As an employer, if you offer any type health and welfare benefit and you have more than 100 employees receiving those benefits, you may be required to file Form 5500, the Annual Return/Report of Employee Benefit Plans with the Department of Labor (DOL)/ Internal Revenue Service (IRS)


A couple of examples of health and welfare benefits would include health insurance and group term life insurance, but there are many other employee benefits that require annual reporting on Form 5500.


This is a good time to review all the employee benefits you offer your employees and determine which benefits require reporting and whether or not the Form 5500 is timely filed because the DOL now has EFAST2, the mandatory electronic filing system. EFAST2 can identify any large employers that file returns for their retirement plans (401(k)) and whether or not any health and welfare benefit plans are being filed also.


The DOL is simply sending letters of inquiry to those identified companies and if there is either no response or the response is questionable an examination is automatically opened.


If you have failed to file accurate or complete Forms 5500(s) timely, in addition to the assessment of severe penalties, the penalty relief available through the Delinquent Filer Voluntary Compliance Program (DFVCP) is closed to you.


The DOL can penalize you up to $1,100 per day for failure to file Form 5500 for health and welfare benefit programs.


The DFVCP is available to plan administrators who have not been notified in writing by the DOL of a failure to file a timely annual report. Participation in the DFVCP is a 2 part process. First, the Form 5500(s) is electronically filed and secondly the penalty payment is remitted using the DOL calculator. The penalty structure can be calculated daily at $10 day; by a “per filing” method with a maximum of $2,000 for large plans or by a “per plan” method with a maximum of $4,000 regardless of the number of late reports filed at the same time.


The JMF Pension team is available to consult with you about the filing requirements; ERISA benefits that are subject to reporting and/or preparation of any Form 5500s not previously timely filed.

Category : News & Events

Officials Say the Actual IRS Will Never Make First Contact by Phone

Con artists posing as Internal Revenue Service agents are back in the news. Despite previous warnings from government officials, some taxpayers still haven’t gotten the message.

“There are clear warning signs about these scams, which continue at high levels throughout the nation,” IRS Commissioner John Koskinen said recently. “Taxpayers should remember their first contact with the IRS will not be a call from out of the blue, but through official correspondence sent through the mail. A big red flag for these scams are angry, threatening calls from people who say they are from the IRS and urging immediate payment.”

“This is not how we operate,” he said. “People should hang up immediately” and contact the Treasury Inspector General for Tax Administration (www.tigta. gov) or the IRS. On the TIGTA site, click on “IRS Impersonation Scam Reporting.”

Government officials have received about 90,000 complaints through a telephone hotline since late 2013, says a TIGTA spokesman. About 1,100 victims have lost an estimated $5 million from these scams.

Scamsters may try to claim that you owe money or are entitled to a big refund, officials say. Callers might use phony names and IRS badge numbers. They might even know the last four digits of your Social Security number.

Real IRS representatives “never” ask for credit-card, debit-card or prepaid card information over the phone, the IRS said. They also never insist that you use a specific payment method. And they never demand immediate payment over the phone, the IRS says.

If you get a suspicious call and think you owe taxes, hang up and call the IRS (800-829- 1040). If you have no reason to think you owe anything, call TIGTA (800-366-4484), and tell the Federal Trade Commission using its “FTC Complaint Assistant” (ftc.gov). Include the words “IRS Telephone Scam.”

By: Tom Herman

Category : Corporate & Partnership Tax | Individual Tax | News & Events

By Jim Stinson | jstinson@al.comAL.com
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on August 20, 2014 at 5:21 PM, updated August 20, 2014 at 5:57 PM

Julie Magee, Alabama revenue commissioner


MONTGOMERY, Alabama — The state of Alabama slowed about 100,000 tax refunds this year because of a new computer algorithm designed to detect fraud and identity theft.

That meant some tax refunds have gone longer than normal in getting returned to Alabama taxpayers, and will be paid with 3 percent interest, as required by law.

“If ID theft was not such a problem, we wouldn’t have to do this,” said Julie Magee, state revenue commissioner. “The criminals have just gotten greedier.”

Magee said she would rather pay interest to taxpayers for delayed refunds than make payments to ID thieves, who can be people who live in other nations. She said in the past, ID thieves would target federal income-tax refunds, but they have expanded operations to state refunds.

The ID thieves are old foes in the credit-card industry, but they have stepped up their efforts to steal state refunds across the nation.

Magee said that the Alabama Department of Revenue, in response to fraud, installed a new computer program to watch for fraud clues. It slowed down as many as 100,000 personal income-tax tax refunds this year, Magee said, using a variety of “filters.”

“If ID theft was not such a problem, we wouldn’t have to do this. The criminals have just gotten greedier.”

“We probably put too many (filters) in place this year, to be honest,” said Magee. Magee apologized to the taxpayers but stressed again that the state is trying to safeguard their refunds.

A complicating factor for the state was the fact that the federal government began processing its federal returns three weeks later than normal, beginning some time in February. That slowed down Alabama’s system too, Magee said.

As of Wednesday, the state still owes $19,867,000 in refunds. Magee said 13,716 individual returns are left to process. That’s far fewer than 1 percent of all returns filed this year.

