Practice Management

Small businesses, those companies with less than 50 employees, increased their payrolls by 58,000 in May, according to the Small Business Report from payroll provider ADP. Highlights from the May report show that the service-providing sector added 61,000 jobs in May, while there was a loss of 3,000 in the goods-producing sector for a net gain of 58,000. Additional charts on monthly job growth and job levels, along with historical data, are available at http://www.smallbusinessreport.adp.com. ADP said its June report would be released July 5.

A business valuation standard that has been incubating for the past five years within the American Institute of CPAs is ready to hatch early next year, and when it does, it could force those who perform business valuations to pay attention to yet another set of guidelines.

Former Internal Revenue Service district director Jesse Ayala Cota pleaded guilty to conspiring to defraud the United States through his involvement in a tax fraud scheme promoted by the Topeka, Kansas-based organization Renaissance, The Tax People Inc.Cota admitted in his plea agreement that from 1997 through April 2002, the conspirators, through Renaissance, operated a scheme to defraud the government by marketing a program designed to sell illegal tax deductions through false and misleading representations.

After learning that more than 450,000 federal workers and retirees owe a whopping $3 billion in back taxes to the Internal Revenue Service, the Senate Finance Committee is urging the president to step up efforts to collect from those delinquent employees.Senate Finance Committee chair Max Baucus, D-Mont., and ranking Republican member Sen. Charles Grassley, R-Iowa, sent a letter to President Bush requesting that he remind the delinquent federal employees and warn them of the consequences of non-compliance.

Tax practitioners looking to Congress, the Treasury or the Patent Office for a solution to the perceived problem of tax strategy patents may instead have found some assistance from an expected source - the Supreme Court.A unanimous Supreme Court, in the case of KSR v. Teleflex, decided on April 30, 2007, overturned a decision of the U.S. Court of Appeals for the Federal Circuit and found a patent claim invalid. In doing so, the high court also criticized the Federal Circuit for applying the wrong standard on patent claims and being too liberal in upholding patent claims for obvious improvements.

Sen. Chuck Grassley, R-Iowa, ranking member of the Senate Finance Committee, has sent a letter to his chamber colleagues in an attempt to blunt what he termed "inaccurate claims" about the private collectors employed by the Internal Revenue Service.In a "Dear Colleague" letter, Grassley pointed out that the agency's own collection infrastructure is better set up for placing liens and garnishing wages than it is for making initial phone calls to delinquent taxpayers to set up a payment plan.

Intuit Inc. and Electronic Clearing House Inc. have agreed to scrap a deal that would have seen Intuit pay $142 million for the debit and credit card processor.Intuit had announced the acquisition plan in mid-December, after the boards of both companies approved the proposed deal. The companies announced late in April that it would be in their mutual best interest to terminate the proposed agreement.

"Segmenting" is nothing new in the accounting profession. It's another term for dividing a marketplace into well-defined groups of likely buyers. It's the foundational step in developing a firm's industry niches and service lines.Although segmenting and then developing niches is a commonly recommended strategy, many CPA firms remain relatively unsophisticated regarding this technique. The result is that potentially remunerative service lines and industries die on the vine. Niches get stuck in ditches and potential opportunities become road kill!

With Friday marking the official start of the hurricane season, the Internal Revenue Service is encouraging taxpayers to safeguard their records. Taking simple steps now can ensure that both individuals and businesses have protected financial and tax records in case of a hurricane, or other disaster.

Nexus - the amount of contact between a taxpayer and the state that subjects the taxpayer to taxation - continues to vary widely from state to state. In addition, the nexus for sales and use tax differs from the nexus for income tax.The nexus requirement is derived from the language in two different places in the Constitution - the commerce clause, which prohibits states from unduly burdening interstate commerce, and the due process clause, which requires a minimum connection between a state and an entity it seeks to tax.