Suzanne Cox Completes Second Iron Man Competition

Suzanne Cox, from our Saltmarsh Tampa office, participated in an Iron Man competition in Florianopolis, Brazil on Sunday, May 27th.  This was Suzanne's second time competing in an Iron Man competition.  Her finish time this year was an impressive 12 hours 25 minutes and 10 seconds! 

Great job, Suzanne!

Teri and Lisa Meet a Star!

Teri and Lisa from the Saltmarsh Ft. Walton Beach office met Tracy Porter of the New Orleans Saints at a fundraiser for Relay for Life in Destin today!

Teri with Tracy Porter

Nicole with Tracy Porter

Saltmarsh Announces 2012 Promotions

Please join us in congratulating the following individuals who have been promoted as of January 1, 2012:

Suzanne Cox, CPA has been promoted to Senior Manager in the Audit Department of the Tampa office of Saltmarsh, Cleaveland & Gund. Suzanne has been practicing in this field since 2003,  and her experience includes audit, accounting, taxation and consulting services. Her areas of expertise include development, construction and manufacturing companies. Prior to working in public accounting Suzanne worked as an Information Systems Consultant for a private accounting software firm.

Cedric Durre has been promoted to Manager in the Information Technology Services Department of Saltmarsh, Cleaveland & Gund. He has been practicing in this field since 2001, and his experience includes networking and information technology. He also has experience working in internet service provider infrastructure and datacenter environments.

Lisa Goodwin, CPA has been promoted to Senior in Audit Department of the Fort Walton Beach office of Saltmarsh, Cleveland & Gund and provides audit and assurance services to clients. She joined the firm in October 2008 and her areas of concentration include non-profit, governmental, condominiums, and homeowners’ associations.

Alexandria O'Brien has been promoted to Senior in the Audit Department of the Tampa office of Saltmarsh, Cleaveland & Gund. Since joining Saltmarsh in 2008, she has worked in our accounting and audit department serving our financial institution clients, private companies and nonprofit organizations.

Ft. Walton Beach Holiday Party

The Fort Walton Beach office celebrated the holidays together at the home of Glenn Scharf with tons of delicious food and fun games, coordinated by Allyson Oury.  After an intense game of "Dirty Santa," the team rounded out the night with the "Team Work" pyramid.

IRS Announces 2011 Voluntary Compliance Program Focused on Employee vs. Independent Contractor Exposure

On September 21, 2011, the Internal Revenue Service (IRS) unveiled a Voluntary Compliance Program (VCP) that offers relief for businesses that may have misclassified workers as independent contractors, rather than employees, and so are potentially liable for significant additional taxes, penalties, and interest.

Background
Prior to announcement of the VCP, the IRS and the Department of Labor (DOL) stepped up joint enforcement efforts by signing a new memorandum of understanding to strengthen information sharing on enforcement actions aimed at misclassified workers. Several states are parties to the agreement including New York and Connecticut.

Observation: This enforcement issue has become more urgent as both federal and state authorities seek additional tax revenues to close large current and projected budget deficits.

V SummaryCP
The VCP is available for employers that are currently treating (perhaps incorrectly) workers or a class of workers as independent contractors, but want to prospectively reclassify the workers as employees for federal employment tax purposes. The IRS retains discretion over whether to accept an employer into the VCP.

VCP Consequences
Under the VCP, eligible taxpayers will generally be entitled to settle their employment tax liability under a single-year assessment of employment taxes of 10% of the Internal Revenue Code Section 3509 rates applicable to the most recently closed tax year. A 10.68% effective rate applies under the VCP in 2011, since the most recently closed tax year is 2010, and a 10.28% effective rate will apply in 2012. A rate of 3.24% also applies to compensation above the Social Security wage base in both years. These rates include federal income tax withholding and employer/employee social security and Medicare tax.

Observation: Employers in the program will generally pay an amount equal to just over 1% of the wages paid to reclassified workers for the most recent tax year and will eliminate the potential exposure for all prior years. It is unclear how states will react to the VCP program.

VCP Qualifications
The VCP is open to businesses, including exempt organizations, which have treated workers as independent contractors in the past, have filed Forms 1099 for the previous three years, and are not currently under a worker classification audit by the IRS, the DOL, or a state agency. An employer previously audited by the IRS or DOL concerning worker classification is eligible for this Program if it has complied with the results of such an audit.
Under the Program, an employer does not have to reclassify all of its workers who are currently treated as non-employees. However, once an employer chooses to reclassify certain of its workers as employees, all workers in the same class – i.e., workers who perform the same or similar services – must be reclassified as employees.

Employers apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program. This form must be filed at least 60 days before the taxpayer wants to begin treating the workers as employees.

Observation: The IRS has indicated that an employer that wants to begin treating a class or classes of workers as employees for the fourth quarter of 2011 may do so, but should file the Form 8952 as soon as possible.

Additional VCP Consequences
In addition to filing Form 8952, employers that participate must sign a closing agreement with the IRS extending the statute of limitations from three years to six years for the first three calendar years beginning after the agreement is signed. The agreement also requires the taxpayer to treat the same class of workers as employees in the future.
Observation: Tax professionals can help businesses and exempt organizations evaluate whether the VCP is feasible, appropriate, and cost effective for recipients of services from workers previously treated as independent contractors. Such a review is appropriate in order to make certain that businesses are not entering the VCP when their contractors are already appropriately classified.

EisnerAmper LLP
This publication is intended to provide general information to our friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.

