A critical decision you will make at the onset will be the type of entity structure you will operate your business.  The main alternatives available to you consist of a sole proprietorship, a single member-owner LLC, multiple member LLC, partnerships, S-Corporations and C- Corporations.  The tax aspects, tax filing requirements and insulation from liability are unique to each of these entities.  The selection of the appropriate entity structure through the business transition phases is a key success factor. Minimizing income, state and local tax costs while maximizing after-tax cash flows for use in your business development and growth can best be accomplished within the right business structure.  Let your business advisory team assist you when evaluating these alternatives in making the right choice for your business.

The creation of an accurate financial accounting and reporting system from the initiation of your business represents another financial objective you should have.  Developing a system that incorporates the financial budgets and expectations contained in your business plan while capturing revenues, expenses and cash flow activities from the beginning will help ensure that timely and accurate financial information is available.  Management decisions can be based on accurate financial and operating results while avoiding costly mistakes.  Let our team of quality Intuit certified, QuickBooks ProAdvisors work with you in developing this system.

Setting up your business can be a time-consuming and a stressful experience. Registrations, acquiring licenses, payroll and income tax compliance filings, set-up and maintenance of internal financial accounting and reporting systems are just a few of the myriad of tasks you will face.  Establishing a team of quality advisors on the front end will provide an environment where accurate and efficient decision making and business success can be achieved.  Please contact us if we can be a part of your team.

About Blackman & Sloop CPAs, P.A. :

Blackman & Sloop is a full-service CPA firm headquartered in Chapel Hill, North Carolina and is actively involved in auditing, taxation, management consulting, financial planning, and related services. The firm directs a large part of its services toward providing management with advice on budgeting, forecasts, projections, financing decisions, financial analysis, and tax developments. The firm also performs review and compilation services and prepares not-for-profit, corporate, individual, estate, retirement plan, and trust tax returns as well as technology consulting services regarding installation and training on QuickBooks. Blackman & Sloop provides services in Raleigh, Durham, Chapel Hill, RTP, Hillsborough, Pittsboro, Charlotte, and the rest of North Carolina. To find out more please visit http://www.blackmansloop.com

Contact: CPA    cpa@blackmansloop.com

Currently, certain tax returns are ineligible for e-filing. In most cases, these returns require documentation to be attached to the return. For example, taxpayers claiming the first-time homebuyer credit now have to attach the settlement statements to their returns and are ineligible for e-filing. It remains to be seen whether exceptions to the mandatory e-file rule will be made available.

It is also uncertain what the enforcement actions will be. The legislation does not provide for sanctions in the event of noncompliance. Further guidance will likely come as the effective date approaches.

Although not required for returns filed prior to 2011, we are encouraging our clients to e-file their 2009 returns now being prepared. E-filing can result in speedier refunds, as the mailing and data entry time is eliminated. Note that e-filing does not require you to pay any balance due when you file, you can still wait until April 15 to pay.

Don’t procrastinate on this one. E-file your tax returns today!

About Blackman & Sloop CPAs, P.A. :

Blackman & Sloop is a full-service CPA firm headquartered in Chapel Hill, North Carolina and is actively involved in auditing, taxation, management consulting, financial planning, and related services. The firm directs a large part of its services toward providing management with advice on budgeting, forecasts, projections, financing decisions, financial analysis, and tax developments. The firm also performs review and compilation services and prepares not-for-profit, corporate, individual, estate, retirement plan, and trust tax returns as well as technology consulting services regarding installation and training on QuickBooks. Blackman & Sloop provides services in Raleigh, Durham, Chapel Hill, RTP, Hillsborough, Pittsboro, Charlotte, and the rest of North Carolina. To find out more please visit http://www.blackmansloop.com

Contact: CPA cpa@blackmansloop.com

Blackman & Sloop will be a sponsor at the 2010 art exhibition and sale, Through Women’s Eyes, By Women’s Hands hosted by The Women’s Center. The Women’s Center partners with women and girls to build their knowledge, skills and confidence to become self sufficient.

To purchase tickets, go to http://www.womenspace.org/events.htm#throughwomenseyes, or you can visit their main website at http://www.womenspace.org/.

Blackman & Sloop will be a sponsor at Child Care Services Association’s Triangle Child Care Awards Breakfast. Child Care Services Association (CCSA) is a nationally recognized nonprofit working to ensure affordable, accessible, high quality child care for all families through research, services and advocacy.

For more information, visit the Child Care Services website at http://www.childcareservices.org/, or receive more information about the event at http://www.childcareservices.org/events.html

     The first step in the process is to identify any potential uncertain tax positions. For tax exempt organizations, management should ask themselves the following: 1) Compare the organization’s current activity with the tax exempt purpose indicated on its 1023 application. Is it the same? If not, have the articles of incorporation been amended, and a copy provided to the IRS, or is the organization’s tax exempt status now in jeopardy, and any net income subject to tax? 2) Review sources of revenue, and determine if they are related to the organization’s exempt purpose. If not, has a 990-T been filed to report unrelated income, and are expenses allocated to offset this income reasonable and allowable? For small businesses, management should ask themselves the following: 1) Are expenses reasonable and allowable? 2) Are we reporting a capital gain properly, or should it be an ordinary gain? 3) If the company is an “S” corporation, is the “S” election in jeopardy of revocation, which subjects income to taxation at the corporate level? 4) If the company has activity in another state, have appropriate state returns been filed in those states?

