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News & Insights: articles

Marks Paneth's 2018-2019 Tax Planning Guide


December 4, 2018

To provide you with convenient access to current tax laws and regulations and prepare you for the 2019 tax season, Marks Paneth has launched its 2018-2019 Tax Planning Guide.

Tips for NFP internal reports


By Sibi B. Thomas  |  November 14, 2018

A not-for-profit should consider the following best practices to ensure that internal financial reports prepared for its board of directors and other governance committees are accurate, timely, and decision-useful.

Update on the Qualified Opportunity Fund Program


By Michael W. Hurwitz  |  July 27, 2018

By now, most real estate professionals have heard about the Qualified Opportunity Fund program created by the Tax Cuts and Jobs Act of 2017 (TCJA). 

Real Estate Financial Statements: One Size Does Not Fit All


By Neil A. Sonenberg  |  July 27, 2018

When a company is in need of an annual financial statement, a Generally Accepted Accounting Principles (GAAP) financial statement is typically the first thing that comes to mind. 

Property Improvement Analysis for Building Owners


July 27, 2018

When the final details of the Tax Cuts and Jobs Act were released late last year, real estate professionals celebrated the industry’s exclusion from the 30 percent business interest expense limitation. 

NYC Retail Marketing Woes: Sign of the Times or Catalyst for Growth?


By William H. Jennings  |  July 27, 2018

In the not-too-distant past, most people shopped in their local stores in New York City – dealing with weather, limited choices, out-of-stock items and sometimes rude salespeople. 

2018 Technical Corrections to the New Partnerships Audit Rules


By Alan M. Blecher  |  July 27, 2018

In late March, the President signed legislation that includes technical corrections to the new partnership audit rules that were introduced in the Bipartisan Budget Act of 2015. 

Wayfair Ruling: Will Foreign Corporations be Required to Collect Sales Tax?


By Solomon Packer  |  July 13, 2018

Will the Wayfair case, which holds that U.S. corporations can be required to collect sales tax from out-of-state customers, also have application to international commerce?

Nonprofit Budgeting: Key Board Roles and Responsibilities and Questions to Ask Prior to Approval


By Hope Goldstein  |  May 29, 2018

The roles different people play in the budgeting process generally depend on the nonprofit’s size, structure, revenue sources and expenditure expectations.

Understanding the Updated Lease Accounting Rules


By Alan Becker  |  May 29, 2018

Updated lease accounting rules have been the subject of numerous exposure drafts, comment periods and rounds of debate by the Financial Accounting Standards Board (FASB) and the accounting industry over the past decade.

Using Effective Ratio Analysis at Nonprofits


By Sibi B. Thomas  |  May 29, 2018

Analyzing key ratios in your nonprofit’s financial statements can be a very useful tool for gaining deeper insight into the organization’s financial condition and evaluating its overall performance, even at the programmatic level. Effective ratio analysis can be used to analyze trends over a period of time, plan for future strategies and measure current financial health.

Compensation Considerations for Attracting and Retaining Not-for-Profit Executives


By Frances McKenna  |  May 29, 2018

Recruitment efforts in the not-for-profit sector can be especially challenging in today’s near record-low unemployment economy, where professional opportunities abound for competent business executives and limited not-for-profit budgets can make it difficult to compete with the for-profit world.

Introduction to GASB 87 Leases


By Warren Ruppel  |  May 29, 2018

The Financial Accounting Standards Board (FASB) is not the only standard-setting body to address updates to lease accounting procedures. State and local governments and governmental entities need to be aware of a similar standard that was issued by the Governmental Accounting Standards Board (GASB). Similar in concept to the FASB standard (discussed on page 4), GASB 87 Leases contains some significant differences.

GASB’s Guidance for Irrevocable Split-Interest Agreements is Now in Effect


By John D'Amico  |  May 29, 2018

The Governmental Accounting Standards Board (“GASB”) Statement No. 81 Irrevocable Split-Interest Agreements is now in effect for financial statement periods beginning after December 15, 2016 (December 31, 2017 year-ends and thereafter) and should be applied retroactively.

Misunderstood Provisions of the New Tax Law Affecting High-Net-Worth Business Owners


By Dawn Rhodes  |  March 20, 2018

The complexity and uncertainty of the new tax bill have left taxpayers with many questions and misunderstandings. Partner Dawn Rhodes provides some clarification in NJBIZ.

Don’t risk facing AML/BSA violations in the U.S.


February 5, 2018

Sareena Sawhney was recently published in the H1 2018 issue of Global Opportunities Bulletin. Her article addresses the importance of complying with Anti-Money Laundering/ Bank Secrecy Act rules. 

How much is artificial intelligence worth?


By Angela Sadang  |  February 5, 2018

Angela Sadang was recently published in the H1 2018 issue of Global Opportunities Bulletin. Her article addresses the growing artificial intelligence industry. 

Tax Reform: A New Reality for Exempt Organizations


By Frances McKenna  |  February 2, 2018

With the 2017 charitable giving season behind us, many exempt organizations (“EO”s) are concerned that their funding may start to decrease this year and in the foreseeable future as a result of the new Tax Cuts and Jobs Act (hereafter, “the Act”) passed into law on December 22, 2017.

Recognizing the Symptoms of Fraud in Your Nonprofit Organization


By John D'Amico  |  February 2, 2018

“Where there is a will, there’s a way.” The old saying holds true even with employees bent on embezzling funds from their employer – whether directly or indirectly.

Protecting Your Nonprofit from a Cyberattack


By Richard Nathan  |  February 2, 2018

2017 was predicted to be the “year of cyber warfare” by Forbes.com. Sure enough, by mid-year, cyberattacks had already doubled the previous year’s totals. Given that an estimated 63% of nonprofits experienced a data breach in 20161, we are likely facing even more devastating statistics for the industry as the results of 2017 are realized.

Using Form 990 as a Marketing Tool


By Frances McKenna |  Robert Lyons  |  February 2, 2018

Unlike a tax return, Form 990 is a public document open for inspection. Currently, the only part not available to the public is Schedule B, which shows contributor information. The rest stands out in all of its glory – which can be good or bad, depending on the organization.

Four Components of Meaningful Internal Financial Statements for Nonprofits


February 2, 2018

At many nonprofits, audited financial statements draw a lot of attention. These are often made publicly available and are scrutinized by management, external auditors, Boards and public stakeholders – such as funding agencies and donors.

The Nonprofit Audit Committee’s Evolving Role


By Joseph J. Kanjamala  |  February 2, 2018

The Audit Committee is an indispensable part of any nonprofit organization’s governance structure. The roles and responsibilities of an audit committee vary from organization to organization. However, as the financial, operational and regulatory complexities of the environment in which nonprofits operate evolve, so must the roles and responsibilities of the Audit Committee. 

Tax Reform Dilemma: Uncertainty Surrounds Business Interest Deduction


By Alan M. Blecher  |  January 22, 2018

Real Estate Partner Alan M. Blecher authored an article entitled “Tax Reform Dilemma: Uncertainty Surrounds Business Interest Deduction” which was featured in the Commercial Observer.

Staying cool in the deposition hot seat


By Eric A. Kreuter  |  January 3, 2018

Eric Kreuter, partner in our Advisory Services Group, contributed the cover story to the January/February 2018 issue of Fraud Magazine. Staying Cool in the Deposition Hot Seat explores how expert witnesses can prepare to represent their clients at a deposition and handle aggressive attorney questioning. 

House and Senate Tax Reform Bills: Where are we now?


By Mark R. Baran  |  November 13, 2017

The House and Senate released their respective versions of the Tax Cuts and Jobs Act this November. The Marks Paneth tax team provides a detailed analysis of both tax reform bills and how their provisions would affect individual taxpayers and businesses.

MARKS PANETH’S 2017-2018 TAX PLANNING GUIDE


November 9, 2017

To provide you with access to current tax rules and regulations and prepare you and your business for possible tax changes ahead, Marks Paneth has launched its 2017-2018 Tax Planning Guide.

What You Need to Know About Pass-Through/Subrecipient Relationships Under the Uniform Guidance


By John D'Amico  |  November 3, 2017

In this article, John D’Amico, Director with our Professional Standards Group, outlines the responsibilities of a pass-through entity under “legacy” OMB Circular guidance, as well as a relatively new rule stemming from the 2014 issuance of the Uniform Guidance.

Lobbying vs. Education and Advocacy: What Does It Mean for Your Nonprofit Organization?


By Frances McKenna |  Robert Lyons  |  November 2, 2017

Charitable organizations often find themselves in the precarious position of determining the difference between lobbying, education and advocacy. This issue revolves primarily around the determination of what constitutes a lobbying expenditure versus expenditures that may be programmatic in nature. Reporting activity falling under any of the three categories can be costly – with penalties ranging from an excise tax of 25 percent on excess expenditures to loss of exemption or the loss of the ability to attract tax deductible contributions.

Changes in Conflict of Interest Laws for Co-ops and Condos


November 1, 2017

Board members of cooperatives and condominiums in New York now have a new fiduciary duty to the shareholders of their respective corporations. In September 2017, the governor signed an amendment to the New York Business Corporation Law (BCL) establishing procedures for handling conflict of interest contracts. The addition of Section 727 identifies the changes in procedures related to contracts entered into with board members for cooperatives and condominiums formed under BCL.

GOP's Proposed Tax Plan Changes the Rules for Businesses and Individuals


By Mark R. Baran  |  October 2, 2017

After months of speculation, President Trump and Republican congressional leaders have released an outline of their tax reform plan. “Unified Framework for Fixing Our Broken Tax Code” is intended to serve as a template for congressional committees to draft legislation aimed at cutting tax rates, simplifying the tax code and providing a more competitive environment for businesses. The framework addresses tax issues that affect both businesses and individuals.

HONOREES ANNOUNCED FOR PHILADELPHIA’S TOP LAWYERS AWARD PROGRAM


September 26, 2017

Marks Paneth is proud to be the Presenting Sponsor of the Philadelphia Business Journal’s inaugural Best of the Bar awards program, which seeks to honor Philadelphia-area attorneys and their recent accomplishments.

The CFO’s Role in Cybersecurity


By Richard Nathan  |  September 5, 2017

In an age when cyberattacks are more of a guarantee than a possibility, safeguarding your company from digital threats requires all hands on deck. As a CFO, how can you ensure that your business is prepared to mitigate and respond to these threats?

Mitigation of damages: Professional obligations for the expert witness computing damages


By Eric A. Kreuter  |  August 29, 2017

Eric A. Kreuter was recently published in the H1 2017 issue of Global Opportunities Bulletin. His article explains how economic damages experts can apply the Mitigation of Damages Doctrine to their casework within the context of the economic analysis.

On boarding a new transfer pricing client


By Angela Sadang  |  August 29, 2017

Angela Sadang was recently published in the H1 2017 issue of Global Opportunities Bulletin. Her article addresses the importance of understanding a new client’s business when initiating a transfer pricing engagement and developing the appropriate transfer pricing policy and methodology.

Foreign Partners in US Business Get Tax Relief in New ECI Ruling


August 23, 2017

A major US tax court handed a victory to foreign investors in US business this summer, when it rejected the controversial IRS Ruling 91-32. The ruling, issued in 1991, allowed the IRS to treat a non-US partner’s gains from the disposition of an interest in a US partnership as ECI (income effectively connected to the trade or business).  ECI of a non-US person is subject to US income tax and an additional 30 percent branch profits tax.

“Mission Drift” and Other Potential Audit Triggers You Should Know About


By Frances McKenna |  Robert Lyons  |  August 22, 2017

It is your organization’s responsibility to apply due diligence when preparing the Form 990, and ensure that you are operating in accordance with the purpose for which you were granted exemption. Manage that responsibility well. 

Border-Adjustment Tax Eliminated from Tax Reform Plan


By Mark R. Baran  |  August 14, 2017

While much of the Trump administration’s tax reform plan remains uncertain, we now know one thing for sure: it will not include a border-adjustment tax.

IC-DISCs: A Powerful Tax Savings Opportunity for Export Companies


August 11, 2017

The U.S. Court of Appeals recently ruled in favor of taxpayers who want to utilize IC-DISCs (interest-charge domestic international sales corporations) for estate planning purposes. In Summa Holdings, Inc. v. Commissioner1, the court rejected the IRS’s application of the substance-over-form doctrine to prevent the use and holding of IC-DISC stock in IRAs and trusts. It found that the substance-over-form doctrine should only be applied when a taxpayer or the IRS attempts to characterize a transaction differently than its substance.

Tax Act puts onus on Americans to do the right thing


By Paul Bercovici  |  August 8, 2017


Planning for Life after a QPRT


By Laura E. LaForgia |  Kathi Mintzer  |  August 3, 2017

Laura E. LaForgia and Kathi Mintzer were published in the August 2017 issue of Trusts & Estates. Their article addresses the decisions, choices and considerations that need to be made at the end of a qualified personal residence trust (QPRT).

Marks Paneth’s Summer 2017 Nonprofit Survey Results


August 1, 2017

Marks Paneth is pleased to reveal the findings of our third Nonprofit Pulse survey, which gauges the views and expectations of nonprofit leaders with organizations ranging from 20 employees to 500 employees. The Summer 2017 survey uncovered the industry’s outlook on funding availability, demand for services, board member effectiveness and other organizational issues.

Amendments to New York Nonprofit Revitalization Act of 2013 are now in effect


By Michael McNee |  John D'Amico  |  July 6, 2017

On November 28, 2016, additional amendments (the “2016 Amendment”) to the New York Nonprofit Revitalization Act of 2013 (the “NPRA”) were signed into the New York Not-for-Profit Corporation Law (“NPCL”). The 2016 Amendment is intended to “improve and make clarifying amendments” in order to “correct certain inconsistencies, and make the statute operate more smoothly and efficiently.”

New rules for telling your financial story


By John D'Amico  |  June 2, 2017

Nonprofits that are at least partially funded through government contracts face two ongoing challenges. One is finding funding for any associated administrative costs that are not covered by the grant. The second is managing cash flow when governmental agencies are notoriously late in reimbursing nonprofits for expenses they have already incurred. It is common for nonprofits to wait three to six months or more for reimbursement. This can result in serious liquidity issues. Combined, these issues often make it difficult for nonprofits to provide potential private donors a true picture of their financial status.

Effective date of OMB’s Procurement Standards extended


By John D'Amico  |  May 25, 2017

On December 26, 2013, the US Office of Management and Budget (OMB) published 2 CFR 200, “Uniform Administrative Requirements, Cost Principles and Audit Requirements for Federal Awards” – also referred to as the Uniform Guidance (UG). One of the most significant changes introduced by the UG relates to procurement standards for non-Federal entities.

Where is US Corporate Tax Headed Under the New Administration?


