference. Encourage your children to participate. My daughter recently attended a birthday party where guests were encouraged to make a contribution to the birthday girl’s favorite charity rather than bring a gift. What a great idea and life lesson!
It is my hope that contribution activity increases throughout the rest of the year. As you know, it’s not just the charity that suffers, but those served by the charity. Every bit can, and does, make a difference.
Happy Thanks-Giving to all!
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November 18. 2009 | Christine Williamson
Prepare Yourself for Limitations of Pass-Through Charges and Rising Indirect Rates
As a government contractor you’re in line for a number of regulatory and economic changes in the near future. The Obama administration has been focusing on revamping the government contracting industry, as well as the ongoing reviews at
DCAA and other federal agencies. Some specific changes to note are as follows:
Last month, the
Federal Acquisition Regulation councils delivered an interim rule that limits the pass-through charges allowed by prime contractors and subcontractors. This rule was issued to “minimize excessive pass-through charges by contractors from subcontractors, or from tiers of subcontractors, that add no or negligible value," according to the
Federal Register. While the rule was considered effective October 14, you have until December 14 to submit comments before a final rule is established.
In addition, increasing unemployment taxes in
Maryland and
Virginia could impact your indirect rate costs for 2010. Rising unemployment rates decreased the two states' unemployment trust funds, resulting in the increase. According to an
article in the Washington Business Journal, Maryland's unemployment insurance taxes are set to rise from an annual minimum of $51 per employee to $187 per employee, while Virginia will increase from $95 to $171.
We believe more changes are on the horizon….so stay tuned!
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November 11. 2009 | Brian Linville
The IFRS (International Financial Reporting Standards) Struggle
Once companies understand what IFRS is, they need to stay in the loop of what will happen next and how it affects them.
Our Director of Quality Control, Brian Linville, just attended a two-day conference held jointly by the International Accounting Standards Board (IASB) Foundation and the American Institute of Certified Public Accountants in which a few of the topics and presenters tried to help attendees determine what steps to take next. Presenters included standard setters from the Financial Accounting Standards Board (FASB) and the IASB, the U.S. Securities and Exchange Commission (SEC), the Public Company Accounting Oversight Board (PCAOB), and several companies who had already gone through the switch.
The most anticipated section was the presentation by SEC Chief Accountant James Kroeker. Everyone was hoping to hear a decision on whether the SEC would stick to its current roadmap to require public companies to transition to IFRS in 2014. While we did not get an answer to that question, Mr. Kroeker indicated that we should not wait for the SEC to make a decision; rather, we should continue with our (FASB and IASB) conversion project. Mr. Kroeker did indicate we would hear more on the roadmap this fall from the SEC.
On the previous day, FASB and IASB had just announced that they would hold monthly meetings to meet their 2011 convergence goal. They realized that the meetings had a dramatic impact in coming to agreements faster. After all that, the questions still remain. Should you start training people? Should you analyze the potential effects of switching to IFRS? Everyone is struggling with what to do and when to do it. Academia and CPA firms are also feeling the pains and trying to decide what to do.
Whatever you determine your answer to be, keep up with the current standards (GAAP). There are several significant standards that may change as a result of the convergence project, but keeping up with GAAP should minimize the effects of switching to IFRS as the convergence project moves forward.
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November 4. 2009 | Kevin Jones
'Tis the Season for Tax Planning
As the year begins to wind down, many of us begin to focus our attention on the activities of the new seasons that are upon us. Most of those are rather obvious…starting with the Fall season with its cooler weather and beautiful colors, leading into Thanksgiving, Christmas, and finally, the New Year. This time of year also brings us full swing into the baseball playoffs, college and NFL football seasons and the fun of tailgating and cheering for our favorite teams. However, not to be lost in all the hoopla of this time of year is another season…one that we don’t often think about and, in fact, probably don’t want to think about…tax planning season.
