Impact of the Proposed Partnership Audit Regime

The IRS recently released new proposed regulations designed to significantly change the rule under which an audit of a partnership can occur. The reason for the changes is it makes it significantly easier and less costly for the IRS to conduct an audit and enforce rulings where appropriate. The new audit regime was originally enacted as part of the Bipartisan Budget Act of 2015 effectively replacing the existing rules enacted under the Tax Equity and Fiscal Responsibility Act (TEFRA).

Nonprofit Industry: Audit Guide

Is your nonprofit organization required to have a financial statement audit in the current fiscal year? If so, the information below will help you gain an understanding of what to do before, during and after the audit.


Construction Employment Trends Revealed in Survey

The right people, in the right position can make the difference between a high growth and stagnant company. Finding and retaining the best and brightest is essential to the vitality of every company. Whether it is in the boardroom or on the production floor, there is always a need for top class talent. Not only does this ensure a quality service or product to meet market demands, but it also creates a foundation for innovation, process improvement and growth. Conversely, a shortage of employees may make it quite challenging for companies to thrive.

Tax Credits for Restaurants

Are you aware of the tax credits your restaurant may be eligible for? Many restaurant owners are not taking advantage of these tax credits. It is very difficult to run your business and keep up with the complex regulations regarding taxes. Getting help from your tax professional, who is familiar with the hospitality industry and all the deductions, credits and exemptions you are eligible for, is crucial.

Tip Credit

You may be able to claim a credit for social security and Medicare taxes paid or incurred by an employer on certain employees’ tips.

You may claim this credit if you meet both of the following conditions:

Are You Aware of the Minnesota Sales Tax Changes Effective October 1st? 

Minnesota Sales Tax Changes 

Effective October 1, 2017

There are upcoming changes to the Transit Improvement Area Sales and Use Tax, as well as rate changes for other jurisdictions. 

When to Charge Local Taxes

As a general rule, local sales tax should be charged to customers on all sales made in a local taxing area, unless the customer provides an exemption certificate. The local tax applies to anyone who is from outside the city or county and picks up items in the local area for business or personal use. This applies even if the customer takes the items outside of the local tax area.

Real Estate Investors: Like-Kind Exchanges

Are you thinking about divesting a real estate investment and then replacing it with another property? If you sell appreciated property outright, you will incur a taxable gain, which lowers the amount available to spend on the replacement property. But you may be able to defer your tax bill (or even make it disappear) with a Section 1031 like-kind exchange.


Dissecting a Business Valuation Report

When the time comes to establish the value of a business, most owners already have a pre-determined number in their mind. They often think the value should equal a multiple of earnings or annual sales. However, this method is rarely accurate and is unlikely to maintain merit if the company is sold or involved in litigation. A good business valuation is not only about determining an accurate and reasonable value, but also about being able to defend it if needed with a clear and concise explanation supporting the conclusions. To help clients, prospects and others understand what makes a good valuation report, Smith Schafer has outlined key items below.


Minnesota Tax Relief Bill

Minnesota recently passed legislation that provides nearly $650 million in tax relief. Prior to this, the most recent tax legislation was enacted in 2014, so a long-overdue reprieve is coming for many Minnesota businesses and individuals. In particular, seniors on Social Security, owners of lower-valued business property, college students and parents saving for college, counties and cities, families with child or dependent care expenses and farmers supporting school construction got the biggest wins. To help our clients, prospects and others understand the new legislation, Smith Schafer has provided the highlights below.

Individual and Estate Income Tax Changes

New income tax credits or subtractions include:

Mandatory Timely Remittances to Qualified Retirement Plans

The Department of Labor (DOL) requires employee remittances to qualified plans to be made as soon as administratively feasible. The Plan Sponsor has a fiduciary and legal responsibility to remit employee pre-tax, ROTH and participant loan repayments in a timely fashion or face possible fines, penalties or sanctions.

Ways to Combat Business Identity Theft

The IRS and state tax authorities have made significant strides in curbing individual identity theft over the last two years. But cyber attacks against businesses are on the upswing. Here are some simple ways business taxpayers can help protect their data from hackers.