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- Written by: Tim Deluca Smith
Employees, suppliers and customers are often spread across different buildings, cities, countries and even continents. All need secure access to workplace information anytime, anywhere. Accountancy firms are no exception.
To succeed, today’s accounting professionals must be able to manage multiple client engagements, coordinate efforts across virtual teams and keep reams of confidential documentation organized, accessible and secure. But are accountancy firms making the most of collaboration tools to do this? We surveyed 200 CPA certified accounts across the U.S to find out.
Interestingly, 70% of those we surveyed admitted to forgetting where they had saved a file within the last 12 months, 51% had wasted time editing a document only to discover it wasn’t the latest version and 40% revealed that they typically spent between 6 – 20 minutes each time they searched for the files they wanted.
That’s a lot of wasted time - impacting employee productivity and billable utilization.
Our survey also found that email can be a hindrance to productivity. Email is possibly one of the longest serving “collaboration” tools used in the business world today. However, with file sizes getting bigger it is a ‘problem child’ for accounting professionals. Of those we surveyed, 55% said that they could not share files because they were too large, while a further 39% had been delayed on a project waiting for email approvals.
People will always find the path of least resistance and such failings only increase the likelihood of employees printing unnecessary documents or sharing them on unencrypted thumb drives – which of course puts client sensitive data at risk.
These findings make a clear case for a more sophisticated digital workplace approach to collaboration within accountancy and advisory firms. Moving to a secure cloud collaboration tool can eliminate the challenges identified in our survey. It can make it easier for internal teams and clients to work together and collaborate effectively on projects, share and edit files, assign tasks and track activity in a secure, shared environment. No more searching for lost documents, editing the wrong document or having the headache of trying to send large files.
As projects become more complex and as documents become larger and more sensitive in nature, traditional ways of collaborating will becoming increasingly difficult. Cloud-based platforms increase productivity and engagement, ultimately impacting the bottom-line. With this in mind, isn’t it time accountancy firms moved to the new age of collaboration?
About Tim
Currently Vice President of Marketing for Huddle, Tim has nearly 20 years of marketing experience spanning startups to Fortune 500 companies. Prior to Huddle Tim served as vice president & head of marketing for WDS, A Xerox Company. Tim has a specialist expertise in technology and telecommunications across Europe, North America, South Africa and APAC.
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- Written by: Rick Richardson, CPA, CITP, CGMA
Facebook CEO Mark Zuckerberg detailed how Facebook aims to reach the planet's 7 billion people — half of whom do not have Internet access. He’s going to have them do that on the Messenger platform using chatbots. Chatbots are chat robots — interactive software powered by artificial intelligence often with an assist from humans — that are designed to simulate human conversation. They are popping up on messaging services where you can use them to perform simple tasks.
While they are not yet common in the U.S. and Europe, Chatbots have taken off in Asia, where messaging services such as WeChat help users schedule doctor's appointments, shop for the latest styles, play games or the lottery and send money to friends. If successful, Facebook could effectively leapfrog the app economy, and create its own thriving digital ecosystem where users can communicate with automated representatives for brands and businesses within Facebook's platforms.
Echo Microsoft
Microsoft’s CEO, the stylish and analytical Satya Nadella, also preached the power of bots at his developer conference, Build. And not just any bots — bots powered by artificial intelligence that can carry meaningful conversations and handle tasks for you.
“It's about taking the power of human language and applying it more pervasively to all of our computing," Nadella said in his cerebral introduction to Microsoft's annual developers conference. "By doing so, we think this can have as profound an impact as the previous platform shifts have had, whether it be GUI [graphical user interface], or the web, or touch, or mobile.”
There will be bots, he said. Bots for ordering you a pizza and calling a cab and booking flight tickets and communicating with you on Skype. “People to people. People to your personal digital assistant. People to bots. Even people to your personal assistant calling on your bots on your behalf," Nadella said in a statement so bizarre even we couldn't have made it up. "That's the world you are going to see in years to come.”
But it took more than an hour for Nadella to acknowledge the elephant bot in the room. Microsoft's wild child: Tay. Just days before Microsoft's biggest event of the year, the company proudly announced Tay, a spunky, experimental AI-powered Twitter bot to chat up millennials. It could have shown off the power of bots to carry on entertaining conversations. Instead, Tay turned into a foul-mouthed bigot, spewing racial slurs after being trolled by Twitter users and had to be taken down. Then, just hours before Nadella took the stage, Microsoft accidentally re-activated Tay only to quickly pull it again after the bot started bragging about smoking weed. “We want to build technology so that it gets the best of technology, not the worst,” Nadella said on stage later. “Just last week, when we launched our incubation Tay... we quickly realized it was not up to this mark.”
