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As you may be aware, for the last few years the Internal Revenue Service has been strongly urging taxpayers to file their income tax returns electronically. Tax return preparers have been required to IRS e-file individual income tax returns since 2012, with certain allowable exceptions. 
One of those exceptions is that the taxpayer can opt-out of e-filing and choose to file on paper. Although you may have a reason for not wanting to e-file, for the 122 million taxpayers who did e-file last year there are actually several good reasons for doing so.
E-file is actually the best way to file an accurate and complete return since tax software is designed to do the math and help you avoid mistakes. E-filing means the IRS does not have to re-type your tax return at their service center, which means less chance that the IRS will make a mistake when processing your return. When e-filing you will receive a confirmation that the IRS has received your tax return. This is proof that the IRS received your tax return and has started processing it. E-file also meets strict security guidelines and uses the best encryption technology. Since the start of the e-file program, the IRS has safety and securely processed more than 1.2 billion e-file individual tax returns.
If you would like to receive your refund earlier, e-filing is definitely the way to go. Because there is nothing to mail and your return is less likely to contain errors, e-filed returns have a shorter turnaround time. 
Most IRS refunds were issued in less than 21 days. An even faster way to get your refund is to combine e-filing with direct deposit into your bank account.
With the e-file program you have several different payment options available. If you owe taxes, you can e-file and set an automatic payment date on or before the April 15th due date. You can pay by check, money order, debit card or credit card. You can also transfer funds electronically from your bank account.
E-file is easy. You can e-file your federal return through IRS Free File at IRS.gov. You can also use commercially available software or simply ask your tax preparer to e-file your return.
Try it. You’ll like it.
Watching the Winter Olympics in Russia makes me wonder if they will ever grace Reno/Tahoe in my lifetime. It has been over 50 years since Squaw Valley hosted the Olympics and I wasn’t alive to see that. 
Tahoe certainly has the snow, even in this drought. The storm from early February would have been a saving grace for the Olympics that are staged in February. I hear of Sochi being in the 60s and I compare it to Reno as we have been basking in 60 degree temperatures as of late. Sochi’s Olympics events are being held as low as 2,000 ft, far lower than the lowest Tahoe elevation of slightly over 6,000 and if you ask me, less awe inspiring. Sochi’s highest elevation for their downhill skiing is also considerably lower than many of Tahoe’s peaks.
I also contemplate the enormous cost that Russia is spending to put on the Olympics. I keep hearing a figure in excess of $40 billion and that sounds ridiculous. The last Olympics in the United States, in Salt Lake City, cost under $5 billion and that included the huge cost of building a light rail that was funded by the government. 
So not only would I like the pride of Tahoe hosting a Winter Olympics, but I would also like the federal government to build a rail system to alleviate the traffic, or at least widen highway 89 to Squaw Valley.
On Monday, February 10, the IRS announced that it is delaying the shared-responsibility requirement under Sec. 4980H of the Affordable Care Act (also known as Obamacare) for employers who have 50 to 99 full-time equivalent employees in 2014. These employers will now have until 2016 to offer health care coverage to their employees. 
However, these employers will still be required to report on their workers and health care coverage in 2015. The penalty had already been postponed last summer (its original effective date was 2014).
To be eligible for the delay, employers must not reduce their workforce or hours of service in order to qualify and they must maintain their previously offered health coverage. This change was part of final regulations issued Monday by the IRS that also made a number of improvements in response to the proposed regulations issued back in 2012.
For instance, the final regulations ensure that volunteers such as firefighters and emergency responders do not count as full-time employees. Also, for employers with 100 or more full-time equivalent employees, the regulations phase in the percentage of full-time workers to whom such employers need to offer minimum essential coverage. 
The percentage is 70% in 2015 and 95% in 2016 and beyond. Employers with 100 or more full-time equivalent employees that do not meet these percentages will be required make an employer shared-responsibility payment for 2015. The final regulations also contain transition guidance for noncalendar-year plans. There was no change for small businesses with fewer than 40 employees, which is about 96% of all employers; they are still not required to provide coverage or fill out any forms under the Affordable Care Act.