By Solomon Packer  |  May 4, 2017

It is contemplated that US Congress will soon revise corporate tax policy.

Among the proposals coming to the fore, and being highly-debated in business and tax journals, is “destination-based cash-flow tax,” or “DBCFT.”

It is important to recognize that a DBCFT tax regime differs greatly from our current income tax system, and incorporates two distinct elements: a destination-based tax system, and a cash flow tax system

Ensuring Nonprofit Compliance with the Federal OMB Uniform Guidance and NJ's Circular 15-08 OMB


By John D'Amico  |  March 13, 2017

The federal OMB’s Uniform Guidance requires New Jersey-based nonprofit organizations with fiscal year expenditures greater than $750,000 to have a Single Audit. Organizations that receive new or incremental federal funding either directly from a federal agency or passed-through from the state or a local government after December 24, 2014 need to follow the federal OMB’s Uniform Guidance. For federal grants awarded prior to that date, OMB Circulars (A-110 and A-122 for nonprofits) are still in effect.

The new employee tax credit your organization may be missing out on


By Mordecai Lerer  |  February 28, 2017

Are you familiar with Internal Revenue Service forms 5884, 5884C and 8850? If not, your organization may be missing an opportunity to reduce its federal tax liability from $1,200 up to $9,600 per new hire. The great news is, both “for-profit” and “nonprofit”employers are eligible for the Work Opportunity Tax Credit (“WOTC”).

Nonprofit Pulse: A Leadership Survey From Marks Paneth


February 9, 2017

Mark Paneth’s Nonprofit Pulse collects the opinions of nonprofit leaders twice a
year. Findings from the Summer/Fall 2016 survey provide insights into the impact of
funding challenges on meeting demand for services, attracting and retaining staff
and the financial stability of organizations facing funding gaps.
The majority of respondents are senior leaders of human-service nonprofits
operating in the US, including executive directors, CEOs, CFOs, board members, and
directors.

Transfer Pricing Business Models


By Angela Sadang  |  January 27, 2017

A key factor in establishing a reasonable transfer price is establishing the business model used by sales and distribution organizations. In this article, the authors describe the three primary models and their relevance establishing and defending a transfer price.

PREPARING FOR THE SALE OF YOUR BUSINESS


By Angela Sadang  |  January 27, 2017

So, you founded your business and, over the years, built it into the profitable — and flourishing — operation it is today.  Or maybe you inherited the business, maybe even bought out an existing enterprise.  But, whatever your path to success, you’ve no doubt worked hard and long to get to where you are.

New Liquidity Disclosure Requirements for Nonprofits


By Sibi B. Thomas  |  January 23, 2017

Under the Financial Accounting Standards Board’s new financial reporting standards for nonprofits released on August 18, 2016, nonprofit organizations are required to provide enhanced disclosures about the liquidity and availability of its resources in the audited financial statements. The disclosures must be both qualitative and quantitative in nature.  

Avoiding Damage Done by Damages Experts


By Eric A. Kreuter  |  December 6, 2016

Economic damages experts are often confronted with legal theories, which must be carefully applied to their casework within the context of the economic analysis. One example is the Mitigation of Damages Doctrine.

Interest-Charge Domestic International Sales Corporations


November 30, 2016

IC-DISCs (interest-charge domestic international sales corporations) were once thought of as uninspiring, and not particularly efficient, tax deferral vehicles. They were originally created by the government as a way to assist US-based corporations that focused on foreign sales and exports. Nothing more.

In fact, regulators at the time even conceded that IC-DISCs were not really tax shelters at all. Nor were they considered as listed or reportable transactions. As a result, IC-DISCs were largely marginalized as a tax savings tool; overlooked at best and, if noticed at all, regarded as ineffective and not worth the attention of serious investors

Corporate Inversions in the United States: A Primer


November 23, 2016

At this point we've all heard about tax inversions: The process by which a company that's taxed heavily in its home country buys a smaller company headquartered in a country where the business taxes are considerable lower, then maintains that the newly amalgamated business is now officially headquartered in the low-tax country. Now domiciled in, say, Dublin, Ireland, with a corporate income tax rate of 12.5 percent or less, rather than Chicago, Illinois, with an effective US corporate income tax rate around 40 percent, the new entity enjoys greatly reduced income tax levels.

This article was originally published in the September 2016 edition of Global Tax Weekly:Corporate Inversions In The United States: A Primer by Curtis Best, a partner in our Tax practice. 

VENDORS CAUTIONED TO SEPARATE SALES TAX ON ALL TAXABLE TRANSACTIONS


By Dov Klein  |  November 23, 2016

A recent advisory opinion (TSB-A-16(28)S) issued by the New York State Department of Taxation and Finance (the “Department”) has concluded that a vendor required to collect sales tax may not “absorb” collected sales tax into its hourly rate.

Tax Law also provides that the person required to collect tax is required to separately state the tax on any invoice, or other statement of the transaction provided to the customer.

TRUMP PRESIDENCY PORTENDS MAJOR TAX CHANGES


By Steven Eliach  |  November 16, 2016

The unexpected election of Donald Trump as President of the United States, along with Republicans retaining control of both chambers of Congress, will likely result in some changes to the U.S. tax code.

In this brief article, Steven Eliach, Principal-in-Charge of our Tax Practice, outlines the potential impact of the 2016 election on tax law.

WHAT’S OLD IS WHAT’S NEW


By Robert G. Kuchner  |  November 15, 2016

Contrary to popular belief ― and probably in keeping with your own professional experience ― high net worth individuals (HNWI) rarely regard tax reduction and improving cash flow as chief among their concerns. For affluent investors it's really about what they can walk away with, not necessarily how much they earn. And let’s face it, a great performing investment can become a very mediocre one once taxes kick in.

This article was written by Robert G. Kuchner, CPA/PFS, a Partner at Marks Paneth LLP. “What's Old Is What's New”, will appear in the December issue of Global Business Opportunities.

US TAXPAYERS ARE PAYING MORE THAN THEY REALIZE


By Steven Eliach  |  October 17, 2016

Most tax policy discussions dwell on three types of taxes: income tax, payroll tax and estate tax. These taxes, however, are only cornerstones in a crowded fiscal system consisting of federal, state and local taxes. Such tunnel vision leaves commentators and taxpayers alike with a murky understanding of what taxation in the U.S. actually entails. The gap between what the public believes about its tax burden and the amount it pays is so wide that it renders much of our tax debate totally off target. Governmental authorities impose many lesser-known taxes, but you’d never know that from public discussions about our tax system.

This article was originally published in the October 2016 issue of Metropolitan Corporate Counsel. It was co-written by Maria L. Castilla of Thomson Reuters and Steven Eliach, Principal-in-Charge of Tax Services, Marks Paneth LLP.

MARKS PANETH’S 2016-2017 TAX PLANNING GUIDE


October 13, 2016

To provide you with access to current tax rules and regulations, Marks Paneth has launched its 2016-2017 Tax Planning Guide.

Are We There Yet? Looking down the road at the health of the hospitality sector


By Lawrence Cohen  |  September 1, 2016

Times are good for many of us in the hospitality industry.  Across every sub-sector, from hotels and airline travel to new building development and job creation, the industry continues to enjoy the fruits of a new US economic recovery.  And yet, those who have lived through downturns and shrinking markets find times like this to be perilous, leading all of us to ask, “Are we there yet?” — i.e. are we at the peak of the market and in for a nasty shock.

In this article, Lawrence Cohen explores the ups and downs of the US hospitality industry and the possibility that we are near the top of the business cycle.

This article, “Are We There Yet?”, was originally published in the September 2016 issue of Metropolitan Corporate Counsel.It can be found on page 29.

Impact of PATH ACT: Section 181 IRS Code Revisions to Live Theater Productions


By Polina Inberg  |  August 18, 2016

On December 18, 2015, Congress passed and President Obama signed the PATH Act of 2015 which included revisions to section 181 of the Internal Revenue Code. One of the revisions was an extension of the film and television rules on expensing production costs for qualified live theatrical productions.  This change in the federal tax code for theatrical production companies is arguably the single biggest legislative change affecting the industry in almost 20 years.  The new law provides opportunities, but it presents challenges as well: the unique aspects of theater companies can create uncertainties as well as obstacles to implementation.

Polina Inberg, CPA, is a Director in the Theater, Media and Entertainment Group at Marks Paneth LLP.  She is based in the firm’s midtown Manhattan headquarters and can be reached at (212) 330-6022 or by email at pinberg@markspaneth.com.

New York changes personal income tax rules


By Steven P. Bryde  |  August 15, 2016

New York State just released a summary of recently enacted legislation regarding income taxes that may be levied in addition to those personal income taxes described in the state's Budget for 2015-2016 corporate tax provisions. 

The following topics are included in the following report:

  • New York City enhanced real property tax credit extended
  • New York City income tax credit for general corporation taxes paid extended
  • Property tax relief credit established
  • Taxpayer refund choice act extended
  • Yonkers resident income tax surcharge and the Yonkers earning tax on nonresidents extended

Fully Leveraging IP Assets


July 12, 2016

R&D is woven into the fabric of our economy, yet it receives very little attention from business magazines, let alone the mainstream press. It might seem like an altogether forgotten part of the American industrial machine, but in 2013, R&D expenditures in the U.S. amounted to a staggering $473 billion – almost 3 percent of the country’s total GDP.

This article, “Fully Leveraging IP Assets”, was originally published in The Metropolitan Corporate Counsel, July 2016. 

Wealth Management: When Is An Inheritance Too Big?


By Robert G. Kuchner  |  June 23, 2016

Creating a legacy can be challenging for high-net-worth individuals because of the size of their assets and the complexity of the vehicles used to pass wealth to the next generation. But there are many other considerations. In a recent article published in Private Wealth, Robert Kuchner, CPA, PFS, shares his experience and observations on:

• The psychological and emotional impact of inheritance decisions
• How to help your clients establish their goals so you can design an appropriate plan
• The risks of transferring wealth to the next generation
• Alternatives to a traditional legacy planning

Partnership Audit Rules Revised


By Mark R. Baran  |  June 10, 2016

The Bipartisan Budget Act of 2015 includes sweeping changes to the rules for auditing partnerships. As a result of this legislation, audits of master limited partnerships, investment funds and other business entities organized as partnerships are likely to increase. In fact, recent IRS examination data reflects an increase in partnership audits and a shift in resources devoted to them. More importantly, given the impact of the new audit rules, many partnership agreements will need to be amended. 

The impact of the new partnership audit regime will be significant for a majority of partnerships in areas ranging from tax and operations to legal issues and economic consequences. 

Tips for improving the quality of your nonprofit’s audit


By Sibi B. Thomas  |  June 8, 2016

Audit quality is one of the most discussed topics in the accounting and auditing profession. Audit quality involves both qualitative and quantitative elements, some of which are not easily measurable. It is subjective and viewed differently by different stakeholders based on their expectations and perceptions. It’s important for all the involved stakeholders to align their expectations in order to produce a quality audit.

Legal Issues and Valuation of Tangible Assets, Patents and Copyrights


May 16, 2016

Understanding the nature and value of the assets of a business is essential for a variety of reasons, and it has become increasingly clear that legal considerations can play an important role. In general, asset values are an important consideration in formulating asset management and protection policies. And many of the financial crises we have experienced in recent memory can be attributed, in part, to the subjective nature of some inputs used to determine fair value.

This article by Steven L. Henning and Peter Twombly, a Partner with McCarter & English, is reprinted with permission from the May edition of The New York Law Journal© 2016 ALM Media Properties, LLC.

Creating the Bridge Between Transfer Pricing and the Valuation of Intangibles


By Angela Sadang  |  May 11, 2016

International mergers and acquisitions (M&A) are at their hottest pace since before the 2008 financial crisis, and an increasing percentage of this activity involves intangible assets as significant components of the transaction. 

As multinational companies shift ownership of intangible assets between legal entities and across jurisdictions for various strategic purposes, the most critical considerations in cross-border M&A include the identification and valuation of intangible assets and transfer pricing. 

In the article, Director Angela Sadang challenges the perception that the value of a transaction and its largely-acquired intangible assets is motivated by financial reporting valuation rather than by transfer pricing valuation. Moreover, she discusses the importance of aligning the two disciplines early on in the M&A process to create lasting, value-added synergies. 

This article, "Creating the Bridge Between Transfer Pricing and the Valuation of Intangibles," appeared in the May version of the Quick Read Buzz.  

Section 181’s Extension to Live Stage Productions Doesn’t Set Clear Path for Producers, Investors


By Christopher A. Cacace  |  May 2, 2016

At the end of 2015, Congress passed, as part of a large tax extender bill, the Protecting Americans from Tax Hikes Act (PATH), H.R 2029 (http://1.usa. gov/1JPofei), an extension of §181 of the Internal Revenue Code. Section 181 has been available since 2004 to permit expedited deduction of the costs of a film or TV production. The present version of §181 permits an expedited deduction of a production’s costs up to $15 million ($20 million in certain circumstances). Since inception, this has had several sunset provisions, each of which was extended as part of year-end extender bills. The latest for the first time has extended the availability of §181 treatment to live stage productions.

Will this new provision be helpful to producers of live theatrical productions as they seek to raise funding for their shows?

Assigning Value Is More Than A Number


May 1, 2016

Approximately 80 percent of the businesses filing U.S. federal income tax returns are S corporations, partnerships or limited-liability companies, collectively known as pass-through entities (PTEs). Valuing PTEs is one of the oldest, least resolved and, some would say, most poorly defined issues challenging the business valuation profession.

In this articleEric J. Barr, CPA, Partner-in-Charge of valuation services in the Financial Advisory Services group at Marks Paneth, outlines the crucial matters attorneys need to know about valuing PTEs. 

This article, “Assigning Value is More Than a Number”, was originally published in the May 2016 issue of Metropolitan Corporate Counsel.

Taxing Intangible Assets: A New Global Approach


By Angela Sadang  |  April 28, 2016

In this article, Angela Sadang Director with the firm's Financial Advisory Services group, looks at the OECD’s 2015 final report on all 15 Action Plans, the aim of which was to, “restore confidence in the international tax framework by addressing weaknesses that create opportunities for BEPS”.  After pinpointing the important functions that contribute to the value of the intangible,  the piece goes on to discuss the ways in which to identify the intangibles that make up a particular transaction, as well as a look at five transfer pricing methods the OECD thinks would be appropriate when transferring intangibles, or rights in intangibles.

This article was originally published in Morison KSi's quarterly tax newsletter, Global Tax Insights, Q1 2016. It was reprinted by permission in Global Tax Weekly, April 28, 2016, published by CCH, a Wolters Kluwer business.