Everyone Else
Because their focus is app-based, the other technology companies (including Microsoft) have built a single, AI-based digital assistant that works from the user’s side. These include Siri from Apple, Cortana from Microsoft, Echo from Amazon and Google Now from Google.
The Chatbot revolution, however, is driven from the other side of the communication channel. The airline will have a bot for you to make your reservations. The Home Depot bot will talk you through how to use a tool you purchased or help you with a return and refund. Companies such as Lyft, Uber and KLM are already working with Facebook to use bots for their customers.
The Next Big Thing
Chatbots are definitely being hyped up, but at the same time they could radically change the way we use our phones and computers. That’s because Chatbots unlock “conversation as a platform,” as Microsoft’s Nadella puts it. We've trained ourselves to click through apps or search in weird phrases to get the information we want. You wake up thinking “I wonder if it will rain today” and instead you have to open an app and search with your zip code to see if it's raining.
Chatbots could change everything about how you surf the web. In the future, you could just say “I wonder if it will rain today” and a Chatbot would know your location and be able to answer conversationally whether you should bring an umbrella. No apps. No search box.
Rick Richardson, CPA, CITP, CGMA received two AICPA lifetime achievement awards for his contributions to the profession in the field of technology. Providing his annual forecast of future technology trends, Richardson is the keynote speaker at the New Jersey, California and Illinois conferences each year presented by Flagg Management. www.flaggmgmt.com. If you have 20 minutes each week and want to keep current with today’s technology, subscribe to Rick’s newsletter, TechnologyThisWeek.net.
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- Written by: Kathleen M. Lach
If you are doing internal bookkeeping for a client and notice he is falling behind on his payroll tax payments, beware. In two separate meetings within a week’s time this author heard IRS managers tell of a $59 billion (yes, billion) shortfall in collection of 941 employment taxes. Along with this astounding number, they told of enhanced efforts for early intervention, and increased crackdown on repeat offenders.
In 2014, over 70% of IRS revenue collection was from funds withheld by employers.1 Thus, when employers do not turn over these funds for a myriad of reasons, the Government’s budget takes a serious hit. In its effort to “do more with less” the IRS is implementing new measures to try to prevent pyramiding of these unpaid taxes.
The IRS is guided by its own rules as laid out in the Internal Revenue Manual (IRM). IRM 5.7.1 deals with federal tax deposit (FTD) alerts. It states: “Federal Tax Deposit (FTD) Alerts are used to determine an employer’s compliance with employment tax deposit requirements for the quarter of the Alert issuance, and for subsequent quarters until the taxpayer is brought into full compliance. The FTD Alert process identifies, at an early stage (i.e., before the return is due), taxpayers who have fallen behind in their deposits.”2
A project implemented in April, 2015 by the IRS is in place to determine whether contacting the taxpayer even earlier when a deposit is missed increases the chances of future compliance. Currently, the FTD Alert analysis is done in the twelfth cycle week of each quarter, in March, June, September, and December. FTD Alerts are sent directly to the Integrated Collection System (ICS) for direct assignment to the field and are supposed to be assigned to a revenue field collection officer within seven days. The revenue officer is to contact the delinquent taxpayer within 14 days.3
In 2016, the IRS hopes to implement a new system that will identify almost immediately changes in FTDs by taxpayers, and trigger an alert. The premise is to “stop the bleeding” as soon as possible. In its struggle to collect unpaid taxes with depleted IRS staff resources, the goal is to increase compliance in the payroll tax area, and ultimately, increase revenue. In addition, compliance levels the playing field for corporations, particularly smaller ones. Taking an illegal loan from the government, i.e., not paying over -withheld taxes, puts compliant taxpayers at an unfair disadvantage in any competitive market.
Another focus during the early intervention process is to be sure the taxpayers are aware of the personal exposure for unpaid withheld taxes. Internal Revenue Code §6672 imposes a penalty on any person the IRS deems “responsible” for non-payment of these taxes. The IRS will cast a wide net in looking for anyone who had control over a corporation’s finances, and chose to pay other obligations, leaving taxes unpaid.