Fort Walton Beach - Annual Fun Day

The FWB office enjoyed their annual Fun Day on Friday. The afternoon began with lunch at Moe's, followed by bumper boats, putt putt golf, race cars and bumper cars at The Track and ended with ice cream at Marble Slab. The coveted Fun Day trophy passed from Teri Elkins to Nicole Fife to proudly display for the next year. Thank you to Glenn for another great Fun Day!

Plan Sponsors Affected by Hurricane Irene Granted Additional Time to File Form 5500 and, in Certain Cases, to Fund Their Plans

As part of Internal Revenue Service (IRS) tax relief related to individual and business taxpayers impacted by Hurricane Irene, where retirement plan sponsors – or the plan sponsor’s records necessary to complete the return – are located in the federally designated disaster areas listed in IR 2011‐87 (originally published September 1, 2011 and subsequently updated to reflect new areas for relief), the sponsors will have until October 31, 2011 to file annual Form 5500 for their retirement and welfare benefit plans. This extension applies to Forms 5500 that had a due date for filing after August 26, 2011 and before October 31, 2011.

Plan Sponsors Qualifying for Relief
The U.S. Department of Labor (DOL) website discusses Disaster Relief Information as follows: “Filers affected by Presidentially-declared disasters are plan administrators, employers, and other entities who file Form 5500 series that are located in the areas designated as federal disaster areas (as listed in IRS’s announcements). These special extensions also apply to filers located outside the designated disaster areas who are unable to obtain the information necessary for filing from service providers, banks or insurance companies whose operations are directly affected by the disasters.”

Impact on Plan Funding and Deductions
Because the tax relief granted by IRS includes an extension of time to file business and individual tax returns, plan sponsors will be able to take a tax deduction for contributions made to their plans for the prior period if the contributions are deposited by the new extended due date of the return and provided they have met the other requirements of Internal Revenue Code (IRC) Section 404(a).

However, sponsors of plans that are subject to the minimum funding provisions of IRC Section 412 – such as defined benefit plans, cash balance plans, and money purchase pension plans – are still required to fund these plans within 8½ months after the plan’s year end, as IRS has not granted additional time to meet the minimum funding requirements under IRC section 412. For calendar year plans, this means that contributions will still need to be made by September 15, 2011 to meet the minimum funding requirements.

Designated Disaster Areas
Plan sponsors – or those with necessary records, as noted further above – located in designated counties (see list below) in Connecticut, Massachusetts, New Jersey, New York, North Carolina, Vermont, and Puerto Rico will receive the extension of time to file. The IRS may announce additional relief for taxpayers in other areas as damage assessments continue and encourages plan sponsors and tax practitioners to monitor Tax Relief in Disaster Situations (http://www.irs.gov/newsroom/article/0,,id=108362,00.html) for updates.

As of September 8, 2011, the IRS filing extension applies to the following counties and municipalities:

• Connecticut: Fairfield, Hartford, Litchfield, Middlesex, New Haven, New London, Tolland and Windham
• Massachusetts: Berkshire and Franklin
• New Hampshire: Carroll and Grafton

• New Jersey: Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Gloucester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union, and Warren

• New York: Albany, Clinton, Delaware, Dutchess, Essex, Greene, Montgomery, Nassau, Orange, Rensselaer, Rockland, Saratoga, Schenectady, Schoharie, Sullivan, Suffolk, Ulster, Warren, and Westchester

• North Carolina: Beaufort, Bertie, Brunswick, Camden, Carteret, Chowan, Craven, Currituck, Dare, Duplin, Edgecombe, Gates, Halifax, Hertford, Hyde, Johnston, Jones, Lenoir, Martin, Nash, New Hanover, Northampton, Onslow, Pamlico, Pasquotank, Perquimans, Pitt, Tyrrell, Vance, Warren, Washington, and Wilson
• Vermont: Addison, Bennington, Caledonia, Chittenden, Orange, Rutland, Washington, and Windsor

• Puerto Rico: Arroyo, Aguas Buenas, Caguas, Canovanas, Carolina, Cayey, Cidra, Coamo, Comerio, Humacao, Jayuya, Juncos, Loiza, Luquillo, Orocovis, Patillas, Ponce, and San Juan.

Reference to Form 5500 can be found in the announcement under the bold caption “Grant of
Relief.” Whatever special extension of filing Form 5500 is granted by the IRS will also be automatically permitted by the DOL and the Pension Benefit Guarantee Corporation (PBGC). Therefore, whether or not DOL and/or PBGC announce a special extension, Form 5500 series filers to whom the IRS has granted a special extension may file their annual returns/reports by the extended due date stated in the IRS’s announcement.

Filing Form 5500 Under the Relief
Plan sponsors should follow the instructions to Form 5500 series under the section “Extension of Time to File” regarding how to file the forms when special extensions are granted. Essentially, the guidance in the instructions is included under the caption “Other Extensions of Time” which advises that, if a plan sponsor is relying on an announced special extension, the sponsor should check the appropriate box on Form 5500 which is Part I, line D, and enter a description of the announced authority for the extension.

Although there is no specific language required under the current extension, the announced authority could be described as follows: “Special extension pursuant to federally designated disaster areas as listed in IR 2011‐87, originally published September 1, 2011 and subsequently updated to reflect new areas for relief, grants until October 31, 2011 to file annual Form 5500 for a retirement and welfare benefit plan.”

If you have any questions regarding this extension, please contact Saltmarsh, Cleaveland & Gund, (850) 435-8300.
© 2011 EisnerAmper LLP


This publication is intended to provide general information to our friends. It does not constitute accounting, tax, or legal advice; nor is it intended to convey a thorough treatment of the subject matter.