Taxation And Technology: Playing Catch-Up In A Digital World


April 28, 2016

In this article, Jeanne Goulet, Senior Consultant, takes an up-close look at OECD recommendations aimed to minimize aggressive tax planning and encourage governments to reduce gaps and tax arbitrage opportunities in their domestic laws. She also discusses treaty abuse, the artificial avoidance of PE status, the use of artificial means of reducing tax in both market and parent jurisdictions and nowhere tax in parent jurisdictions.

This article was originally published in Morison KSi's quarterly tax newsletter, Global Tax Insights, Q1 2016. It was reprinted by permission in Global Tax Weekly, April 28, 2016, published by CCH, a Wolters Kluwer business.

FASB Project on Not-for-Profit Financial Reporting


By John D'Amico  |  April 21, 2016

New Accounting and Auditing Matters on the Horizon -- The FASB is moving forward with the proposed ASU Presentation of Financial Statements of Not-For-Profit Entities. The proposed changes are considered to be the most sweeping changes since 1993.  After receiving 264 comment letters and holding three public roundtables, which representatives of Marks Paneth LLP participated in, the FASB Board decided to separate the project into two phases. This summary provides useful information on the changes which lie ahead.

Use Caution: Foreign Agents Ahead


April 1, 2016

In a recent case, four multinational corporations and a Japanese trading company paid a combined $1.7 billion in civil and criminal sanctions on their joint bribery scheme to win natural gas construction projects in Nigeria.  Too many companies are unaware that hiring local individuals or entities in a foreign country to help them conduct business may expose them to criminal or civil liability under FCPA.

Sareena Sawhney, Director with the firm's Financial Advisory Services group, examines how third-party compliance with anti-bribery provisions is under scrutiny in a recent article with Metropolitan Corporate Counsel.

This article, “Use Caution: Foreign Agents Ahead”, was originally published in the April 2016 issue of Metropolitan Corporate Counsel.

Ways to avoid identity theft


By Steven Eliach  |  March 30, 2016

Identity theft presents a challenge to businesses, organizations and governments, including the Internal Revenue Service. Tax-related identity theft occurs when someone uses a stolen Social Security number (SSN) to file a tax return to claim a fraudulent refund. Although identity theft affects a small percentage of tax returns, it can delay a taxpayer’s refund and have a major impact on the victim’s peace of mind.    

2016 Tax Calendar


By Mark R. Baran  |  March 7, 2016

This summary is a friendly reminder of various tax due dates for both individual and business taxpayers. 

Location, Location and Tax Implications


By Alexander X. Wang  |  March 1, 2016

Foreign investors need to consider FIRPTA when purchasing US real estate

With the global economy still struggling to shed its post-recession pessimism, it’s no wonder that many foreign investors still regard the US real estate market as a better investment than most. However, foreign investors should tread carefully when approaching the US market and its wide range of tax legislation – mostly notably, the 1980 Foreign Investment in Real Property Act (FIRPTA).

In a recent article, Alexander Wang, Partner, and Kenneth Siu, Manager with the firm’s Tax Group, discuss FIRPTA and its implications, as well as best practices for foreign investors to accomplish their business goals while successfully navigating the US tax system.

This article, “Location, Location and Tax Implications”, was originally published in the March 2016 issue of Metropolitan Corporate Counsel.

Nonprofit Revitalization: Checklist for Compliance


By Michael McNee  |  February 24, 2016

New York State has a law pertaining to nonprofits called the Nonprofit Revitalization Act of 2013. It was signed by Governor Cuomo on December 18, 2013 and most provisions were effective on July 1, 2014. Marks Paneth has developed a self-administered checklist you can use to help with the process of verifying compliance for your organization.

 

What's Next? Implications of Proposed IRS Regulations on Family-Owned Entities


By Angela Sadang  |  February 1, 2016

At the American Bar Association’s Section of Taxation meeting in May 2015, Cathy Hughes, Estate and Gift Tax Attorney Advisor with the US Treasury Department’s Office of Tax Policy, indicated that proposed regulations under IRC Section 2704(b)(4) (§2704) concerning restrictions on valuation discounts pertaining to the transfer of family-owned entity interests could be issued by mid-September 2015. As of this writing, no such regulations have been issued, though further informal communication on behalf of the Internal Revenue Service (IRS) suggests that new regulations are forthcoming. Meanwhile, questions and speculations abound. In a recent article, Angela Sadang discusses the implications of these proposed regulations on family-owned entities.

This article, “What's Next? Implications of Proposed IRS Regulations on Family-Owned Entities”, was originally published in the February 2016 issue of Metropolitan Corporate Counsel.

The Dangers of Letting Bribery Go Undetected


January 26, 2016

The US Foreign Corrupt Practices Act (FCPA) includes both anti-bribery and accounting provisions. As detailed in A Resource Guide to the U.S. Foreign Corrupt Practices Act, from the Criminal Division of the Department of Justice (DOJ) and the Enforcement Division of the US Securities and Exchange Commission, the FCPA makes it a crime for American corporations or their subsidiaries to bribe foreign officials to obtain or retain business. 

In this article, Sareena M. Sawhney, director in the Financial Advisory Services group at Marks Paneth, details the ways to avoid an FCPA disaster and the serious consequences that may result if companies do not take necessary precautions. 

Gotham Commercial Real Estate Monitor


By William H. Jennings  |  January 26, 2016

The Gotham Commercial Real Estate Monitor from Marks Paneth represents the findings of a survey of commercial real estate professionals in the New York City market. Overall, 201 individuals responded to the survey — 64 online following a series of email invitations and 135 in person at a convention of New York City real estate professionals. Marks Paneth staff supervised the convention site intercept interviews and email deployments for online data collection.  Michaels Opinion Research, Inc. hosted the online data collection site and tabulated all questionnaires. Interviews were completed during the period of November 11 - Decemeber 23, 2015.

"Irrational Exuberance” or Golden Age: Is This The Best of Times for New York City Hotels?


By Lawrence Cohen  |  January 11, 2016

What’s changed in the NYC hospitality sector over the past two years? Nothing, but everything…

Partner and Hospitality Group Leader Lawrence Cohen has refreshed his 2014 article, “’Irrational Exuberance’ or Golden Age: Is this the Best of Times for New York City Hotels?” and discusses the impact that the last two years have had on the market.

Monitoring your organization’s fiscal health to avoid financial failure


By Sibi B. Thomas  |  January 8, 2016

When considering the myriad of challenges the nonprofit sector faces today, it is important that nonprofit leaders take a holistic approach to understanding the factors affecting their organizations' financial viability. There are several tools and specific approaches to nonprofit governance that can greatly facilitate this undertaking. 

In this article, Partner Sibi Thomas discusses give factors that nonprofit leaders should consider to better secure their organizations against financial mismanagement and organizational risk.

This article was originally published in New York Nonprofit Media in January 2016.

CREATING A LEGACY: HOW MUCH WEALTH IS ENOUGH TO LEAVE CHILDREN


By Robert G. Kuchner  |  January 7, 2016


CREATING A LEGACY: WHAT ARE THE ALTERNATIVES TO A LUMP-SUM TRANSFER & BASICS OF CHARITABLE PLANNING


By Robert G. Kuchner  |  January 4, 2016


Meeting US FATCA Reporting Requirements


December 31, 2015

The Foreign Account Tax Compliance Act (“FATCA”) was enacted with the primary goal of providing the Internal Revenue Service (“IRS”) with the ability to locate US tax evaders hiding assets abroad.  Foreign Financial Institutions (“FFIs”) will now need to conduct the necessary due diligence and meet the necessary documentation requirements in order to help find such US tax avoiders.  Non-compliance can result in the FFI paying a 30% withholding tax on income from US sources. Sareena Sawhney outlines the overall steps an FFI needs to take to maintain FATCA compliance.

This article was originally published in Morison KSi's Global Opportunities Bulletin, December 2015. It was reprinted by permission in Global Tax Weekly, December 31, 2015, published by CCH, a Wolters Kluwer business.

The Dangers of Letting Bribery Go Undetected


December 17, 2015

In 2012, the New York Times reported that Walmart routinely bribed public officials to speed its expansion into Mexico. As a result, executives at Walmart’s headquarters shut down an internal investigation in 2005 in spite of a wealth of evidence that illicit and illegal payments had been made. The company did not report the alleged violations of the Foreign Corrupt Practices Act (FCPA) until November 2011.  In the wake of investor lawsuits and U.S. investigations into its operations, eight executives left.  Walmart increased its compliance staff by more than 30 percent in response to a Department of Justice request to improve its internal controls and compliance programs and has spent more than $430 million on investigations and its compliance program.

Sareena M. Sawhney reviews the anti-bribery and accounting provisions of the FCPA in this article originally published in Corporate Compliance Insights on December 17, 2015.

Marks Paneth’s 2015-2016 Tax Planning Guide


December 9, 2015

To provide you with access to current tax rules and regulations, Marks Paneth has launched its 2015-2016 Tax Planning Guide.

Start-ups Coming to the US


November 12, 2015

Emerging companies coming to the US are faced with myriad of tax and reporting obligations that carry substantial penalties for noncompliance. This checklist covers the issues and helps you prepare for the tax requirements your startup will encounter.

Uncertainty Over Expired Tax Breaks Once Again Complicates Year-end Tax Planning


By Steven Eliach  |  November 11, 2015

Year-end tax planning this year will be just as complicated as last year primarily because of uncertainty surrounding many expired tax breaks for individuals and businesses. Tax legislation signed into law last December extended several expired breaks, but only through the end of 2014. This article reviews expired tax breaks that Congress may revive later this year and details tax-saving strategies currently available to individuals and businesses.

Nonprofit Pulse: A Leadership Survey from Marks Paneth


By Michael McNee  |  October 28, 2015

Marks Paneth is proud to service many leading nonprofits.  To gain insights that will be useful and interesting to these organizations, and to help us meet their audit and other business needs, we regularly survey the leadership to top nonprofits around the country.  Topics span a range of issues organization leaders face or are concerned about.

Our most recent survey of nonprofit chief executives officers, executive directors, presidents, chief financial officers and board members was fielded during the second half of 2015.

Expanded New York State Film Production Tax Credit Program Offers More Funding, Faster Applications


By Richard Stern  |  October 22, 2015

New York State’s film production tax credit program is more robust than ever.  Richard Stern has written an article that explains how the credit works, what’s required to apply for it and how it can help production companies recover up to 30 percent of their production and post-production costs back from the State.

What to Consider When Using Guideline Transaction Data


October 15, 2015

Income taxes play a major role in the pricing and structure of transactions because income taxes can substantially reduce the seller’s net proceeds and/or lower the net cost of a purchased ownership interest.  Transactions are priced and structured to address these tax consequences.  Failing to properly consider the tax consequences of the entity form of the seller or the decision to buy/sell assets or equity may result in an improper valuation conclusion.  In this article, Eric Barr, partner-in-charge, Valuation Services, discusses the impact of Federal income taxes on transaction prices and terms.  

This article appeared in the September/October 2015 issue of The Value Examiner, published by the National Association of Certified Valuators and Analysts (NACVA).

Valuing Physician Practices Using the Market Approach


By Monica Kaden  |  October 15, 2015

The changing regulatory environment caused by the passage of the Patient Protection and Affordable Care Act (PPACA) has led to additional uncertainty in the healthcare industry on many levels. Practices are consoldating to gain market share and increase efficiency, as many believe that a larger group or network will produce greater profitability. This article explores the factors that are affecting the healthcare industry and complicating the valuation of medical practices.

This article appeared in the September/October 2015 issue of The Value Examiner, published by the National Association of Certified Valuators and Analysts (NACVA).

Marks Paneth Comments on HUD's Proposed Changes to §200.216


By William H. Jennings  |  October 8, 2015

Marks Paneth recently submitted its comments in response to the United States Department of Housing and Urban Development's (HUD) proposed rule meant to improve the previous participation reviews process, particularly under FR-5850-P-01 §200.216.

Transfer Pricing: A Primer for International New Entrants to the US


October 1, 2015

Regardless of structure and revenue levels, the operations of corporations with related entities across international tax jurisdictions inevitably involve intercompany transactions.  International and local rules and guidelines require that the arm’s length standard must be met in the pricing of intercompany transactions, requiring contemporaneous documentation.  International transfer pricing rules and guidelines are established by the Organisation for Economic Co-operation and Development (OECD) as set forth by the OECD Guidelines, while transfer pricing rules and regulations for the US are established by the US Department of the Treasury, Internal Revenue Service (IRS). 

This article, "Transfer Pricing: A Primer for International New Entrants to the US", was originally published in Morison International's quarterly tax newsletter, Global Tax Insights, Q3 2015. It was reprinted by permission in Global Tax Weekly, October 15, 2015, published by CCH, a Wolters Kluwer business

FASB Roundtable on Proposed Nonprofit Accounting Standards


By Michael McNee  |  September 28, 2015

Marks Paneth was invited to attend one of two FASB roundtable meetings held on September 21 to discuss our views with the FASB Board and their technical managers on the Proposed Accounting Standard update (exposure draft) which suggests major revisions to the way nonprofit financials will look in the future.

Minimum Distribution Requirements for Private Foundations


By Robert Lyons  |  September 18, 2015

Every year, private, non-operating foundations are faced with determining their minimum investment return in order to calculate their distributable amount. For calendar year 2014, the distributable amount is the amount that the foundation must pay out as a qualifying distribution by the end of 2015 to avoid the 30% excise tax on the undistributed portion.

In this article, director Robert Lyons provides foundation administrators with technical guidance around the appropriate timing of and planning that should go into the distributable amount’s payout.

Developing a Fraud-Free Workplace for the Nonprofit Organization: A Fresh Perspective


By Eric A. Kreuter |  Hope Goldstein  |  September 16, 2015

Fraud is a significant and growing problem for nonprofit organizations, according to a number of sources, occurring more frequently and becoming more costly. According to the 2014 Report to the Nations by the Association of Certified Fraud Examiners (ACFE), nonprofit fraud accounted for 10.8% of total incidents of fraud in 2013, up from 9.6% reported in 2010. Nonprofit organizations lost a median $108,000 per incident in 2013, up from $90,000 reported in 2010. Since many nonprofits are relatively small, the financial impact is often far greater than the dollar amount implies. 

This article by Eric Kreuter, partner, Financial Advisory Services, and Hope Goldstein, partner, Nonprofit and Government, reviews the risks (financial, reputational and funding threats), fraud’s origins and the steps an organization should take to strengthen its control environment.

The Pass-Through Entity Conundrum


September 15, 2015

Entity form affects after-tax economic benefits and thus entity values, and the courts have provided conflicting guidance on how analysts should address the issue when valuing pass-through entities.  Does entity form impact after-tax economic benefits and thus entity value?  If so, why does it, and how much?  And if entity form affects economic benefits, what happens when tax laws or tax rates change?  These questions have vexed business appraisers for years.  This article, by Eric J. Barr, partner-in-charge of Valuation Services, examines how the appraisal community and the courts have addressed such entity form valuation issues. 