In total so far, according to the Alabama Department of Revenue website, 1.85 million returns have been processed, and 1,063,768 refunds have been issued.

Magee said next year’s program will more narrowly focus on questionable returns, and raise fewer red flags, while still rooting out fraudulent returns.

Federal refund status can be checked here.

This story will be updated.

Category : News & Events

A new Alabama income tax credit is available for Alabama individuals and businesses that contribute cash to the Alabama Department of Postsecondary Education (ADPE) for qualifying educational expenses directly associated with the state’s Career‐Technical Dual Enrollment Program. The tax credit was created by House Bill 384 (Act No. 2014‐147, the “Act”), which was sponsored by Representatives Buttram, Baker, Collins, and Hubbard. The Bill was signed into law by Governor Robert Bentley on March 11, 2014, and will go into effect for tax years beginning on or after January 1, 2015.

We have had a lot of questions about the particulars about implementing and complying with the law, so we created a handy guide (linked below).

JMF Memo Explaining the Alabama Dual Enrollment Tax Credit

If you have any questions, please feel free to contact any of our CPAs for further explanation.

Category : Corporate & Partnership Tax | Individual Tax | Manufacturing | News & Events

On April 23, 2014 Mississippi became the 15th state to allow for the creation of a “self-settled asset protection trust”.  This new legislation was effective July 1, 2014 and allows the grantor of the trust to transfer assets into trust to protect them against future creditors.  This trust is often referred to as a Domestic Asset Protection Trust (DAPT) and is not available to protect assets from current creditor claims, but can be a very valuable planning tool to protect the assets from future creditors while still allowing the grantor to be the primary beneficiary of the trust.  This could be the perfect planning tool for individuals with high net worth, those who face a greater risk of personal lawsuits due to the nature of their business, or just for gaining some extra peace of mind by creating a barrier to potential creditors.   Please call your JMF tax professional today if you would like some more information or if you think a DAPT may be a good option for you.

Here is the link to the MS Society of CPA’s newsletter article.


Category : Estate & Trust | Timber

Effective January 1st, 2015, and in keeping with the Tax Court’s recent decision, the limit of one IRA rollover to another within any 12 month period will now apply on an aggregated basis.

The old IRA-by-IRA rollover basis when considering the 12 month period has been withdrawn, even though the IRS Publication 590, Individual Retirement Arrangements, still provides that this application is acceptable.

The limitation does not affect any Trustee-to-Trustee transfers between IRAs or any rollovers, called conversions, from traditional IRAs to Roth IRAs.  Nor does it apply to any moves from a 401(k) plan to an IRA.

The transactions being targeted is the tax code provision that permits tax-free IRA rollovers as long as any amount withdrawn from one IRA is repaid to another, or the same, IRA within 60 days.

Recently, the Tax Court held that only one non-taxable IRA rollover is available within any 12 month period when considering all the IRAs a taxpayer owns.  In the TC Memo 2014-21, the taxpayer had made more than one rollover from more than one IRA during the tax year, therefore only one rollover was tax-free and any others were considered fully taxable.

In addition to the possibility that the 10% early withdrawl excise tax could apply on the fully taxable rollovers, the IRS will be looking to apply the 6% (per year) penalty on excess contributions related to the repaid and now disallowed IRA rollovers.

If you frequently rollover IRAs, or if you believe the one-rollover-per-year-per-account rule could easily be violated in 2015, then look at your recent IRA transactions.  Excess contributions can be corrected without penalties if they are timely withdrawn.

The IRS has delayed implementation of the new rule and states it will not apply to rollovers made before January 1st, 2015.

Category : Pension Admin & Consulting

JamisonMoneyFarmerPC was recently named as one of the Best Companies to Work for in Alabama. This fifth annual program was created by Business Alabama and Best Companies Group.

This survey and awards program was designed to identify, recognize and honor the best employers in Alabama, benefiting the county’s economy, workforce and businesses. The list is made up of 20 companies. JamisonMoneyFarmerPC has been named one of this year’s Best Companies to Work for in Alabama.

To be considered for participation, companies had to fulfill the following eligibility requirements:

  •  Be a for-profit, not-for-profit business or government entity;
  •  Be a publicly or privately held business;
  •  Have a facility in Alabama;
  •  Have at least 15 employees in Alabama;
  •  Be in business a minimum of 1 year.

Companies from across the state entered the two-part survey process to determine the Best Companies to Work for in Alabama. The first part consisted of evaluating each nominated company’s workplace policies, practices, philosophy, systems and demographics. This part of the process was worth approximately 25% of the total evaluation. The second part consisted of an employee survey to measure the employee experience. This part of the process was worth approximately 75% of the total evaluation. The combined scores determined the top companies and the final rankings. Best Companies Group managed the overall registration and survey process in Alabama, analyzed the data and determined the final rankings.

The rankings were published in the August 2014 issue of Business Alabama.

For more information on the Best Companies to Work for in Alabama program, visit www.BestCompaniesAL.com.

JMF is a Best Company to Work For

Category : News & Events | Press Releases