     Once uncertain tax positions are identified, it is time to recognize and measure them. Under FIN 48, a tax benefit related to an uncertain tax position cannot be recorded in an entity’s financial statements, unless it is “more-likely-than-not” (more than 50% chance) that the tax position will be sustained by the taxing authority. You must assume the taxing authority will examine the tax return, and has full knowledge of all the facts and circumstances regarding the tax position. If it is determined that a tax position will not be sustained, recognition has occurred, and it is time to measure, or calculate an amount that will reduce the tax benefit recorded related to the uncertain tax position. FIN 48 uses the term ‘cumulative probability’ to determine this measurement factor. The amount to record as a tax benefit is the largest cumulative amount that is more-likely-than-not to be sustained by the taxing authority.

     Let’s look at a quick example. Let’s assume a C corporation has $100,000 in revenues and $100,000 in expenses, resulting in no taxable income for 2009. In arriving at that figure, the corporation has deducted an expense for $10,000. Management has questioned whether or not the expense is fully deductible in one year. Management decides to fully deduct the expense in 2009, but has determined the following: there is a 40% chance that the entire expense will be allowed by the taxing authority in 2009, a 40% chance that only $8,000 will be allowed, and a 20% chance that only $2,000 will be allowed in 2009. Using ‘cumulative probability’, the largest cumulative amount that is more-likely-than-not (remember, this means over 50%) to be sustained by the taxing authority is $8,000 (40% that the expense is fully deductible + 40% that only $8,000 is deductible). Therefore, a liability needs to be recorded for the $2,000 that may be denied by the taxing authority. Assuming a 40% tax rate, the company would debit current income taxes and credit liability for uncertain tax benefit for $800. Additional disclosures would also be required in the notes to the financial statements.

     As you can see, FIN 48 affects all entities preparing GAAP based financial statements. Management needs to thoroughly analyze the organization’s tax positions, current and applicable past years, to determine if any are deemed uncertain, thus requiring adjustment in the organization’s financial statements. This article is a very brief overview of the provisions FIN 48. Each particular organization’s tax situation must be analyzed in order to properly implement FIN 48. If you or your organization has any questions in regards to this article, please do not hesitate to give us a call.

About Blackman & Sloop CPAs, P.A. :

Blackman & Sloop is a full-service CPA firm headquartered in Chapel Hill, North Carolina and is actively involved in auditing, taxation, management consulting, financial planning, and related services. The firm directs a large part of its services toward providing management with advice on budgeting, forecasts, projections, financing decisions, financial analysis, and tax developments. The firm also performs review and compilation services and prepares not-for-profit, corporate, individual, estate, retirement plan, and trust tax returns as well as technology consulting services regarding installation and training on QuickBooks. Blackman & Sloop provides services in Raleigh, Durham, Chapel Hill, RTP, Hillsborough, Pittsboro, Charlotte, and the rest of North Carolina. To find out more please visit http://www.blackmansloop.com

Contact: CPA cpa@blackmansloop.com

Will McDougall, a Durham resident and Eagle Scout, is a pilot in the US Air Force, currently stationed in Afghanistan. He and his fellow base pilots have teamed up to assist with reconstruction of an orphanage in the area where they are stationed. Blackman & Sloop will hold a spaghetti fundraiser for employees to help raise money for the orphans to help buy clothes and school supplies for the children there.

Blackman & Sloop will be certifying the scores of the 2010 Miss Capital City Pageant.

The Miss Capital City Scholarship Pageant is a local preliminary pageant to the Miss North Carolina Pageant and an affiliate of the Miss North Carolina Pageant Organization and the Miss America Organization.  The Miss America Organization is the world’s largest provider of scholarship assistance for young women, aged 17-24, to support them achieving their goal of higher education and community service.  Last year, more than $45 million in scholarship assistance was provided to winners across the country.

For tickets and additional information, visit the Pageant website, or email at misscapitalcitypageant@yahoo.com

The 2010 AICPA National Not-for-Profit Industry Conference addresses the complex challenges faced by the Not-for-Profit community particularly in this  economy with critical training and the latest updates on auditing, accounting, tax, management, operational analysis and new strategies to enable you to survive in this economic climate.

The comprehensive agenda allows you to choose from the more than 70 sessions. With a breadth of topics, in-depth workshops, industry-specific sessions, and expert laden panels you will be armed to meet your particular challenges.

For registration and more information, go to http://www.aicpa.org/ or the conference page

Foretelling the Future of Not-for-Profits
In these uncertain economic times, how will the economy, new risk assessment standards, and other recent changes and developments affect the not-for-profit world? Trying to predict what’s in store in 2010 can be tricky.

NCACPA’s Not-for-Profit conference is packed with sessions to arm you with the information you need to guide your organization through good times and bad. As always, this program’s primary focus is on NPO financial and operational issues, collaboration with CPAs and NPOs, and networking—all to help you better manage your resources.

Don’t leave the future of your organization to chance—let us guide you to the answers.

 For registration and additional information, please visit http://www.ncacpa.org.

The Chamber will host its Annual Meeting Thursday, January 28, 2010, at the Sheraton Chapel Hill Hotel. Join more than 300 Chapel Hill-Carrboro Chamber of Commerce members at our Annual Meeting to network with local and state elected officials and regional business leaders, to celebrate the Chamber’s success in 2009, and to recognize the recipients of the 2009 Business of the Year Awards. The Annual Meeting will also provide attendees with an overview of what’s in store for the Chamber in 2010. Visit www.carolinachamber.org/events to register online. For more information, contact Laura Morrison at 357.9989 or lmorrison@carolinachamber.org.

Registration required. Early Bird Tickets (Register Before January 12): $45. Tickets Purchased After January 12: $50. Preferred Seating for 10: $600.