These issues arise even when a taxpayer uses a third party payroll provider or accounting firm for services such as return preparation and federal tax deposits. There have been cases when third party payroll services have stolen from taxpayers, filed false tax returns, and made insufficient deposits. Even in such cases, corporate owners and officers have been held liable for non-payment of taxes.4 The 8th Circuit opined: “It is no excuse, precluding liability of responsible persons for failure to pay over employment taxes, that, as a matter of sound business judgment, money was paid to suppliers and for wages in order to keep the corporation operating as a going concern.”5
Corporations, including accounting firms, have also been held liable for nonpayment of withholding taxes. An accounting firm that had the authority to pay its client’s monthly bills, had a signature stamp of the client’s treasurer and president, and provided financial advice was found to be “responsible” for non-payment of withholding taxes.6 The fact that the accounting firm had to review its disbursements with the client’s Board every month was not a defense to its control over which bills were paid, and which were not. The firm knew that employment taxes were not paid, and the Court found that it “made voluntary, conscious and intentional decisions to prefer other creditors over the Internal Revenue Service.”7 It was liable for the unpaid withholding taxes.
It is also noteworthy that the U.S. Department of Justice, Tax Division, is focusing efforts on non-compliant taxpayers in federal court filings. It may pursue civil remedies including judgments and injunctions, as well as criminal prosecution for failure to turn over the collected taxes.8
In summary, in the current climate of stretched IRS resources, it is looking to where collection efforts will be most effective, and the area of unpaid employment taxes is its target. Clients/taxpayers who are cutting corners in this area should be aware of this focus, and make every attempt to stay compliant, or risk being quickly shut down. Likewise, anyone involved in the financial aspects of their client’s business should take precautions to assure they are not a part of any decision to neglect a corporation’s tax obligations.
Kathleen M. Lach is a Partner in the Tax and Litigation Departments of Arnstein & Lehr LLP. She represents clients before a variety of different tax authorities, including the Internal Revenue Service, the Illinois Department of Revenue, and the Illinois Department of Employment Security.
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1 This information was taken from the power point presentation by IRS management to the Chicago Bar Association on February 1, 2016.
2 IRM 5.7.1.1
3 IRM 5.7.1.4
4 See, for example, Rocha v. U.S., 142 F. Supp. 2d 1277; 87 A.F.T.R.2d 2001-1661 (D. Or. 2001).
5 Honey v. U.S., 963 F.2d 1083 (8th Cir., 1982).
6 Quattrone Accountants, Inc. v IRS, 895 F.2d 921 (CA3 Pa, 1990,)
7 Quattrone, at 928.
8 See U.S. Department of Justice Tax Division website, “Employment Tax Enforcement”
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- Written by: T. Steel Rose
There are many facets of the commercial collection process that fascinate me. Possibly because I believe the credit-based economy in this great country is based on honorable people who honor their obligations and pay for services they receive. Like most small businesses, I pay for all the services rendered to my company and I expect customers to pay for our services provided to them. I have been in courtrooms in various states across the country for cases which have all been settled before the case is actually tried. I interviewed a commercial collector last year who said, “I love commercial debt. You have a contract, services rendered, an invoice, and a going business refusing to pay.”
It is essential a business recognize a vital reality; if a customer does not pay soon after 30 days, you are now dealing with a customer in name only. If handled properly the customer may become a real customer again; one who pays for their service as opposed to one who does not. In my experience with business to business, the proof of the pudding is the person in charge of paying for services. Just like in consumer collections, most people are honorable in meeting their obligations, have good intentions, but become overextended for some reason. Just like in consumer collections, there are also businesses with the ability to pay but try to evade payment.
As soon as the account is past due the client needs to be sent letters of advancing severity. At a predetermined time, hopefully less than 30 days, it is necessary to notify the old customer his/her account will be referred to a collection agency or law firm. Abide by this commitment and forward the account on the date you stated.
When the time comes to turn the account over for recovery, the agency or law firm will need the details. They will need the signed contract, all the invoices, the amount due along with any interest or late fees and early payment discounts lost. They will also need a dated summary of these events. Preparing this exacting package will take serious time; thus explaining why businesses believe the old customer when they provide assurances of some pending action. This only misleads the business hoping to save the old customer.
If the old customer ignores this letter, the account will require added expense. Agencies and attorneys may work on contingency but both require court costs advanced before a case may proceed. In my experience it is rare to obtain attorney fees. Therefore the account is already worth less, although not altogether worthless. Many businesses are taken advantage of because they believe they are throwing good money after bad.
I have great belief in the U.S. court system and the rule of law. There are new evasion tactics every day, but courts still agree customers should pay for services. Therefore this step-by-step guide will help businesses deal with commercial debt.
Step One
Pre-determine when to send the last letter, preferably before 60 days old, 30 days past due.
Step Two
Create the same letter your attorney will send with the contract, invoices, and a detailed cover letter detailing all dates and interest charges. Demand the full amount or a phone call to work out a payment plan. Provide a final date by which the old customer may call. Explain in the letter you will no longer be at liberty to speak with them after the account moves to your attorney. Send this package to the president of the company by certified mail and regular mail. It seems they don’t collect certified mail except those from the IRS.
