IRS Proposes PTIN Registration Fees

Last week, the Internal Revenue Service (IRS) released its proposed regulations to establish fees for those applying for preparer tax identification numbers (PTIN). This is the next step in the IRS's efforts to increase oversight of federal tax preparation.

Here's what CPAs must know: Beginning in 2011, all CPAs and other paid tax preparers must either re-register their PTINs or obtain a PTIN if they sign tax returns. CPAs, attorneys and enrolled agents all must renew their registrations every three years, but are exempt from testing, criminal background checks and continuing education requirements.

According to the IRS, the proposed $50 fee would cover technology costs and compliance and outreach efforts associated with the new PTIN program. An additional, smaller fee will be added by the third-party vendor chosen to operate the online registration system.

The PTIN proposal is not without its controversy. The CPA profession finds the requirement of PTINs for non-signing preparers problematic, as there are many employees at CPA firms who would fall into this category and would thus be subject to the testing and education requirements from which CPAs are exempt.

Read the VSCPA's July 1, 2010, letter to Virginia's federal representatives and senators for more on the Society's position.

The comment period for the IRS fee proposal ends August 23, 2010. Contact VSCPA Government Affairs Director Emily Walker at (804) 612-9428 if you have questions or comments.

Dodd-Frank Act Expands Whistleblower Protections

The Dodd-Frank Act includes significant amendments to the whistleblower protection provisions of the Sarbanes-Oxley Act of 2002 (SOX) and adds new private rights of action for whistleblowers. For instance:

• It establishes a whistleblower incentive program requiring the SEC to generally pay a whistleblower in securities law actions leading to the recovery of more than $1 million a bounty of between 10 and 30 percent of the recovery.
• It amends the Securities Exchange Act of 1934 to generally prohibit employers from taking punishing acts against an employee for providing information to the SEC; assisting in certain actions relating to that information; or making disclosures that are required or protected under SOX, the Securities Exchange Act or another law, rule or regulation subject to the jurisdiction of the SEC.
• Aggrieved employees now have 180 days instead of 90 days to file a complaint with the OSHA beginning with the date of the violation OR the date the employee became aware of it.
• It expands SOX coverage to include employees of “nationally recognized statistical rating organization[s]” as well as employees of subsidiaries of publicly traded companies in specific instances.
• And more.

Check out a more detailed description of these changes and more online at www.vscpa.com.

Virginia Board of Accountancy (VBOA) to Form Peer Review Oversight Committee; VSCPA Offers Feedback

The Virginia Board of Accountancy (VBOA) is establishing a Peer Review Oversight Committee to oversee the process and review of peer review in the Commonwealth effective July 1, 2010.

To provide reasonable assurance that peer reviews are conducted and reported in accordance to the AICPA Standards for Performance and Reporting on Peer Reviews, the PROC will monitor the VSCPA Peer Review Program, which administers the AICPA Peer Review Program in Virginia.

The VSCPA Peer Review Program also undergoes a biennial oversight process conducted by the AICPA, and received clean reports on its last two oversights, conducted in 2007 (PDF) and 2009 (PDF).

In establishing the PROC, the VBOA is following the recommendation of the National Association of State Boards of Accountancy (NASBA) that all state boards perform oversight of approved practice-monitoring programs as part of their usual and customary duties when practice monitoring is a condition of licensure, as is the case for licensed Virginia firms.

Read more about the establishment of the PROC, including the VSCPA's feedback to the VBOA here.

Health Care Reform Q&A With the VSCPA Insurance Center: Preexisting Condition Exclusions

Question: What do I need to know about interim final regulations released for preexisting condition exclusions, lifetime and annual limits, rescissions and patient protections.

Answer: On June 23, 2010, the Departments of Labor, Health and Human Services and Treasury released final interim regulations relating to preexisting condition exclusions, lifetime and annual limits, rescissions, and other patient protections under the Affordable Care Act. The Regulations were published in the June 28, 2010 Federal Register. The table below contains a brief description of each regulation, its effective date, and its application to grandfathered group health plans.

Regulation	Effective for Plan Years Beginning On or After	Applies to Grandfathered Group Health Plans?
Prohibition of preexisting condition exclusions or other discrimination based on health status	January 1, 2014, or for individuals under age 19, September 23, 2010	Yes
No lifetime or annual limits	September 23, 2010	Yes
Prohibition on rescissions	September 23, 2010	Yes
Patient protections	September 23, 2010	No

For more details on these final regulations, download the full pdf available on the VSCPA Insurance Service Center’s administrator, Dominion Benefits’, website.

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.

Sales Tax Holidays: Helping or Hurting Consumers and Businesses?

Eighteen states are offering sales tax holidays in 2010, up from 16 in 2009 and 17 in 2008. Many consumers regard tax holidays as a great opportunity to save on necessities and products that improve their safety or reduce their carbon footprint.

The Tax Foundation, a nonpartisan, nonprofit organization monitors fiscal policy at the federal, state and local levels, provides another prospective.

The Foundation released a report on July 26, concluding that tax holidays are, in fact, bad public policy, distorting consumer choices while favoring certain industries over others, increasing tax code complexity, and distracting from real, permanent tax relief.

What are your thoughts? Are tax holidays friend or foe? Are there ways they can be better implemented to achieve the goal, or are they working just fine?

What Do You Want to See in Disclosures?

