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Upcoming Changes for our Review, Compilation, and Financial Statement Preparation Clients

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Some of the services our firm provides are governed by standards set by the American Institute of CPAs (AICPA). There are changes to some of these standards that go into effect for engagements on financial statements dated on or after December 15, 2015, and they may impact you if we provide you or your organization with financial statement preparation services or perform a review or compilation of your financial statements. We will review the changes in more detail with you but here’s a brief overview of some of the changes. These changes do not impact tax or audit engagements.

Financial Statement Preparation Services: For clients who have engaged us to prepare their financial statements, you will notice a substantial change in our deliverables. Whereas in the past, we were required to issue a report if such financial statements were expected to be used by third parties (including most boards of directors), we can now issue financial statements to you without a report. However, we will be required to indicate on each page of the financial statements that we prepared that no assurance is provided on the financial statements. Our firm name will not appear on the financial statements. We are happy to discuss with you in more detail if this is a service that may be a good fit for your organization.

Compilation of financial statements: For clients who have engaged us to perform a compilation engagement in the past, if you require a report on your financial statements (regardless of whether we prepared the financial statements), you’ll see a few changes. We’ll ask you to sign an engagement letter that includes some changes designed to clarify responsibilities. The compilation report is also changing to make it easier for readers to distinguish it from a review or audit report.

Review of financial statements: For clients who have engaged us to perform a review of financial statements, there are also a few changes. We’ll ask you to sign an engagement letter that includes some changes designed to more clearly outline responsibilities. The review report is changing slightly and there may be some other changes throughout the course of the review engagement.

This is just a quick synopsis of some topics we will be discussing with you in more detail if you are impacted by the changes outlined above. We believe that these changes will allow us to better serve you by offering the option of formalizing our accounting assistance through the new preparation service and by providing another opportunity to discuss services to best meet your needs. Until then, if you have questions, please feel free to contact us any time at (951) 801-4628.

Healthy Workplaces, Healthy Families Act of 2014: What it Means for Employers

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On September 10, 2014, Governor Brown signed into law the “Healthy Workplaces, Healthy Families Act of 2014” (“HWHFA”) (AB 1522) to provide protection to California employees to ensure, among other things, that they are able to address their own health needs and those of their families. This new law is effective July 1, 2015, and requires California employers to provide paid sick leave benefits to their employees.

Action Required

Employers in California will need to carefully review their sick leave or paid time off policies and practices, as well as revise payroll and wage statement practices regarding such time off. The law also requires the following: 1) changes to the employer’s new-hire employee notice, 2) a different workplace-posting requirement, and 3) recordkeeping mandates. Specific requirements under the HWHFA include:

  • Displaying a poster addressing employees’ rights for mandatory sick time pay; poster should be in a prominent location where employees can easily access and read the notice.
  • Providing a written notice to newly hired employees of paid sick leave rights at the time of hire.Providing an accrual of sick time or paid time off for employees, including part-time and temporary employees, to earn at least one hour of paid leave for every 30 hours worked.
  • Alternatively, employers may provide at least 24 hours or three (3) days at the beginning of a 12-month period of paid sick leave for each eligible employee to use per year (calendar year or other designated 12-month basis). Accrual begins on the first day of employment or July 1, 2015, whichever is later.
  • Allowing eligible employees to use accrued paid sick leave upon reasonable request beginning on or after the 90th day of employment. An employer may limit an employee’s use of paid sick days to 24 hours or three (3) days in each year of employment. Note: However, employers are prohibited from discriminating or retaliating against an employee who requests paid sick days.
  • Providing written notice to employees every payday of the amount of sick time the employee has accrued and has available for use; this may be on a pay stub or a document issued the same day as a paycheck.
  • Maintaining employment records going back three years showing hours worked, paid sick time accrued and paid sick time used.

HWHFA also defines certain key terms including “employer,” “employee,” and “family member,” and provides specific guidance regarding the allowable uses of accrued sick time. It is extremely important that you take the time now to understand HWHFA’s impact on your company, and to take the necessary steps to ensure appropriate compliance with this law.

How is the law enforced?

The law assigns enforcement authority to the California Labor Commissioner, the agency that already has enforcement power over California employee wage claims, and the California Attorney General.Employers that violate the law can face up to three times the unpaid sick pay due and administrative fines that vary from $50 to $4,000 per violation, depending on the nature of the violation. The law also authorizes the Labor Commissioner or the Attorney General to recover civil penalties, attorneys’ fees, costs, and interest against violating employers, as well as to reinstate employees.

