About half of all companies close within five years of opening, and 70 percent will close within 10 years. An established company that suffers a significant loss due to a disaster faces the same long odds. The failure rate is virtually identical to the failure rate of startups, risk management consultant Bob Bernens said.
“You are starting over,” said Bernens, the founder of CORE Risk Services. “You have to go get your marketshare back. If you fumbled the ball, you’re in for the fight of your life.”
At Barnes Dennig’s most recent Manufacturers Roundtable, Bernens and Jim Hedrick of Gallagher SKS discussed the value of a well-researched, well-documented and well-rehearsed business continuity plan. A business can help fund such a plan by utilizing the Research and Expirementation (R&E) Tax Credit.
Legislative changes in recent years have opened the R&E credit to companies that previously would not have qualified, and more companies are using it for process improvements that previously they might have shrugged off as “just part of the job.”
“In many cases,” Barnes Dennig Tax Director John Michel said, ”the time and resources you commit to developing a business continuity plan would qualify as a process improvement and thus be eligible for the R&E credit. If you are looking for a way to pay for it, this is an option.”
[click to continue…]
A note from Tax Manager Cheryl Ganim, CPA:
In an effort to speed tax receipts into the next fiscal year, Ohio and Kentucky recently signed tax amnesty measures that would allow those who owe back taxes to pay at a reduced interest rate with little or no penalty.
The Ohio amnesty program began Tuesday and is only available until June 15. Taxpayers who have certain unpaid state taxes from prior to May 2011 can pay those taxes and half of the interest due, and the remaining interest and all penalties will be waived. The program covers individual income tax, commercial activity tax, sales and seller’s use tax, employer withholding tax and corporate franchise tax, and state officials estimate it could bring in $40 million.
The Kentucky amnesty program will be in effect from July 1, 2012, through June 30, 2013, and it applies to tax liabilities incurred between December 1, 2001, and October 1, 2011. Nearly all Kentucky tax liabilities will be eligible for the amnesty program. In order to qualify for amnesty, taxpayers must pay all of the back taxes and half of the interest due, then file all tax returns and make all tax payments on time for the next three years.
Kentucky will allow installment payments, as long as the amnesty amount is paid in full by May 31, 2013. Ohio requires the full amnesty amount to be paid by June 15.
A Kentucky taxpayer who owes back taxes and opts not to participate in the amnesty program will be assessed additional penalties if the state uncovers his or her unpaid taxes in the future.
For more on the tax amnesty programs, or any of your tax needs, contact a member of the Barnes Dennig tax team at (513) 241-8313.
Steve Hube has worked alongside Bill Cloppert throughout his 30 years at Barnes Dennig. For most of that time, Cloppert was the firm’s Managing Director, and Hube watched closely as Cloppert led by putting others first.
Now that he is Managing Director, Hube aspires to lead the same way. He explained the style in an article in the current issue of the Cincinnati Business Courier:
Barnes Dennig Managing Director Steve Hube
He describes his leadership style as a “servant-leader” and cites Cloppert as his role model.
“It’s putting others first. If an employee has an issue, I’ll put down what I’m doing to address those concerns,” Hube said. “I’m trying to make sure I’m enabling for others, to make sure I have the brightest and smartest people around me to make the best decisions for the firm.”
In a question-and-answer exchange with the Courier, Hube also discussed the firm’s strategy for attracting talent and developing leaders, the uncertainty surrounding future tax law, and the impact of government regulation.
When asked whether government regulations are “more trouble” for Barnes Dennig or our clients, Hube said:
Our clients. Regulations are our business, not theirs. They’re making the products and delivering the services that drive our economy, and too much government regulation gets in the way of that. With issues like health care, labor relations and monetary policy, it’s such an uncertain environment right now, and they’re looking for us to provide insight on the best path forward.
Courier reporter Jon Newberry expanded on that theme in a sidebar article, “Accountants, lawyers seeing boost in business from changing regulations.” In the article, Barnes Dennig Tax Manager Scott Cress discusses some of the tax incentives that Barnes Dennig has helped clients claim – including a tax credit for international marketing efforts and a 10 percent investment tax credit.
From the Courier article:
Ohio, Kentucky and Indiana are all competing to attract businesses to spur economic development, Cress said, and employing professional advisers is probably the easiest way to maximize the benefits. All of the states’ development departments are very helpful, and a business could do it on its own. But most of the time, “the adviser fees pay for themselves and then some,” he said.
The Recovery Audit Contractor program has evolved and expanded in the two years since it was launched nationwide, and it now covers Medicare parts C and D and Medicaid, in addition to the original focus on Medicare parts A and B. Beginning June 1, healthcare providers in Ohio will be subject to “prepayment reviews” by Medicare RACs.
The “prepayment reviews” will begin as a three-year demonstration program in 11 states, including Ohio. Medicare RACs in those states will review claims before they are paid, to make sure the healthcare provider complied with all Medicare rules. Initially, they will focus on inpatient hospital stays of two days or less – the type of claim that historically results in high rates of overpayment.
It is part of a larger effort by the Centers for Medicare & Medicaid Services (CMS) to eliminate fraud and waste in the Medicare system. According to the CMS’s most recent update, the RAC program has identified $1.45 billion in improper payments since the program went nationwide January 1, 2010 – including $422 million identified in the first quarter of 2012.
Some of those improper payments were actually underpayments, where the healthcare provider was due more money than it originally claimed. But most of the improper payments – about $1.27 billion of the $1.45 billion total – were overpayments, which the Federal government reclaimed through the RACs.
Another subtle change in the program should help providers by issuing demand letters more quickly, since any delay in a RAC issuing the demand could have limited how much time the provider had to file a rebuttal. The demand letters will now be issued by Medicare Administrative Contractors (MACs) rather than RACs.
The Medical Group Management Association has a number of resources available on its website at www.mgma.com/rac. For more information on how Barnes Dennig can help, visit the Healthcare section of our website or contact me at (513) 241-8313.