Surveyors measured the snowpack in the Sierra Nevada in January 2014, and the results are more proof of Nevada and California’s severe drought: The California Department of Water Resources said the snowpack was 12 percent of average for this time of the year, the lowest level since electronic record-keeping began in 1960 . 
Prior to today, the lowest comparable snowpack reading was January 1991, when accumulated Sierra snowfall was 21 percent of average. This year, snowpack levels in the northern section of the Sierra were 6 percent of average levels.
If we don’t get several significant storms to create a reasonable snowpack by April 1, we’re going to be looking at runoff values into the streams that quite possibly are going to hit historic all-time lows.
Nevada’s severe drought is a tragedy unfolding in slow motion. But its effects will be far reaching — from rural communities that depend on ranching and agriculture for their existence to the prices we all pay for food at the grocery store.
For the third year in a row, the rain and snow has not come on time. Some longtime ranchers and farmers say the current drought is the worst they have ever seen.
Because of the stingy snowpack through much of the West, federal officials this past month designated portions of 11 Western and Central states as primary natural disaster areas including Nevada.
Some Nevada ranchers have already sold some of their cattle, primarily to their counterparts in the Midwest, where there are healthy grazing lands. The sales are mostly a precautionary move to take advantage of high cattle prices and to reduce herds if normal water deliveries don’t materialize. On a recent Tuesday, about 400 cattle from around the state and even neighboring California were up for auction at a yard.
Alfalfa is Nevada’s largest crop, with just more than 1 million tons worth $217 million produced in 2012. Cattle and dairy cows are also important. There were 470,000 cattle and 29,000 dairy cows in Nevada in 2012, the state Agriculture Department reports. Many people don’t seem to understand the connection between alfalfa and food production, or the relationship between farms and the food they buy in the grocery store.
Additionally, closer to the Sierra’s, tourism is key to the economy. 
Drought conditions are wreaking havoc on the winter sporting activities so vital to our livelihood in northwestern Nevada. Continued drought will impact tourism in the Reno/Tahoe area during the summer as well with lake levels well below normal and dry conditions yielding threats of wildfire in the Tahoe basin. Should the lake drop far enough, the Truckee River will slow to a trickle impacting fish and wildlife as well as the beautiful backdrop it offers to visitors and locals during the outdoor summer events held in downtown Reno.
As resilient Nevadans, we will make it through this latest challenge we face. We always rise up in the face of adversity and this will not be the exception.
So, when venturing out for a meal, a trip to the market or mini-vacation, think local first. There are many fine choices in restaurants, farmer’s markets and nearby tourist attractions that benefit our own local economy in this beautiful area we call home, drought or no drought.
Large party automatic gratuities may be a thing of the past. These were originally implemented to ensure servers were being adequately compensated. However, as of January 1st, the IRS now considers these automatically calculated tips as service fees, and will treat them as regular wages, subject to payroll withholding tax.
Think back to your last experience at a restaurant when you were with a large group of people and your tip was calculated into the bill when you went to pay it. 
You probably knew beforehand that this would be the case since it was most likely printed somewhere that a certain percent gratuity would be added to the bill for tables with more than a certain number of people. Did you consider this a tip or a service charge?
The IRS uses the following factors to determine whether a payment is a tip or a service charge:
If even one of these conditions is not met, the payment is considered a service fee and not a tip.
This is a big change for employers and employees. The employer now has to treat this money as income and has to include it in that employee’s regular wages. This means it is subject to normal reporting and withholding requirements. Also, employees will not be able to take their money as they receive it, they will have to wait until the next pay day.
This ruling will probably deter a lot of restaurants from including an automatic tip into their customer’s bills. By removing this, it will likely reduce the amount of tips servers will receive. 
A good way for employers to help their servers get adequate tips is to include suggested tip amounts on the bills. Putting a suggested tip amount on the bill does not qualify the money as a service charge because the customer still has a choice in the decision.
The Tax Court ruled on a case in December that involved falsified documents, deception and forgery – perpetrated by the wife.
The wife’s tangled web included:
➜ Submitting falsified requests to withdraw funds from her husband’s IRAs
➜ Forging her husband’s signature to endorse the distribution checks
➜ Depositing the funds into a joint account that only she used
➜ Using the proceeds for her personal benefit
The husband did not find out until the next year. The Tax Court said the husband was not required to include the distributions in his gross income and was not liable for the additional tax on early distributions.
