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HLB Adds Presence in Beijing China: CAC CPAs LLP

HLB International, one of the leading global accountancy networks with presence in 140 countries, has added the Beijing office of CAC CPAs LLP (CAC) to its network in China.

CAC CPAs LLP has been representing HLB in Tianjin and Urumqi for the past 9 years and has been expanding rapidly through organic growth and strategic consolidations with local accounting practices. CAC will now represent HLB in Beijing, the capital city of China.

CAC is HLB’s largest member firm in China with 16 offices nationally. With 80 partners and 1500 staff including 700 CPAs, CAC is ranked number 18 in China and is also one of the top 40 firms holding a license to audit securities. The firm has a strong focus on capital market services and has successfully facilitated IPOs for over 60 Chinese mainboard/GEM board companies and over 150 National Equities Exchange and Quotations Companies.

CAC delivers a full range of audit & assurance, IPO, M&A, valuation, engineering assets appraisal, specialist advisory services to listed companies, state-owned enterprises, private and family-owned funds and public sector clients. The Beijing office has strong expertise in state-owned companies and central government clients.

Mr Huang Qinglin, Managing Partner of CAC’s Beijing office commented: “Joining the HLB network is a milestone to mark CAC Beijing’s new move into international business. We also look forward to exchanging ideas and best practice with fellow HLB members to create a strong collaborative culture, improve the quality of the professional services and to continuously enhance the firm’s core competitiveness. CAC Beijing will work closely with HLB members to provide a globalised service to mutual clients.”

Mr FANG Wensen, Managing Partner of CAC CPAs LLP emphasised: “As the largest HLB member firm in China, CAC will work closely with HLB International, to integrate and utilise the domestic and international service platforms, to assist the development of international companies in China and Chinese companies going global.”

Coco Liu, Chief Regional Officer of Asia Pacific added: “We are pleased to welcome CAC’s Beijing office to our dynamic network in Greater China. CAC Beijing’s strengths and connections with large state-owned-enterprises will further contribute to HLB’s successful outbound initiatives from China.”

HLB is a top 12 ranked regional network in Greater China with 210 partners and 4300 staff. CAC Beijing will work closely with HLB members worldwide and makes a great addition to our coverage across Greater China.

The R&D Credit for Software and Technology Companies

The R&D Tax Credit is one of the most beneficial tax credits available to software and technology companies. Made permanent with the passage of the Protecting Americans from Tax Hikes Act of 2015, this non-refundable credit is available to businesses of all sizes and is designed to encourage the development of innovative and enhanced products, processes, and software in the United States. As both a federal and a Georgia credit, the R&D Tax Credit is one of the largest business tax incentives provided by the U.S. and state government.

The R&D Tax Credit is calculated at 20 percent of the excess of an eligible taxpayer’s qualified research expenses over a base amount. Qualified research expenses are comprised of all internal or contract research expenses paid or incurred by a taxpayer in carrying on trade or business. These expenses include (but are not limited to) salaries and wages, supply cost and technology costs (i.e., technology research). In order to qualify as a qualified research expense, the research activities have to be conducted on U.S. soil and they must pass a four part test outlined in the Internal Revenue Code (IRC §41). The base amount is determined in reference to the total qualified research expenses for the previous three years. The R&D Tax Credit is incremental in nature – meaning that in order to realize greater benefits from the credit, a taxpayer must increase their research expenses over time.

The Georgia R&D Tax Credit is available to any business that increases its qualified research spending in the state. Just as the qualified research expenses have to be incurred on U.S. soil to be eligible for the federal R&D Tax Credit, the qualified research expenses have to be incurred in Georgia to be eligible for the Georgia R&D Tax Credit. Whereas the federal credit can be carried back one year and forward twenty years, the Georgia credit can be carried forward ten years and is able to offset 50% of net Georgia income tax liability.

Often times, taxpayers do not realize that the work that they are doing is innovative and qualifies for the R&D Tax Credit. The activity does need not be an “innovative” and have an industry-wide impact – as long as the R&D work is related to improving your businesses products or processes, it may be a qualified research and development expense. It is recommended that all business involved in some type of research and development activities have a feasibility study to determine the amount of the possible federal and state credits available to them. The credit can be taken for all open tax years. Thus, the tax benefits of conducting a research and development credit feasibility study and a R&D Tax Credit study could be tremendous and help to generate enormous tax savings over several years.

