kcjenkins

New Tax Penalty Starts Today on Small Business Health Insurance Washington, D.C. (July 1, 2015) By Michael Cohn Small business groups are sounding a warning about an obscure Internal Revenue Service rule that takes effect Wednesday imposing heavy fines on small businesses for helping defray the cost of their workers’ insurance or medical expenses. The National Federation of Independent Business said small businesses that get caught helping their workers buy insurance or pay medical bills can be fined 18 times more than larger employers that don’t provide coverage at all. “It’s the biggest penalty that no one is talking about,” said NFIB policy director Kevin Kuhlman in a statement. “The penalty for compensating employees for healthcare-related expenses is enough to destroy most small businesses.” Under the rule, which the NFIB noted appears nowhere in the Affordable Care Act, employers who do not offer a group health plan, but give their workers additional pay to compensate for the purchase of health insurance or direct medical expenses, can be fined $100 per day, per employee. Over the course of a year that can add up to $36,500 per employee, up to $500,000 in total. In contrast, the penalty on businesses for failing to comply with the employer mandate is only $2,000 per year. The National Association for the Self-Employed, an advocacy group for the self-employed and micro-business community, is calling on the Treasury Department to immediately delay the policy until the end of the year in order for bipartisan legislation to passed through Congress to remedy the situation. “Currently in Congress bipartisan legislation has been introduced that would fix this unintended consequence of the Affordable Care Act,” said NASE vice president for government relations and public affairs Katie Vlietstra. “The Treasury Department should immediately announce a delay in this rule until the end of the year in order for the legislative process to work and for small businesses to be spared the devastating effects this IRS rule could have across America’s Main Street.” In February, the U.S. Department of the Treasury’s announced a delay in the enforcement of the technical guidance issued in September 2013 for health reimbursement arrangements. The February delay expires July 1 and fines could begin to be imposed on businesses not meeting the requirement for group coverage plans that provide health care assistance for their employees through the use of traditional HRA accounts. “It’s hard to believe Congress or the President intended to punish employers much more severely for actually helping their workers,” said Kuhlman. “Nevertheless, that’s the consequence and most small businesses don’t know it.” According to the NFIB’s research, 14 percent of small businesses that do not offer group insurance reimburse their workers instead, unaware of the potential pitfalls of the regulation. “Reimbursing employees for the cost of insurance or medical services is a way for small businesses to help their workers without the administrative headache of setting up a costly group plan,” said Kuhlman. “Most small employers don’t have HR departments or benefits specialists, so this is a simpler, easier way to help their employees.” The NFIB noted that Congress would be able to remedy the situation by repealing the IRS rule, and there is legislation in both houses awaiting action. The bipartisan Small Business Healthcare Relief Act, introduced last week in Congress by Rep. Charles Boustany, R-La., and Mike Thompson, D-Calif., in the House and Sen. Charles Grassley, R-Iowa, and Heidi Heitkamp, D-N.D., in the Senate, would provide a remedy to this situation by enabling small businesses to continue to use health reimbursement arrangements, which allow employers to provide pre-tax dollars to employees to pay for medical care and services. “Health reimbursement accounts have historically been a very powerful and effective tool for the small business community,” said Vliestra. “HRAs allow small business owners to do the right thing by helping provide financial assistance to their employees for qualified health care expenses. Which should be applauding them for wanting to help their employees access affordable health care coverage, not punish them with arbitrary IRS policies that could cripple their business.” When the technical guidance was originally issued back in 2014, the NASE provided comment on the guidance stating that, “the technical guidance misinterprets the intent of the ACA as it relates to these types of tools (HRAs) used to provide financial support to employers with less than 50 employees.” “If there’s an opportunity for a bipartisan improvement toward affordable health care, this has to be it,” said Kuhlman. “There’s no real justification for penalizing small businesses that do what the law’s strongest supporters claim to want, which is to help employees obtain coverage or pay medical bills. This is a rigid and thoughtless bureaucratic rule that undermines the purpose of the law, and it ought to be repealed immediately.”

Makes me think about a situation I ran into, that might be a warning for someone else. I was married many years ago, at age 18, we eloped and got married secretly. Had my marriage certificate in a lock box at home when the house burned down. I got new copies of our birth certificates, but did not even think about the marriage certificate. Well, when I moved out to CA, I had to get a CA driver's lic, and they wanted to see proof of who I was, birth certificate AND marriage lic. Because of how we got married, I was not even sure in which county we got married, and AR records are not on-line for most counties, so I had a terrible time getting proof of my legal name, even after 50 yrs of marriage. I ended up with a driver's lic in my maiden name for 5 months! I can just imagine the problems that could have caused me. So, a word of advice, if you don't already have certified copies of ALL your legal identity documents, get them now, before you need them.

