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Tax Reform’s Potential Impact on Tech

By David Yasukochi

On Dec. 2, the Senate passed its version of proposed tax reform legislation, the “Tax Cuts and Jobs Act,” on a vote of 51-49. The House had previously passed its own tax bill on Nov. 16, 2017. Currently, both bills reside with a conference committee for reconciliation. This sets the stage for a possible enactment of a final bill before the New Year.

With each bill proposing slightly different provisions, it’s important that tech companies familiarize themselves with the proposals to understand how they may be impacted in the future. Should legislation pass, most provisions of both bills will be effective starting in 2018.

What’s at Stake for U.S. Tech?

The key highlights of the House and Senate tax bills, as well as their potential impact on tech companies, are summarized below.

ProvisionImplication for Tech Companies
Reduce the Corporate Tax Rate (House & Senate):
Both the House and Senate bills propose to reduce the corporate tax rate from 35 to 20 percent. The Senate bill, however, would delay this implementation until 2019.
A reduction in the corporate tax rate would be a boon to tech companies overall, as they have often protested that the current U.S. corporate tax rate is among the highest of all the developed nations.
While all tech companies are looking forward to the change, smaller tech companies that operate domestically are especially excited: This is because many still face high effective tax rates when compared to their global tech peers, like Google or Apple, who are often able to enjoy lower effective rates due to sophisticated tax planning, including base shifting and other measures. Because smaller companies often have more limited bandwidth, resources, and footprint, they may be unable to implement as effective a global tax structure as their global tech counterparts. Thus, the corporate tax reduction would be a huge win.
Eliminate Ability to Carryback Net Operating Losses
(House & Senate):
Both the House and Senate proposals will generally eliminate taxpayers’ abilities to carryback net operating losses (NOL), and will limit the use of NOLs to 90 percent of taxable income (it is down to 80 percent after 2022 in the Senate bill). NOLs will no longer have an expiration period.
In situations where tech company earnings are volatile, the restrictions on the carryback and use of NOLs could present a significant cash flow obstacle.
Repeal the Domestic Activities Deduction (DPAD)
(House & Senate):
The House and Senate bills both propose to repeal the Domestic Activities Deduction (DPAD), which was originally enacted to encourage manufacturing within the U.S. For C corporations, repeal is effective one year later (years beginning after 2018) in the Senate version.
While the impact of this repeal is somewhat muted, since a good portion of hardware manufacturing activities are done offshore, many software developers were able to take advantage of the DPAD.
Create a Territorial Tax System (House & Senate):
Both bills propose the creation of a territorial tax system, which would tax U.S. companies only on their domestic income vs. their worldwide income.
The creation of a territorial tax system is a provision that has long been on the tax wish list for U.S. tech companies, who have long complained that the current tax framework has made them uncompetitive with their global peers. Most businesses would agree that a territorial tax system could lead to significant tax savings. Nevertheless, accompanying international tax provisions (including those covered below) may mute some of the enthusiasm.
Tax Existing Overseas Profits:
House: The House bill imposes a one-time tax rate of 14 percent on companies’ existing foreign profits held in cash offshore and 7 percent on their offshore noncash assets. Companies would have up to eight years to pay what they owe.
Senate: The Senate bill’s proposed one-time tax rates on companies’ existing foreign profits are slightly higher: 14.49 percent on cash assets and 7.49 percent on non-cash assets held offshore.
This measure is designed to raise tax revenue from income that has not previously been subject to U.S. tax. Under current law, companies pay U.S. tax only when they bring the money home. But it’s also meant to entice companies to invest some of their foreign profits stateside.
While tech companies are widely viewed as key beneficiaries of the shift to the territorial tax system because of the large amount of earnings maintained overseas by some of the more prominent members, the toll charge may also disproportionately impact them as well.
