Training: Turn Up the Heat in August

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Summer will be in full swing with a multitude of training opportunities to enhance employees’ expertise and protect your bottom line this August.

First up is the 2016 Indiana Tax Conference, one of the state’s largest, on August 11. Learn the latest in tax case law and legislation as highly-experienced speakers identify ways to help you stay in compliance and reduce tax liability.

Francina Dlouhy, partner at Faegre Baker Daniels, will share her perspective on a crucial issue during her keynote luncheon presentation – It Was a Bad Idea Then and It Still Is Now! What Combined Filing Would Mean for Indiana. Among other themes are multistate tax hot topics for 2016, Affordable Care Act reporting compliance and an Indiana Department of Revenue update.

BKD, LLP is the presenting sponsor. Gold sponsors are MCM CPAs & Advisors and McGuire Sponsel. The silver sponsor is DMA – DuCharme, McMillen & Associates, Inc.

Fuel business savings the following week by attending the 14th Annual Indiana Conference on Energy Management on August 17-18. Learn how to cut costs and maximize resources as energy experts from throughout the state share practical – and effective – compliance strategies.

Don’t miss engaging keynote presentations:

  • Congresswoman Susan Brooks (invited) – opening general session: August 17
  • Canadian Consul General Doug George – Energy Security and Supplies: the Canada-U.S. Relationship – general session: August 18
  • Kyle Rogers, The American Gas Association, and The Edison Electric Institute representative (invited) – Outlook on Natural Gas and Electric – closing luncheon: August 18

Additional highlights include panel discussions, customized training (choose from a variety of options) and an expo showcasing the products and services offered by businesses in your field. Explore topics such as distributed generation; reducing utility bills; using the government and tax code for energy efficiency; and energy bankruptcies.

The 14th Annual Conference on Energy Management will take place at the Crowne Plaza Indianapolis-Downtown Union Station. Register online or call (800) 824-6885.

Gold sponsors: EDF Energy Services; Ice Miller LLP; MacAllister Power Systems; and Vectren. Silver sponsors: Cummins, Geronimo Energy, Indiana Electric Cooperatives, NIPSCO and Telamon Corporation.

Rounding out August offerings are:

Sponsorships are available by contacting Jim Wagner at (317) 264-6876.

Tax Court Under Scrutiny

10044552In April 2015, the Indiana Supreme Court ordered the creation of the Ad Hoc Tax Court Advisory Task Force to review the Indiana Tax Court’s resources, caseload, performance and operations. In May of 2015, the General Assembly passed legislation calling for the Indiana Judicial Center to conduct a like review and submit a report to the Legislative Council by December 1, 2016. The Supreme Court subsequently amended its order to have the task force submit its report to the Judicial Center and the Legislative Council by May 1, 2016.

In April 2016, the task force issued its findings and recommendations along with a report compiled by the National Center for State Courts (NCSC), which was contracted to assist the task force. These materials are now getting some attention and are definitely worthy of examination. The nine-member task force was chaired by Court of Appeals Judge James S. Kirsch. The members include a variety of experienced tax practitioners as well as the general counsel for the Department of Revenue and chief deputy for the Office of Attorney General. Tax Court Judge Martha B. Wentworth also participated as an “ex officio” liaison and attended meetings by invitation from the chair.

The NCSC researched the Court’s caseload, staffing and timeliness. It also interviewed stakeholders and conducted a survey seeking opinions on these subjects and on the perceived timeliness, fairness and demeanor of the Court. And it looked into case management, internal procedures and administrative practices. The statistical results, observations and recommendations are all set out in the report. The survey results evidence a contrast in opinions between the government responses and taxpayer responses regarding the quality of service provided by the Tax Court.

In short, it seems that the government representatives are significantly less satisfied with the Court. Not unrelated to their disgruntlement, it was noted in the preface to the findings that the Department of Revenue and attorney general members of the task force sought recommendations to review the very structure of the Court, recommending review of the de novo hearing process and the lack of automatic appeal rights. However, the majority of the group and the chair found these matters “outside the purview of the task force’s directive.”

Several things were apparently deliberated and no specific findings or recommendations were made. Ultimately, the task force’s primary finding was that after 30 years, the existence of the Tax Court still serves its initial purposes of providing tax expertise, tax law consistency and renders fair and thoughtful opinions.

The findings do focus on the need for continued progress in timely addressing pending cases and the utilization of resources and staff. The report recommends an ongoing review and suggests the Tax Court explore several reforms to its case management practices, including ruling on some matters without oral arguments, limiting discovery, requiring the Department of Revenue to certify a complete audit file (to avoid it having to be reconstructed) and referring some cases to mediation.

The findings and recommendations, NCSC report and other materials are available online.

Clinton vs. Trump? A Taxing Decision in November

Now that the election process is to the point where the presidential nominees of the two major parties appear clear, it’s a good time to start considering their various tax plans. Although things can change, details will have to be determined and Congress will have its say, below are some of the current proposals from the two presumptive candidates.