This article is reprinted with permission from Valuation Strategies (published by Thomson Reuters), September/October 2015.

Lost Profits: The Reasonable Certainty Standards and the Modern New Business Rule


September 9, 2015

While the vast majority of jurisdictions have moved away from the new business rule and adopted the modern new business rule, by which new/unestablished businesses can recover damages, such adoption does not diminish the requirements under the reasonable certainty standard. Given the lack of historical financial performance data and under the lens of the reasonable certainty standard, estimates of lost profits damages to new/unestablished businesses are subject to a higher level of scrutiny. This article by Josefina V. Tranfa-Abboud, principal, Financial Advisory Services group, focuses on new/unestablished businesses and the importance of post-incident business-specific data/facts to isolate the effects of the disputed event, and to establish a measure of lost profits damages that can be considered reasonably certain.

This article appeared in the September 9, 2015 issue of QuickRead, published by the National Association of Certified Valuators and Analysts (NACVA).

Foreign Investors Need a Roadmap as They Flock to New York Real Estate


By Alexander X. Wang  |  September 3, 2015

For foreign investors, it may be tempting to hurriedly rush into the flourishing New York real estate market, which has recovered much faster than expected from the 2008 financial crisis. It’s small wonder, therefore, that savvy investors are attracted to New York real estate, but they should not go it alone. In a recent article, Alexander X. Wang and Carl Leung discuss considerations that should be made prior to investing foreign capital into the market.

This article, “Foreign Investors Need a Roadmap as They Flock to New York Real Estate”, was originally published in the September 2015 issue of Metropolitan Corporate Counsel.

Highway Funding Law Brings Important Tax Compliance Law Changes


By Steven Eliach  |  August 25, 2015

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 provides a temporary three-month extension of the Highway Trust Fund that is paid for through several tax compliance revenue offsets. These revenue offsets primarily affect tax return filing due dates and extension deadlines for C corporations, partnerships, and trusts and estates. There are also other important tax provisions contained in the law that include modifications to estate and mortgage reporting, consistent basis reporting, clarification of the 6-year limitation period for overstated basis, veterans tax incentives regarding ACA exemptions and improved HSA contribution eligibility, and an excise fuel tax provision for alternative fuels.

Employee or Independent Contractor? Worker Misclassification Investigations are Growing


By Mark R. Baran  |  August 7, 2015

There has been a sharp increase in worker classification cases and investigations by the Department of Labor and the Internal Revenue Service (IRS).  The DOL’s Wage and Hour Division (WHD) is leading the Fair Labor Standards Act (FLSA) enforcement effort and has been working with the IRS and many states to “combat employee misclassification and to ensure that workers get wages, benefits, and protections to which they are entitled.” 

While the majority of classifications of workers are not challenged by the IRS, that may soon change as a result of the increased investigations and information sharing among the various federal and state agencies. The best protection for employers is to be proactive, and review and test employment arrangements.  It is not enough to explicitly describe a worker as an independent contractor in an agreement or rely on a set number of factors to make the worker an employee or independent contractor.  Businesses must weigh all of factors and evaluate each arrangement. 

You can download a copy of the article below.

Corruption Knows No Borders: FCPA compliance is not just an emerging market concern


July 17, 2015

In the wake of the recent FIFA and Petrobras scandals, Steven L. Henning and Sareena M. Sawhney discuss why violations of the Foreign Corrupt Practices Act (FCPA) should not be deemed a concern only within emerging markets, and what recent trends may suggest for US companies looking to expand their operational footprint internationally.

 This article, "Corruption Knows No Borders: FCPA Compliance is not just an emerging market concern" was originally published in the July-August 2015 issue of Metropolitan Corporate Counsel.

Finding an Intersection Between Intangibles Valuation and Transfer Pricing


By Angela Sadang  |  July 9, 2015

In the recent boom of cross-border merger and acquisition (M&A) activity, the large proportion of transactions involving intangible assets or intellectual property (IP) as a dominant acquired asset has shed light on the importance of the identification and valuation of intangible assets and transfer pricing.

In this article, director Angela Sadang discusses how aligning these two disciplines early on in the M&A process can create lasting, value-added synergies.

This article, “Finding An Intersection Between Intangibles Valuation and Transfer Pricing in the US”, was originally published in Morison International’s quarterly tax newsletter, Global Tax Insights, Q2 2015.  It was reprinted by permission in Global Tax Weekly, July 9, 2015, published by CCH, a Wolters Kluwer business

Supreme Court upholds premium tax credits for coverage purchased on federal exchanges


By Steven Eliach  |  July 1, 2015

On June 25, the US Supreme Court, in a much-anticipated ruling, essentially again upheld the Affordable Care Act (ACA), this time by upholding premium tax credits for qualifying taxpayers whether they purchase coverage through a federal or a state exchange. In a 6-3 decision, the Court found that taxpayers purchasing coverage through a federal exchange can qualify for subsidies. The decision is important not just to taxpayers receiving subsidies, but also to the viability of the entire ACA. The majority of states have not set up exchanges. For “large” employers, as defined under the ACA, the decision means that the shared responsibility provisions due to go into effect this year and next, as well as the information reporting requirements due to go into effect this year, will indeed go into effect.

Marriage Ruling Brings Significant Changes for Same-sex Couples


By Steven Eliach  |  June 29, 2015

The U.S. Supreme Court’s decision in Obergefell v. Hodges ruled that same-sex couples have a constitutional right to marry, effectively making same-sex marriage legal in all 50 states. The decision has numerous implications for the tax, estate and retirement planning of same-sex couples and will also affect some employers in states that had not previously recognized same-sex marriage. 

Uniform Guidance (Formerly A-133) for Federal Award Programs


By Michael McNee  |  June 26, 2015

The Office of Management and Budget recently published Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. This guidance supersedes several OMB Circulars that govern federal awards, including the Circulars that affect non-profits, such as Circular A-110 and A-122. These new regulations are commonly called “Uniform Guidance” or “UG”.

Regulators Clamp Down on Casinos for Noncompliance


June 17, 2015

In 2013, the Las Vegas Sands Corp. paid $47 million to the US government for failing to file the necessary activity report (SRC) required by federal law.  This penalty was the result of an investigation by the US Department of Justice into wire transfers and cashiers’ checks totaling $58 million the Las Vegas Sands Corp. received on behalf of one gambler.  This is just one of many examples of US regulators more aggressively brining enforcement actions against casinos and banks for failure to comply with anti-money laundering (AML) rules and regulations.

In her recent article in Gaming Law Review and Economics, Sareena M. Sawhney, director, Financial Advisory Services, provides a detailed analysis of the components of a robust AML program and discusses how organizations can mitigate the risk of exorbitant fines and other penalties brought on by regular enforcement.

This article has been reprinted with permission from Gaming Law Review and Economics, Vol. 19, Issue 5, June 2015, published by Mary Ann Liebert, Inc., New Rochelle, NY.

Spring 2015 Gotham Commercial Real Estate Survey Results


By William H. Jennings  |  April 29, 2015

The Gotham Commercial Real Estate Monitor from Marks Paneth represents the findings of a survey of commercial real estate professionals in the New York City market. The 107 professionals participating in the research include owners and managers of commercial property, commercial real estate brokers and agents, and attorneys, accountants and other professionals specializing in the sector. The research employed self-administered questionnaires completed online and on paper by respondents. The list of professionals surveyed was compiled by Marks Paneth LLP, the research sponsor, and by Michaels Opinion Research. Interviews were completed during the period of February 25 to March 31, 2015.

To Operate or Not to Operate Your Hotel Restaurant Yourself...That is the Question


By Lawrence Cohen  |  April 29, 2015

Upscaling your hotel restaurant can do wonders for your brand.  For hotel owners who are ready to renovate their property as a result of a healthy economy and are looking to upgrade services, the restaurant is often a prime target for renovation.  For a well-run full-service hotel, quality food service is paramount.  But a top-flight hotel restaurant can be a draw in its own right, attracting customers who might not otherwise visit the hotel, and adding energy and an air of prestige to help build the hotel’s brand.  Leasing the operation to a third party may be the obvious answer – and it can be profitable to boot.  But there are traps for the unwary.  And the result – rather than a smooth-running business – can become a nightmare of obligations that don’t fit well with the restaurateur’s talent and business and can result in ongoing contract disputes.  And if you, the hotelier, decide to run the restaurant yourself, you’ll find that unless you know the business well, the execution may be much different than your original plan.

Executive Summary: Exploring the Financial and Governance Ingredients for Nonprofit Stability


By Michael McNee  |  April 2, 2015

Executives from the nonprofit world convened at Marks Paneth recently for a seminar co-sponsored by Charity Navigator, a nonprofit charity watchdog group. Using the financial collapse of the Federation Employment and Guidance Services (FEGS), as a backdrop, the seminar explored issues related to fraud, governance, reporting transparency and operational sustainability – and underscored practices and safeguards that can protect nonprofits.

Nonprofit Pulse: A Leadership Survey from Marks Paneth


By Michael McNee  |  March 30, 2015

The Nonprofit Pulse: A Leadership Study from Marks Paneth represents the findings of a survey of nonprofit leaders in the United States. The 103 professionals participating in the research include Board Chairs, Presidents, Executive Directors, Chief Executive Officers, Chief Financial Officers, Treasurers, Chief Operating Officers, Development Directors, Vice Presidents and Board members and are with organizations with annual budgets between $10 million and $100 million. The research employed self-administered questionnaires completed online by respondents. The national list of professionals surveyed was compiled by Marks Paneth LLP, the research sponsor, and by Michaels Opinion Research. Interviews were completed during the period of November 12 to December 31, 2014.

The Definitive Guide to Income Tax Planning for Same-Sex Couples


By Robert Lyons  |  March 26, 2015

The Supreme Court’s decision in Windsor expanded the range of tax-planning considerations same-sex couples must navigate as they transition  from a tax system that disregarded their relationship to one that treats and taxes their relationship as a single economic unit.  As a result, the federal income tax ramifications of marriage may surprise some same-sex couples, particularly those who have been in relationships long before marriage was even possible.

Providing insightful guidance, The Definitive Guide to Income Tax Planning for Same-Sex Couples published in the March, 2015 issue of the Journal of Taxation  comprehensively explores these issues and opportunities The article was authored by Robert R. Lyons, tax director in the Nonprofit and Government Group at Marks Paneth LLP, Sean R. Weissbart, a trusts, estates and tax attorney with Morris & McVeigh LLP and Michael T. Meltzer, a portfolio manager at Tocqueville Asset Management LP.

You can download a copy of the article below.

Lost Profits, Business Cycles, and the Reasonable Certainty Standard


March 18, 2015

Courts standards require that damages analysis results be within “reasonable certainty”, and objective rather than speculative, terms more of art than of science.  Given these standards, it is of vital importance to analyze all relevant factors to the extent permitted by the best data available. And it is the responsibility of the damages expert to present an analysis that is both reasonably certain and objective by making every effort to request and/or research the best data available. The expert who is unable to isolate the wrongdoing from exogenous factors may be challenged on the basis that analysis is speculative.

This article, “Lost Profits, Business Cycles, and the Reasonable Certainty Standard”, appeared in the March 18, 2015 issue of QuickRead, published by the National Association of Certified Valuators and Analysts and the Consultants’ Training Institute.

A Call for Guidance: Tip Credit Uncertainty Burdens Vital NYC Restaurant Industry


By Kurt S. Kiess  |  March 11, 2015

Restaurant owners in New York City are left in the difficult position of interpreting the rules on the federal tip credit.  The New York City Department of Finance has not issued clear and definitive guidelines on how to treat the federal tip credit as it relates to New York City taxable income.  As a result, New York City restaurant owners may be paying tax on phantom income – not real income but rather paper income for which there is no cash to offset the tax burden.  The lack of clarity has created inconsistent reporting throughout the city, placing a burden on the New York City restaurant industry – an industry that is vital to the city’s economy.

This article, “A Call for Guidance:  Tip credit uncertainty burdens vital NYC restaurant industry”, was originally published in The Metropolitan Corporate Counsel, April 2015.

Choosing an Experienced Health Care Appraiser


By Monica Kaden  |  March 1, 2015

Thinking of Buying or Selling a Medical Practice? Having an experienced health care appraiser will ensure that the correct information and documents are requested, the right questions are asked, and all of the potential opportunities and risks of the entity and industry are included in the valuation. There are many resources available to health care appraiser. 

Valuation for Your Healthcare Practice


By Monica Kaden  |  March 1, 2015

There are many reasons to value a physician practice, ambulatory surgery center, imaging center or other health care entity (for example, merger, acquisition, sale, litigation, matrimonial dissolution). But such health care businesses are subject to different regulations, technology changes, consolidation and other risk factors than companies in other industries. Thus, the person performing the appraisal should be experienced and knowledgeable in health care valuation.

Advising Physician Clients Regarding the Decision to be Acquired


By Monica Kaden  |  February 1, 2015

Many physicians wonder if they should be part of a larger group, such as a hospital or multi-specialty practice group. It is common for small groups and solo practitioners, in certain specialties, to be approached by large health care organizations to consider selling their practice and becoming an employee.

Doing Business Guide – Switzerland


January 27, 2015

Doing business around the world presents a variety of challenges. Morison International (MI), the association of independent accounting and consulting firms to which Marks Paneth belongs, publishes a series of guides designed to provide an introduction to foreign investors on the various aspects of doing business. The guides are written by the MI member firm in the country that is being profiled. Please click below to access the guide for Switzerland.

Health Care Fraud: Are You Prepared to Absorb the Costs?


January 23, 2015

Health care fraud is a national problem affecting everyone in the US, either directly or indirectly.  It is also a growing criminal enterprise.  In Fiscal Year 2012 alone, various government teams involved in the Health Care Fraud and Abuse (“HCFAC”) Program recovered $4.2 billion from individuals and companies who attempted to defraud federal health programs.

This article outlines the schemes carried out by many segments of the health care system, including hospitals, physician practices and individuals, and discusses the various forensic accounting techniques used to identify fraudulent activity or the heightened risk of fraud. 

Originally published in HealthCare Business NewsJanuary 2015 issue.

Restrictions on Distributions and Impact on DLOM...Who Else WIll Follow?


January 7, 2015

In 2009 Nevada Senate Bill 350 was passed into law. This law authorized the creation of two new business entities: the Restricted LLC and Restricted LP. The bill also allowed for the conversion of existing entities into one of the above types. In this article, Eric J. Barr provides an overview of these two entities, explains the advantages of such restricted pass-through-entities, and whether the IRS will respect the valuation implications of Nevada senate bill 350's statutory restrictions.

This article appeared in the January version of the Quick Read Buzz.  

