IMA-February-2011 - Long Island Chapter of the Institute of

LONG ISLAND CHAPTER
Monthly Dinner Meeting - Tuesday, February 8, 2011
The Milleridge Inn - Jericho, NY - Cocktail Hour begins at 6:00 pm
Hiring & Retention Strategies
Special Guest Speakers:
Barbara Cohen Farber
Lloyd Staffing
Rita DiStefano
Portnoy, Messinger,
Pearl & Associates, Inc.
Siobhán Murphy
The Quest Connection
Moderated by Gail Trugman-Nikol, President, Unique Business Solutions, Inc.
Pricing and Payment
for the meeting:
$65
(IMA Members receive $15 discount)
Payment can be made by Cash, Check or Credit Card
Thank You To Our
February Sponsors
Ajilon Finance
CMIT Solutions of Nassau
Jackson Lewis LLP • PBI Payroll
February 2011
Institute of Management ACCOUNTANTS
Page 2
barbara cohen farber, Executive Director - Lloyd Staffing
Barbara Cohen Farber’s career in the staffing and employment industry spans 25 years; she has been with Lloyd Staffing
for the last 10 ½ of those years. As Executive Director at Lloyd’s Melville headquarters, Barbara is responsible for the
placement of Administrative and Human Resources professionals. Since 1971, Lloyd Staffing has been successfully answering
the employment needs of the national and regional workforce by providing people skilled in the demands of the current
marketplace. Lloyd responds to the employment and staffing objectives of the business community and job candidates at
all levels of their careers and in many specialized disciplines.
Prior to joining Lloyd, she served as Director of Staffing and Director of Training and Development for 15 years at a large
national staffing firm based in Manhattan. During her 25 year career in the staffing industry, Barbara has helped more than
5,000 individuals find satisfying employment, in addition to the millions that she has coached in this time. She continues
to stay in touch with clients and applicants alike, amassing one of the largest databases in the industry. Barbara’s expertise
is sought by clients for her talent in finding the precise candidate based on skills, background, and most of all, a cultural fit.
Her goal is to be an extension of her clients’ Human Resources department and increase their overall productivity.
Barbara has demonstrated an outstanding commitment to the development of the Long Island workforce. As an active
member of SHRM Long Island’s Workforce Readiness Committee, she eagerly volunteers to share her expertise with high
school and college students through group presentations, career fairs and mock interviews. Barbara received her Bachelor’s
degree from SUNY in Business Economics, with a minor in Business Communications. She was also recently honored by
Long Island Business News with the “50 around 50 award” in recognition of outstanding achievements, leadership and
contributions to Long Island.
rita diStefano, Director of Human Resources - Portnoy, Messinger, Pearl & Associates, Inc.
Rita DiStefano joined PMP in 2005 after working for a large global company for over 20 years overseeing HR for their Nassau
and Suffolk County locations. During her tenure, she gained expertise in the field of recruitment, training, benefits, employee
relations, performance management and compensation.
Since 2001, Rita has held the position of Director for the Hauppauge Industrial Association, also serving on their Executive
Board and liaison to the HIA-LI Health Care Committee. Rita has also served as Chair of the Suffolk County Workforce
Investment Board for four years after receiving an appointment for that position from Suffolk County Executive Steve Levy.
In 2002 Rita was honored to receive an award from the Long Island Works Coalition for her vision and dedication to the
collaboration of business and education along with State recognition for her internship programs. She is the past Chair of
the C.W. Post Employee Advisory Board.
Rita currently offers clients her expertise with policy development, interactive management training, job descriptions,
and compensation analysis; she provides guidance on Employee Handbooks, developing and implementing performance
management programs, employee relations, recruiting, discipline and termination. Where no HR department exists, Rita
provides on-site HR services or augments clients’ HR departments with either on-site or off-site support.
Siobhán murphy, President - The Quest Group
Siobhán (an Irish name pronounced Sha-vaun) Murphy created The Quest Connection to bring cutting edge strategies and
processes to her clients through coaching, training, facilitation, and speaking. She works with executives, professionals,
business owners and their teams - in short, extraordinary people with a vision for a wonderful life.
Siobhán combines an extensive business background -- over 25 years experience in sales, management, coaching and
training including 12 years of corporate sales and management at AT&T serving accounts in the financial services industry in
Manhattan and across industries on Long Island in Sales and Sales Management -- with her life-long passion for professional
development and a gift for intuition, to help clients achieve breakthrough results with more ease and enjoyment.
She is a licensed facilitator of the Excelerator™ Coaching Skills Program and is the New York Area Affiliate of the HiringSmart
programs for recruiting, talent management and succession planning.
She is member number 326 of the 17,000 member strong International Coach Federation, the governing body of the coaching
industry, and pioneered coach training internationally.