Andrew Roberts and his wife, Cristie Smith, maintained two joint checking accounts. Although the accounts were titled in joint name, Roberts exclusively used one account, and Smith exclusively used the other account.
Roberts did not have a checkbook for, write checks on or make withdrawals from Smith’s account, and he didn’t receive or review the bank statements. He didn’t know about, authorize or benefit from any deposits into, or withdrawals from, Smith’s account.
The custodians of Roberts’s two IRAs received requests with his forged signature, faxed from Smith’s workplace, to withdraw approximately $37,000 from his IRAs. Roberts did not make or authorize the requests.
Checks were sent pursuant to the withdrawal request, the endorsement was forged, and the checks were deposited into Smith’s joint account that she maintained separately from Roberts. The court inferred that Smith (or someone on her behalf) forged Roberts’s signature on the distribution requests and endorsements.
Roberts first learned of the unauthorized withdrawals when he received Forms 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., early in the following year. By the time Roberts had determined Smith’s involvement, the couple was already involved in a divorce proceeding.
Roberts advised the trial court of what had happened, and the court’s decree of dissolution took into account that Smith had withdrawn the funds.
Throughout their marriage, Smith prepared and filed a joint income tax return with Roberts. In early 2009, Roberts, although separated from Smith, discussed with her the preparation and filing of a joint income tax return for 2008. He understood from that conversation that he and Smith would still file a joint return.
Roberts gave his tax information to Smith so that she could prepare the 2008 joint return. However, Smith prepared and filed separate returns, using married filing separate filing status for herself and single filing status for Roberts.
On Roberts’s return, Smith made several errors, including not reporting the IRA withdrawals as income. Roberts’s return showed a refund that had been electronically deposited into the joint account controlled by Smith. She did not show Roberts the return or give him a copy, despite his asking for one.
Upon examination, the IRS argued that Roberts should have reported the withdrawals as taxable distributions because he was the owner of the IRAs and the person entitled to receive distributions, the distributions were deposited into a joint account, and they went toward “family living expenses.” The IRS also found it significant that Roberts never attempted to return the funds to the IRAs or contest the distributions once he discovered the payments.
Roberts claimed that he was not a payee or distributee of the funds because the IRA withdrawals were made pursuant to forged requests, the checks were stolen, the endorsement signatures were forged, and he had received no economic benefit.
The Tax Court concluded, based on common sense as well as its finding of fact and analysis, that Roberts was not a payee or distributee of the funds. The court noted that, although it has held that the distributee or payee of an IRA distribution is “generally” the participant or beneficiary entitled to receive the distribution, it has rejected the claim that the recipient is “automatically” the distributee.
The court also found that Roberts’s failure to timely pursue a state law remedy did not necessarily mean that he had received a taxable distribution from his IRA accounts. Thus, on the basis of the overall facts, the court concluded that Roberts did not fail to report any income attributable to the IRA distributions. Because the withdrawals were not distributions taxable to Roberts, he was not liable for the additional tax on early withdrawals.
However, the court ruled against Roberts on the issue of filing status. It reasoned that, because Roberts and Smith were still married on Dec. 31, 2008, and were not separated for the last six months of the year, the proper filing status was married filing separately.
The court also held that, to the extent that the final computations showed that his understatement of tax exceeded the greater of 10 percent of the tax required to be shown on the return or $5,000, Roberts would be liable for a substantial underpayment penalty (Andrew W. Roberts v. Commissioner, 141 TC No. 19, Dec. 30, 2013).
©2014 CPAmerica International
How much do you pay for your cell phone monthly? I’m not on the most expensive plan, but I still pay nearly $80 a month. While the price of my plan hasn’t increased in recent years, primarily because I haven’t upgraded my phone, I still feel $80 is too much. 
On top of it currently being too expensive, if I decide to upgrade my phone at a subsidized price with my current carrier my monthly bill will go up (to about $100 per month), my unlimited data plan will go away and I will be locked into the carrier for another two years. So, over the past many months I’ve been agonizing over how I should change my cell phone plan in order to get a lower bill with reasonable cellular coverage. Here are some of the options I’ve come up with.