This article originally appeared under the firm of Fischer, Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

Committing to a Hotel Conversion? Look Before You Leap


By Lawrence Cohen  |  January 7, 2015

Conversions are a hot topic in the hospitality industry – understandably, because the hotel market itself is hot, and converting a property is a quick way to establish or expand your footprint. In many cases, it’s far easier and much less expensive to convert an existing building than it is to build from scratch. Why wouldn’t you want to get a fast start on an opportunity – and possibly a jump on the competition – by committing to a conversion? For all players in hotel property – real estate investors looking to move into hospitality, business owners who want to claim a share of hospitality industry revenues and established hotel owners in need of an expansion path – conversion looks like the smart way to go. Is it? Not always.

Valuing Pass-Through Entities Using the Guideline Public Company Method


January 1, 2015

Pass-through entities (PTEs) comprise approximately 78% of all business entities, yet their valuation is one of the most discussed, controversial and least understood areas of business appraisal practice. Much attention has been focused on valuing PTEs, yet there remains a lack of clarity and consensus. In this article, Barr critiques the manner in which business appraisers have historically applied the Guideline Public Company Method when valuing PTEs and offers a new perspective on how to apply this method.

"Valuing Pass-Through Entities Using the Guideline Public Company Method", By Eric Barr, originally appeared in the January-February, 2015 issue of The Value ExaminerThe Value Examiner is published by NACVA.

This article originally appeared under the firm of Fischer, Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

The Challenge and Responsibility of Protecting Client Data


January 1, 2015

According to an October 2014 Gallup Poll, 69 percent of Americans frequently or occasionally worry about theft of their credit card information.  Other than having a computer or smartphone hacked, the majority of Americans worry about this crime more than any other crime they were asked about.  These worries are driven by the growing wave of hackers that hit major retailers throughout 2014, including Neiman Marcus, Sony, Morgan Stanley, eBay, AOL and others.  As businesses collect more and more information about their customers, and in spite of the concern over theft of this data, few Americans are taking actions to protect themselves.  And businesses, which seem to have ample incentives to protect themselves and have repeatedly been warned about data breaches, routinely ignore such threats for a variety of reasons.

This article, “The Challenge and Responsibility of Protecting Client Data”, was originally published in The Metropolitan Corporate Counsel, January 2015.

Fall 2014 Gotham Commercial Real Estate Results


By William H. Jennings  |  December 10, 2014

The Gotham Commercial Real Estate Monitor from Marks Paneth represents the findings of a survey of commercial real estate professionals in the New York City market. The 124 professionals participating in the research include owners and managers of commercial property, commercial real estate brokers and agents, and attorneys, accountants and other professionals specializing in the sector. The research employed self-administered questionnaires completed online and on paper by respondents. The list of professionals surveyed was compiled by Marks Paneth LLP, the research sponsor, and by Michaels Opinion Research. Interviews were completed during the period of November 6 to December 1, 2014.

Have You Outgrown Your Accountant?


By Laura E. LaForgia  |  November 24, 2014

Have You Outgrown Your Accountant?

When it comes to selecting tax advisors, there is a point in your life where equal focus should shift to the value that an accountant may bring to your situation as opposed to putting sole focus on the price of traditional core services such as preparation. Quite often people ignore their intuition that tells them it is time to move on until either the government has reached out to them in some unpleasant way or someone questions whether there are more tax-efficient ways of doing things. Do not miss an opportunity to have your return reviewed by a qualified professional for planning that may equate to current and future tax savings such as estate planning, small business sales tax issues, Schedule D reporting and “married filing separate” issues.

Implementing the New Tangible Property Regulations


By David R. Gette  |  November 21, 2014

Implementing the New Tangible Property Regulations The IRS released final regulations addressing the treatment of repairs and maintenance expenses for federal income tax purposes as well as regulations governing the treatment of dispositions of tangible assets and the treatment of assets included in general asset accounts (GAAs) that are deemed to be disposed of upon the completion of significant repairs. The changes, however, extend beyond just repairs and address the tax treatment of improvements, repairs and maintenance, materials and supplies, spare parts and acquisition costs as well as a broad range of capitalization and deduction issues associated with tangible property expenditures and potentially impacting businesses in all industries.

This article provides a brief description of the significant areas addressed by the final regulations.

EB-5 Visa Applicants Need Careful Tax Planning


By Alexander X. Wang  |  November 5, 2014

Immigration policy may be a sore point in Washington DC, but one immigration program has been a resounding success.  The EB-5 Visa program, created by the Immigration Act of 1990, provides a fast track to a US green card for foreign investors who promise to create jobs for US workers.  The program has the potential to be a win-win – for investors who want to become US residents, for US workers and for the US economy.

But participation in the program comes with a price – having to manage a complex set of tax issues.  If not handled correctly, the result can be excessive taxation and in some cases compliance problems. 

This article was originally published in The Metropolitan Corporate Counsel, December 2014.

Marks Paneth: Year-End Tax Planning for Businesses and Individuals


By Steven Eliach  |  October 30, 2014

Now that the final quarter of 2014 has begun, many businesses and individuals are turning their attention to year-end tax planning. This year, however, uncertainty over dozens of expired or expiring tax provisions complicates the planning process, particularly for business owners.

NEW ACCOUNTING STANDARD TACKLES DISCLOSURES ABOUT BUSINESS CONTINUITY


By William M. Stocker III  |  October 15, 2014

The Financial Accounting Standards Board (FASB) has updated U.S. Generally Accepted Accounting Principles (GAAP) to eliminate a critical gap in existing standards. The new guidance, found in Accounting Standards Update (ASU) 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, clarifies the disclosures management must make in the organization’s financial statement footnotes when management has substantial doubt about its ability to continue as a “going concern.” The guidance applies to all companies.

The History of Federal Income Tax Rates


October 1, 2014

The History of Federal Income Tax Rates The following chart is not the pattern of an irregular heartbeat, although it may cause cardiac arrhythmias.  It is a chart of the federal tax rate in the maximum statutory income bracket for married filing jointly taxpayers, for the years 1913 through 2013.

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

Valuation Implications of Dividend Income


October 1, 2014

The after-tax earnings resulting from ownership interests in Pass-Through Entities (PTEs) and C corporations are impacted by Federal income tax laws.  Such laws legislate tax rates, income brackets and other matters – all of which have historically been subject to extreme volatility since the inception of the Internal Revenue Code.   

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

The Guideline Transaction Method


September 27, 2014

A The Guideline Transaction Method (GTM) remains a viable option for valuing businesses; the question is whether it is being properly applied. In this article, Eric Barr proposes that despite the recent negative press, the GTM can provide valuable insight.

This article appeared in the September version of the Quick Read Buzz.  

This article originally appeared under the firm of Fischer, Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

GAAP Financial Statements of Pass-Through Entities


September 1, 2014

Business Entities and their Income Tax Differences C corporations incur income tax expense (federal and state) at the business-entity level; a second level of income taxes are incurred at the C corporation owner level when after-tax net income is distributed in the form of dividends.   

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

New York State and City Residency Rules Create Tax Traps for the Unwary


By Steven P. Bryde  |  September 1, 2014

Is your client a resident of New York State for tax purposes?  Under NYS Tax Law Section 605(b), a resident is defined as someone who maintains a “permanent place of abode” and spends more than 183 days of the tax year in New York.  But a recent case has redefined “permanent place of abode” for the purposes of determining statutory residency – and taxpayers and their counsel need to be careful:  City and state residency rules remain complex and continue to lay many tax traps for the unwary.

This article, “New York State and City Residency Rules Create Tax Traps for the Unwary”, was originally published in The Metropolitan Corporate CounselSeptember 2014.

A Conversation With a Prospective Business Valuation Client


September 1, 2014

This morning I was speaking with a prospective client that was interested in knowing the value of her business.  The subject company was an owner-managed, 100%-owned specialty retail business.  The owner was tired of the 7-day per week grind, depressed about a looming one hundred percent rent increase and knew that the company was underperforming. 

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

Choosing the Right Medical Practice Valuation Consultant


By Monica Kaden  |  August 1, 2014

The physician who obtains an independent valuation gains a better understanding of the practice’s value.  An independently prepared valuation prepared by a qualified, experienced accredited or certified business appraiser with medical practice experience will help to insure that you make an informed and proper decision.  In addition, the medical practice valuation consultant will often be available to offer advice regarding the parameters for setting an asking price, deal terms and restrictive covenants.

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

Five Problems to be Aware of When Performing Analytical Procedures


August 1, 2014

A key assumption in performing analytical procedures is the belief that the information being examined (current year data) can be benchmarked against measures (ratios, percentages, etc.) that are based on properly formed expectations.  Such measures are often derived from company prior years’ data, industry results, etc.

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

The Value of Analytical Review Procedures


August 1, 2014

Analytical procedures are an essential, efficient and effective tool used by accountants to understand a company’s financial position, results of operations, cash flows and/or their changes from year-to-year.  In fact, accountants are required to perform analytical procedures for audits performed in conformity with Generally Accepted Auditing Standards in the United States (“GAAS”) and in connection with reviews of financial statements performed in conformity with Statements on Standards of Accounting and Review Services (“SSARS”).

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

Summer 2014 Gotham Commercial Real Estate Results


By William H. Jennings  |  July 28, 2014

The Gotham Commercial Real Estate Monitor from Marks Paneth represents the findings of a survey of 100 commercial real estate professionals in the New York City market. Professionals participating in the research include owners and managers of commercial property, commercial real estate brokers and agents and attorneys and accountants specializing in the sector. The inaugural survey was completed in January 2013, the second in June 2013, the third in December 2013 and the fourth in May 2014.  The research employed self-administered questionnaires completed online by respondents. The list of professionals surveyed was compiled by Marks Paneth LLP, the research sponsor, and by Michaels Opinion Research. Interviews were completed during the period of June 17 through July 11, 2014.

Long-Awaited FASB Standard Revamps Revenue Recognition Model


By William M. Stocker III  |  July 24, 2014

The Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) have issued new joint guidance that addresses one of the most important measures investors use when assessing a company’s performance and prospects — revenue. By extension this also affects net income. FASB’s version, communicated in ASU No. 2014-09, Revenue from Contracts with Customers, standardizes the revenue recognition process for customer contracts across different industries and geographic locations. It also requires more comprehensive footnote disclosures for all types of public and, especially, private companies. This article provides an overview of the converged guidance, along with a brief look at the potential impact on certain industries.

Selling Your Medical Practice?


By Monica Kaden  |  July 1, 2014

It seems that in recent years, more physician practices are bringing in partners, combining with larger practices, or joining hospitals.  There are a number of demographic and economic factors contributing to this urge to grow and merge.

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

Valuing Your Medical Practice


By Monica Kaden  |  July 1, 2014

When considering the sale or purchase of all or certain assets of a physician practice, a valuation is often warranted.  Sellers need to be able to realistically assess the value of their practice in order to monetize its full value, while buyers may need a valuation for both business and regulatory reasons.

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

 

When to Decline a Business Valuation Request


July 1, 2014

I am often asked by potential clients to determine the value of an ownership interest in a business. The prospect offers limited context, are coy about the purpose of the valuation, and an incomplete description of the business ownership interest being valued is provided. 

This article was published by Fischer Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

Presenting Compensation Estimates to a Jury


July 1, 2014

Presenting a damages estimate to a jury is an art that must be backed up by understandable science.  The art is in the combination of effective questions by counsel (whether retaining or opposing) and a presentation by the expert that gets the jury’s attention. 

This article, “Presenting Compensation Estimates to a Jury”, was originally published in The Metropolitan Corporate Counsel, July-August 2014.

IRS Announces Major Changes Regarding Offshore Voluntary Disclosures


By Paul Bercovici  |  June 30, 2014

On June 18, 2014, the IRS announced significant changes to the 2012 Streamlined Program and to the 2012 Offshore Voluntary Disclosure Program. The changes to the terms of the 2012 Streamlined Program and the 2012 Offshore Voluntary Disclosure Program are designed to encourage more taxpayers who have failed to report income from offshore assets to voluntarily come forward to report the existence of such offshore assets and the income derived therefrom. According to the IRS, approximately 45,000 taxpayers have voluntarily disclosed the existence of such accounts under the terms of the various iterations of the offshore voluntary disclosure program that was first announced in 2009, and that such disclosures have resulted in the collection of approximately $6.5 billion in taxes, interest and penalties.

DEPRECIATION RECAPTURE: WHAT DOES IT MEAN TO YOU?


June 16, 2014

Over the past decade, business owners have been reaping generous tax benefits by writing off their new equipment purchases, including certain qualified leasehold improvements. What they may fail to realize is that some or all of the previously-derived tax benefits could be negated when the affected assets are disposed of. What does depreciation recapture mean to you?  (Note:  Due to some expired provisions and uncertain future tax developments, this article has been updated since its original publication in May 2013.)

Effect of 2013 NY Non-Profit Revitalization Act on Incorporating NY-Based Charities in Delaware


By Robert Lyons  |  June 1, 2014

In December 2013, Governor Cuomo signed into law the New York Non-Profit Revitalization Act (the “Act”), which addressed, for the first time in over forty years, many of the inefficiencies in New York laws regulating not-for-profit organizations. Among the changes, the Act eliminates the requirement that many organizations with an educational purpose receive Education Department consent before they can incorporate. When this law takes effect on July 1, 2014, these organizations will be able to complete the New York incorporation process without the delays previously caused by the Education Department. This article addresses whether New York-based organizations should still continue to incorporate in Delaware.

This article by Robert Lyons, Tax Director, Marks Paneth LLP, and Sean R. Weissbart, an attorney with Morris & McVeigh LLP, is reprinted with permission from: Trusts and Estates Law Section Newsletter, Summer 2014, Vol. 47, No. 2, published by the New York State Bar Association, One Elk Street, Albany, NY 12207.

Spring 2014 Gotham Commercial Real Estate Results


By William H. Jennings  |  May 21, 2014

The Gotham Commercial Real Estate Monitor from Marks Paneth represents the findings of a survey of nearly 100 commercial real estate professionals in the New York City market. Professionals participating in the research include owners and managers of commercial property, commercial real estate brokers and agents and attorneys and accountants specializing in the sector. The inaugural survey was completed in January 2013, the second in June 2013 and the third in December 2013.  The research employed self-administered questionnaires completed online by respondents. The list of professionals surveyed was compiled by Marks Paneth LLP, the research sponsor, and by Michaels Opinion Research. Interviews were completed during the period of March 3rd to May 7th, 2014.

New York State Makes Significant Changes to Estate and Trust Tax Laws


By Eric A. Itzkowitz  |  May 13, 2014

On March 31, 2014, New York State Governor Andrew Cuomo signed into law the 2014-15 budget legislation (the Executive Budget), which made a number of significant changes to New York's estate and trust tax laws. This article discusses the highlights and the impact of some of these changes.