February 2011
Institute of Management ACCOUNTANTS
Last Month's Meeting
Page 3
by Gail L. Trugman-Nikol, Unique Business Solutions
On the brink of another Long Island snow storm, Martha Stark of Signature Bank moderated a panel discussion on Protecting Companies
from Fraud and Embezzlement. Our panelists Josh Berman, a Commercial litigator, Brian Sanvidge, Director of Business Fraud and
Investigations at Holtz Rubenstein Reminick, and Steven D’Alessandro, a Partner at Holland Knight, provided facts and information that
all companies should be aware of.
Martha provided an introduction of facts that were found in an article on Forbes.com by James A. Kaplan dated 6/10/10. Some facts
from this article include:
• The dollar value of fraudulent financial reporting soared in the last decade despite implementation of Sarbanes-Oxley.
• Fraud occurred most frequently in the computer hardware and software industries.
• The SEC cited a company’s CEO and/or CFO for some level of involvement in almost 90% of fraud case studies.
Brian Sanvidge added statistics that received surprise from the audience:
• Fraud represents 5% of the annual revenue in the US.
• $2.9 trillion worldwide has been reported.
• The median fraud amount is $160,000.
• 25% of fraud is over $1 million.
• The frauds are committed over an 18 month period.
While 85% of the perpetrators have no previous criminal background, the higher the executive level, the larger the fraud. An employee
might defraud the company for $50K, while an Executive average is $485K. Another interesting tidbit was the statistic that 66% of fraud
is committed by males.
Steven D’Alessandro discussed a Compliance Program companies can create. It doesn’t matter the size of the company, all companies
should have a written policy. The policy should be designed to educate the employees, protect the company and why they are crucial to
the precautions taken to protect the company.
Josh Berman spoke about Fraud detection procedures. He reminded us that it isn’t always the high level executives committing fraud
and suggested we look a level below the surface.
All of the panelists discussed the collateral damage and the people both internally and externally that get caught in the fray. Be careful before
making this a criminal case, was the overall comment from each of the panelists -- remember the damage it can do to your company’s reputation.
We want to thank our distinguished panel for their knowledge and sharing their insight. We look forward to seeing you on February 8th
for Hiring and Retention Strategies. Have a great month!
John Crowley, Lori Catapano, Mike Conway
Manny Cafiero, Lucy Mazany, Matt Dowd
Steve Ballen, Karen Goldberg
Martha Stark, John Berman, Steve D’Alessandro, Brian Sanvidge
Terry Williams, Doug Williams, Marc Palker
Tom Gomez, Gail Trugman-Nikol, Sima Ali
Thank You To Our January Sponsors
Boylan Brown• The LISS Group • Renaissance Merchant Services • State Bank
February 2011
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Page 4
by Randy Schwartzman, CPA, MST
key provisions in the tax relief,
unemployment insurance reauthorization, & job creation act of 2010
On December 17, 2010 President Obama signed the Tax
Relief, Unemployment Insurance Reauthorization, and Job
Creation Act of 2010 (“Tax Relief Act”). As discussed below,
the main provisions of the Tax Relief Act were to extend the
Bush-era 2001 and 2003 tax cuts for all income levels for
two years, extend unemployment insurance for another 13
months, and set the estate tax at 35 percent through 2012.
Provided below are some key provisions affecting taxpayers.
Ordinary Income Tax Rates
Over the past several years, there has been a strong political
debate about whether the favorable individual income tax
rates, which were set to expire at the end of 2010, should
be extended for everyone, or for everyone except those
taxpayers who made more than $250,000.
The new law settles the issue by extending the lower rates
for all taxpayers. Under the new law, the rates that have
been in effect in recent years will remain in place instead of
reverting to higher rates. Instead of going up to 39.6 percent,
the highest individual ordinary federal income tax rate will
remain at 35 percent for two more years through 2012.
Capital gains tax rates
Capital gains and losses generally arise from sales of capital
assets (i.e., generally non-inventory assets). Taxpayers
often realize capital gains from the sale of securities. For
individuals, trusts and certain other members of flow through
entities, capital gains pass through and are generally taxed
at a preferential capital gains rate in comparison to ordinary
income tax rates.
Since 2008, the highest rate of tax on long-term capital
gains has been 15 percent. However, the 15 percent rate
was scheduled to expire at the end of 2010, with the result
that in 2011 the long-term capital gains tax rate would have
risen to 20 percent if Congress had not acted. The Tax Relief
Act forestalls the rate increase by extending the highest 15
percent long-term capital gains tax rates through 2012.
Qualified dividends
Since 2003, “qualified dividends” have been taxed at the
same low tax rates that apply to long-term capital gains,
which is generally 15 percent. To count as “qualified,”
dividend-paying common stocks must be held for at least
61 continuous days and preferred stock must be held for at
least 91 days before the ex-dividend date—the last purchase
day for collecting the dividend.