I love your new avatar.

Who knew baby armadillos love baths? https://video-dfw1-1.xx.fbcdn.net/hvideo-xpf1/v/t42.1790-2/11178995_922409804471409_76410129_n.mp4?efg=eyJybHIiOjc5MiwicmxhIjo1MTJ9&rl=792&vabr=440&oh=b214720cbb7aed4919ecb786a19ad5b1&oe=55964B2A

Simpler, put in the W-2 as received, then add Form SE, on the first blue line put "W-2 from foreign employer" and the amount from box 1. You're done.

No end to what the human mind can imagine, and then someone can build, is there? Bet there will be a $499 version within a year, and a $199 home version in three years!

I am totally ignorant in this area, just want to say how great this group is. No matter what exotic question comes up, someone always seems to come forward with an answer, or at least a direction in which to look for an answer. Just want to thank you all, I've learned a lot, myself, and I know I'm not the only one.

Funny, isn't it, that 'round' is so darn cute in most every critter except people? LOL

here's another adorable video watch this newfi DEMAND more belly rubs...

Can you imagine a tax professional who is still using computers and software purchased in the 90's? Much less the 80's or 70's?

Thanks for that info, Tabby. I was not familiar with Airbnb, so did not realize their part in the transaction. Based on that, I agree with you.

http://www.accountingtoday.com/tax-alpha/videos/get-ready-to-get-married-74540-1.html?mkt_tok=3RkMMJWWfF9wsRokuarId%2B%2FhmjTEU5z17ewsUKa2gYkz2EFye%2BLIHETpodcMTsdlNb7YDBceEJhqyQJxPr3AKdUN38FoRhTjDA%3D%3D

Some people start their day with the news...I keep it for later and get lots of cuteness first heart emoticon https://www.facebook.com/2DayFM/videos/vb.132495853450335/916376531728926/?type=2&theater This video will cure hangovers...heart emoticon

Me too, Elrod. Still very funny.

That's good. So why is he forfeiting his interest? Understanding the motive night make the options clearer to me.

Absolutely correct, and the POSSIBLE reason behind this example is that A is trying to transfer a gift to B but avoid gift tax, If there is ANY relationship between A and B, for sure that's how the IRS will see it. Maybe these links will help. http://www.irs.gov/Businesses/Partnerships/Partnership---Audit-Technique-Guide---Chapter-7---Dispositions-of-Partnership-Interest-(Rev.-3-2008) http://www.rutan.com/files/Publication/ac056037-38dc-494e-b9da-23e78c269187/Presentation/PublicationAttachment/158a0e07-f0da-4687-a37a-27b6cde9c966/TaxNotesMartinson.pdf http://www.alvarezandmarsal.com/ordinary-loss-worthless-partnership-interests-still-alive

Rita, you are SO right! I'm sure it's somewhere in those 74,608 pages.

This is hilarious https://www.facebook.com/dailybestlike/videos/379780572221122/?fref=nf

Yes, for sure I'd love to see that with you and Patty

Tom, just sort of debating it. The nice thing about staying in the hotel where the sessions are conducted is that you have no taxi fees, travel time, etc. Since it's only 2 or 3 days, the difference in room cost is not that big. I've gone to them in Vegas several times in the past, because the travel costs to Vegas were always a lot less than to anywhere else. We always stayed in the hosting hotel, and the NATP sessions were always valuable and well run. Staying in the same place made it easier to attend more sessions than I expect we would have if we had to travel back and forth. I will let you know if I decide to go, so we can get together.

I do not think this is US income, since it is earned in Mexico from the use of Mexican real estate property. The fact that the money earned is then sent to a US bank should not make it US income.

