Archive for October, 2012

Who is Responsible for Fidelity Bonding?

Friday, October 26th, 2012

When it comes to following the ERISA requirement of fidelity bonding, the devil, as they say is in the details.

The Employee Retirement Income Security Act of 1974 (ERISA) requires that fidelity bonding be obtained to cover each person who “handles” plan assets.  The general rule is the bond amount be ten percent (minimum of $1,000) of plan assets as of the beginning of the plan year, not to exceed $500,000, or one million dollars if the plan holds employer securities.

While this requirement seems relatively straightforward, we find plan sponsors are sometimes unclear about their fidelity bond responsibilities when we are performing  benefit plan audits.   Following are some of the commonly asked questions. (more…)

What are the Tax Rules for Gamblers?

Thursday, October 25th, 2012

With the new Cleveland Horeshoe Casino, gaming is becoming big business in Ohio.  From occasional slot machine players to poker pros, Ohioans are experiencing gambling and all the wins and losses that come with it.  While residents of Las Vegas may already be familiar with the IRS’s tax treatment of gambling wins and losses, Ohio gamers might not be  The IRS has special rules for gaming income and losses, which I’ll describe below, but the general rule is this: gambling winnings are taxable. (more…)

How Can Employers in Ohio, Kentucky, Michigan & Tennessee Get a FICA Tax Refund?

Thursday, October 18th, 2012

Downsizing by companies has been a fact of life over the past several years.  As a part of this process companies may have paid severance payments to employees who were involuntarily terminated due to either: (1) reduction in force (“RIF”) initiatives or (2) plant closings or other similar conditions.

Historically the IRS has argued that such payments are subject to FICA tax withholding in addition to income tax withholding at the time of payment.  In 2002, the Court of Federal Claims in CSX Corp v. U.S. held that severance payments made by CSX were not subject to FICA tax and thus CSX was entitled to refunds of amounts previously withheld.   The IRS appealed and in 2008 the Court of Appeals for the Federal Circuit reversed the Court of Claims holding that such payments were subject to FICA tax. (more…)

Will You Be Ready for Retirement?

Wednesday, October 10th, 2012

You may have heard the retirement terminology “three-legged stool” used to describe the three most common sources of retirement income: Social Security, employer sponsored retirement plan and personal savings. Many factors affect the strength of each “leg,” so you must continually evaluate what changes you need to make to keep the stool strong and upright. (more…)

How Do You Stop School Credit Card Fraud?

Tuesday, October 9th, 2012

Is your school struggling with declining funding? If so, you’re probably worried about the top line. You’re closely watching what’s coming in. You’re exploring ways to generate revenue. But, you need to be equally worried about what’s going out.

Credit cards are one of the most common ways for funds to escape your district. This type of fraud is particularly destructive because it tends to be long-term, continuous and difficult to spot. Employee fraud is like a hole in a bucket – no matter how much water you add, slowly but surely, the water level keeps going down. However, if you understand where fraud may be taking place, you can take steps to deter it. (more…)

How Can Lease Holders Benefit from the Utica Shale Play?

Friday, October 5th, 2012

Much has been written about the Utica shale development phenomena since it first arrived on the scene in eastern Ohio. The topics of discussion are numerous and include tax planning and environmental impact, just to name a few.  But, for the most part, discussion of the Utica shale involves two main parties of interest:

  • Acquisition/exploration/production companies and supporting casts
  • Landowner/mineral interest entities (“lease holders”) (more…)

Do You Need to Send an Annual Notice to Your 401k Participants?

Tuesday, October 2nd, 2012

As we begin the last quarter of the year, if your company sponsors a calendar year 401k plan, don’t forget about participant notice requirements.  They must be furnished by December 1, 2012 and may impact the operation or qualification of your plan.  Here is a checklist that may be helpful, but check with us if you are not certain which of these requirements apply to your plan. (more…)