This is the 9th consecutive year McGladrey has polled executives in the manufacturing and distribution industries.  Of the 1,147 total survey respondents, 775 were categorized as manufacturers and 372 distributors.  The Monitor report takes a close look at how and why thriving companies are able to succeed.  This year’s report covers strategies for growth; profit and sales growth plans; continuous improvement; supply-chain management; and managing external challenges.

Download a copy of the Monitor report here.  If you would like to discuss the report further or have questions, please contact Brant Kennedy, CPA at 800.880.7800 ext. 1425 or bkennedy@hsccpa.com.

Harding, Shymanski & Company, P.S.C. will sponsor seminars in Evansville, IN and Louisville, KY on September 4th and 5th (respectively) this year.  Karen Kurek, national manufacturing and distribution practice leader for McGladrey, and Indiana Secretary of Commerce Victor Smith will speak at both events.

Additional information will be released as it becomes available.

Written by Bill O’Malley and Jill Harris, Source: McGladrey LLP. Used with permission as a member of the McGladrey Alliance.

Most manufacturing companies will face additional Affordable Care Act (ACA) information reporting requirements in 2015. Currently, companies that issue 250 or more federal W-2 forms are required to include the cost of employer-provided group health plan coverage as an information item on the W-2 form. Newly issued regulations now require a company to report additional information if the company either: (1) sponsors a self-insured  health plan, or (2) is an applicable large employer (one with 50 or more full-time employees or full-time equivalent employees).

New information returns
A new information return (Form 1095-B or 1095-C) must be prepared for each applicable employee for calendar year 2015 and filed with the IRS by Feb. 28, 2016 (March 31, if filed electronically). A copy of the Form 1095 or a substitute statement must be given to the employee by Jan. 31, 2016. Employers will be subject to penalties for failing to timely file the returns or provide statements to employees.

Health plan reporting requirements
Employer-sponsored health plans of all sizes will need to inform the IRS of employees and family members enrolled in the plans during 2015. Employees who are offered coverage, but decline the coverage, are not reported. Insurers will be responsible for reporting this information for insured plans, but employers will be responsible for reporting this information for self-insured plans. The IRS will use this information to determine whether the employees are exempt from the individual mandate penalty due to having health coverage for themselves and their family members.

Large employer reporting requirements
If a company is a large employer, it must report whether it offered its full-time employees affordable, minimum value health coverage for 2015. Full-time employees are those who work, on average, at least 30 hours per week. Health coverage is considered affordable if the amount that the employer charges an employee for self-only coverage does not exceed 9.5 percent of the employee’s W-2 form wages, rate of pay or the federal poverty level for the year. A health plan provides minimum value if the plan is designed to pay at least 60 percent of the total cost of medical services for a standard population. Employees who are offered this coverage, but decline it, are included in the report. The IRS will use this information to determine whether the employer is subject to the employer mandate penalties. Employers with fewer than 50 full-time or full-time equivalent employees in 2014 are exempt from this large employer reporting requirement for 2015.

Controlled group issues
Since employers that are members of a controlled group are deemed to be one employer for ACA purposes, employees of all entities in the group are counted for the 50-employee threshold. A controlled group can exist if one company owns at least 80 percent of another company, or if the same five or fewer individuals, estates or trusts have both a controlling interest (80 percent common ownership) and effective control (50 percent identical ownership) of at least two companies. For example, if a manufacturing company with 80 full-time employees is the sole owner of a distribution company with 20 full-time employees, both companies are deemed to be large employers, since together they have at least 50 full-time employees. Consequently, both companies must comply with the large employer reporting requirements. Each company must file the IRS forms using its own employer identification number to report its employees.

Filing the return
In general, a large employer must report the following information to the IRS each year, even if the employer does not sponsor a group health plan:

• A certification by month as to whether the employer offered its full-time employees (and their dependents) the opportunity to enroll in minimum essential health coverage
• The months that coverage was available
• Each full-time employee’s share of the lowest-cost monthly premium for self-only minimum value coverage
• The number of full-time employees for each month of the calendar year
• The name, address and tax identification number of each full-time employee during the calendar year and the months, if any, during which the employee had health coverage

Any other information required by the IRS
Regarding collectively bargained employees participating in multiemployer plans, the employer is still responsible for providing the required information to the IRS and the employees, even if the multi-employer plan administrator prepares the IRS forms or provides other assistance to the employer. Consequently, the IRS will look to the employer to pay any penalties for noncompliance.