Both the House and Senate bills feature an assessment of tax on a “deemed” distribution of existing profits, whether or not the amounts are actually distributed. The toll charge is significantly higher than that assessed under Section 965 (which featured an effective tax rate of 5.25 percent), a one-year tax holiday created by the American Jobs Creation Act of 2004. The toll charge is payable over eight years under both bills, with some differences in annual amounts due.
Taxation of Low-Taxed Income and Intangibles:
House: The House bill requires shareholders to include in their income 50 percent of the “Foreign High Return Amount” (FHRA) of their foreign subsidiaries. The FHRA is income earned by controlled foreign corporations (CFC) in excess of a specified routine return on tangible assets. A foreign tax credit equal to 80 percent of the amount attributable to this excess is permitted.
Senate: The Senate bill requires inclusion by shareholders of Global Intangible Low-Taxed Income (GILTI), which is similar in concept to the FHRA above. However, there are differences in the way in which the excess is computed, and rather than being imposed on 50 percent of the excess, the bill introduces a deduction equal to 50 percent that decreases down to 37.5 percent after 2025. The bill also permits a deduction for foreign-derived intangible income (below).
Tech companies with foreign subsidiaries in low-tax jurisdictions appear to be prime targets for this legislation. While the territorial income provision is the carrot, these provisions are the stick to get U.S. companies to domesticate their high value activities, or at least to permit the U.S. to monetize some of those activities located in low-tax jurisdictions.
Offer a Deduction for Foreign-Derived Intangible Income (Senate):
The Senate bill permits an additional deduction against profits of a U.S. shareholder derived from foreign-derived intangible income, as an offset to GILTI. The deduction is initially 37.5 percent of the foreign derived intangible income, which is the U.S. shareholder’s excess return associated with export sales of property or services.
This provision effectively taxes such income at a 12.5 percent tax rate. Some commentators have described this as being similar to a “patent box,” which is featured in the tax framework of some European countries to encourage the formation of intellectual property within those respective countries, and provides a preferential tax rate on certain income.
Change Taxation of Foreign-Related Party Transactions:
House: The House bill imposes a 20 percent excise tax on payments to related foreign parties that are part of the same international financial reporting group. It also applies to partnerships and branches. Specified amounts include amounts allowable by the payor as a deduction, or includible in the cost of goods sold (COGS) or inventory, or in the basis of a depreciable or amortizable asset. The related party can opt out by electing to treat the income as Effectively Connected Income (ECI).
Senate: The Senate bill requires payment of 10 percent of a company’s modified taxable income over its regular tax liability. The tax rate increases to 12.5 percent for taxable years after 2025. This is applicable to a C corporation with gross receipts of $500 million or more, and a “base erosion percentage” of 4 percent or more for that taxable year. Base erosion payments are those that are amounts paid or accrued to a foreign related party, but importantly, does not include amounts includible in COGS. The base erosion percentage represents the base erosion payments as a percentage of total deductions.
The House provision could have a significant impact on technology companies that depend on overseas related parties as a key part of their supply chain, and could force companies to evaluate ways to restructure their operations and flows to mitigate the proposed taxes. The election to treat income as ECI could be a widely considered option.
Limitations on Interest Deductibility:
House: Revises Section 163(j) and expands its applicability to every business, including partnerships. Generally limits deduction of interest expense to interest income plus 30 percent of adjusted taxable income (an EBITDA-like measure). Disallowed interest may be carried over for five years. Contains a small business exception.
Senate: Similar to the House provision with the notable differences that adjusted taxable income is essentially an EBIT measurement, and disallowed interest is carried forward indefinitely.
Interest expense ceiling could be problematic to many tech companies, especially with the relatively short five year carryforward period in the House version. The impact of the two proposals will also be dramatically different for some tech companies due to the differences in the definition of adjusted taxable income.