What happens if I am found to have violated the law?

The HWHFA does not expressly permit employees to bring private civil lawsuits against employers for violations under this statute. However, employees may be able to bring wrongful termination tort claims for alleged violations that result in terminations. In addition, California employees may be able to bring claims under the Private Attorney General’s Act, and can seek equitable, injunctive, and restitutionary relief (presumably an order from the court to perform or refrain from some act, and lost sick pay due to the employee), and an award of reasonable attorneys’ fees and costs.

Employers that violate the law can face up to three times the unpaid sick pay due and administrative fines that vary from $50 to $4,000 per violation, depending on the nature of the violation. The law also authorizes the Labor Commissioner or the Attorney General to recover civil penalties, attorneys’ fees, costs, and interest against violating employers, as well as to reinstate employees.

What are the fines and penalties?

Employers that violate the law can face up to three times the unpaid sick pay due and administrative fines that vary from $50 to $4,000 per violation, depending on the nature of the violation. The law also authorizes the Labor Commissioner or the Attorney General to recover civil penalties, attorneys’ fees, costs, and interest against violating employers, as well as to reinstate employees.

Employers that violate the law can face up to three times the unpaid sick pay due and administrative fines that vary from $50 to $4,000 per violation, depending on the nature of the violation. The law also authorizes the Labor Commissioner or the Attorney General to recover civil penalties, attorneys’ fees, costs, and interest against violating employers, as well as to reinstate

Where should I go for assistance and additional information if I have questions regarding my obligations?

Additional information and resources are available on California’s website under the Division of Labor Standards Enforcement at http://www.dir.ca.gov/dlse/ab1522.html. It is our understanding that after these types of laws go into effect, the state often issues clarifications and additional information. We suggest that you check the website listed above regularly for further information.

We also strongly encourage you to consult with legal counsel experienced in employment practice matters to review your company’s compliance with the requirements of the HWHFA and to assist you if revisions need to be made to your policies and procedures to ensure compliance with the new law and to mitigate potential legal exposures to your business.

Cancellation of Debt and Tax Consequences

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What is the difference between a 1099A and a 1099C?

With the recession continuing, so many borrowers received a 1099A and/or a 1099C due to foreclosure, mortgage debt cancellation, and credit card debt cancellation. According to the IRS, it received fewer than 1 million debt cancellation forms in 2003, compared to more than 3.9 million in 2010. The IRS expects to receive 6.4 million debt cancellation forms in 2012. There is so much confusion and misinformation about the tax implications of a 1099A and a 1099C from foreclosure and cancellation of debt. So let’s take a look at these forms and see what the differences are and how to avoid tax liabilities when you receive such forms.

What is a 1099A?

When the borrower abandons real or secured personal property, the creditor may have to issue a 1099A to the IRS and send a copy to the borrower. According to the IRS 1099A instructions, “abandonment occurs when the objective facts and circumstances indicate that the borrower intended to and has permanently discarded the property from use.” Please remember that receiving a 1099A does not mean that the debt is cancelled. The 1099A is simply a notice from your creditor to the IRS that the borrower abandoned the property, thus, it does not create the tax liability yet.

What is a 1099C?

A 1099C is the form that financial institutions use to report the cancellation of debt to the IRS. The borrower who received the copy of the 1099C from the financial institution may have to report the amount showing in the 1099C as an ordinary income and pay taxes which can be a significant amount. If the borrower abandoned the real estate, eventually ended up in foreclosure, and it resulted in a cancellation of debt, then that foreclosure maybe a taxable event and the borrower may receive both forms (1099A and 1099C). Also, the 1099C can be derived from successfully resolving the credit card debts. For example, a person with $15,000 in credit card debt who negotiates to pay only $7,500 of the balance would have $7,500 in forgiven debt as an income. From the bank’s perspective, it’s not their job to give tax advice, so generally the bank or credit card company does not disclose that a 1099C would be coming after the settlement of debt. Therefore, the borrowers who received the 1099C or in the process of a debt cancellation should immediately consult with a CPA.

How to avoid tax consequences?

As stated above, a 1099A does not mean that the borrower owes taxes, but a 1099C may. However, there is hope for the borrowers who are already having financial difficulties and received a 1099C. There are generally three ways for the borrowers to have their debt cancelled and avoid tax liabilities.

First, if the principal residence is lost in foreclosure, which resulted in cancellation of the debt, then generally up to $2 million is not taxable because of the Mortgage Forgiveness Debt Relief Act of 2007.