A horrible example of what can happen to someone when the IRS decides to abuse their power. KC At the historic federal courthouse in Marquette, Michigan, on Washington Street near Lake Superior (known as the UP, or Upper Peninsula) and after a five-year criminal investigation and a four-count felony indictment, Jon Matteson — who lives in Moran, Michigan, and was in the marine-service business with two full-service marines on Gun Lake — was found not guilty on all four charges of income-tax evasion. The jury trial began on Monday, May 18; and the jury returned with a verdict of not guilty on Friday, May 22. Matteson, if convicted, faced up to 20 years in a federal prison and fines of up to $1 million. The case was prosecuted out of the Grand Rapids, Michigan, U.S. Attorney’s Office by Assistant U.S. Attorney B. Rene Shekmer and IRS special agent Rick Pike. Matteson was defended by one of the nation’s top criminal defense lawyers, lead counsel Michael Minns, and his partner Ashley Arnett, both of the law firm Minns and Arnett (formerly The Minns Firm), and local counsel Karl Numinen. The government had previously indicted the trustee of Matteson’s trust, Herb Friske, who pleaded guilty and received time in prison. Friske, during the trial of Matteson, testified that he pleaded guilty after Pike conducted a raid on his home, breaking down the door in the wee hours of the morning, handcuffing his ill wife, cuffing his son and restraining him on the floor with four officers holding M16s to his head. Friske testified Pike threatened him with nine years in prison and that both his wife and his son would be indicted if he did not agree to plead guilty to a felony. Both Friske and Matteson had purchased trusts from alleged expert David Simmons, who operated out of Sarasota, Florida. Simmons had secretly cooperated with the IRS to accuse and convict his two former clients of tax evasion by voluntarily testifying before a grand jury against each client: Friske in 2010 and Matteson in December 2014. Both Friske and Matteson claimed that they had paid Simmons a great deal of money to give them tax and trust-planning advice. Simmons, however, had twice secretly testified before grand juries that he did not do that. During the trial itself, Simmons testified that he never gave legal advice or accounting advice or any other advice regarding trusts. Matteson’s former tax preparer, Bill Ayers, testified that he quit doing Matteson’s tax returns when Pike approached him and “suggested” that Ayers quit doing Matteson’s work. Ayers testified that he was then fearful of losing his license if he did not do as Pike asked. During a blistering cross-examination by Minns, Simmons admitted that he had worked for A.L. Williams and was called a “termite.” Williams’ “termites” would “sell” generally elderly customers on the idea that they should convert the valuable equity in their whole life insurance policies into cash and “invest” the cash with them. Most of Williams’ “termite” customers lost all or most of their equity in their insurance. Simmons angrily responded that he failed to see what his past had to do with Matteson’s trial. Minns calmly smiled and told him, “That’s for the jury to decide.” And in short order, it would. Simmons also admitted that he had a $1 million tax lien against him, that he had been ordered by the Florida State Bar not to practice law, that he had signed a consent agreement, that he had been found guilty of using a false Social Security number and that had been found guilty by a tax court judge of selling useless trusts of the same nature as the one he had sold both Friske and Matteson. Pike never took the witness stand to explain his actions. In his closing argument Minns asked the jury why the IRS would separate a legitimate tax preparer from his client, Matteson, while simultaneously doing nothing to separate him or anyone else from con man termite Simmons. IRS revenue officer Jaime Howard testified that Matteson owed back taxes for incorrectly prepared returns in 2008, 2009, 2010 and 2011 in substantial amounts. However, on cross examination by Minns she admitted she may have gotten her figures wrong and it was possible that Matteson owed no taxes and, in fact, was due a refund. Earlier, on cross-examination, another IRS agent, Victoria O’Brien, was interrogated by Arnett, who introduced a refund check for 2013 in the amount of $529 through the IRS agent. The agent agreed it was a bona fide refund check from the IRS, and she admitted under Arnett’s continued and forceful questioning that it meant the IRS believed no taxes were due as of 2013 on any returns previously filed. The government gave no clear explanation for this inconsistency. In his final argument to the jurors, Minns reminded them that one IRS expert said she wasn’t sure a tax was owed and another said the refund for 2013, received in 2014, meant no tax was owed for the previous years. The jury deliberated for two hours on Thursday afternoon and continued until 11 on Friday morning before reaching its unanimous not guilty verdict on all counts. Shekmer appeared to be shocked by the verdict and asked that the jury be polled. Twelve jurors then rose and one by one said that “not guilty” was his or her verdict. The case was tried in a small, old courthouse near Lake Superior to a full courtroom of supporters of the Matteson family, onlookers who simply came to watch Minns’ trial expertise (some of whom traveled hundreds of miles) and numerous IRS officials who also tend to flock to these trials when Minns is leading the defense. The US~Observer has found only nine acquittals on criminal tax evasion counts this entire year by American juries. All nine belong to Minns and Arnett. If you are aware of a bona fide not guilty jury verdict this year, particularly if it involved misconduct by government officials, please notify the US~Observer at 541-474-7885 or send an email to [email protected]. If you or anyone you know has done business with Simmons, or purchased trust products, or received legal or accounting advice from him, please notify us as well. –Edward Snook

I got this from Catherine, when she shared this on Facebook, it's so valuable I just had to share it here.