Tax return preparers know the shortcut in preparing current year returns, called “SALY”. SALY stands for “same as last year”. The SALY shortcut provides a quick method to review a tax return before filing using the prior year return as a guide. While the numbers from year to year are most certainly different, for the most part the annual transaction cycle is … [Read more...]
Client Tax Savings and Refund Results -by the 'Champions of the Obscure'
We find value by investing time in client fact patterns to obtain “contextual knowledge”. Since fact patterns and tax profiles vary significantly, often we find value in unexpected places. Evidence of this may be found in the following stories. In every story below the subject company had a tax relationship with one or more “Big 4” firms.
Georgia offers an income tax credit for businesses that retrain existing employees on new technology or software, quality management, and similar programs. The credit may offset 50% of the taxpayer’s liability. While the credit may be quite lucrative, companies sometimes overlook it. Barnwell found such a case with a large telecommunications company that trained … [Read more...]
A construction materials client purchased several other companies in its industry. The company became plagued with arcane and inconsistent accounting systems, and decentralized operations. For two years following the acquisitions the company consolidated operations. We understood that by centralizing the sales force in a central location, we could obtain a significant … [Read more...]
We attended an introductory lunch with a client based in the Northeast. The client had significant net operating loss carryforwards, and while willing to meet with us, believed that we could offer little in the income tax arena given their huge losses. In fact, the losses were so great that the client had a large valuation allowance as utilization of the losses was … [Read more...]
California’s Franchise Tax Board is known for its two-sided interpretation of the theory of unity and seems to recognize the facts that lead to unity when the tax is greater or non-unitary when the tax is less. The unitary theory is so esoteric that taxpayers have a difficult time determining unity, and if unity exists, when it might exist. We met with a new client … [Read more...]
This taxpayer sold a significant business and reported an apportioned share of the gain to Florida. Advice from a “Big 4” firm was that “Florida doesn’t have non-business income” and therefore the client was advised to report an apportioned share of the gain. We told the client that while Florida has a statute that typically requires apportionment this is certainly … [Read more...]
In this case, the Texas based client sold Texas based radio and TV stations for a significant gain. Since the California operations were unitary with the Texas and other operations the client properly apportioned the extraordinary gain. This resulted in over $10 million in California Franchise tax. Upon our review of the return we determined that the taxpayer had … [Read more...]
In a regular meeting with a client relationship, the client (CFO) informed us that the company planned to close on the purchase of a large software package. We inquired as to whether the client would be paying sales tax on the software in Georgia. ‘Yes, we are. We looked at it, and it appears the software is taxable, and the vendor agrees and plans to collect it’. The … [Read more...]
Another client has significant work opportunity tax credits. The client wished to outsource credit processing, a service offered by Barnwell (we currently process several thousand WOTC applications a year). The client wanted to outsource, but insisted that for it to win, it needed to be convinced that the WOTC credit would grow enough to cover the incremental fees. … [Read more...]
A new client sold a subsidiary for a $110 million gain, and hired a regional CPA firm to prepare the tax returns to report the §338(h)(10) gain, a transaction in which the sale of stock gets treated as the sale of assets for tax purposes. The regional firm prepared the California return, reporting a $1 million tax. The company agreed to Barnwell’s review prior to … [Read more...]