Step Three
Abide by what you say. Turn the account over and do not talk with the account after you do. Your attorney will normally advise you to allow them to represent you exclusively at this point.
Step Four
Again provide an absolute drop-dead date for payment or contact in 10 days. If your local lawyer only charges a nominal fee for the letter, allow her to send a similar letter on her letterhead. Empower your attorney to settle for a pre-determined amount, like forgiving interest and late fees. Only accept a payment plan guaranteed with a credit card.
Step Five
If this fails, use a Law Directory to locate and retain an attorney in the county of the corporate headquarters.
Step Six
Expect to pay for court costs to file suit and pay a contingency fee on any amount collected.
Step Seven
At this stage, the account responds. Expect frivolous counterclaims, casting the blame on an employee, vacuous attempts at changing venue, as well as ridiculous settlement offers.
Step Eight
Empower this attorney to accept the full payment, with slight concession for interest and attorney fees if the full amount is paid by the end of the week.
Step Nine
Prepare to go to court on the day of trial. Find someone or something fascinating to visit when you arrive.
Step Ten
Expect a settlement before trial begins, even in the judge’s chambers. The rattling of sabers is over. The weight of your case makes an actual trial absurd.
Step Eleven
Send a thank you letter to the rest of your true customers who pay for the same services.
When old customers provide payment, they are redeemed so to speak. Although in some cases it is wise to obtain a credit card to guarantee payment for future services. Test the credit card for validity. In my experience whether the customer solves the payment with your business, through a collection agency, or after the lawsuit is filed, an all-is-forgiven approach is the best approach going forward.
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- Written by: Peter J. Scalise
The Internal Revenue Service (hereinafter the “Service”) issued on March 24 of 2016 their Announcement 2016-14 addressing the transition period implementation dates in connection with the recently revised Form 3115 entitled “Application for Change in Accounting Method” which was most recently revised and released to the public in December of 2015. This presents a paradigm shift as while most tax forms and publications are updated annually, this was the first update to Form 3115 since December of 2009.
Scope and Application of Announcement 2016-14
In order to provide a reasonable transition period with proper clarity in connection to the December of 2015 release of the newly revised Form 3115, the Service indicated that it will now accept either the December of 2015 version of Form 3115 or the December of 2009 version of Form 3115 filed on or before April 19, 2016, except where the use of the December of 2015 version of Form 3115 is specifically required in guidance published within the Internal Revenue Bulletin.
In contrast, a taxpayer filing Form 3115 after April 19, 2016, must use the December of 2015 version of Form 3115. Noting, the Service encourages taxpayers to use the December of 2015 version of Form 3115 prior to April 20, 2016. It should be duly noted that regardless of the form used, taxpayers must still provide all the information required as set forth pursuant to Rev. Proc. 2015-13 (or Rev. Proc. 2011-14, 2011-4 I.R.B. 330, if the taxpayer is making a change under the transition rule in section 15.02(1)(a)(ii) of Rev. Proc. 2015- 13, 2015-5 I.R.B. 419, as modified by Rev. Proc. 2015-33, 2015-24 I.R.B. 1067).
Finally, the Service also announced that the filing locations for the duplicate Form 3115 is changing. In previous years, taxpayers were required to file a duplicate Form 3115 with the Service Center in Ogden, Utah. However, commencing in January of 2016, the duplicate copy of the December of 2015 version of Form 3115 for an automatic change request is now filed with the Service Center in Covington, Kentucky located at:
Internal Revenue Service
201 West Rivercenter Blvd.
PIN Team Mail Stop 97
Covington, KY 41011-1424
If filed prior to April 20, 2016, a taxpayer may file its duplicate copy of Form 3115 with the Service in either Ogden, Utah; or Covington, Kentucky, utilizing the December of 2009 version of Form 3115.
The December of 2015 version of Form 3115 can be accessed and downloaded at https://www.irs.gov/pub/irs-pdf/f3115.pdf
The IRS Announcement 2016-14 can be accessed and downloaded at https://www.irs.gov/pub/irs-drop/a-16-14.pdf
Peter J. Scalise serves as the Federal Tax Credits & Incentives Practice Leader for Prager Metis CPAs, LLC a member of The Prager Metis International Group. Peter is a BIG 4 Alumni Tax Practice Leader and has over twenty years of progressive CPA Firm experience developing, managing and leading multi-million dollar tax advisory practices on a regional, national, and global level. Peter serves on both the Board of Directors and Board of Editors for The American Society of Tax Professionals (ASTP) and is the Founding President and Chairman of The Northeastern Region Tax Roundtable, an operating division of ASTP.