Category Archives: News

Business registration taking too long? Register your business at Cruz-Caymo Partners & Associates for a waiting time of only 3 days prior to the approval of the document.

CP&A assist with the formation procedure, planning, and registration with the relevant government agencies such as SEC, DTI, BIR and other Philippine government agencies.

Business name registration is compulsory and must be completed before the business starts operating. In putting up a business, there are several government agencies you have to register with depending on the type of your business. To help the client with the business registration, CP&A prepares and facilitate all the steps and procedures in the registration.

If the client is sole proprietor, first step is to apply for the business name registration certificate. CP&A staff let the client accomplished business name registration form, TIN no. and list of five business names ranked according to preference. After the issuance of DTI business name certificate, apply for the Mayor’s/Business Permit to the local municipality where the business is located. This requires accomplished business permit application form, DTI business name certificate, sketch of the business location, Fire and Safety Inspection clearance, sanitary permit, Barangay clearance, lease contract, and 2×2 pictures. Then, get business TIN no in BIR, SSS certificate, and DOLE registration. All these procedures are handled by CP&A and properly coordinated with the client. Same procedure for partnership and corporation applies except that there are more requirements needed for them.

After accomplishing the DTI certificate of registration, next step is to apply for BIR certificate of registration. Procedure is to accomplish BIR Form 1901, together with birth certificate or any valid identification showing name, address and birth date, mayor’s permit and DTI Certificate to the Revenue District Office having jurisdiction over the registered address of the business establishment. Then the RDO will issue the Certificate of Registration (Form 2303).

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IRS awards to whistleblowers grew last year

The Internal Revenue Service’s Whistleblower Office ramped up the number of monetary awards it gave to tax tipsters last year, according to a new report.

In fiscal year 2016, the Whistleblower Office made 418 awards to whistleblowers, a total of more than $61 million, representing a 322 percent increase compared to the 99 total awards paid in FY 2015. In addition, whistleblower claims assigned in FY 2016 were up 6.4 percent from those submitted in FY 2015, while closures of whistleblower cases increased 99 percent, according to the Whistleblower Office’s 2016 Annual Report to Congress.

However, even though the number of awards increased sharply, the total amount in dollar terms declined from the previous year, from $103 million in fiscal year 2015 to $61 million in FY 2016. Still, that represented an improvement over the $52 million awarded in FY 2014.

This is the tenth year since Congress passed legislation formally created the office that oversees the whistleblower program. “Whistleblowers have helped the IRS detect and deter tax noncompliance and avoidance, helping to protect both the nation’s revenue collection and the integrity of our voluntary compliance tax system,” wrote IRS Whistleblower Office director Lee D. Martin in the report. “Indeed, since 2007, information submitted by whistleblowers has assisted the IRS in collecting $3.4 billion in revenue, and, in turn, the IRS has approved more than $465 million in monetary awards to whistleblowers.”

He noted that his office has succeeded in all but eliminating a backlog of whistleblower claims over the past year, in response to recommendations from the Government Accountability Office and the Treasury Inspector General for Tax Administration. The office has also put in place a more streamlined process to avoid future backlogs.

“The whistleblower office is more welcoming to whistleblowers all the time, and the American public benefits as a result,” said Sen. Chuck Grassley, R-Iowa, in a statement Thursday. Grassley wrote the provisions in a 2006 law improving the incentives for whistleblowers to come forward and report large-dollar tax fraud. “Whistleblowers have helped the IRS recover $3.4 billion that otherwise would have been lost to fraud,” he noted. “Cracking down on big-dollar tax fraud is a matter of fairness to the vast majority of taxpayers who pay what they owe. Still, the IRS and Congress can’t rest on our laurels. The IRS still is not as fast it could be in considering whistleblower information. Whistleblowers often have put their livelihoods on the line to come forward, and they deserve timely answers from the IRS. Another challenge is making sure the IRS interprets the whistleblower statute in a favorable light toward whistleblowers, which it doesn’t always do. I look forward to working with the new administration on whistleblower concerns. As I mentioned to Treasury secretary nominee Steven Mnuchin during our meeting, it’s required a lot of oversight to maintain the momentum at the IRS whistleblower office, and I’d like to see a Treasury secretary who will build on the progress.”

Clark A. (Tuesday, January 17 2017)”IRS awards to whistle blowers grew last year.”  Accounting today. Retrieved from: http://www.accountingtoday.com

 

Corporate tax avoidance not a sign of risky management

Profitable companies that pay little in income taxes aren’t necessarily indulging in risky management practices with their tax strategies, according to a new academic study.

 

The study, by professors David A. Guenther and Steven R. Matsunaga of the University of Oregon and Brian M. Williams of Indiana University, found tax avoidance activities that lower a company’s tax rate are not associated with a greater degree of risk. The study appears in the January/February issue of The Accounting Review, published by the American Accounting Association.

The researchers performed three riskiness tests: whether low effective tax rates that a company achieves prove to be merely temporary and are less persistent then higher effective tax rates; whether low effective tax rates are more predictive than higher rates of future tax volatility; and whether low tax rates are associated with greater uncertainty about a company’s overall future cash flow, as reflected in greater future stock-price volatility.

In all three tests, low effective tax rates proved not to be associated with corporate risk. The study comes at a time when Congress is considering wide-ranging tax reforms that promise to lower corporate taxes from the top rate of 35 percent.

“The current statutory rate may not be to companies’ liking, but we don’t find that it’s driving managers into risky behavior,” Guenther said in a statement. “Our findings suggest a firm’s low taxes to be more reflective of skilled management than risky management.”

The researchers found that not only are companies with low effective tax rates no more likely than other companies to pay higher rates in succeeding years, they are significantly less likely to do so. They found no evidence linking low effective tax rates with future stock price volatility. Instead, some of their results suggested high rates predict future stock price volatility. Even companies that operate in tax havens had no tendency toward higher stock price volatility.

What does appear to be a sign of future financial troubles is not a low tax rate, but ups and downs in effective tax rates. Tax-rate volatility appeared to be predictive of future stock-price volatility. A potential explanation for that phenomenon, the researchers wrote, “is that past volatility leads to greater uncertainty regarding the firm’s future tax rate and overall uncertainty regarding the firm’s future cash flows.”

The findings come from an analysis of the finances and taxes of a large sample of companies over a 25-year period. The researchers calculated the effective tax rates for both taxes that companies acknowledged on their financial statements and the tax payments they actually made over three- and five-year periods.