The low rates for qualified dividends, like the other Bush tax
cuts, were scheduled to expire at the end of 2010. If Congress
had not acted, beginning in 2011 taxes on dividends would
have returned to the rates that were in effect before 2001, and
all dividend income received in 2011 would have been taxed as
ordinary income. Therefore, individual investors would have
paid as much as a 39.6 percent tax on dividends (and even 3.8
percent more once the provision of the Health Care Reform
Act becomes effective in 2013). The Tax Relief Act prevents the
rate increases from happening by continuing the tax regime
in effect for qualified dividends whereby the maximum tax
rate on dividends will remain at 15 percent through 2012.
Qualified small business stock
Subject to limitations, certain non-corporate taxpayers
may exclude up to 100 percent of the gain realized on the
sale of “qualified small business stock” (“QSBS”) held for
more than five years and acquired in a temporary period.
Additionally, the excluded portion of the gain from eligible
QSBS is excluded from treatment as an alternative minimum
tax (AMT) preference item.
For certain periods before and for all periods after the
temporary period, the exclusion is only partial – generally
50 percent. For regular income tax purposes, the portion of
the gain that can be included as taxable income is taxed at a
maximum rate of 28 percent. Thus, for regular tax purposes,
the gain from QSBS that is subject to the 50 percent exclusion
is taxed at a maximum effective rate of 14 percent – which is
only 1 percent less than the 15 percent maximum capital gains
rate in effect in previous years (not much of an incentive).
The Tax Relief Act extends the 100 percent exclusion and
exception from minimum tax treatment for QSBS for one
year by changing the date before which eligible QSBS must
be acquired from before January 1, 2011 to before January
1, 2012. Thus, subject to meeting all of the QSBS limitations
and the more-than-five-year holding requirement, no regular
tax or AMT will be imposed on the sale or exchange of QSBS
acquired after September 27, 2010 and before January 1, 2012.
Social Security Payroll Tax
The Federal Insurance Contribution Act (FICA) tax is
composed of the Social Security tax portion taxed at 6.2%
of earnings up to $106,800 and the Medicare tax portion
uncapped and taxed at 1.45%. The Tax Relief Act reduces
the individual, but not employer, Social Security payroll tax
by two percent during 2011, from 6.2 to 4.2 percent. This
should provide immediate cash to individuals subject to
social security with the hope that they will use the excess
cash flow to purchase goods and services.
Bonus Depreciation
Under the Tax Relief Act, companies will be allowed to
expense the full cost of any capital investments made during
2011. Two of the most significant changes provide incentives
for businesses to invest in machinery and equipment by
allowing for faster cost recovery of business property.
Businesses are allowed to deduct the cost of capital
expenditures over time according to depreciation schedules.
Continued on page 5
February 2011
Institute of Management ACCOUNTANTS
Continued from page 4
In previous legislation, Congress allowed businesses to
more rapidly deduct capital expenditures of most new
tangible personal property, and certain other new property,
placed in service in 2008 – 2010 (or 2011 for certain longterm property), by permitting the first-year write-off of 50
percent of the cost.
The new law extends and temporarily increases this
additional first-year depreciation provision for investment
in new business equipment. For investments placed in
service after September 8, 2010 and through December 31,
2011 (through December 31, 2012 for certain longer-lived
property and certain transportation property), the Tax
Relief Act provides for 100 percent additional first-year
depreciation. In other words, the entire cost of qualifying
property placed in service during that time frame can be
written off, without limit. The fifty percent additional firstyear depreciation limit will apply again in 2012.
The Tax Relief Act leaves in place the existing rules as to
what kinds of property qualify for additional first-year
depreciation. Generally, the property must be (1) depreciable
property with a recovery period of 20 years or less; (2) water
utility property; (3) certain qualified computer software; or
(4) qualified leasehold improvements. Also the original use
of the property must commence with the taxpayer – used
machinery doesn’t qualify for bonus depreciation (but it does
for purposes of Section 179 expensing, as discussed below).
For those taxpayers who do not otherwise benefit from bonus
depreciation because they have net operating losses, the Tax
Relief Act extends through 2012 the election to accelerate
pre-2006 AMT credit instead of claiming additional first
year depreciation. Now even those businesses with net
operating losses will have a cash incentive in the form of a
potential refund from the government to purchase qualified
property through December 31, 2011.
Section 179 Expensing
The election to expense fixed asset additions is made
available, on a tax year by tax year basis, under Section
179 of the Internal Revenue Code, and is often referred to
as the “Section 179 election.” The Small Business Jobs Act
passed three months earlier increased the expensing limit
of Section 179 to $500,000 and the start of the investment
ceiling phase-out was raised from $800,000 to $2,000,000 for
tax years beginning in 2010 or 2011. The new law makes three
important changes to the Code Section 179 expense election.