Second, if the borrower was insolvent (meaning liabilities exceed assets) at the time the debt was cancelled, then, the borrower is not liable for taxes on the cancelled debt. However, this applies only up to the amount by which the borrower is insolvent. That means if $100,000 in debts were forgiven by the bank and liabilities exceeded assets by $60,000, then the $60,000 would be excluded as income, but the remaining $40,000 would be reported as an income to borrower. In order to demonstrate the insolvency, the borrower should file the IRS Form 982 with the tax return in the applicable year. Third, there could be no tax liabilities if the debt was cancelled as a result of a bankruptcy filing.

Conclusion

Dealing with debt collectors is not a very pleasant experience for borrowers. After months of fighting with the debt collectors and finally the debts were cancelled, then, they now have to deal with an even bigger problem, the tax collectors. Please consult with your CPA if this is your case.

If you have questions, need additional information or would like to discuss more on the above topic, please feel free to call us and/or visit our office.

S-Corp or LLC – Which Do I Choose?

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The most popular choices for a small business entity are S-corporation and LLC (Limited Liability Company). Both entity types provide legal protection and have income pass through to owners. There are many similarities between them, but also very big differences. Choosing the right entity may save you thousands of dollars in taxes. Depending on where the entity is formed, different rules may apply, so for this article let’s take a closer look at the S-corporation and LLC that are formed in the state of California.

The S-corporation and LLC are a relatively new form of organizations. The S-corporation was started with Republican President Dwight Eisenhower’s recommendation to Congress. During this time in the U.S., there was concern in Washington that too much economic power was held by mega sized public C-corporations and a sense of fear began that small business ownership will be a thing of past. So, congress finally created subchapter – S in 1958 to support the small private businesses. Since then it became the most popular form of small business entity, numbering over 4.5 million. The LLC is an even newer form of entity in the U.S., but it is not so new in other countries like in Europe and South America. It actually started in Germany in 1892,then quickly spread out to countries like Portugal (1917), Brazil (1919), Chile (1923), France (1925), Mexico (1934), Belgium (1935), Switzerland (1936), Italy ( 1936), and Peru (1936). In the U.S., the LLC started in Wyoming which enacted a true LLC Act in 1977 modeled after the 1892 German company law. And soon other states, like California, adopted the LLC law and the number of LLC’s grew exponentially. In fact, there were only about 120, 000 LLCs in 1995, but well over million today. You may wonder why these two forms of entities are so popular among small business owners today and here is why.

The traditional C-corporation has two levels of income taxes. The first is the corporation level and the other is the shareholder’s level. While there are many benefits associated with C-corporations and ways to minimize the double taxation effect, nevertheless, a S-corporation and LLC does flow through the income to the individual level and pay no taxes at the corporate level while enjoying the legal protection like that of a C-corporation. This is one of the major reasons why S-corporation and LLC is so popular among small business owners today. It is true that flow through entities does not pay entity level taxes, but that only applies to the federal level and not the state level. States, like California, impose entity level taxes on flow through entities like S-corporations and LLCs. This will be one of the major areas why you should consider S-corporation over LLC or vice versa.

In California, S-corporations are subject to a 1.5% income tax on their net income, but the LLCs are subject to taxes based on their gross receipt and not their net income with a fixed percentage. Here are LLC tax amounts based on the gross receipts: $900 for gross receipt of $250,000 ~ $ 499,000, $2,500 for gross receipt of $500,000 ~ $999,000, $6,000 for gross receipt of $1million ~ $4.99million, and above $5million is $11,790. To see the difference easily, let’s use real numbers. There are companies A & B. Company A has a gross revenue of $1million and a net income of $200,000 and company B has a gross revenue of $4million and a net income of $800,000. In the case of company A with S-corporation status, $3,000 ($200,000 x 1.5%) must be paid to the state, but with LLC status, it must pay $6,000 to state. In the case of company B with S-corporation status, $12,000 ($800,000 x 1.5%) must be paid to the state, but with LLC status, it must pay the same amount of $6,000 to the state. So here is the tax saving ideas, if your company is extremely profitable, generally LLC will save thousands in taxes over S-corporation, but if your company has a very large gross revenue, but a very small net income or even a loss then S-corporation is better.

