Survey - Independence in Complications
Due to the evolving complexity of the Independence Standards as codified in the AICPA Code of Professional Conduct, the Accounting and Review Services Committee is seeking the input of CPAs, their clients, and third-party users of compiled financial statements as to the need for independence when performing compilation engagements. To read more click here.

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Providing Relevant Information for Decision Makers
How are most successful businesses managed today? Are the historical financial statements or the budget the sole sources of data and information, upon which critical decisions are formulated? Adept organizations utilize historical information, along with real-time indicators that are predictive in nature to manage their day-to-day operations and make strategic decisions. To read more click here.

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Firm Opens Online to Assist Hurricane-Affected Firms
The AICPA’s Private Companies Practice Section (PCPS), with the assistance of the AICPA’s Audit Quality Centers and sections, has created an online database to help individual members and CPA firms affected by Hurricane...  To read more click here.

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Franchising As A Growth Option For Your CPA Firm
By: Calvin Dale Brown II CPA, Founder and CEO
American Tax and Financial Group

Gaining new clients and increasing business is very challenging and difficult for many small CPA firms. There are a number of ways in which CPAs market. Many of these methods are not very effective for providing for any significant, real long-term.. To read more click here.

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Top 5 Reasons why you should accept credit cards

1. Decrease your cost of collections.
2. Make it easy for clients to pay you.
3. You can guarantee payment within 30 days of billing.
4. Decrease your delinquent A/R to 0%.
5. Increase customer satisfaction and convenience.

Top 5 Reasons to use Pro Pay

1. Sign up and start processing in under 5 minutes
2. Pro Pay is low cost and low risk.
3. No special equipment is needed.
4. Get started processing cards immediately with real-time account approval.
5. NO equipment fees, monthly fees, or long-term contracts.

To read more click here.

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New Manufacturer / Producer deduction
Code 199 of the American Jobs Creation Act of 2004 made a change, with potential impact for the accounting profession. When fully phased in, the manufacturer / producer deduction is equal to 9% of the lesser of the qualified production activities income (QPAI) of the taxpayer for the taxable year, or taxable income for the taxable year (AGI for an individual). There are related opportunities to assist clients.

Read more...

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Marketing Tool Kit
The AICPA has announced two new brochures and accompanying speeches which have been added to the CPA Marketing Tool Kit at www.aicpa.org/cpamarketing. These resources are designed to help members market their services. Both the brochure and speech, “College Planning: Easing the Financial Burden,” offer financial guidance to those who are planning to send their children to college. Additionally, the speech and brochure, “Securing Your Business Financing,” discuss funding options for businesses and how a CPA can help to secure adequate capital to start up or expand a business.

Please feel free to use these and other speeches in the CPA Marketing Tool Kit to increase visibility.

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PCPS Creates Tool for CPA Firms Advising Not-For-Profit Boards
PCPS, the membership section of the AICPA committed to making practicing CPAs and their firms successful, has created a resource for CPA firms that work with not-for-profit clients. The tool, Understanding the Responsibilities of a Not for Profit Board Member, is a Power Point presentation that firms can deliver to current and potential clients regarding corporate governance and effective board management. The presentation provides critical information for not-for-profit organization board members, including: how not-for-profits differ from other organizations; board member responsibilities; major legal and regulatory issues; performance management; and how to identify and mitigate organizational risk. This presentation is available free of charge to all member firms by visiting www.pcps.org, clicking on "Member Resources" and then clicking on the "Not-for-Profit Resources" logo on the left side. Firms that are not members of PCPS may purchase the presentation for $25.00 by visiting www.cpa2biz.com. Call 1-800-CPA-FIRM for details.

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AICPA's PEEC Institutes Revisions to Non-attest Service Rules
No concept has been more fundamental to the public's trust of the CPA than "independence." Although essentially a state of mind, the appearance of independence is just as important, since the public must have confidence that CPAs are acting in an objective manner. As a result of the changing business environment, the independence rules are continually re-evaluated and, where needed, strengthened to recognize the changing profession and the needs of those using the profession's services.
Click here to read more

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IRAs: Tax Problems and Charitable Giving Opportunities
Inheritances come in many forms - cash, stocks, land, insurance proceeds, homes, IRA's, etc. In most cases, these bequests are received by heirs in a tax-favored manner, i.e. with a step-up in cost basis to the value as of the date of death of the decedent. Therefore, the heir is taxed (usually at long-term capital gain rates) when he or she sells the asset - and only if the value has increased since it was inherited.

Ird Problem
However, there is no step-up in basis when the heir receives certain assets which would have produced ordinary income had they been sold during the decedent's lifetime. These assets contain what is called "income in respect of a decedent" (IRD). IRD assets include (but are not limited to) retirement funds such as IRA's, US Savings Bonds and commercial deferred annuities. When these items are "cashed in" or otherwise withdrawn by the heirs, ordinary income taxation occurs because the decedent's cost basis carries over to the heir.

Many wealthy individuals who are subject to the estate tax have substantial IRA balances. Upon their death, the IRA usually passes to the heirs with a zero cost basis. Income taxation therefore occurs when family members make future withdrawals from the IRA. Because of this double taxation, some families could lose two-thirds or more of their IRAs to these two forms of taxation.

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Problem Assets Present Charitable Opportunities
IRAs (and other forms of IRD assets) should be considered for deferred charitable gifts. Most savvy donors and their estate planning advisors consider IRAs to be the asset of choice for charitable gifts which will take effect at death.

There are two well-established methods for carrying out this charitable estate planning. Both forms utilize IRA beneficiary designations as their cornerstone.

Some individuals designate their favorite charities along with family heirs as percentage beneficiaries of their IRA accounts. In other cases, individuals set up testamentary charitable trusts as part of their will. Then, the IRA beneficiary designation form earmarks the charitable trust to receive all or a portion of the IRA assets. Upon their death, the charitable trust is funded, and is set up to provide a lifetime income source for their surviving spouse. At the death of the surviving spouse, the charitable trust assets are distributed to one or more named charities.

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In Summary
In both of the above scenarios, both the estate tax and income tax burdens from the IRA principal amount have been eliminated. It is clear that IRA's should be strongly considered when families strategies to direct appropriate assets to charities of their choice.

Please contact your own tax advisor for guidance on matters addressed in this article.

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RIA Publication Discounts
RIA, a Thomson Business, offers NDSCPA members a discount on numerous RIA and Warren, Gorham & Lamont publications.

To order, use the link below; the discount will be carried through the checkout process.

To contact an RIA rep., call 800-950-1216. Click to learn about Checkpoint, our integrated online research.

Click here for more info about the discounts on RIA publications.

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Practical Accountant

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