Pigs Get Slaughtered: Do’s and Don’ts for Buyers and Sellers in a Red Hot Hotel Real Estate Market


By Lawrence Cohen  |  May 2, 2014

Today’s hotel transaction market is definitely hot – after several slow years, the pace has accelerated sharply – and it’s exciting for both buyers and sellers.  Should you be a buyer . . . a seller . . . or both?  Should you act now, or wait?  The answer depends on your situation – and also on your expectations.  How realistic are they?  A hot market can be a good time to make money.  It can also burn you.  As with any other market, you need to understand the market dynamics and develop a strategy.  Above all, don’t get greedy.  What’s said of the stock market can also be said of buying and selling in the hospitality industry: Bulls make money and bears make money.  But pigs get slaughtered.

New York State Nursing Home Assessment Credit


By Laura E. LaForgia  |  May 1, 2014

The nursing home assessment credit is a commonly overlooked New York State income tax credit that could provide some real money to those in need. The credit is a refund on the portion of the assessment which a New York nursing home is required to pay to the State and which is then passed through on the nursing home resident’s bill. It is equal to up to 6 percent of the base-rate portion of the assessment and can be claimed by anyone who pays the assessment, whether that person is the nursing home resident or is a relative or other individual responsible for paying the charges.

This article originally appeared in the May 2014 issue of the TaxStringer. It is reprinted with permission from the New York State Society of Certified Public Accountants. It can also be accessed by clicking here.

Succession Planning: To Avoid Landmines, Seek Advice Outside the Family


By William H. Jennings  |  May 1, 2014

Succession Planning: To Avoid Landmines, Seek Advice Outside the Family

Succession planning is a difficult matter in any business. In a family-owned business, the difficulty is, if anything, much greater. Family politics and interpersonal relationships are always challenging – all the more so when the future of a business is at stake. Most family businesses are dominated by one or two strong leaders – often a founder, always an authority figure – who leave succession planning until the last possible moment, sometimes settling on a successor who doesn’t have the makings of a good future leader. The results can be disastrous. Picking the wrong successor can destroy the business. It can be equally bad to pick no successor at all.

This article was originally published in ABO Developments, Volume 22, Number 2, Spring 2014.

Consequences of Having a Poor Anti-Money Laundering Program


April 25, 2014

A surge in recent investigations suggests that financial and non-financial institutions are increasingly in violation of Bank Secrecy Act (BSA)/Anti-Money Laundering (AML) policies and procedures as well as regulatory requirements.  IRS statistics illustrate that the number of money laundering investigations and Bank Secrecy Act investigations has increased from 1,597 to 1,663 and 738 to 923 from 2010 to 2012, respectively. Many different kinds of businesses are at risk for money laundering and for penalties if AML programs do not meet regulatory standards – all the more reason to ensure that adequate anti-money laundering programs are in place.

Health Care Fraud and Abuse


April 25, 2014

Health care fraud is a national problem affecting everyone in the US, either directly or indirectly, and is carried out by many segments of the health care system, including companies or individuals, using various methods.  It is also a growing criminal enterprise:  In Fiscal Year 2012 alone, various government teams involved in the Health Care Fraud and Abuse (“HCFAC”) Program recovered $4.2 billion dollars from individuals and companies who attempted to defraud federal health programs.  And the Justice Department opened 1,131 new criminal health care fraud investigations involving 2,148 potential defendants.  For the health care provider or the insurer or the companies offering health care to their employees, detecting such schemes can involve various forensic accounting techniques.

As The New York Commercial Real Estate Boom Continues, Help Investors Avoid These Common Mistakes


By Abe Schlisselfeld  |  April 16, 2014

For commercial real estate investors, the boom mentality continues, and those seeking opportunities continue to flock to New York City. That can spell trouble if they are not prepared for the consequences real estate investment can bring, including results that are hard to foresee.

See Abe's article originally published in The Metropolitan Corporate Counsel April 2014.

Despite Higher Tax Rates, 'S' Corporations Retain Advantages Over 'C' Corporations


By John N. Evans  |  March 25, 2014

Owners of small, growing businesses face a perennial question: Should the business function as an S corporation, or should the entity revoke its election under Subchapter S of the Internal Revenue Code? Individual tax rates are now generally higher than corporate rates – but that doesn’t mean that it’s an advantage to realize income as a corporation. Tax rates are not the whole story.

This article, “Despite Higher Tax Rates, ‘S’ Corporations Retain Advantages Over ‘C’ Corporations”, by John Evans and Maria Castilla, was originally published in Practical Tax Strategies by Thomson Reuters, December 2013.

Trends Shaping NY Real Estate Industry, According to Latest Gotham Commercial Real Estate Monitor


By William H. Jennings  |  March 21, 2014

Uncertainty about the de Blasio administration and a high commercial vacancy rate were among the issues that worried New York real estate professionals, according to the 2013 editions of the Gotham Commercial Real Estate Monitor, an ongoing survey conducted by my firm, Marks Paneth.

This article, “Uncertainty about de Blasio, a Soft Commercial market and Other Trends Shaping New York’s Real Estate Industry, According to Latest Gotham Commercial Real Estate Monitor”, was originally published in The New York Real Estate Journal, February 25, 2014.

Managing Intellectual Property In A Knowledge Economy


February 21, 2014

We frequently see new products, brands and creative designs that are the result of continuous innovation and creativity. Many of these innovations are driven by small businesses that possess innovative and creative capacity, but may lack awareness of the protection that our intellectual property system can provide. Left unprotected, an invention or creation may be lost to competitors who are in a better position to commercialize the product or service, leaving the original inventor or creator without financial benefit or reward. Therefore, securing adequate protection of a company’s intellectual property may be a crucial step in deterring potential infringement and in turning ideas into business assets with a real market value.

This article was originally published in The Metropolitan Corporate Counsel, February 2014.

IRS issues final regulations on 3.8% net investment income tax and 0.9% additional Medicare Tax


By Robert J. Hughes  |  January 29, 2014

The IRS has issued final regulations addressing two new taxes under the Affordable Care Act that took effect Jan. 1, 2013: the 3.8% net investment income tax (NIIT, also known as the Medicare contribution tax), and the 0.9% additional Medicare tax. This article reviews these taxes and details how the final regs. differ from the proposed regs. that were issued last year.

Increased Regulation Drives Demand for Forensic Accounting Services


December 23, 2013

Major financial reforms and volatility following notorious frauds and scandals have led to outsized growth in the demand for forensic accounting services.  During the past decade or so, Congress reacted to the WorldCom Inc. and Enron bankruptcies resulting from fraudulent financial reporting by passing the Sarbanes-Oxley Act of 2002, adding regulation targeting internal controls over financial reporting, among other requirements.  The more recent financial crisis that is blamed for the Great Recession led Congress to pass the Dodd-Frank Wall Street Reform and Consumer Protection Act, requiring greater financial transparency of public companies.  This increased regulation has contributed to strong revenue growth for forensic accounting services providers. 

This article was originally published in The Metropolitan Corporate Counsel, December 2013.

Fall 2013 Gotham Commercial Real Estate Results


By William H. Jennings  |  December 17, 2013

The Gotham Commercial Real Estate Monitor from Marks Paneth represents the findings of a survey of over 100 top commercial real estate professionals in the New York City market. Professionals participating in the research include owners and managers of commercial property, commercial real estate brokers and agents, and attorneys and accountants specializing in the sector. The inaugural survey was completed in January 2013 and the second in June 2013. The research employed self-administered questionnaires completed online by respondents.  The list of professionals surveyed was compiled by Marks Paneth, the research sponsor.  In addition, a link to the survey site was included in an online trade publication.  Interviews were completed during the period of November 7-30, 2013.

Cloud Computing Transactions are the New "Wild West" Sales Tax Frontier


By Steven P. Bryde  |  September 13, 2013

New York imposes a sales tax on basic data access known as a taxable information service. In addition, the state has begun subjecting software-as-a-service (“SaaS”) and cloud computing to sales/use tax if the buyer is located in New York. It is one of a limited number of jurisdictions at the leading edge of aggressiveness in defining the taxability of online and cloud-computing transactions. But such aggressiveness is a growing trend. And for businesses, this tax posture creates a new set of obligations.

This article, “Cloud Computing Transactions are the New ‘Wild West’ Sales Tax Frontier as Jurisdictions Push Aggressively to Increase Online Revenue”, was originally published in The Metropolitan Corporate Counsel, September 2013.

Your Grant Might Be a Wolf in Sheep’s Clothing


By William H. Jennings  |  September 13, 2013

Due to a loophole in the Internal Revenue Code, grants to partnerships – unlike grants to corporations – are taxable income.  Worse, they are fully taxable in the year received, and unfortunately, there is no after-the-fact remedy.  Once the partnership receives the grant, the tax consequences are automatic.  Only by advance planning can it be structured properly to avoid this potential tax time bomb. An IRS loophole can lead to devastating tax consequences when partnerships receive New York State energy grants.

This article, “Your Grant Might Be a Wolf in Sheep’s Clothing:  An IRS Loophole Can Lead to Devastating Tax Consequences When Partnerships Receive New York State Energy Grants”, was originally published in the New York Real Estate Journal, August 27, 2013.

Before The Measurement Of Lost Profits: Investigating To “Isolate” The Source Of A Decline


July 22, 2013

Evaluating the reasons why a business may have experienced a decline requires that factors such as general economic conditions, shocks to a specific industry or locale, changes in relationships with suppliers or in the demand for goods and/or services, etc. be investigated and analyzed. A more telling story about the historical financial performance of a business is revealed when put into the context of its industry, the local economy and the market in which it operates.

This article, 'Before The Measurement of Lost Profits: Investigating the Business and the Market to "Isolate” the Source of a Decline' was originally published in The Metropolitan Corporate Counsel, July-August 2013.

Spring 2013 Gotham Commercial Real Estate Results


By William H. Jennings  |  July 22, 2013

The Gotham Commercial Real Estate Monitor from Marks Paneth LLP represents the findings of a survey of over 100 top commercial real estate professionals in the New York City market. They included owners and managers of commercial property, commercial real estate brokers and agents, and attorneys and accountants specializing in this sector. The inaugural survey was completed in January 2013. The research employed self-administered questionnaires completed online by respondents. The list of professionals surveyed was compiled by Marks Paneth LLP, the research sponsor. In addition, a link to the survey site was included in an online trade publication. Interviews were completed during the period of May 6 to July 1, 2013.

The Importance Of Business Continuity Planning: Dealing With Inevitable Risk


By Eric A. Kreuter  |  July 18, 2013

Increased awareness of the need to prepare for risk and risk of disaster does not always translate into action. One reason is because businesses feel prior events are not likely to recur or effects would not be overly severe. Business managers should plan for the worst and commit to the development of a responsible strategic plan to minimize the impact of harmful events, even unlikely ones.

This article was originally published in The Metropolitan Corporate Counsel, June 2013.

Nonprofit Revitalization Is Here. Is Your Organization Ready?


By Michael McNee  |  July 16, 2013

New York State Attorney General Eric T. Schneiderman’s initiative called the Nonprofit Revitalization Act (the Act) represents the most sweeping changes in New York State’s nonprofit law in 40 years. The law is a balance between less red tape and more oversight by the Attorney General. It considerably increases liability of Board members and scrutiny of Board actions. With the new Act, it’s time for a routine checkup of your organization’s governance policies.

The Impact of State and Local Income Taxes on Pass-Through Entity Valuations


July 1, 2013

Parsippany, NJ – Eric J. Barr, Member, Fischer Barr & Wissinger LLC was published in the July/August 2013 issue of The Value Examiner. His article is entitled, “The Impact of State & Local Income Taxes on Pass-Through Entity Valuations,” and discusses and analyzes individual state income tax rates and its impact on business valuation.

“The Impact of State and Local Income Taxes on Pass Through Entity Valuations", by  Eric Barr, originally appeared in the July-August, 2013 issue of The Value Examiner. The Value Examiner is published by NACVA.

This article originally appeared under the firm of Fischer, Barr & Wissinger LLC (FBW), now part of Marks Paneth LLP.

Identity Theft: The Tax and Financial Implications


By Laura E. LaForgia  |  June 11, 2013

By now, everyone is familiar with the phrase “identity theft” and probably knows someone who has been hurt in some way from it. Identity theft occurs when someone uses your personally identifying information, such as your name, Social Security number, or credit card number, without your permission to commit fraud or other crimes.  This article outlines the areas where people are vulnerable, the techniques thieves can use to steal identities and the tips people should be aware of to protect themselves.

This article originally appeared in Tax Stringer, a publication of the New York State Society of CPAs (NYSSCPA).  It appeared in the June 2013 issue.

Revenue Maximization for Landlords: Monetizing Existing Leases


May 20, 2013

In these challenging economic times, we realize that even seasoned property owners are reviewing their portfolios in order to find ways to maximize revenue. We offer a team of experienced, knowledgeable professionals who are highly skilled in performing lease audits and providing lease consulting services with the goal of recovering “hidden” revenue. These professionals work with property owners to perform audits of leases that provide for contingent rental payments including, but not limited to, percentage rent, participation payments, subletting profits and operating escalations.

A Key to Managing Your Hotel Through Troubled Times: Keeping Your Lender Happy


By Lawrence Cohen  |  May 17, 2013

You bought your hotel with the highest expectations. And why not? All owners do. But the best-laid plans of hotel owners can go astray. Maintaining control of a distressed hotel can be a challenge. To meet it, focus on your contingency plan and have the right team in place.

Avoid Becoming "The Dog That Caught The Car" When You Acquire A Distressed Hotel


By Lawrence Cohen  |  April 3, 2013

A distressed hotel isn’t an acquisition you can make and then forget. It won’t run on its own. It requires daily, hands-on, operational management – a specialized, knowledgeable kind of management sensitive to the particular realities of a hotel in turnaround, a management that is able to work with the hotel’s people and its physical plant and set the property back on the road to success. This article reviews how an effective turnaround plan will anticipate, and help you avoid a worst-case outcome.

Exemption on Gain of Small Business Stock


February 15, 2013

In 1993, the Qualified Small Business Stock (QSB) provision was enacted granting a 50% exemption on the gain on sale of shares of a qualified small business. The provision, known as section 1202, was largely ignored, because, for various reasons, the benefits were not worth the effort. Fortunately, the American Taxpayer Relief Act of 2012, signed into law on January 2, 2013 made the 100% exemption retroactive to January 2012 and effective until January 1, 2014.

Reaping the Full Benefits of Intellectual Property


By Glenn D. Sacks  |  February 5, 2013

Intellectual Property (IP) accounts for nearly $6 trillion value added, roughly equal to 40 percent of US GDP. Moreover, IP is critical to our balance of trade, as goods from IP-intensive industries account for 60 percent of all U.S. exports. Given the jobs, exports and wage premiums those businesses support, many will say we must protect our IP from infringers in developing nations and elsewhere. But we must also protect our IP from ourselves.

