the WISCONSIN ACCOUNTANT
a newsletter of the Wisconsin Association of Accountants
 

May 2015

Executive Corner

I hope you are enjoying the spring weather and the fact that the busiest time for all us is behind us.   This summer plan on attending our annual convention which has been moved to July 26th - 28th at the Country Springs in Waukesha, WI.  Day one features Estate and Retirement Planning with Robert Keebler and Ethics with Kevin Palmersheim.  Day two brings us Gear Up with a full day on accounting compilation & OCBOA.  The convention will also feature our traditional net working in the evening and banquet and installation of officers on Monday night.  Sunday's events are coming together also!  

 

 

 

Byron L Dopkins, EA, ABA

WAA Executive Director 


 

  Byron Dopkins

 

Executive Corner

Another successful tax season completed.  I hope everyone in the organization feels the same way.  As usual this tax season had its share of ups and downs twists and curves. No doubt the Affordable Care Act made things interesting at times.  That and the increasing ineptitude of revenue service agents at the Federal and State levels serves to underscore the importance of quality continuing professional education for our members to answer the plethora of situational questions that arise during a typical season. So be sure to sign up and attend the various course offerings we have available for 2015.

 

On the Wisconsin Legislative front we continue to make progress toward reversing the "or compilation" language that was added to Section 442 in 2014.  We are taking a two-pronged approach to this issue.  First to remove the added language of "or compilation" and second to add language that clarifies Section 442 will not apply to non-certified public accountants who are preparing financial statements with no form of assurance. 

 

As the weather gets warmer I am looking forward to spending some time outdoors. I have plenty of yard work to do and I am going to take some time for hunting and fishing.  



 

Paul F Kersten, CPA

WAA President 


 

 

 

Report Changes in Circumstances that could Affect Your 2015 Premium Tax Credit

IRS Tax Tips

 

If you have enrolled for health coverage through the Health Insurance Marketplace and receive advance payments of the premium tax credit in 2015, it is important that you report changes in circumstances, such as changes in your income or family size, to your Marketplace.


Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Marketplace. Having at least some of your credit paid in advance directly to your insurance company will reduce the out-of-pocket cost of the health insurance premiums you'll pay each month.

However, it is important to notify the Marketplace about changes in circumstances to allow the Marketplace to adjust your advance payment amount. This adjustment will decrease the likelihood of a significant difference between your advance credit payments and your actual premium tax credit. Changes in circumstances that you should report to the Marketplace include, but are not limited to:

  • An increase or decrease in your income
  • Marriage or divorce
  • The birth or adoption of a child
  • Starting a job with health insurance
  • Gaining or losing your eligibility for other health care coverage
  • Changing your residence
For the full list of changes you should report, visit HealthCare.gov/how-do-i-report-life-changes-to-the-marketplace.


If you report changes in your income or family size to the Marketplace when they happen in 2015, the advance payments will more closely match the credit amount on your 2015 federal tax return.  This will help you avoid getting a smaller refund than you expected, or even owing money that you did not expect to owe.

 

Tax Preparer Fraud Can Lead to Serious Consequences for Both the Tax Professional and Filer 

TaxPro Info

 

Most accountants, CPAs, and certified tax preparers are honest, hardworking people who are dedicated to their profession. Most tax professionals simply want to secure the best possible tax deal for their clients while following all best practices regarding accuracy. However some tax professionals may over emphasize their ability secure favorable tax treatment for their clients and may cross the line into overly aggressive tax minimization strategies. Even more troubling, other tax preparers may be corrupted by greed and act dishonestly by improperly obtaining or using client tax refunds or other client funds.

 

If you are a tax professional, you already understand the devastating impact allegations of this type can have on your professional reputation and livelihood. Therefore any tax professional potentially facing an investigation or referral  to the IRS Office of Professional Responsibility (OPR) should immediately retain tax counsel. However laypeople may not understand that mistakes or other improprieties found in tax filings are ultimately the responsibility of the filer.

 

#1 Tax Lady Indicted for Tax Fraud
Before proceeding any further, it is important to note that this is merely an indictment meaning that charges have been filed and have been presented to the defendant, but they have not yet been proven. The defendant is still innocent under the laws of the United States until prosecutors can prove otherwise. However, this brings us to another important point; the IRS times its announcements of indictments, convictions, and plea deals to coincide with tax time. This approach is intended to deter both tax professionals and taxpayers from taking overly aggressive positions or engaging in questionable tax acts. Furthermore it has the added benefit of making taxpayers more wary so that they are more likely to ask their tax professional tough questions if things don't seem quite right.