Limitation on Interest Deductions of International Financial Reporting Groups:
House: Would impose a ceiling on U.S. corporations which are members of large (>$100 million average annual gross receipts over a three year period) international financial reporting groups. The proposal would limit U.S. members from deducting more than a proportionate share of worldwide interest expense, based on worldwide EBITDA, multiplied by 110 percent. Interest expense limitation is the lower of this or that computed under 163(j) (above).
Senate: Similar to the House proposal. Applied to members of worldwide affiliated groups, but proportionate share is based on a debt-to-equity differential percentage of the worldwide affiliated group, and multiplied by 130 percent (reduced down to 110 percent in years 2022 and forward).
See comment above. These provisions could also impact tech companies in dramatically different ways because of the use of EBITDA in the House version, and a debt-to-equity ratio concept used in the Senate bill.
Require Amortization of Research & Experimental Expenditures (House & Senate):
Both bills will require research and experimental (R&E) expenditures to be capitalized and amortized over a five-year period. The inclusion of software development costs in this category is codified. This is effective for tax years beginning after 2022 under the House bill and after 2025 under the Senate bill.
While much fanfare was given to the fact that the R&E credit would be preserved under both versions of the tax legislation, little was said about this provision, perhaps due to the delayed effective date.
Change Taxation for Employee Fringe Benefits:
House: Among items no longer excludable from employee wages include: moving expense reimbursements, employer-provided dependent care assistance, and employer-provided educational assistance. The House bill also limits exclusion for employer-provided lodging to $50,000.
Items no longer deductible, unless includible in W-2, include: certain moving expense deductions, employer-paid parking, mass transit, van pooling and other qualified transportation benefits, entertainment expenses, amounts in excess of imputed income for cafeterias, and dependent care facilities.
Senate: The Senate bill includes similar non-deductibility provisions as the House proposal. In addition, it disallows deduction for meals provided for the convenience of the employer on the employer’s business premises (effective after 2025).
Tech companies have been at the forefront of offering employees “friendly” working environments and amenities. Elimination of non-taxable fringe benefits and the denial of the deduction for such items will make companies face the decision of ceasing to offer those benefits or to absorb the imputed tax cost of continuing.
Add $1 Million Deduction Limitation on Executive Compensation (House & Senate):
Both the House and Senate bills add the CFO to the definition of “covered employees.” The proposals eliminate the exception for commissions and performance-based compensation, including stock options. These amounts are currently not subject to the limitation.
For many public tech companies, the exclusion applicable to performance-based compensation provides significant tax relief from the impact of Section 162(m).
Qualified Equity Grants (House):
The House bill permits an election to be made by a recipient of qualified stock that is not publicly tradeable to be deferred until the earlier of:
• The stock is transferable;
• The employee becomes an excluded employee;
• The first date the stock becomes readily tradable on an established securities market;
• Five years after the employee’s right to the stock is substantially vested; or
• The date on which the employee revokes his or her election.
“Qualified stock” is stock received by virtue of the exercise of an option or settlement of a restricted stock unit (RSU). This does not apply to stock appreciation rights (SAR) or restricted stock.
This provision is not included in the Senate bill.
If passed, this may come as welcome relief to private tech companies—particularly, startup companies—that otherwise restrict the transferability of their stock. Recipients of equity grants have historically had to remit cash to their employer upon exercise of, e.g., stock options to cover the withholding taxes due upon exercise, even though the underlying stock lacked liquidity.
The ability to defer taxation of a stock award until it becomes transferable helps to mitigate some of the risk on the part of the recipient.

