Deadline Approaches for Remedial Amendments for 403(b) Plans
Jun 19,2019
Maintaining compliance for 403(b) retirement plans historically has been challenging given the lack of historical regulatory oversight, guidance from the Internal Revenue Service (IRS), and non-profit organizations’ limited resources. But the IRS has taken steps to address this, including publishing a list of providers offering pre-approved prototype plans and creating a remediation period ending in March 2020 for sponsors to self-correct non-compliant plan documents. Background on 403(b) Compliance and Remediation In 2007, IRS regulations were updated to require sponsors of retirement plans that fall under the Internal Revenue Code 403(b) to adopt and follow a plan document for their retirement plans as of January 1, 2009.  Subsequently, relief was granted to extend this deadline to January 1, 2010. Before this time, many 403(b) plans did not have a plan document outlining specific operational and governing terms of the plan. The IRS didn’t provide robust guidance on how to create the...
FASB Topic 842: Presentation and Disclosure
Jun 13,2019
Introduction In February 2016, the Financial Accounting Standards Board (“FASB” or “the Board”) issued its highly-anticipated leasing standard in ASU 2016-02 (“ASC 842” or “the new standard”) for both lessees and lessors. Under its core principle, a lessee will recognize right-of-use (“ROU”) assets and related lease liabilities on the balance sheet for all arrangements with terms longer than 12 months. The pattern of expense recognition in the income statement will depend on a lease’s classification. During deliberations for the standard, many users indicated that the existing disclosure requirements did not provide sufficient information to understand an entity’s leasing activities. As a result, the new standard also introduces an overall disclosure objective together with significantly enhanced presentation and disclosure requirements for leases. Disclosure Objective FASB Accounting Standards Codification (ASC) 842-20-50-1 and 842-30-50-1 provide that “the objective of the disclosure requirements is to enable users of financial statements to assess the amount,...
IRS Updates to Retirement Plan Limits
Nov 06,2018
One of the most common compliance issues for employers and plan sponsors is failure to adhere to annual retirement plan limits. To avoid costly penalties and administratively burdensome correction procedures, plan sponsors must remain up-to-date with respect to applicable retirement plan limits. Today, November 1, 2018, the IRS announced cost-of-living adjustments affecting the 2019 dollar limitations for retirement plans and other retirement-related items.  Please note that the chart below does not include all applicable retirement plan limits, just some of the common ones. [table id=7 /] [table id=8 /] The information above originally appeared in Hall Benefits Law, LLC's  November 2018 Blog post. 
Smith & Howard Appoints J. Sean Spitzer to Lead Assurance Practice Effective January 1, 2019
Aug 07,2018
ATLANTA, GA – On July 24, 2018, Smith & Howard announced that J. Sean Spitzer will assume the role of Partner in charge of the firm’s Assurance Services group, effective January 1, 2019. Spitzer will succeed Sean Taylor who will become Managing Partner of Smith & Howard on January 1, 2019. Spitzer will oversee advisory, audit, review, attestation and other assurance services to the firm’s privately-held business clients. Sean joined Smith & Howard in 2002 and was promoted to Partner in 2014. “I have been working with Sean since he joined Smith & Howard almost 20 years ago. He is well suited to lead our assurance practice, having the trust of the firm’s leaders and employees as well as that of our clients,” said Sean Taylor, current Assurance Services practice leader and incoming Managing Partner. Sean earned a BBA and a Master of Accountancy from the University of Tennessee. He...
Entities Find Some Relief in FASB’s Revised Lease Accounting Standard with “Targeted Improvements”
Aug 07,2018
On July 30, 2018, the Financial Accounting Standards Board issued revisions to Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842). The revisions address concerns that the original ASU creates hardship and ultimately expense for: Entities and their auditors who prepare comparative financial statements, and Lessors who, under the original ASU, are required to separate components of leasing agreements and recognize the different components according to applicable guidance. This separation of components could result in certain components of the lease agreement being recognized under the accounting guidance for leases and other components being recognized under the accounting guidance for revenue for contracts with customers or other guidance. ASU No. 2018-11, Leases (Topic 842): Targeted Improvements aims to alleviate these concerns with the following two options: An option to apply the transition provisions of the new standard at the effective date instead of at the earliest comparative period presented in an entity’s financial...
