On April 9, 2021, the IRS issued IR-2021-82, which urged participants in abusive micro-captive insurance arrangements to exit these transactions as soon as possible. At the time of the release, the IRS noted it has increased examinations of micro-captive arrangements and that it recently won another US Tax Court Case with the March 10, 2021 ruling in Caylor Land & Development, Inc. v. Commissioner, T.C. Memo 2021-30 (“Caylor”).
Laurie Bizzell Shares Tips on How to Navigate Captive Insurance Taxation Landscape
While the COVID-19 pandemic prompted delays in some captive insurance tax case proceedings and IRS audit activity, there were many other captive insurance developments that occurred in 2020. Captive.com recently published an article that takes a closer look at the current captive insurance landscape.
The Consolidated Appropriations Act 2021 Provides COVID Relief from Partial Plan Terminations
The Consolidated Appropriations Act of 2021 (CAA), signed into law on December 27, 2020, includes a temporary rule providing COVID-related relief from certain partial plan terminations for employee benefit plans. Under this provision, a plan is not treated as having a partial plan termination during any plan year which includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021, is at least 80 percent of the number of active participants covered by the plan on March 13, 2020.
Important Takeaways for Single Audits Under the CARES Act
There is no disputing that the intent of the Coronavirus Aid, Relief and Economic Securities (CARES) Act of 2020 is to provide immediate and tangible economic relief to American workers, families and small businesses. What has been less clear since its passage in March 2020 is how the acceptance of funds available through various CARES Act programs could impact single audit requirements.
What’s Adequate Risk Distribution After Recent Trilogy of Captive Tax Cases?
In three recent cases, the U.S. Tax Court found related-party insurance companies (captive insurance companies) didn’t sufficiently distribute risk to allow the insured parties to deduct their premium payments. In an article recently published by Bloomberg Tax, Laurie Bizzell of Bennett Thrasher LLP analyzes the cases, the court’s historical view and the IRS’ position to find there is no conclusive definition of risk distribution.
How to Navigate the New Lease Accounting Adoption Process
As was publicized earlier this month, FASB officially approved the deferral of the new lease accounting standard (ASC 842) for private companies for another year. The new effective date is for fiscal years beginning after December 15, 2020, or 2021 for calendar year companies.
FASB Announces Official Deferral of Lease Accounting Standard for Private Companies
On Wednesday, FASB made the additional one-year deferral of the new Lease Accounting standard, as well as two others, official. These delays had long been sought by private companies as they attempted to implement the complex revised standards.
Considerations for Contractors Implementing the New Revenue Recognition Standard (ASC 606)
When the Financial Accounting Standards Board (FASB) finally revealed its new revenue recognition standard (ASU 2014-09 – Revenue from Contracts with Customers) back in 2014, the standard was beyond complex. As a result, the FASB formed 16 industry task groups (including one for construction) to clarify and explain the standard, and issued five related standards.
Laurie Bizzell Provides 12 Tax Practices and Procedures for Captive Insurance Companies in Captive Review
In an article published in the June 2019 issue of Captive Review, Laurie Bizzell discusses best practices for captive insurance companies as the Internal Revenue Service (IRS) focuses on aggressive examination and focus of captive insurance arrangements.
Scott Hazy Provides Analysis of 2019 Georgia Construction Outlook Survey in Construction Executive
In an article for Construction Executive published on May 19, 2019, Scott Hazy shared an analysis of the 2019 Georgia Construction Outlook Survey and the business considerations of busy Georgia contractors when facing the top challenge of attracting and retaining talent in the hot market given the number of revenue increases and project backlog in recent years.
Manufacturers Should Adopt the New Revenue Recognition Standards
Like many businesses, you may have put off implementing the necessary changes required to align your business with the new revenue recognition accounting standards. These standards, set by the Financial Accounting Standards Board (FASB), became effective this year for annual reporting periods, and in 2020 for interim periods.
ASU 2016-02 (Leases) – Key Components and Important Considerations
After years of consideration, the Financial Accounting Standards Board (FASB) revised lease accounting by issuing Accounting Standards Update (ASU) 2016-02, Leases (Topic 842). In the eyes of the FASB and users of the financial statements, leases in the financial statements of lessees represented valid assets and obligations as a result of the lessee receiving the right to use certain assets while receiving the economic benefits of using such assets.
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