T-mobile has been one of the leading contenders for price and coverage. Their unlimited talk and text plans start at $50 per month with 500 MB of high speed 4G data and unlimited slower speed data after you hit the monthly cap. T-mobile has been pushing their ‘un-carrier’ branding, which is basically them trying to say we’re not like the other big carriers out there. 
The biggest difference T-mobile has right now is the customer pays for the phone outright. You can pay the entire cost upfront or finance it over a two year period. Once the phone is paid for you can cancel service at any time. It’s an interesting idea and much closer to the European cell phone market, but it still basically locks you in until the phone is paid off. With other carriers, long after your subsidized phone cost has been recovered by them you are still paying the same monthly price for your cell phone service. From a cost perspective, if I was to get a new phone and update my plan with my current carrier, it would cost approximately $900 more than going with T-mobile over a two year period.
The other potential contender is a relatively new company called Republic Wireless. 
Republic Wireless is a mobile virtual network operator (or MVNO) like Boost Mobile or Virgin Mobile. MVNOs do not own the cellular network infrastructure, but lease the use of a cellular network to build their mobile operation. The unique selling points for Republic Wireless are the cost and the use of WIFI calling in addition to traditional cellular network calling. To start, you buy the phone outright. 
There isn’t much selection, but their top end phone right now is the Moto X which will set you back $300 (this is cheaper than buying the phone at full price from other carriers). From there you can pick from four different plans that go for $5, $10, $25 or $40. These plans range from being WIFI calling only to having regular cellular coverage with 4G data. 
Of those plans, the $25 plan fits my needs as I will get regular cell service with 3G data and access to Republic Wireless’ unique WIFI calling. If I was to get this same phone and update my plan with my current carrier, it would cost approximately $1600 more over a two year period. That is not an insignificant amount.
With both of these options there are drawbacks of course. T-mobile has decent coverage in the Reno/Sparks area, but I know when I leave metropolitan areas I will definitely not get the coverage I currently get with Verizon. Republic Wireless runs off the Sprint network, which is probably the last carrier I would choose if I was going for one of the four network operators (ATT, T-mobile and Verizon being the other three). Republic Wireless also has the downside of having virtually no phone selection and because of their unique WIFI calling feature the phone is locked to them and can’t be brought to other carriers. So, now I have to weigh the downsides, which are less financially impactful, with the savings I could have by switching to a different carrier from my current one. I’m not quite sure what I’m going to do, but I’d love to know what you think and what your experiences have been with different carriers.
Theft of personal information, such as social security numbers, to commit fraud on tax returns, to claim refunds or credits to which a taxpayer is not entitled to or commit other financial crimes is on the rise. Using this information, thieves often file fraudulent returns early during the filing season to avoid information matching. 
So you should have a pretty good indication that you are a victim of identity theft if you receive a notice from the IRS stating that more than one tax return has been filed using your information or wages are shown from an employer that you have not worked for. For the 2011 tax filing season, it has been estimated that identity theft related fraud was involved in the filing of 1.5 million tax returns representing $5.2 million. If you are a target, it can take months to clear your name, during which time a legitimate refund you should have received is withheld.
Typical methods used to gain access to your personal information include email or telephone phishing or dumpster diving. Some taxpayers receive phony IRS emails telling them they have a refund pending or are under investigation. 
The IRS does not send unsolicited tax-account related emails requesting personal and financial information. If you receive a suspicious email from the IRS report it by calling the IRS at 800-829-1040 or forwarding the email to phishing@IRS.gov.
The following are some of the preventative techniques one can employ to avoid identity theft:
• Arrange for masked social security numbers (SSN) where possible, e.g. on insurance cards.
• Store your social security card in a safe and secure location and do not discard any documents with your SSN on them. Use a shredder before discarding documents.
• Resist giving your SSN or other personal information to businesses just because they ask for it.
• Protect your computer by using firewalls and anti-spam or anti-virus software. Regularly change passwords for internet accounts with sensitive information.
Remember – an ounce of prevention is worth a pound of cure.