Supreme Court Rules Against Wayfair – For Sales Tax on Internet Sales
Jul 13,2018
In a landmark decision by the U.S. Supreme Court on June 21, 2018, the gates to the collection of sales tax on internet sales were flung wide open, revealing the promise of significant new revenue for 45 states. Background In brief, the overall issue at the court’s feet in South Dakota vs. Wayfair was whether states have a right to collect tax on sales made in their state by remote sellers, regardless of whether the seller has a physical presence in the taxing State. According to the Court’s opinion, the estimated sales tax revenues being lost each year because of the nexus rule range from $8 to $33 billion. In previous cases of Quill and Bella Hess (links below), the Court had ruled against states’ authority to collect sales tax without substantial nexus under multiple facets, the most significant being the physical presence test levied under the Quill decision. Ultimately...
U.S. Supreme Court Set to Render Decision on Wayfair vs. South Dakota
Jul 09,2018
Within a matter of days, the Supreme Court of the United States (SCOTUS) is set to render a decision on Wayfair vs. South Dakota – a landmark case that will impact the collection and reporting of sales tax on internet sales. Eric Tresh, Partner with Eversheds Sutherland and Tim Howe, Partner with Smith & Howard provide background on the case and thoughts on how a ruling may affect businesses: Q: Consensus seems to be that SCOTUS will rule in favor of South Dakota. Is this likely? In oral arguments, the Justices seemed to be split. Many seem to be interested in the practical ramifications of the case, which are significant. Those questions surrounded the cut-off number for requiring sales tax collection – would it be $90,000, $200,000, $500,000?  In addition, they asked about third-party sellers, such as Amazon, that could be required to collect sales tax for sales made by...
Internet Sales Tax Alert – U.S. Supreme Court Decision Imminent
Apr 05,2018
If you sell your products online in a state in which you do not have a physical presence, a decision expected to be rendered by the US Supreme Court in the coming months may dramatically change your business. Since 1992, the rule of the land has been that if you do not have a physical presence in a state that you sell products to (nexus), you do not have to charge or collect sales tax from your customers. With the explosion of internet sales, states across the country have been missing out on significant revenue from such sales tax collections. The fight that will decide this issue for the future is now before the Supreme Court (South Dakota vs. Wayfair).  We fully expect the Supreme Court to rule in favor of South Dakota, with several Justices indicating concerns about the original decision (Quill) that established the nexus rule. Justice Kennedy...
Why Should Your Service Organization Provide a SOC Report to Customers?
Jan 23,2018
As an outsourced vendor of tasks for businesses, you may be asked to provide your customer with reliable documentation that your systems and procedures are structured in a way that significantly minimizes their risks. Businesses that most often are asked to provide this documentation are those that provide services such as: data backups cloud computing network monitoring telecommunications platforms application development managed security bill processing receivables collections payroll services Experience has shown that simple questionnaires and contractual clauses are not sufficient for businesses to rely on. The American Institute of Certified Public Accountants stresses this to business owners by stating, “Although management of a user entity can delegate tasks or functions to a service organization, the responsibility for the service provided to customers of the user entity cannot be delegated.  Management of a user entity is usually held responsible by those charged with governance (for example, the board of directors);...
Why Should You Request a SOC Report from Your Vendors?
Jan 22,2018
The importance of vendor management continues to grow, especially given the rise in outsourcing tasks or entire functions of an organization to a service provider.  Many companies function more effectively and profitably by outsourcing tasks like data backups, cloud computing, network monitoring, telecommunications platforms, application development, managed security, bill processing, receivables collections, payroll services, and many more new services every day. Practicing this breadth of outsourcing exposes your organization to risk and underscores the need for effective vendor due diligence.  Experience has shown that simple questionnaires and contractual clauses are not sufficient for critical vendors – businesses need to obtain an Independent System and Organization Controls (SOC) report. The American Institute of Certified Public Accountants states the following: “Management of a user entity is responsible for assessing and addressing risks faced by the user entity related to financial reporting, compliance with laws and regulations, and the efficiency and effectiveness of...

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