This article was originally published in The Metropolitan Corporate Counsel, February 2013.

Winter 2013 Gotham Commercial Real Estate Results


By William H. Jennings  |  January 23, 2013

This summary presents the key findings of a survey of over 100 top commercial real estate professionals in the New York City market. A dual-mode methodology was employed of self-administered questionnaires completed either online or on paper by respondents. The list of professionals surveyed was compiled by Marks Paneth LLP, the research sponsor. Interviews were completed during the period of November 16, 2012 to January 4, 2013.

Marks Paneth Tax Planning Guide 2012/2013


December 28, 2012

To facilitate ongoing access to the latest tax rules and regulations,Marks Paneth offeres an online tax guide that is updated on an ongoing basis.

U.S. And China Look To Each Other For Opportunity


December 24, 2012

U.S. investors have been enthusiastically investing in Chinese businesses listing on U.S. exchanges in order to achieve returns that were believed to exceed those available in lower growth Western economies, including the U.S. Ironically, Chinese businesses have been buying U.S. businesses and assets in record amounts because of the opportunity for growth the U.S. offers. Can these seemingly disparate strategies both work?

This article was originally published in The Metropolitan Corporate Counsel, December 2012.

At the Crossroads of Health Care Reform, Corporate Restructuring and Employment Litigation


December 20, 2012

The Patient Protection and Affordable Care Act (PPACA), recently upheld by the US Supreme Court, brings into the marketplace many significant changes affecting individuals and organizations, both of which will be required to comply with the changes established by this new legislation. The most significant changes established by the PPACA will become effective as of January 2014, specifically, the directives referred to as the Individual Mandate and the Employer Mandate.

This article was originally published in The Metropolitan Corporate Counsel, December 2012.

US and China Ensnared in Regulatory Cold War


December 17, 2012

The regulatory stalemate has accelerated the pace at which Chinese companies are “going dark” and withdrawing from US exchanges. Many of these companies are seeking listing status on Hong Kong’s Hang Seng stock market. Moreover, the impasse diminishes the competitiveness of the US markets as other companies seek to raise capital elsewhere.

Cost Segregation - Wait a Minute... Exercise Caution and Research all Scenarios


By William H. Jennings  |  November 5, 2012

Cost segregation is basically an engineering study that breaks large assets into components with shorter lives to attain an accelerated depreciation benefit. A cost segregation study dissects the building into components with shorter depreciable lives, therefore throwing off larger depreciation deductions in earlier years.

This article was originally published in New York Real Estate Journal, August-September 2012.

To Succeed with Your New Restaurant, Take a Businesslike Approach


By Lawrence Cohen  |  November 1, 2012

The restaurant business can be a wonderful, rewarding pursuit. It can also be a trap. The industry is one of the most challenging in existence. It demands a mix of creativity, inspiration and hard business sense. And like any industry, it imposes its own very specific, very demanding business conditions. As in any other field, experience counts and systematic planning is rewarded.

Employee Benefits: Not All Are Created Equal


July 31, 2012

In every instance of employment, a potentially significant difference exists between an employee’s take-home pay and the actual cost of employment to the employer. This difference may be greatly increased in the presence of employer-provided ‘fringe benefits’ – non-wage compensation provided to employees in addition to normal wages or salaries. Fringe benefits represent an additional cost to the employer, above and beyond the actual wages, salaries, bonuses and other compensation directly paid to the employee. They may also impose a cost on the employee, reducing the net amount that an employee may receive at the end of each pay period.

See Josefina's article originally published in The Metropolitan Corporate Counsel July/August 2012.

Watchdogs for Your New Hotel: Why a Hotel Owner Needs a Friend (or Friends) on Top of Managers and F


By Lawrence Cohen  |  May 15, 2012

New owners often come into the hospitality industry from a background in real estate. Buying a hotel seems like a logical next step for those who own other forms of commercial property, such as office buildings and retail locations, and who are looking to expand their portfolios. But owning a hotel isn't like owning other types of property, even those that, like hotels, involve third-party management. Hotel ownership carries its own terms and conditions, its own rules of engagement, and its own particular dangers that can trap – and cost – the unwary.

A Major Challenge for Hotel Owners: Managing Employees and Labor Issues


By Lawrence Cohen  |  May 15, 2012

The largest ongoing expense for a hotel is, of course, payroll. Whether your hotel is union, non-union, five-star luxury or limited service, managing your employees and their costs are one of the biggest challenges a hotel owner or operator can face.

Playing Tax Defense + Offense When Starting a New Business


April 30, 2012

Today many entrepreneurs want to try their hand at developing a new product or service that will solve a problem, fix a pain point or change the world. It is instinctive to focus one's attention on the technology and the product market fit. Attorneys, however will frequently advise the entrepreneur to set up a legal entity right away in order to minimize legal risks, and to establish agreements among the founding team to reduce friction and misunderstandings that can develop as the business evolves. Even if a product has not yet been developed or revenue has not yet been generated, once a legal entity is established or once an agreement is reached by individuals to work together to share profits and losses, tax matters must be addressed as inevitably tax consequences result. One of the key indications that an entrepreneur is able to transition from the creation of a product to the creation of a successful business is his/her ability to manage corporate responsibilities.

Facing Up to the State and Local Tax Headache The Internet Era Serves Up to the Hospitality Industry


By Steven P. Bryde  |  April 30, 2012

The hotel you operate sold a block of rooms through Expedia. Expedia charged consumers $100 per night. You received a discounted rate of $80 per room per night from Expedia – discounted because Expedia went to the effort of advertising and booking the rooms for you. In addition, Expedia paid you $8 per room per night to cover the 10 percent occupancy tax – based on the discounted rate of $80 per night. Expedia keeps $22 per room per night for itself, as its fee. Has Expedia done the right thing? Or has it underpaid you for the occupancy tax?

Owner-Manager Fraud: Getting Worse...How to Detect It


April 2, 2012

Statistics show that private businesses -- often owner-managed -- typically lack internal controls mandated by federal laws and the human and managerial resources to focus on possible employee crimes such as embezzlement, corruption and trade secret theft. But there's a bigger problem at privately-held companies: Owners themselves committing fraud.

Reproduced with permission of the copyright owner © White-Collar Crime Fighter, April 2012.

Property Owners Need to Seize Tax Opportunities Before Provisions Expire


By Abe Schlisselfeld  |  April 1, 2012

New York City commercial real estate is enjoying a significant comeback. Commercial properties were less affected by the economic downturn than residential property or business ventures. Now, as the economy improves and as interest rates remain dramatically low, lenders have regained confidence in the sector. All of that moves commercial real estate farther along the road to recovery.

See Abe's article originally published in The Metropolitan Corporate Counsel April 2012.

Exchanges Need to Take Initiative to End New Scam: Fraudulent Listings of Chinese Companies on U.S.


April 1, 2012

The problem with reverse mergers is that they have long been a favorite technique of financial fraudsters - and they are now giving many Chinese companies easy entry to US markets. Some of those Chinese companies, however, do not actually exist and those that do often publish false, misleading or incomplete financials.

Reprinted from the April 2012 issue of the Financial Fraud Law Report.

Compensatory Damages in Lost Wages Claims: The Relevance of Unemployment Trends Adjustments


March 27, 2012

When claims of lost compensation arise, the role of the economic expert is to provide a reasonable estimate of the potential damages. The economic damages model designed should be tailored to the claim and its jurisdiction, but should also incorporate the effect of the economic environment and the effect of potential unemployment on the estimation of expected compensation. A simplified hypothetical example highlights the impact of the probability of unemployment on the lost compensation estimate.

See Josefina's article originally published in Employee Relations Law Journal, March 2012.

Bad Benchmarking in Damages Determinations: Consulting Experts Can Help


By Donald M. May  |  March 6, 2012

In the complex world of commercial litigation and damages calculation, even experts can make critical mistakes that put litigation at risk. In particular, experts sometimes use the wrong benchmarks to calculate damages, making assumptions that don't stand up under legal scrutiny and causing their testimony to be excluded on Daubert challenge.

This article was originally published in Bullseye: A Legal Blog on Expert Topics, March 6, 2012.

2012 Westchester Real Estate Market: Expect a Slight Improvement in the Year Ahead


February 20, 2012

The rollercoaster conditions of the Westchester real estate market will continue in 2012, and barring any significant negative developments such as a repeat of European debt crises, in general, we at Marks Paneth expect a slight improvement in the year ahead.

This article was originally published in New York Real Estate Journal February 14, 2012.

Surviving Daubert: Bad Benchmarking Puts Cases at Risk


By Donald M. May  |  February 16, 2012

Expert Witnesses Misstep by Using the Wrong Benchmarks to Calculate Damages

To the challenges of managing complex litigation, add one more: Expert witnesses often make critical mistakes that put litigation at risk.

Specifically, experts often use the wrong benchmarks to calculate damages for lost profits, lost enterprise value, or shareholder damages, making assumptions that don't stand up to scrutiny, and causing their testimony to be excluded on Daubert challenge.

Benchmarking: A Challenging Task for Expert Witnesses


By Donald M. May  |  December 2, 2011

In civil litigation, few questions are as important as where to set damages. Beyond the basic issue of who prevails, litigants, juries and courts struggle with the issue of how loss should be compensated. What is an accurate estimation of the impact on the plaintiff of the event under dispute?

Year-End 2011 Tax Planning: Opportunities and Challenges


November 29, 2011

As the end of the year approaches, it's always a good idea to review your tax situation and assess whether there are any actions you should take by Dec. 31 to reduce your tax bill. This year is no exception, and many opportunities are available that may significantly reduce your taxes. However, 2011 also presents some unique challenges.

Small Businesses Warned to Beware of Employee Fraud


November 18, 2011

Small businesses and nonprofit organizations often overlook the warning signs of employee fraud, especially by senior managers, according to accounting firm Marks Paneth.

This article, written by Michael Cohn appeared in Accounting Today on November 18, 2011.

Damages in Labor and Employment Disputes: Designing the Economic Damages Model and the Role of the E


October 26, 2011

Labor and employment disputes may result from allegations of employment discrimination, and from work-related injury, wrongful death incidents, or medical malpractice. In many cases, such disputes lead to claims of lost earnings and other compensation, and may also include a claim of damages to family members. Differences in the nature of the claim, the basis of ‘but-for’ and post-incident compensation, potential inclusion of damages to family members, along with jurisdiction-specific rules are just some of the factors that render the estimation of damages in these matters complex. The general economic environment makes the task more complicated still. A fitting economic model, one that accounts for relevant factors and is structured as allowed by the specific jurisdiction, is at the heart of the proper estimation of damages. The economic expert, serving as part of the litigation team, can and should play a central role in developing it.

See Josefina's article originally published in The Metropolitan Corporate Counsel November 2011.

Compensatory Damages in Lost Wages Claims: The Case for Employment Trends Adjustments


September 2, 2011

Claims for lost wages and other forms of compensation are at the heart of wrongful dismissal, workplace injury, and workplace discrimination lawsuits.  But the economic model designed for the estimation of damages may be incomplete if it does not adjust for unemployment trends and the probability of continued "but-for" employment, according to an economics expert. There is never a 100% guarantee of continued employment, and the probability of economic fluctuations and recessions, and other factors affecting long-term employment, should always be considered when estimating lost wages.

To read the rest of this article, please click the download link below.

Tax Tips for Start-Ups: US Sales and Employment Withholding Obligations


By Alyssa Forslund  |  September 1, 2011

Tax ranks high among the many structural issues a start-up needs to consider. Even tax responsibilities that seem straightforward – such as collecting sales tax and setting up withholding for employees – can be challenging and need to be approached carefully.

See Alyssa's article originally published in The Metropolitan Corporate Counsel, September 2011.

Endowment Accounting under FASB Topic 958-205 (Formerly FSP 117-1) and NYPMIFA


By Michael McNee  |  August 14, 2011

A PREAMBLE NYPMIFA calls for: Prudence, donor notification and investment management. As the Beatles said, "Dear Prudence, won't you come out and play?" Do not mistake NYPMIFA and FASB 958-205 for being the same. Legal issues and accounting issues do not always agree. In legal terms, as it relates to endowments, you can "borrow", but you can't "steal". In accounting terms, you can't "hide".

EXAMPLES OF ENDOWMENT RESTRICTIONS

  • True endowment with no use restriction-My contribution should be kept intact and the income is to be used for the organization.
  • True endowment with use restriction-same as above except the income from the contribution is to be used for supplies for the organization.
  • Endowment for a term of years-keep the gift intact for 20 years, during which time the income is for supplies and after 20 years, the gift has no restrictions.

Should You Consider an Interest Charge Domestic International Sales Corporation (IC-DISC)?


July 12, 2011

Setting up and operating an interest charge domestic international sales corporation (IC-DISC) can reduce the tax rate on qualifying export sales by up to 20 percentage points. An IC-DISC's tax-savings power is derived from the current 15% tax rate on qualified dividends. Businesses that could benefit include companies that earn significant income from exporting goods, including software, or from engineering or architectural services on foreign construction projects. If your company falls into one of these categories, you should consider creating an IC-DISC sooner rather than later because, without additional Congressional action, this tax rate applies only through 2012.

Factors to Consider When Hiring an Expert


By Donald M. May  |  May 26, 2011

Expert guidance and testimony play a central role in the late stages of legal proceedings, when experts provide reports and serve as witnesses concerning the substance of the case and the appropriate damages. In the hope of minimizing fees, many insurers often wait until the late stages to engage them.

See Don May's article originally published in Claims Journal May 26, 2011.

For Technology Start-ups, A Road Map is Essential and It Should Cover Every Stage of the Journey


March 10, 2011

 |  Steven Eliach  |  March 10, 2011

A technology start-up is a complex entity, even if its initial scale is small.

Careful planning is needed to arrive at a roadmap – not just for product development, marketing and sales, but also for a business model that ultimately will result in a great product market fit. The ideal roadmap is one that addresses the financial needs of both the entrepreneur and the business.

See Steven and Jeanne's article originally published in The Metropolitan Corporate Counsel March 2011.

Empowering Intellectual Property


By Glenn D. Sacks  |  February 1, 2011

Intellectual property ("IP") is an untapped frontier in value creation. The problem is the basic tendency regarding IP, including patents, as the single, proprietary, closely guarded holding of the patent developer. That tendency is fundamental to the patent system – indeed, to all property rights, because at the root, we are talking about patent ownership.

See Steven and Glenn's article originally published in The Metropolitan Corporate Counsel, February 2011.