Individual Income Tax
Donald Trump proposes just four brackets; Hillary Clinton proposes eight brackets.

trump clinton tax

Deductions
Clinton caps itemized deductions at 28% of the deduction. Trump phases out all deductions except for the charitable deduction and the mortgage interest deduction.

The Alternative Minimum Tax (AMT)
Clinton creates a new minimum 30% rate on individuals earning over $1 million, while Trump eliminates the AMT.

Corporate Income Tax
Trump lowers the top corporate rate to 15%; Clinton has no specific proposal at this time.

Estate Tax
Clinton increases the top estate tax rate to 45% and lowers the estate tax exclusion to $3.5 million. Trump eliminates the estate tax.

Effect of Plans on the Deficit
And as a final note, you may also want to consider how these proposals will likely impact our federal deficit. Trump’s plan is projected to increase the deficit by $9.5 trillion over the next 10 years; Clinton’s is estimated to reduce the deficit by $1.2 trillion over that same period of time.

Online Sales Tax Collection Inching Closer?

19145168It’s been nearly 25 years since the U.S. Supreme Court ruled in the Quill case regarding online sales – that states could not require a company that has no physical presence in their state to collect the state’s sales tax when they sell their goods to a resident of that state through the mail or via the Internet.

The Court held that requiring the collection of sales tax, without congressional authorization, constitutes interference with interstate commerce in violation of the U.S. Constitution. So Congress needs to pass legislation allowing the states to require online sellers to collect the tax. But that has still not happened.

The Marketplace Fairness Act (MFA) legislation would provide the needed authority, but hasn’t gotten enough support.

The opposition primarily comes from two groups: (1) some of the Internet-based companies which would have to collect the tax; and (2) people who view the legislation as a new tax.

Internet companies object to the administrative burden of collecting and remitting the tax, and they obviously want to maintain their current price advantage over the local brick-and-mortar retailers and other Internet companies that have a physical presence in many states, who must already collect and remit sales tax.

Those who consider it a new tax are, at least technically-speaking, simply wrong. When an in-state resident buys something online and doesn’t pay because the company isn’t obligated to collect the tax, those residents are legally responsible to pay the equivalent of the sales tax.

In these cases it is called a “use” tax (because they use the purchased product in their state) and everybody is supposed to report it on their state tax return. Unfortunately, the vast majority of taxpayers ignore this obligation. The simplest answer is to have the Internet seller collect the tax just as the local retail store does.

Online purchases now make up close to 10% of all retail sales and that percentage is steadily climbing.

This is a growing problem across the country, but especially for states like Indiana that are heavily dependent on sales tax – which accounts for 46% of Indiana’s total tax revenues. States are losing an estimated $11 billion in uncollected sales tax each year. Indiana’s losses are put at $200 million annually, and these numbers are growing by nearly 10% each year.

No question these numbers are driving up pressure for Congress to take action. The MFA passed the Senate in 2013, but it got bogged down in the House Judiciary Committee.

Many who are dedicated to the cause have worked to iron out a number of administrative wrinkles and to keep momentum going on this effort. The best speculation is that it will have to be made part of some larger legislative package in order to garner some compromises and the necessary level of support.

Of course, it is impossible to predict, but tax reforms and such tax packages could be on the table after this election year.

A Big Jump in the Minimum Wage: Will It Help or Hurt Low-Skilled Workers?

Reason.TV’s Nick Gillespie sat down with George Mason University economist Don Boudreaux to discuss raising the minimum wage and its impact on not just businesses, but workers.

Some states and cities have moved to increase their minimum wage to $15, and results have yet to be determined. Boudreaux is adamantly against the increase, however, and expects many workers will lose not only their jobs, but opportunities to gain skills to move up the economic ladder.

May 18 Webinar: FREE for Indiana Chamber Members

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Did you know over 75% of Americans are living paycheck to paycheck? Your employees are likely dealing with financial stresses in one of the following areas:

  • Retirement
  • Health care
  • Student loans
  • Emergency savings

And if they’re stressed, it’s likely their productivity at work is suffering.

But you can help them. Our friend, financial expert Pete the Planner, will tell you how during our FREE webinar for Indiana Chamber members on Wednesday, May 18 at 10 a.m. (EDT).

Register for the FREE webinar now, and dial in on May 18 to receive this Indiana Chamber membership benefit!

How to Extend Your Tax Filing Deadline

19159583The April 18 deadline to file your individual income taxes is right around the corner. If you’ve waited to file, there’s no need to panic. The Indiana Department of Revenue offers resources to help Indiana taxpayers.

If you can’t complete your tax return by the deadline, you can complete an extension of time to file form with either the IRS or the Indiana Department of Revenue. Filing either extension will give you until Nov. 14, 2016 to file your tax return.

Although the extension provides an extension of time to file, you are still responsible for paying any tax owed by April 18, 2016.