If you believe that your business is conducting some research and development activities eligible for either the federal or Georgia credit, HLB Gross Collins, P.C. can assist you.  HLB Gross Collins, P.C. has been serving some of the Southeast’s most prominent software and technology companies for nearly 50 years.  Our Technology Practice works closely with the clients to ensure that they are taking advantage of all available credits and savings opportunities.

HLB Gross Collins, P.C. named Top 300 Firm in U.S. by Inside Public Accounting

HLB Gross Collins, P.C. is pleased to announce that once again we have been named as one of the Top 300 firms in the United States based on the 2017 Inside Public Accounting Survey and Analysis of Firms.

IRS Office of Appeals Pilots Virtual Service

The Internal Revenue Service Office of Appeals will soon pilot a new web-based virtual conference option for taxpayers and their representatives. This virtual face-to-face option will provide an additional option for taxpayer conferences. The IRS expects it to be especially useful for taxpayers located far from an IRS Appeals office.

Each year, the Office of Appeals hears appeals of more than 100,000 taxpayers attempting to resolve their tax disputes without going to court. Currently, taxpayers involved in the appeals process can meet with an Appeals Officer by phone, in person or virtually through videoconference technology available only at a limited number of IRS offices.

While a phone call works well for most taxpayers, others prefer face-to-face interaction. Appeals’ pilot program will use a secure, web-based screen-sharing platform to connect with taxpayers face-to-face from anywhere they have internet access. Similar to popular screen-sharing programs used on phones and home computers, this technology may also be a way for the IRS to provide greater access, efficiency and flexibility to taxpayers. This web-based model is more convenient and has more features than the existing video-conferencing technology.

“Taxpayers who choose the web-based option will be able to get face-to-face service remotely,” said IRS Chief, Appeals Donna Hansberry. “In the future, the technology may give taxpayers greater options in engaging with Appeals and could allow us the flexibility to serve taxpayers virtually from any location using mobile devices or computers.

“We hope this is one more option to enable IRS employees to provide timely, efficient and effective service to taxpayers,” said Hansberry.

Appeals plans to start the pilot Aug. 1, 2017 and will assess the results, including taxpayer satisfaction with the technology.

The IRS reminds taxpayers that their right to appeal an IRS decision in an independent forum is one of 10 key rights guaranteed to taxpayers under the Taxpayer Bill of Rights. Other rights especially relevant to the appeals process include the right to quality service, the right to pay no more than the correct amount of tax, the right to challenge the IRS’s position and be heard and the right to retain representation.

De Minimis Safe Harbor Election

Taxpayers should confirm they are maximizing tax benefits associated with the acquisition and production of tangible property and improvements to tangible and real property. One way is with the de minimis safe harbor election.  In general, the de minimis safe harbor election allows businesses to deduct expenditures for the purchase or production of a unit of tangible property that would otherwise have to be capitalized. Specifically, the election applies to the acquisition of tangible property that falls under the specified threshold.  Eligible taxpayers include:

  1. Taxpayers that have an accounting policy, for nontax purposes, at the beginning of the tax year, that is to expense amounts that are less than a certain dollar amount;
  2. The taxpayer treats the cash outlay that is subject to the de minimis safe harbor as an expense according to the accounting procedures; and
  3. The amount expensed cannot exceed the per invoice or per item (if an itemized invoice) threshold set forth by the IRS

There are two separate thresholds, one for those taxpayers that have an applicable financial statement, and one for taxpayers without an applicable financial statement. If the taxpayer has an applicable financial statement the business can expense $5,000 per invoice or per item if substantiated by the invoice instead of capitalizing and depreciating the asset.  Taxpayers without applicable financial statements, are able to expense items that are $2,500 per invoice or per item if substantiated by the invoice (an increase from the prior threshold of $500). The safe harbor requires an annual irrevocable election which is made by attaching a statement to the taxpayers timely filed original federal income tax return.  This election is not considered an accounting method change.

For more information on the de minimis safe harbor election and how it can benefit your business, contact a member of our Real Estate team.

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