There are more factors to consider before you make your decision. For example, active incomes generated by LLC which then flow through to individuals are subject to SE taxes (Self-Employment Taxes 15.3%) which could be thousands of dollars, but this does not apply to income flow through from the S-corporation. In some cases, even if LLC pays more in taxes than an S-corporation, you should choose LLC over S-corporation. For example, if you are a land lord and would like to protect your personal asset from other liabilities associated with this rental property then a LLC is generally much better than an S-corporation because it may become a taxable event if you decided to take your appreciated rental property out of your S-corporation, however, this does not apply to a LLC. Also, incomes from rental and investment activities are generally not subject to SE taxes in LLC and the heirs may receive benefits of step up basis to reflect the fair market value of assets if the owner of the LLC dies. Furthermore, LLCs will allow foreigners to be its members and there are no restrictions in the number of owners, such as the case for S-corporation. Such benefits and flexibility of LLCs are the reason why the numbers of LLCs formed in the U.S. are growing faster than any other business entity. The above mentioned are simple examples, and many more are not explained in this article. Please consider all other factors that may affect the benefits of forming an S-corporation or a LLC before you make your decision.

If you have questions, need additional information or would like to discuss more on the above topic, please feel free to call us and/or visit our office. We are a <a title=”Riverside CPA Firm” href=”https://www.trimblecompany.com”>Riverside CPA Firm</a> with 30 years of trustworthy experience.

Tax Preparation and Strategy

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The due date for corporation and individual income tax returns is fast approaching. The Corporation income tax return due date is March 15th and individual and partnership income tax return due date is April 17th. In this article, I will focus on the individual income tax return and show you the strategies to help you lower your taxes, save money and avoid penalties when you prepare for your individual income tax return.

First, one of the best strategies to lower your tax liability is to contribute to your retirement plan, such as an IRA, Keogh or SEP. Contribution into qualifying retirement plans, such as IRA, can lower your Adjusted Gross Income (AGI) which is better than the deductions reported on your schedule A which could be subject to AGI level. For example, your medical bills could be deductible only if the amount is above 7.5% of your AGI. The due date for 2011 IRA contribution is April 17, 2012 and if you have Keogh or SEP, the due date could be October 15, 2012 if you file for extension. Contributions to these retirement plans not only reduce your current income (AGI) which could help you get more deductions on your schedule A, but also the gains are tax deferred. The result in 20 years could amount to tens of thousands of dollars more in your account than a regular investment account. It will be very tough to find better deals than this.

Furthermore, contributions to a Roth IRA may not give you the tax break for 2011, but the distributions from a Roth IRA is tax free, so this could be even better than a traditional IRA for some others. Similar to a Roth IRA are the 529 plans and is not tax deductible in your federal income tax return when the contributions are made. However, a 529 plan distributions are tax-free as long as they are used to pay for qualified higher education expenses for a designated beneficiary. But be careful, the money in the 529 plan could have a negative effect on your child’s FAFSA (Free Application for Federal Student Aid) and grants. The government will assume that you have the money to pay for your child’s college. The solution is to have the child’s grandparents own the plan. In the eyes of FAFSA, the assets do not exist in this way.

Second, make sure to get the social security number (or Tax ID) for your dependents. Without the social security number, the IRS will deny the personal exemption which could be $3,700 and additional $1,000 for child tax (for qualifying child). If you have a new born baby and don’t have the social security number by the tax return due date, then file an extension. If you are divorced, make sure that only one parent can claim the child. The IRS has a sophisticate system to match and compare your return with your ex-spouse and if both parents claim the same child then the IRS will find it and contact you.

Third, good record keeping can save you from big headaches when you prepare to meet your CPA for your tax return. This is even more crucial if you are a small business owner. According to the IRS a small business owner should keep their documents such as gross receipts, proofs of purchases, expense documents, documents to verify your assets including purchase and sales invoices, real estate closing statements and canceled checks. Remember that good record keeping not only helps you reduce the time and stress about getting the information to your CPA before the tax return due date, but also it helps you respond to the IRS quickly, if they ever contact you.

Lastly, file it on time. If you don’t have all of the information to file the return by April 17th, then use the Form 4868 to file an extension. This form gives you an extra 6 more months to complete your income tax return, but you must make a reasonable estimate of your 2011 income tax liability. The late filing penalty is 4.5% per month and could be up to 22.5% of your taxes due. The late payment penalty is 0.5% per month and could be up to 25% of your taxes due. So try to file it on time or file for an extension with a reasonable estimate of the tax payment to avoid unnecessary penalties.

If you have questions, need additional information or would like to discuss more on the above topic, please feel free to call us and/or visit our office. We are a Riverside CPA firm that brings 30 years of experience to the tax preparation table.