 

However, according to a press release from the U.S. Department of Justice, this deterrent effect did not prevent a slew of tax crimes from a Kalamazoo, Michigan based business. Federal prosecutors allege that Fontrice Lenee Charles participated in a number of tax schemes while promoting herself as the #1 Tax Lady. The main allegations contained in counts 1 through 25 of the indictment allege that Ms. Charles provided false information to the IRS to ensure that her clients would receive large tax refunds. Prosecutors alleged that Ms. Charles provided false information on 482 tax returns that resulted in excessive deductions of about $2 million. If convicted, Ms. Charles could face up to 5 years in prison, among other consequences, for each of these charges.

 

Ms. Charles also faces charges for alleged improprieties on her own income tax filings for 2010 and 2011. Prosecutors have alleged that Ms. Charles did not report the income from her tax preparation business in these returns and that she claimed a deceased individual as a dependent. Upon conviction, filing a false return can be punished with a prison sentence of up to 3 years.

 

Tax filers are also impacted by return preparer fraud
For clients of an accountant, CPA, or other tax professional who is convicted of fraud, providing false information or other improprieties the consequences can be harsh. The taxpayer is responsible for the information he or she provides to the IRS. In fact, when a taxpayer signs or otherwise authenticates their tax return, they are certifying the information contained within the tax filing is true and correct under the penalty of perjury. Even if the taxpayer was legitimately fooled by the representations of the tax preparer, errors will have to be corrected. This may include paying additional tax, interest and penalties to correct an underpayment. If excessive deductions were taken, the money will have to be paid back and additional penalties may also apply. In short, failing to ask difficult questions and make sure what your tax preparer is telling you adds up can lead to significant tax problems that may take years to correct.

 

Rely on our experience when handling tax issues due to preparer errors

The tax attorneys of the Brager Tax Law Group can provide representation for tax preparers who have been accused of tax fraud, errors or other improprieties. Furthermore we can work with individual tax payers who are simply attempting to return to compliance after discovering a tax problem. To schedule a consultation, 800-380-TAX-LITIGATOR or contact us online.

 

NFL Surrenders its Tax-exempt Status 

TaxPro Info

 

What once seemed like a tax Hail Mary pass doomed to fall short is now a game ending completion.


 

The National Football League is giving up its tax-exempt status, which he called a "distraction."

 

NFL Commissioner Roger Goodell announced the change, which will take effect with the league's 2015 fiscal year, in a memo to the 32 NFL team owners. Reps. Paul Ryan (R-Wisc.) and Sander Levin (D-Mich.), the chairman and ranking minority member on the House Ways and Means Committee, also reportedly got copies.

 

Goodell cited among the reasons for the change in tax status recent Congressional criticism of the NFL, which generates billions in revenue every year.


 
The commissioner also noted that while the league office and its management now will file tax returns for the first since they obtained Internal Revenue Code section 501(c)(6) tax-exempt status in 1966, the separate NFL teams have always operated as taxable businesses and paid taxes.


 
The change in the league's tax status will not affect the team's tax bills.

 

More changes unlikely: Will the National Hockey League and the Professional Golfers Association, the other two major sports organizations that have similar tax-exempt status, follow suit. I suspect not. Neither captures as much attention from fans or members of Congress as does the NFL.


 
One of many tax-exempt options: The section of the federal tax code that deals with tax-exempt status is larger than most of us realize. 

 

There are seven sections delineating the various groups that are eligible to operate tax-free. They are: 

  • 501(c)(3) is the designation that is familiar to taxpayers who claim itemized deductions for their charitable donations. It applies to religious, educational, charitable, scientific, or literary organizations; testing for public safety organizations; and organizations preventing cruelty to children or animals, or fostering national or international amateur sports competition.
     
  • 501(c)(4) is granted to civic leagues, social welfare organizations and local associations of employees. You probably know this from the Internal Revenue Service Tea Party targeting scandal.
     
  • 501(c)(5) is for labor, agriculture and horticultural organizations.
     
  • 501(c)(6) is for business leagues, which includes the NHL, PGA and, until today, the NFL, as well as for chambers of commerce and real estate boards.
     
  • 501(c)(7) is for social and recreational clubs.
     
  • 501(c)(8) is for fraternal beneficiary societies and associations.
     
  • 501(c)(9) is for voluntary employee beneficiary associations.

Makes you wonder just who was responsible, on both the lobbying and lawmaker sides, for all this parsing of what counts as tax-exempt?

 

Trim all the tax-exempts: Given all the other "distractions" these multiple groups' tax status causes, not mention the dollars they cost the U.S. Treasury, perhaps it's time, as I've argued before, to eliminate many tax-exempt status designations.