That’s right, tax planning season. Yes, I know, some of you just finished filing your 2008 tax returns at the October 15 final deadline. You were thinking that once your return was filed that you would have a break from the unpleasant thought of taxes for at least six months. But with all the federal tax law changes enacted over the past year and all the tax proposals pending, including tax provisions of health care reform and the Obama Administration’s other tax proposals, it is hard to keep up with which provisions are in and which are out. One thing is sure though, year-end tax planning is more important than ever in 2009.
Tax planning is completed near the end of the year for strategic reasons. First, it’s relatively easy to know where you stand currently and where you will end up in terms of your income and allowable deductions. With this information in hand, the impact of different alternatives and strategies can be quantified and the best course chosen. Second, almost all strategies for minimizing your 2009 tax bill must be implemented prior to the end of the year.
Just to give one simple example, for many taxpayers, it is advantageous to pay the 4th quarter state estimated tax payment prior to December 31, 2009, even though it is not due until January 15 of next year. The reason is that, if paid before the end of the year, it is deductible as an itemized deduction on the 2009 tax return. On the other hand, for taxpayers subject to the alternative minimum tax (AMT), there is no tax benefit to making the payment prior to the end of the year because state income taxes are not deductible in determining the AMT. The point is, without proper planning prior to the end of the year, there is no way to know what strategy makes sense in your particular situation and the ability to take advantage of most opportunities will be lost. This is just as true for your business as it is for you individually.
For clients of Watkins Meegan, a booklet will be sent shortly providing the tools needed to get organized to properly conduct year-end planning. The booklet also discusses some of the more relevant planning techniques and opportunities. For others, I urge you to contact your tax advisor to explore ways to minimize your taxes in 2009. When done properly, the unpleasant task of focusing on taxes now can reap substantial benefits next year when you file your 2009 tax return.
So yes…’tis the season…
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October 29. 2009 | Sean Roddy
Accounting in the Web 2.0 World
We began this process the same way we begin any new engagement - by educating ourselves. This began when we invited the Maryland Association of Certified Public Accountants’ Executive Director Tom Hood to speak to us about his experience with Web 2.0 technologies. After hearing Tom speak, we did additional research, which helped us develop our objectives and establish a plan for maximizing the firm’s use of these technologies.
Our goals were to enhance our name recognition, bring our experience and knowledge to the web and improve our communications, both internally and externally. We have worked very hard over the past 10 months on these efforts and like most large projects there were a lot of talented people participating in the process. It is with a degree of pride that we can say we have successfully changed our name, our logo, our website and our collateral materials. We have also instituted our blog, Watkins Wire, and we have developed and begun to deploy our CRM system, allowing us to better manage and keep in contact with our clients and prospects. Additionally we’re in the process of launching an e-mail newsletter, which will provide valuable and timely news and information about the accounting industry.
We have also established a presence on LinkedIn, Facebook and Twitter. We hope these platforms will help strengthen our brand and showcase the knowledge of our staff. The enhanced communication will also provide value to our clients, employees, and the communities in which we live and work. We encourage you to follow us on these sites and provide us with your feedback on Watkins Meegan’s presence in the Web 2.0 world.
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October 22. 2009 | Mike Micholas
Welcome to Watkins Wire
I’d like to welcome you to Watkins Wire, the newly launched, official blog of Watkins Meegan. For more than 30 years, the professionals at Watkins Meegan have provided our clients and the business community with insight, expertise and ideas about accounting, tax and business issues.
We’ve built upon our reputation by hiring and training talented people, assisting our clients in achieving their objectives, and educating the business community via our newsletters, white papers, seminars and webinars, among other outlets. As industry thought leaders, we see the Watkins Wire blog as an extension of our commitment to continue to educate and bring timely and valuable information to every interested party.
Whether you are interested in the International Financial Reporting Standards (IFRS), Federal Acquisition Regulations (FAR), new tax legislation or the Recovery Act, you’ll find the topic covered at Watkins Wire. Our team of CPAs, financial specialists, forensic accountants and risk management consultants will blog about these topics and their thoughts on the latest industry news.
I hope that you’ll come to find Watkins Wire as one of your go-to sites for industry commentary and news. While doing so, we will remain mindful that effective communication is a two-way street and we encourage you to send us your comments and suggestions.
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