Oversea Assets and Income Reporting

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In my last column, I talked about the uniqueness of the U.S. income tax law because it could be applied to U.S. citizens and legal residents no matter where they live (in or out of the U.S.). To make sure all applicable U.S. persons and businesses pay proper taxes, the IRS requires any foreign financial accounts to be reported if the aggregated value exceeds $10,000 under FBAR (Report of Foreign Bank and Financial Accounts). The FBAR also requires the domestic financial institutions to report the deposits of $10,000 or more to the IRS under code 31 USC 5313. But the FBAR wasn’t enough to track down financial assets hiding overseas, so Congress came up with a new law called FATCA (Foreign Account Tax Compliance Act). Under this law, the aggregated foreign financial assets of $50,000 (single living in U.S.), $100,000 (married filing joint living in U.S.), $200,000 (single living out of U.S.), and $400,000 (married filing joint living out of U.S.) on the last day of the tax year must report their foreign financial assets using Form 8938. Failing to comply with this law may result in penalties up to $50,000 for tax payers and participating foreign financial institutions will be obligated to withhold and pay over to the IRS 30% of the U.S. source income under code 26 USC 6038D.

The real unusual part of FATCA is that it requires foreign financial institutions to comply with the U.S. internal revenue service. Never mind Chinese financial institutions, but even most of the western banks such as a Canadian institution like Toronto-Dominion Bank is opposing U.S. regulations and complaining that it will cost an estimated $100 million in software and staffing costs to implement the system to comply with the U.S. regulations, according to Bloomberg News in April, 2011. Furthermore, German banks including Deutsche Bank AG and Italian Bank UniCredit SpA in Germany are canceling securities deposit accounts made by Americans because of the new U.S. regulations, according to the Business Week December 2011. Could oversea foreign financial institutions turn in their clients’ confidential information to the U.S. government agency? Doesn’t that violate their financial law if it restricts it from doing so? I am not so sure about it at this point. Even if the foreign financial institutions want to comply with the U.S. regulations, they have to first comply with their own financial regulations within their countries. If foreign financial institutions do not comply, how will the IRS enforce the regulations and penalize foreign institutions is another question. As you can see, FATCA has created complicated situations for the U.S. taxpayers, foreign financial institutions, and the administrating U.S. agency.

So you may wonder why we have FBAR in place first and then create the new FATCA. Aren’t they overlapping except for the dollar limits and foreign financial institutions’ reporting requirement? They are similar, but also very different.
For example, the beneficiaries of foreign trust could be exempt from FBAR requirement but not from FATCA if the aggregated value exceeds the limit. But the real big difference between FBAR and FATCA comes from their origin.
The FBAR reporting requirements originated from the Bank Secrecy Act, which is part of Title 31 Money and Finance Code versus Title 26 which is the Internal Revenue Code. Even though the FBAR is received and processed by the IRS, it is not part of the income tax return. For example, the only connection between your 1040 and FBAR is the question on Schedule B. And the required form TD F 90-22.1 should not be filed with your income tax return and not to be filed to the same office as the income tax return is filed. Also, the due date for TD F 90-22.1 is June 30th, not the usual due date for tax returns such as April 15th or March 15th. As you can see that since the FBAR is not an IRS code, the IRS has limited power to make the enforcement. The willful failure to comply with FBAR reporting requirement has serious penalties as mentioned above, but penalties for non-willful and negligent failure to file is substantially reduced. However, not with Title 26 IRS code. For example, the failure to comply with FATCA, the statute of limitations for penalties and taxes due could be suspended indefinitely (not usual 3 years or 6 years apply). Also, the IRS has fewer burdens to prove tax payer’s willful act vs. non-willful negligent act.

In conclusion, the excessive tax evasion, money laundering, terrorism financing, narcotics, and gun trafficking by offshore foreign accounts and assets lead to the creations of FBAR and FATCA which can impose serious penalties and fines who failed to report their foreign financial assets. How well will it serve its purpose? I guess that most of the criminals who are involved in money laundering, terrorism financing, narcotics, and gun trafficking would not care too much about missing the due date for reporting their foreign financial assets, but it will most likely have positive effect on reducing tax evasion by the average person placing their financial assets oversea and not reporting it. So please use this article as an opportunity to review your foreign financial assets and see if any of your financial assets are subject to FBAR or FATCA.

If you have questions, need additional information or would like to discuss more on the above topic, please feel free to call us and/or visit our office.
Grant Yi (Accountant)
Trimble & Company
(951) 781-2910 ext. 143
grant@trimblecompany.com
5041 La Mart Drive Ste. 110
Riverside, CA 92507

US Tax Law, Past, Present, and Future.