 
The easiest move would be to simply cut it to one. My preference is the 501(c)(3) category.


 
But, and there always is a but with taxes, there are issues within that category.


 
A lot of people, including me, believe that mega churches that rake in enough money to pay their pastors big bucks and house them in million dollar mansions don't fit the spirit of what a tax-exempt should be.


 
Others, me included again, believe the religious category is too broad, allowing questionable organizations such as Scientology to operate under a tax-exempt mantle.


 
So how would the 501(c)(3) section be narrowed? Should it be? Or should all groups, regardless of their ostensibly noble goals and good works, simply pay at least some tax?


 
It's something for us and our legislators to consider when they finally get around to talking about serious tax reform.

 

2015 SPRING SEMINAR & ANNUAL CONVENTION

 
Sign Up Now!

 

Welcome to our New Members!


  

Brian Fosdick 

Madison


Thomas Kuenzi

 Manitowoc


 

James Glorioso

 Oconomowoc


 

Michael Deininger

 Kenosha

 

 

If any of these new members should not be

granted membership to the WAA please submit your objections to the Executive Director.

2015

Seminars

 

 

Quickbooks from A to Z

May 22, 2015 8:00am

Radisson Hotel

Green Bay, WI 


2015 Annual WAA Convention 

July 26-28, 2015 12pm to 4:30pm

Country Springs Hotel

Pewaukee, WI
 


 

2015 Gear Up Business Entities 

Sept 21, 2015 8:00pm

Brookfield Suites

Brookland, WI


 

Tax Speaker Business Tax Updates (Bob Jennings) 

Oct 19-20, 2015 8am to 4:00pm

Kalahari Resort

Wisconsin Dells, WI
 


 

Gear Up 1040 Update 

Nov 2-3, 2015 8am to 5:00pm

Country Springs Hotel

Pewaukee, WI


 

Tax Speaker Business Tax Updates (Bob Jennings) 

Nov 30-Dec 1, 2015 

Mon 8am to 5:00pm

Tues 8am to 4:00pm

Kalahari Resort

Wisconsin Dells, WI


 

Gear Up 1040 Update

Dec 7-8, 2015 8am to 5:00pm

Hudson House Inn

Hudson, WI  

 


  

Visit our website at  
to register or view the seminar schedule. 
 
(608) 328-8341

OFFICERS

 

President:

Paul Kersten, CPA

610 W Green Bay Street 

Shawano, WI  54166 

(715) 524-2302 

[email protected] 


Vice Presidents:

Mark Burbey, CPA 

900 South 10th Street 

Manitowoc, WI  54220 

(920) 682-6661 

[email protected]


Mark Nelson, Sr EA, ABA

2581 S Kinnickinnic Ave 

Milwaukee, WI 53207

(414) 481-6812

[email protected]

 

Secretary:

Chuck Kirsch, EA

155 S Jefferson Street

Lancaster, WI 53813

(608) 723-2502

[email protected]

 

Treasurer:

Ben Gaus, EA, ABA

715 N Main St

River Falls, WI 54022

(715) 425-7521

[email protected]

 

NSA State Director:

Tom Adler, CPA, ATA, ATP 

1424 N High Point Rd, Ste 101 

Middleton, WI 53562 

(608) 664-1944

[email protected]

 

Past President:

Steve Smith, EA, ABA, ATA

34 North 4th Street

Black River Falls, WI 54615

(715) 284-4419

[email protected]r.net

 

Directors:

Robert Burgardt 

414  Hartford Square 

Hartford, WI  53207 

(414) 520-0863 

[email protected] 

 

Mark Nelson, Jr, EA 

2581 S. Kinnickinnic Avenue

Milwaukee, WI 53207

(414) 481-6812

[email protected]


Margaret Schell, CPA

6609 Montclair Lane

Madison, WI 53711

(608) 442-7525

[email protected]


 

Jim Haas, ATP, CTP, CPB

401 Main St Ste 305

La Crosse, WI 54601

(608) 784-5507

[email protected]

WAA Benefits

 

Seminars and Educational Forums

 

Accreditation

 

Local Chapter Involvement

 

Government Agency Liaison

 

Monitor Legislation

 

Insurance Programs

 

Accountants Protection Plan

 
WAA Objectives
 

To raise professional standards and improve the practice of accountancy.

 

To strive for excellence in the profession.

 

To encourage accountants in a continuing program of

professional development.

 

To foster increased recognition for the professional in the public, private and educational sectors of our state.

 

To initiate legislative action and provide government liaison between the accounting profession and

government leaders.

 

To provide meetings and fellowship for accountants.

 

To promote the highest standard of ethical conduct among its member.