Each year, the VSCPA Editorial Task Force convenes at the Richmond CPA Center to brainstorm topics for the upcoming year's Disclosures Editorial Calendar. On August 11, 12 CPA members of the Task Force are meeting to discuss their ideas -- and yours!

Now's your chance to propose topics that YOU think should be covered in the magazine. What's missing? What would you like more in-depth info on? The magazine is here to serve the VSCPA membership, so we want to make sure it applies to you.

Send me an e-mail at jedmonds@vscpa.com with your ideas. Of course, we're always looking for interested writers, too.

Leaders' Institute Sponsoring Firm Shareholder Responds to This Year's Event

Marty Einhorn, CPA, managing shareholder with Wall, Einhorn & Chernitzer, P.C., one of this year's Leaders' Institute sponsors, shares his thoughts on this year's event:

"I had a great time at the Leaders’ Institute in Blacksburg put on by the VSCPA. I am the managing shareholder with Wall, Einhorn & Chernitzer, P.C., an 80+ person regional CPA and consulting firm in Norfolk, Virginia. This was our second year participating in the event and we continue to feel it is a great opportunity to meet the top rising accounting talent in the Commonwealth. Our firm has sponsored the Friday evening dinner the past two years and we have invited a number of our team members to participate. We have also provided several team members to serve as group leaders for the students during the weekend event.

This is a great way for our firm to gain name recognition at many of the universities around the state and to be able to interact with these students. They seem genuinely interested in our profession and obtaining any and all advice they can receive from the other participants and CPA firms represented.

Participation in the event is also a very efficient way to recruit for the future. Whether these students decide to begin their career in our market or elsewhere, we have made an impression on them and we hope they will remember our firm for future opportunities.

Thanks to the outstanding VSCPA staff for putting on a great weekend and making a rather long drive to Blacksburg more than worthwhile!"

Health Care Reform Q&A With the VSCPA Insurance Center: Grandfathered Health Plan Provisions

Question: What do I need to know about grandfathered health plans?

Answer: On June 14, 2010, the Departments of Labor, Health and Human Services, and Treasury released final interim regulations relating to the status of grandfathered health plans under the Affordable Care Act (the “Act”). These regulations, published in the June 17, 2010 Federal Register, explain the rules for determining whether a group health plan or health insurance coverage qualifies as a grandfathered health plan, how that status is maintained, and how a grandfathered health plan may lose its grandfathered status. In addition, the preamble to the regulations provides helpful and important guidance for plans that are not subject to the Act’s mandates, such as those that cover fewer than two participants who are current employees and those that provide excepted benefits.

As part of their effort to provide as much information as possible to the regulated community, the agencies also released a Fact Sheet, FAQs, and a Model Grandfathered Health Plan Notice. Together with the regulations, this guidance provides a great deal of helpful information for employers to consider as they evaluate their plans’ grandfathered status. Knowing whether a group health plan or health insurance coverage is grandfathered is critical to determining which of the Act’s coverage mandates apply to the plan.

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.

Scenes from the Fourth Annual Leaders’ Institute

The VSCPA held the fourth Leaders’ Institute for Virginia’s top accounting students on June 25–27 at Virginia Tech, and it was another great success.

With a generous $100,000 gift from accounting and consulting firm Baker Tilly (formerly Beers + Cutler), the VSCPA established the first-ever Leaders’ Institute in 2007. The Leaders’ Institute provides a hands-on workshop program for young aspiring CPAs. The only development program of its kind in Virginia, the Institute provides rising college seniors the opportunity for vital leadership training and real-life skills to successfully transition into the competitive marketplace.

Thank you to this year’s generous sponsors for their support of this program and accounting education: Baker Tilly, Ernst & Young; Becker CPA Review; Cherry, Bekaert & Holland; Deloitte; Johnson Lambert & Co.; KPMG; National Association of Black Accountants; PBGH; RSM McGladrey; RyanSharkey; Wall, Einhorn & Chernitzer; and the VSCPA Educational Foundation.

Read more about this year’s event here, and check out more photos from the event here.

Health Care Reform Q&A With the VSCPA Insurance Center: Employee Free Choice Voucher

Question: What is the Employee Free Choice Voucher, and how will it work?

Answer: Here is a detailed summary of the Employee Free Choice Voucher and how it will be administered:

Employee has a household income less than 400% of the Federal Poverty Level (FPL) (i.e. family of four with an income of $88k).

Employer pays 100% of individual premium and 0% for dependents.

Employer must offer a free choice voucher if the employee’s contribution to the health care premium falls between 8-9.8% (9.8% could change to 9.5%) and the employee does not enroll in the company’s health plan.

The voucher must be for the amount the employer would have paid toward the employee’s health plan had he/she enrolled in the company plan.

Example:
Employee premium = $300 a month

Family premium = $1,000 month

Employee enrolls in family category

Employee’s cost = $700 month ($1,000-$300) / $8,400 a year

$8,400/$88,000 = 9.5% so the employer must offer a free choice voucher to the employee

Voucher would total $3,600 for the year

Health Care Reform Q&A is facilitated by the VSCPA Insurance Center. Have a question? Leave a comment, or contact the VSCPA Insurance Center directly. This document is not intended to imply or provide tax or legal advice and is the VSCPA Insurance Center's current interpretation of the Health Reform Bill.