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When the United States was born, there were not that many taxes for its citizens of a newly formed nation. The government’s major source of revenue came from the sales taxes imposed on trading tobacco, sugar, slaves and property sold at auctions; however it did not have income taxes like we experience now. It is hard to believe but back then things were a lot simpler than now and even the US government did not need a lot of money to operate as a functioning government. In fact, even the sales tax was removed in 1817 because the US government could function as a government from just tariffs collected from imported goods. The first income tax law was introduced during the American Civil War in 1861 to support the war effort. Under this new income tax law, 3% of all income over $800 was collected. Compared to our highest tax bracket today, which is 35%, it is incredibly low despite the fact that it was during the darkest and bloodiest moment is US history. The federal income tax became a permanent part of our lives in 1913 when the 16th amendment to the constitution was made which gave Congress real power and authority of collecting income taxes from its citizens. The 16th amendment states “Congress shall have power to lay and collect taxes on incomes, from whatever source derived”. The important key words are “whatever source”. This means that from this point on the US government is your business partner for whatever you do and therefore whatever you earn from your work or business, you now have to legally share it with the US government.

The current federal income tax is just a part of many taxes that we are paying every day. On top of federal income taxes, there are payroll taxes, excise taxes, sales taxes, tariffs, gift taxes, unemployment taxes, state income taxes, property taxes, estate taxes, and self-employment taxes. The federal income tax is a progressive tax meaning that as you make more, you will be taxed more. For 2011, the income tax bracket consists of 10%, 15%, 25%, 28%, 33%, and 35% for individuals and C corporations could be taxed up to 39% of its income. The today’s top tax rate of 35% for an individual and 39% for a business seems a lot, but during War World 2, the top tax bracket for an individual was an incredible 94% to pay for the war effort. The US income tax is unique in that no matter where you live, Korea, India, or Germany, as long as you are a US citizen or legal resident of the US, you will be subjected to US income taxes. In other words, even if you are living alone in the North Pole and earn money by fishing or living in a remote desert of Africa and make money by hunting and never lived in the US, as long as you are a US citizen, you are subject to the US tax law. Most of the other major countries do not apply income tax or estate tax law to expatriated citizens. Looking only from the outside, the current tax law looks extremely complex, more advanced, strict, and rigid than the foreign tax law, but if you look from the inside, there are many loop holes that legally allow the tax payers to pay less tax or pay no tax at all. In 2006, out of 134,372,678 individuals who filed a federal income tax return, about 32.58% didn’t pay any federal income taxes and according to CNN Money that percentage grew to 47% by 2009. Of course with our current bad economy, the government policy to give away tax credits and deductions contributed to this growth of non-income tax payers thus, it is wise to go over the tax credits and deductions carefully to make sure that you did not miss out any new tax credits and deductions.

So what is the future for income taxes? There are some very radical tax reform ideas among a very small group of politicians in Washington such as Rep. John Linder who sponsored the Fair Tax Act of 2003 which now is supported by the House Majority Leader Tom DeLay (Rep. Texas). The idea is to replace the overly complex tax laws, loop holes, and unfair current federal income tax with a flat 23% sales tax on final sales of goods and services. The suggested tax reform will never be passed and, in fact, no country in the world is planning to abandon the income tax or is even considering a personal expenditure tax to replace the income tax, but we can understand where this radical idea came from. The federal income tax is not just complex for tax payers, but also for tax collectors and law makers. For the past almost 100 years, congress has been fixing the loop holes and improving the tax law by making the tax law even more complicated. Every year more and more updates and modifications are added to the current tax laws, but rarely taken out. We can positively assume that it will get even more complicated in the future.

If you have questions, need additional information or would like to discuss more on the above topic, please feel free to call us at (951) 781-2910 and/or visit our office.

Grant Yi is an accountant in Riverside, CA at Trimble & Company. The company provides comprehensive small business accounting services throughout Southern California.

Company Profile:

James W. Trimble's public accounting experience goes all the way back to 1978. Now a managing shareholder of Trimble & Company, he was initially with a local firm in the Palm Springs area, until 1984 when he started his own firm in Riverside. Trimble & Company has two shareholders, three CPAs, and 15 employees in total, several of whom have been with the firm for over 20 years. Learn more...

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Trimble and Company
4201 Brockton Ave # 100
Riverside, California 92501
United States (US)
Phone: 951-781-2910
Fax: 951-788-6135