Joseph A. Giacinto
Chief Executive Officer
(516) 338-5454 Ext 23
Fax (516) 338-4479
[email protected]
www.pbipayroll.com
Page 5
First, the new law provides that for tax years beginning in
2012, a small business taxpayer will be allowed to write off
up to $125,000 (indexed for inflation) of capital expenditures
subject to a phase-out once capital expenditures exceed
$500,000 (indexed for inflation). Absent further legislation,
for tax years beginning after 2012, the maximum expensing
amount will drop to historical levels of $25,000 and the
phase-out level will drop to $200,000.
Extenders
A number of popular business tax breaks that expired at
the end of 2009 have been retroactively reinstated and
extended through 2011 by the Tax Relief Act. These extenders
favorably affect the tax liabilities of businesses and some
of the more popular ones are summarized below:
• The research and development credit.
• 15-year write-offs for qualified leasehold
improvements, and restaurant buildings (and
certain improvements to such restaurant buildings).
• The active financing exception from the Code’s
Subpart F rules for a controlled foreign corporation
predominantly engaged in the conduct of a
banking, financing, or similar business.
• The new markets tax credit.
• Expensing of environmental remediation costs.
• The enhanced education for contributions of food
and book inventories, and computer equipment
for educational purposes.
• The work opportunity credit (extended for four
months through the end of 2011).
For more information on the above provisions or any other
provisions of the new tax legislation, please feel free to
contact the author.
Randy A. Schwartzman, CPA, MST is the Tax Partner-in-Charge of the
Melville office of BDO USA, LLP. He can be reached at 631-927-1159
or [email protected].
Circular 230 Disclosure
To ensure compliance with Treasury Department regulations, we wish to
inform you that, unless expressly stated otherwise in this communication
(including any attachments) any tax advice that may be contained in
this communication is not intended or written to be used, and cannot
be used, for the purpose of (i) avoiding tax-related penalties under the
Internal Revenue Code or applicable state or local tax law provisions or
(ii) promoting, marketing or recommending to another party any taxrelated matters addressed herein.
February 2011
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Page 6
The Suffolk Chapter of the New York State Society of CPAs
would like to inform you of the following events:
Privacy & Data Security
Panel Discussion
Thursday, February 17, 2011
6:00 to 8:00 p.m.
at Nixon Peabody LLP
50 Jericho Quadrangle • Jericho, NY 11583
RSVP to Sharon Dickinson (212) 940-3193 - [email protected]
The Cooperation with Bankers And Other Credit Grantors Committee
Joint Nassau/Suffolk Spring Chapter Meeting: An Evening of Networking
Thursday, March 24, 2011
Crest Hollow Country Club • Woodbury, NY
6:00 p.m. – 8:30 p.m.
Networking, cocktails, buffet dinner
$50 in advance • $60 at the door
RSVP to Carol Pinto (516) 937-9500 - [email protected].
If you are interested in attending any of these events, please feel free to contact
Joel Ackerman at [email protected] or at 631-870-3920.
You can also visit the NYSSCPA website at www.nysscpa.org.
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February 2011
Institute of Management ACCOUNTANTS
Page 7
Not a member yet? Now is a great time to join!
Exclusive Offer - Join the IMA during February, 2011 and Save $35.00!
Great seminar topics for our Monthly Dinner meetings and our Quarterly Breakfasts,
IMA benefits including Free Webinars, on-line professional news letter and full access
to a professional library! A great value anytime!
Discounted Rate: $175.00 per person
Promotion Code: ALLMEM12011
Check payable to: Institute of Management Accountants
Download a Membership Application at: http://longisland.imanet.org/
Mail application, Promotion Code # and payment to:
Gail L. Trugman-Nikol, VP Membership
Unique Business Solutions,
P.O. Box 7777, Hicksville, NY 11802-7777
*Postmark no later than February 28, 2011*
2010-2011 Dinner Meeting Schedule
March 8th, 2011 - IT Update: Changing Technologies in Business
April 12th, 2011 - The CFO Interaction/Dealings with Banks, Accountants & Attorneys
May 10th, 2011 - FINANCIAL EXECUTIVE OF THE YEAR AWARDS DINNER
Quarterly Breakfast Series
April 26th, 2011 - LEAN Manufacturing / Six Sigma
Your Newsletter Editor
Your newsletter editor is always looking for information about you and other chapter members
as well as significant issues concerning our Long Island community relative to accounting and
business matters. Please forward all personal notes for possible inclusion in the newsletter
to the editor:
Karen A. Goldberg, CPA
Grassi & Co., CPAs
50 Jericho Quadrangle, Suite 200 • Jericho, NY 11753
(516) 336-2455
Email: [email protected]
Visit our website at
www.longisland.imanet.org