I recently came back from a 3 ½ week vacation from Taiwan, Hong Kong and China.
We were traveling in a group tour in both Taiwan and China. I was very impressed with the tour guides who provided us with information about the various places we were visiting as well as stories from previous tours they headed. One particular story told pertains to the new wealth of some Chinese from mainland China.
Shopping at various stores are part the each tour. A Chinese tourist was in a group that went to a jewelry store as part of the tour. The store clerk was trying to get this particular tourist to purchase a Rolex watch from a tray of various Rolex watches. The Chinese tourist said to the clerk, “Bring me more expensive ones, these look cheap.” So the store clerk brought out another tray with maybe thirty very expensive Rolex watches. 
The Chinese tourist pointed out three or four of the thirty or so watches. To the pleasant astonishment of the store clerk, the three or four were watches that the Chinese tourist did not like and ended up purchasing the rest of the watches in the tray.
The power in the all hotel rooms we stayed at in Taiwan, Hong Kong and China were controlled by our room key. There’s a slot by the door where the room key is inserted to turn on the electricity in the room. I thought this was a very environmentally sound method of conservation.
We are used to having toilet paper in every stall and plenty of paper napkins at all eating places. Some of the public restrooms in Taiwan and China had a spot where one would grab some toilet paper before entering a stall. And then there are some that don’t provide toilet paper at all. Paper napkins at restaurants sometimes were just Kleenex, not what we are accustomed to. 
Of course, the expensive restaurants catering to the wealthy and the westerners had the paper or cloth napkins.
We were warned not to drink the tap water without boiling it first. Bottled water was provided in all the hotel rooms. We drink bottled water in the states by choice and not because we must.
Overall, I came home with a feeling of how good we have it in the United States and how much we take for granted.
As many of my clients and friends reading my blogs may know, I serve as Nevada’s only elected representative to the governing Council of the American Institute of Certified Public Accountants (AICPA). This is a position that I am pleased and honored to hold as it offers me the opportunity to provide a voice in the national forum that represents our profession with respect to standard-setting as well as giving me a glimpse of all that goes on behind the scenes when it comes to being an advocate for our collective interests as practitioners and clients on the national stage. 
I attend two national Council meetings and one regional meeting each year. These meetings are packed with Council business and often other interesting topics that promote thought leadership in areas you wouldn’t always expect. My last meeting was no exception.
The 2013 Fall Meeting of the AICPA Council was held in late October in Los Angeles, California. As is always the case at the Council meetings, AICPA President and CEO Barry Melancon, gave a masterful presentation outlining the current issues facing our profession. Near the conclusion of his presentation, Mr. Melancon provided a few remarks regarding the evolution of the CPA’s learning environment pointing out that the general trend in learning is becoming more focused on measuring competency rather than the time spent. This was to become one of the major focuses in this meeting.
In conjunction with the topic of the future of learning, the AICPA had arranged for a presentation by Sal Khan, Founder – Khan Academy. 
Many of you may be familiar with Mr. Khan as he has been in the spotlight recently having been on CBS’s news magazine 60 Minutes and can be seen on a commercial currently running on TV describing his organization and its partnership with Bank of America. For those of you who are not familiar with him, Sal Khan is the founder and faculty of the Khan Academy— a not-for-profit organization with the mission of providing a free world-class education to anyone, anywhere. It now consists of self-paced software and, with over 1 million unique students per month, the most-used educational video repository on the Internet (over 30 million lessons delivered to-date). All 2000+ video tutorials, covering everything from basic addition to advanced calculus, physics, chemistry and biology, have been made by Mr. Khan.
Prior to the Khan Academy, Mr. Khan was a senior analyst at a hedge fund and had also worked in technology and venture capital. He holds an MBA from Harvard Business School, an M.Eng and B.S. in electrical engineering and computer science from MIT, and a B.S. in mathematics from MIT.
During his presentation to the Council, Khan gave an energetic, often humorous, background story on how he founded his not-for-profit organization. It was a fascinating presentation and I would encourage everyone, especially parents of school-aged children, to learn more about this organization and its revolutionary approach to learning. I now know where I will turn to brush up on my algebra, calculus physics and biology, all of which baffled me during my formative years!