If you don’t have a federal extension, you can file for an Indiana extension by following these three steps below:

  1. Download Form IT-9 and mail it to the Indiana Department of Revenue. It must be postmarked by April 18, 2016. This form is available online.
  2. Determine if you owe Indiana taxes. You should pay at least 90 percent of the tax due when you submit the extension. Pay as much as you can to avoid penalty and interest.
  3. If you file and pay the remaining balance by the extension date (Nov. 14, 2016), there will be no penalty.

If you need last-minute assistance or have questions about your return, please contact the department at (317) 232-2240. Spanish support is available.

Protect Your Identity this Tax Season

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It’s tax season! As you prepare to file your taxes, remember to store your personal information such as W-2 forms, bank account summaries and other tax-related documents in secure locations. This time of year, identity thieves are especially prominent and out to steal real taxpayer identities and file fraudulent tax returns to request and steal the victims’ refunds.

Since its inception in 2014, the Indiana Department of Revenue’s Identity Protection Program has identified and stopped more than $100 million in fraudulent refund attempts and helped thousands of legitimate taxpayers realize their identities have been stolen. This year, the department again will be implementing the Identity Protection Program to protect Hoosier taxpayer identities and refunds. This program will look similar to the security measures implemented last year, including the Identity Confirmation Quiz, a two-minute quiz asking some taxpayers to confirm their identities.

Those selected to complete the Identity Confirmation Quiz will receive a letter from the department. The Identity Confirmation Quiz is taken on a secure web site or over the phone and contains four short questions, which only the person asked to complete the quiz would be able to answer.

Through the Identity Protection Program, the department aims to protect taxpayers’ identities and potential refunds and the state of Indiana from potential refund fraud.

For more information about the Identity Protection Program and tips for protecting your tax refund and identity, visit the department’s Stop ID Theft web site.

Corporate Tax Reform Would Benefit Nation, Workers

Abstract View of Urban Scene and Skyscrapers

Lawmakers and candidates on all sides of the political spectrum acknowledge reforming America’s corporate tax rate is overdue. President Obama has even suggested reducing the rate from 35% to 28%. Writing for Reason, Veronique de Rugy of the Mercatus Center sums up the necessity for this, concluding it’s an optimal way to benefit both businesses and the workforce:

Even such high-tax nations as France have lower rates. However, the real competition comes from Canada (26.1 percent), Denmark (25 percent), the United Kingdom (20 percent) and the many countries, such as Ireland (12.5 percent), with rates below 20 percent. Moreover, competition is intensifying. Last June, the U.K. announced that it would cut its rate from 20 percent to 18 percent in the next five years. It’s now saying that it will lower the rate even further, to 17 percent. These reductions are the final stage of drastic cuts implemented since 2007, when the country’s companies faced a 30 percent tax rate. That’s a second wave of reduction since the rate was as high as 54 percent in the 1980s.

Now contrast this with the United States. In the 1980s, policymakers responded to the pressure put on by many countries lowering their corporate rates by decreasing America’s rate from 49.7 percent to 33 percent. However, since then, the U.S. has fallen asleep on the switch (and even raised the rate by 1 percentage point in the 1990s) and is now widely out of sync with internal competition. In 2015, the average corporate rate for countries in the Organisation for Economic Co-operation and Development was 25 percent, down from 48 percent in the early 1980s.

As if that were not enough competition for American companies, the U.S. government burdens them with another layer by taxing them on a worldwide basis. In that system, income from American companies is subject to U.S. taxes whether it’s earned in Seattle, Paris or Singapore. By contrast, most wealthy countries don’t tax foreign business income; about half of OECD nations have “territorial” systems that tax firms only on domestic income. In other words, U.S. exporters face a much less competitive tax system than most of their biggest competitors…

Not everyone would like to reduce taxes on corporations, but everyone should. The data show that most of the corporate tax burden is actually shifted to workers, who end up shouldering the tax in the form of lower wages. With the U.K. taking further measures to reduce its burden on corporations, boosting its workers’ wages and inflicting yet another blow to U.S. competitiveness, Congress should do what’s right by reforming the corporate tax. It may be the one bipartisan issue out there. All we need is leadership.

Tax Credits Available for Hiring Veterans

37738634Veterans, National Guard Members and Reservists remain key assets in helping meet workforce needs.

A free publication for employers, prepared for the Center for America, provides clear and concise understanding along with step-by-step guidance on four new federal tax credit programs: Returning Heroes; Wounded Warrior; Activated Military Reservist Credit for Small Businesses; and the Federal Empowerment Zone Employment Credit.

The guide includes links to the required Internal Revenue Service and Department of Labor forms employers need to submit. It features key eligibility and filing details, with guidance on eligibility and the specific steps to take to claim the credits.

American Jobs for America’s Heroes is a nonprofit campaign sponsored by Phillips 66 and foundations to encourage employers to post full-time jobs for veterans, National Guard members and Reservists. Access the guide and additional information.