Action required
In light of the complexity of the new information reporting requirements, employers should take action now to learn about the rules and ensure that their internal systems will be able to collect the data needed to complete the returns.

The information contained herein is general in nature and based on authorities that are subject to change. McGladrey LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. McGladrey LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

Taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2013 must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). This form replaces FBAR form TD F 90-22.1. It is due to the Treasury Department by June 30, 2014, must be filed electronically and is available online through the BSA E-Filing System website.

For questions on this topic, contact Michael Vogel, CPA or John Rittichier, CPA at 800.880.7800.

UPDATED December 20, 21019:

As the tax-filing season approaches, it is always a good idea to be aware of current scams and phishing tactics used by hackers to steal personal identification information. Remember that the IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information.

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The Internal Revenue Service today warned consumers to be on the lookout for a new email phishing scam. The emails appear to be from the IRS Taxpayer Advocate Service and include a bogus case number.

The fake emails may include the following message: “Your reported 2013 income is flagged for review due to a document processing error. Your case has been forwarded to the Taxpayer Advocate Service for resolution assistance. To avoid delays processing your 2013 filing contact the Taxpayer Advocate Service for resolution assistance.”

Recipients are directed to click on links that supposedly provide information about the “advocate” assigned to their case or that let them “review reported income.” The links lead to web pages that solicit personal information.

Taxpayers who get these messages should not respond to the email or click on the links. Instead, they should forward the scam emails to the IRS at phishing@irs.gov. For more information, visit the IRS’s Report Phishing web page.

The Taxpayer Advocate Service is a legitimate IRS organization that helps taxpayers resolve federal tax issues that have not been resolved through the normal IRS channels. The IRS, including TAS, does not initiate contact with taxpayers by email, texting or any social media.

For more on scams to guard against, see the “Dirty Dozen” list on IRS.gov.

Yes. Identity theft is a growing problem, and the start of the return filing season is one of the peak times for identity thieves filing fraudulent returns. Criminals file false returns early to get refunds and unsuspecting taxpayers are unaware their identities have been stolen until they file their returns. Individuals who believe they have been victims of identity theft should immediately alert their tax professional and the IRS. The IRS has a number of programs in place to assist victims of identity theft.

Identity theft

Identity theft has been the number one consumer complaint to the Federal Tax Commission for 13 consecutive years, and tax identity theft has been an increasing share of the FTC’s identity theft complaints. In 2010, tax identity theft accounted for 15 percent of the FTC’s identity theft complaints from consumers, while in 2011 it made up 24 percent of the overall identity theft complaints. In 2012, tax identity theft accounted for more than 43 percent of the identity theft complaints, making it the largest category of identity theft complaints. The IRS has reported similar growth in this troubling problem.

Identity theft occurs when a criminal uses the personal information of another to commit fraud or other crimes. Personal information includes an individual’s name, date of birth, Social Security number, bank account numbers, credit card numbers, personal identification numbers, and other identifying information.

In tax identity theft, a criminal typically uses a taxpayer’s identity to fraudulently file a tax return and claim a refund. The identity thief has obtained the taxpayer’s Social Security Number and other personal information. As mentioned, identity thieves attempt to get a refund early in the filing season. The taxpayer discovers that a false return has been filed when he or she files a genuine return.

IRS actions

The IRS has set up a special Identity Theft Protection Specialized Unit. These employees are the first responders in assisting taxpayers whose identities have been stolen. The IRS will take a report, and request that the victim complete a special form (IRS ID Theft Affidavit Form 14039). This special form requires the taxpayer to briefly describe the events giving rise to the identity theft. The taxpayer also must provide proof of his or her identity by submitting photocopies of identifying documents, such as a passport, driver’s license or other valid federal or state government-issued identification.

The IRS is assigning special identity protection personal identification numbers (IP PINs) to victims of identity theft to use when filing their returns. An IP PIN is a unique six-digit number and is assigned annually to victims of identity theft. During the 2014 filing season, the IRS reported that it expects to provide more than 1.2 million identity theft victims with an IP PIN, up from more than 770,000 in 2013.

Additionally, the IRS has overhauled its identity theft screening filters to spot suspected fraudulent returns before they are processed. After a suspected fraudulent return is flagged, the IRS will hold the return for further processing until the agency verifies it is a true return. If you receive a notice from the IRS, please contact our office immediately.

If you have any questions about protecting yourself from identity theft or the IRS’s activities to curb tax return identity theft, please contact our office.