International Tax Planning - An Essential Step For Global Start-Ups


January 30, 2011

The same turbulence that has challenged the global economy has also created pockets of opportunity around the world. Simultaneously, entrepreneurship is at a high, as recent college graduates create their own opportunities, as layoffs at senior levels transform executives into entrepreneurs.

See Jeanne's article originally published in the January-February 2011 issue of Corporate Taxation, © 2011 Thomson Reuters/RIA. All rights reserved.

The Road Map of a Start-Up and the Entrepreneur


January 10, 2011

 |  Steven Eliach  |  January 10, 2011

A start-up venture is not just about product development, marketing and sales. It is a constant search for a business model that ultimately will result in a great product market fit. During the course of this endeavor, the financial needs of both the entrepreneur and the business can be complex. The financial needs of the entrepreneur and the business model run on two parallel paths and can change substantially over the life cycle of the venture.

Where in The World is My Business? Taxable Presence and the Global Start-up


December 10, 2010

You are probably comfortable – even energized – by the idea that your business can easily reach beyond geographic boundaries. Thanks to the Internet, even as a start-up, you can do business around the world, selling goods and services, quickly setting up offices to help you penetrate new markets, and moving employee teams into critical locations to put them closer to the marketplace.

Don't Pay Tax Twice on Each Dollar of Earnings!


December 10, 2010

Many experienced entrepreneurs, investors and business owners who have successfully operated in the past in their local environment are unaware of the tax pitfalls involved in cross-border transactions. It is easy to fall prey to serious missteps and to pay tax to more than one government for the same dollar of earnings.

An Alternative Approach to a Critical Issue in Employment: Identifying and Correcting Potential Disp


December 1, 2010

Employers define human resources policies and practices and make employment decisions that, while based on legitimate business decisions, may have a disparate effect on different groups of employees. A hypothetical example of selections for a proposed reduction in force (RIF) illustrates how an evaluation can reveal a disparate impact of a protected class group. Unveiling potential disparities before the implementation of the proposed RIF allows management to revise the goals, objectives, and the planning of the selections for termination, correcting a potential disparate effect of protected class groups, and minimizing the likelihood of legal disputes.

See Josefina's article originally published in Employee Relations Law Journal, Winter 2010.

Real Estate Financial Reporting: Understand the Differences Between US GAAP Versus Income Tax Basis


November 30, 2010

US generally accepted accounting principles and income tax basis accounting often yield very different financial reporting results; real estate companies need to understand what the choices mean for their business and apply what best serves their needs.

See Susan's article originally published in The Real Estate Finance Journal, Winter 2011, copyright 2010 Thomson Reuters.

Forensic Accountants: An Essential Part of the Bankruptcy Team


September 21, 2010

Bankruptcy is rampant. According to the United States Bankruptcy Court, there were 1.4 million bankruptcy filings in fiscal year 2009, a 32 percent increase over 2008. Bankruptcy filings for 2010 are higher still - data from AACER (Automated Access to Court Electronic Records) shows 379,000 bankruptcy filings in the first quarter of 2010, a 17 percent increase over the same quarter of the previous year. July 2010 saw a 24.2 percent increase in bankruptcy filings over the previous month. The upsurge in bankruptcy filings is unsurprising, given the severe economic downturn and the slow pace of recovery. Predictably, along with the high rate of bankruptcy filings comes another trend – a sharp and prolonged spike in bankruptcy fraud. Economic desperation – of the sort that drives individuals and businesses into bankruptcy – also drives them into complex schemes designed to conceal assets and shelter them from creditors.

The Global Start-Up: A Look at Jurisdiction


August 27, 2010

You've weighed the entity options for your Start-Up. You now understand the tax differences between corporations and transparent entities and the impact they could ultimately have on your bottom line. You think you have a strong sense of where you want to set-up your legal entity. Or do you?

An Introduction to the Global Start-Up


August 6, 2010

Start-Ups have been around for a long time. Traditionally, they have been local enterprises run by small business entrepreneurs. Today, however, thanks to the Internet's global reach, entrepreneurs have the ability to tap networks and establish Start-Up operations all across the world.

Economic Downturn Brings a Return to Classic Fraud


July 14, 2010

The mid-2000s financial bubble has run its course. Enron and MCI/Worldcom are history, Bernard Madoff has been sentenced, other major frauds have been exposed, and the world has moved from irrational exuberance to a new challenge: coping with the effects of what might become a prolonged downturn.

New Requirement For Registered Investment Advisers - July 10th Deadline


By Steven L. Berse  |  June 25, 2010

The US Securities and Exchange Commission (SEC) has amended its custody rule — Rule 206(4)-2 under the Investment Advisers Act — to help safeguard investor assets. Now it's time for certain SEC-registered investment advisers (RIAs) to start taking steps to facilitate compliance with two major new SEC requirements.

Recipe for a Hedge Fund Litigation Nightmare


By Donald M. May  |  June 25, 2010

In many cases, domestic hedge funds are structured as limited partnerships with a general partner receiving the performance allocation and a separate limited liability company serving as the investment manager and receiving an asset-based investment management fee.

Securities Litigation Report, Discounted Cash Flow Methodology Can Give Litigators the Upper Hand


By Donald M. May  |  June 15, 2010

Most formulas used to arrive at valuations are based on Wall Street criteria. This is obviously the case in transactions, but not only in that instance. Valuation assumptions based on transactional formulas are commonly used by private equity investors to make strategic decisions about their portfolio companies, and by litigators and courts to argue for and arrive at determinations of damages.

When Owner's Commitment And Dedication Work Against Them


By Lawrence Cohen  |  May 25, 2010

Your client's business used to be a major success. Now it isn't. But if you rely on your client to tell you that he or she is in trouble, you'll be the last to know – and worse, you might be unable to intervene.

The Use of Attrition Rates for Economic Loss Calculations in Employment Discrimination Cases: A Hypo


May 21, 2010

In cases involving employment discrimination, claims such as failure to promote or wrongful termination, economists are asked to calculate the difference between what the plaintiff(s) would have earned had the alleged discriminatory act not occurred offset by what the plaintiff is now expected to earn given that the alleged discriminatory action did occur. The economic losses are based upon the plaintiff's past and future income specific to the employer who committed the alleged discriminatory act. By contrast, in cases involving personal injury and a permanent reduction in the plaintiff's earnings capacity, the economic losses are usually based upon the plaintiff's entire worklife expectancy, regardless of where the plaintiff would be working.

See Josefina's article originally published in Journal of Forensic Economics, 2004.

Worldwide Tax Daily, Audit Might Be Best Choice for U.S. Taxpayers in Voluntary Disclosure Program


April 19, 2010

U.S. taxpayers who enrolled in the IRS's voluntary disclosure program may find it in their best interests to challenge the IRS penalty through an audit, David Gannaway, director in the Litigation and Corporate Financial Advisory Services Group at Marks Paneth & Shron LLP in New York, told Tax Analysts on April 7.

The Case for the Forensic Accountant


March 26, 2010

Suddenly, Ponzi schemes seem to be everywhere. Credit for the renewed attention to this classic financial fraud is of course due in large measure to Bernard Madoff, the now-convicted financier who defrauded investors of an estimated $65 billion. Madoff's widely publicized crime was a classic Ponzi – he took on investor funds, diverted them to finance his own lifestyle, falsified his clients' financial statements to show investment positions when there weren't any, then used new investments to pay "dividends" and "interest" to past investors. It was the largest and most dramatic example of a Ponzi scheme to date.

Executive View, Why the US Must Adopt International Financial Reporting Standards


March 16, 2010

Can you envision a world in which the U.S. is no longer the world's premier marketplace for capital? We can. In fact, unless U.S. companies and exchanges act, we believe that the world may be well on its way to a new financial order, one in which the U.S. no longer leads.

Executive View, Prepare Now for the Knock on the Door: As Tax Enforcement Accelerates, Legal Counsel


March 15, 2010

Is your client a target of federal tax authorities? The odds that you answered "yes" are higher today than they have been at any time in recent memory. The federal government is on a drive to increase tax revenue, and part of their effort involves a much higher level of tax enforcement – up to and including the dreaded "knock on the door" – a full-scale visit to the taxpayer's home, often after hours, by multiple law-enforcement agencies, not just the IRS but also the FBI, as well as local and state law enforcement agencies.

Wealth Management for High Net Worth Individuals


November 16, 2009

As the financial crisis took hold, high net worth individuals (HNWIs) watched their wealth decline and quickly lost faith in their wealth managers. Many withdrew assets or left their wealth management firms altogether. But as the economy improves, wealth management firms are seeking ways to alter their business models and provide a better service to their increasingly risk-averse clients, who are demanding more transparency on how their fortunes are managed.

Fresh-Start Reporting: An Additional Challenge for Bankruptcy Counsel


November 1, 2009

Emergence from bankruptcy presents a series of challenges for debtor companies, their creditors and counsel for all interested parties. One of the most significant challenges is financial reporting.

Tax Litigation Risk Increases for High Net Worth Individuals


September 17, 2009

Federal tax authorities are on the hunt. Their sights are trained in particular in three categories of tax payers: sole proprietors, officers of closely-held businesses and high net worth individuals.

IRS Targets Offshore Bank Accounts: Taxpayers Need Professional Guidance on Quick, Complete Disclosu


September 3, 2009

To many, tax management is imperative. But one approach – offshore banking – has recently caught the attention of policymakers. The misuse of offshore bank accounts now, more than ever, has the potential to land tens of thousands of Americans in some very hot water.

Fresh-Start Reporting: An Opportunity for Debtor Companies Emerging from Bankruptcy Strategist


August 10, 2009

Business bankruptcies are surging. That fact is unsurprising given that we are in the midst of the worst economic crisis since the Great Depression, but the numbers are still startling.

Revenue Maximization Checklist


July 23, 2009

The Real Estate Group at Marks Paneth LLP has developed a Revenue Maximization Checklist to help property owners ask the right questions and gain maximum benefit from existing lease provisions. A well designed audit of procedures surrounding property accounting such as billing, collections, lease abstracts and lease audits conducted by accountants deeply versed in commercial real estate can turn up unanticipated revenue opportunities and help ensure that property portfolios are yielding maximum returns.

Revenue Recovery: Lease Audits Can Reveal Hidden Income Potential


July 23, 2009

With the commercial real estate industry still in an economic tailspin, now is the time for property owners to look at their existing portfolios and monetize any untapped opportunities.

Location: A Taxing Choice For New Businesses


By Solomon Packer  |  June 25, 2009

Given the raft of issues involved in launching a new business in the U.S., it should come as no surprise that the question of where the new legal entity should be formed is often given short shrift, when it is considered at all.

Navigating the Recession


By Steven Eliach |  Steven Eliach |  Steven J. Ciavarella  |  May 18, 2009

The current economic downdraft is a first in many respects. Just a glance at headlines from the fourth quarter of last year reveals a perfect storm of economic trauma whose magnitude is like nothing in recent memory.

Effects of New York's 2009-2010 State Budget


By Steven Eliach  |  May 1, 2009

On April 7, 2009, New York Governor David Paterson signed into law New York State's Fiscal 2009-10 Budget. The enacted budget agreement closes a two-year $17.7 billion 2009-10 budget gap and reduces the State's multi-year deficit by an estimated 80 percent from approximately $60 billion to approximately $11 billion.

American Recovery and Reinvestment Act of 2009


By Steven Eliach  |  April 10, 2009

The American Recovery and Reinvestment Act of 2009 totals $787 billion. Nearly $300 billion of the bill includes tax relief for individuals and businesses which is outlined in the Marks Paneth alert.

The Future of Accounting Principles


February 10, 2009

The events of the last few months have shed light on accounting principles and the role they might have played in prolonging the current market turmoil. Fair value accounting, in particular, has been accused, by some professionals and officials, of being at least partly responsible for the current financial troubles.

Increasing Business Cash Flow with an ESOP


October 30, 2008

In the current economic environment, business owners are searching for strategies to increase their available cash flow. This becomes critical when the business owner, struggling to find capital to expand his business, must then find the resources to pay taxes on his business income. This perpetual burden on cash flow can be reduced, almost to zero, with proper planning.

Marks Paneth Outlines Departure Tax in Recent Article


By Solomon Packer  |  September 4, 2008

Solomon Packer, Senior Marks Paneth International Tax Consultant, publishes Corporate Business Taxation Monthly article on the recently enacted U.S. departure tax, which taxes built-in gains in excess of $600,000 from assets owned by “covered” expatriating U.S. citizens and long-term residents who relinquish their green cards.

Property and Casualty Insurance Solutions for Entity Owners, June 2008


June 1, 2008

An increasing number of Americans are transferring personal ownership of residential property to trusts, limited liability corporations (LLC), limited liability partnerships (LLP), and other entities designed to protect assets or take advantage of favorable tax treatment.

Nonprofit Investment Committees: Buyer Beware


By Michael McNee  |  March 5, 2008

Increasingly, nonprofits are moving into alternative investments: private investment funds, hedge funds, real estate funds, venture capital funds, oil, and gas funds. The goal is generally higher returns and diversification.

Practitioner's View on Recruiting New Professionals


March 1, 2008

Over the past few years, the NYSSCPA’s Quality Enhancement Policy Committee (QEPC) has been looking at peer review, ethics, and now education. We’re studying education-related issues in two pieces: 1) pre-service education, meaning the preparation students need to become CPAs; and 2) post-service education, the continuing education of CPAs.

A Brave New World for a New Form 990


By Michael McNee |  Robert Lyons  |  February 1, 2008

On February 29, 2008, Michael McNee and Robert Lyons of the Nonprofit and Government Services Group presented a webinar entitled "A Brave New World for a New Form 990." This event discussed significant IRS changes to Form 990 and what they mean for the industry.

Auditing Alternative Investments


By Michael McNee  |  January 1, 2008

Auditing alternative investments presents unique challenges. As an auditor, it is critical to evaluate processes used by your clients to help support valuation and existence assertions in the financials.

Preparing for a Fraud Investigation: A View from the Trenches


August 1, 2007

Case study: New York Corp (NYC), a Manhattan-based maker of household products, such as tableware, cookware and flatware, manufactured all of its goods in a New Jersey plant for over 100 years. A year ago management decided that, to remain competitive, the company would move its manufacturing operations to Tijuana, Mexico. The new Tijuana plant is a wholly-owned subsidiary of NYC.

Global Presence, Local Excellence


June 1, 2007

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JHI is a leading international business association for independent business advisers, financial consulting, and accountancy firms. JHI exists to support the development of its member firms by facilitating communications, exchange, networking, and resource sharing worldwide. Its members benefit from global networking while maintaining total practice independence.

Communicate Right From the Start


By Eric A. Marks  |  January 1, 2006

Understanding exactly what your employer is looking for from you, will determine how satisfied and successful you will be with your job. Good communication can quickly help set you on the course to becoming a superior performer.


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