Looking Forward

Many changes are still expected over the next several weeks, as the House and Senate bills undergo reconciliation by the conference committee. Based on the magnitude of the changes proposed thus far, if a final bill is signed before the end of the calendar year as targeted by President Trump, the changes will require significant reassessments of tax positions for financial reporting purposes to be reported in the quarter. U.S. tech companies would be wise to keep abreast of the latest developments to avoid the risk of being unprepared.

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This article originally appeared in BDO USA, LLP’s “BDO Knows Alert” (December 2017). Copyright © 2017 BDO USA, LLP. All rights reserved. www.bdo.com

David Yasukochi is a Tax Office managing partner and co-leader of BDO’s Technology practice. He can be reached via phone at 714-913-2597 or email at dyasukochi@bdo.com.

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Tax Reform Update

House and Senate Reach Tax Reform Compromise

Summary

On December 13, 2017, House and Senate Republicans reached a compromise on tax reform legislation, the “Tax Cuts and Jobs Act.” The compromise bill reportedly includes agreements on corporate and individual tax rates, the treatment of pass-through income, the estate tax, and itemized deductions such as those for mortgage interest and state and local taxes, among other areas. The text of the bill is expected to be released on Friday, with votes in the full House and Senate next week.

Details

These are among the changes reportedly included in the compromise legislation… While bill language is not yet available, these agreed-to provisions are the first provisions reportedly out of the Conference Committee. The corporate tax rate would be set at 21% for tax years beginning in 2018, as opposed to the current rate of 35% and the previously proposed cut to 20%.

  • The highest individual tax rate would be reduced from 39.6% to 37%. The Senate legislation originally called for a 38.5% top rate.
  • Individuals receiving pass-through income from entities such as partnerships and S corporations would be able to deduct 20% of this income from their taxable income, a lower rate than the 23% proposed in the Senate plan. The House bill would have capped the rate at which this income was taxed at 25%. This deduction would be subject to various limitations and applicable to only certain income sources.
  • The estate tax would remain in place; however the lifetime exemption is expected to increase to roughly $11 million in 2018 (and be indexed for inflation). Both the House and Senate had proposed an increased exemption amount. The House had further proposed the future repeal of the estate tax.
  • The alternative minimum tax for corporations would be repealed, matching the House bill. The individual AMT would remain, but the threshold amounts would increase.
  • Mortgage interest would be deductible based on indebtedness up to $750,000, which is the midpoint between the House proposal of $500,000 and the Senate’s plan to keep the existing $1 million cap.

 

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Tax Cuts and Jobs Act: What We Know

Senate Passes it’s Version of Tax Reform, Setting Stage for Conference Committee Action and Possible Enactment Before the New Year

Summary

In the very early hours of Saturday morning December 2, 2017, the Senate passed its version of proposed tax reform legislation, the “Tax Cuts and Jobs Act” 51-49, with Senator Bob Corker (Tenn.) as the only Republican voting against the bill. The House previously passed its own tax bill on November 16, 2017. With Saturday’s Senate action, the House will meet Monday, December 4, 2017, and vote whether to send both bills to a conference committee for reconciliation or to move forward with the Senate’s version of the bill. This sets the stage for a possible enactment of a final bill before the New Year.

Details

The Senate bill is similar to that passed by the House; however, there are some significant differences that must be reconciled between the two houses. The Senate bill, for example, provides seven individual rate brackets with the highest at 38.5 percent, while the House bill provides for four rates with the top rate at 39.6. Both bills raise the standard deduction, with the House doubling the deduction to $24,400 and the Senate raising the deduction to $24,000 for married couples filing a joint return, and both bills eliminate personal exemptions. Regarding state and local taxes, both bills would repeal the individual state and local income tax deduction, while allowing individuals to deduct up to $10,000 of U.S. property taxes. The Senate bill increases the child credit to $2,000; the House bill increases the credit to $1,600. Mortgage interest would be deductible for debt up to $1 million in the Senate bill; the House would cap debt at $500,000 and only for indebtedness on taxpayers’ principal residence. The House bill repeals the individual alternative minimum tax (“AMT”), while the Senate bill retains the AMT but raises the exemption amount. The Senate bill also repeals the individual health insurance mandate. Estate and generation-skipping transfer (“GST”) taxes would be repealed after 2024 under the House bill. Prior to repeal, the House proposes to double the lifetime exemption amounts. The Senate would similarly double the exemption amounts, but would not repeal the estate and GST taxes. Both bills would reduce the corporate tax rate to 20 percent, with the Senate bill delaying that reduction for one year (2019). The Senate bill provides a 23-percent deduction for income from pass through entities – the House would tax such income at a 25-percent rate. The Senate version would permit certain small service businesses to take advantage of the pass through deduction; the House version does not permit service businesses from applying their proposed lower pass through rate. Further, the Senate pass through deduction would not apply to trusts and estates, the House version permits trusts and estates to take advantage of the lower pass through rate. While the House bill repeals the corporate AMT, the Senate bill retains the corporate AMT. With the new 20-percent rate on corporations, retention of the corporate AMT may reduce or eliminate many of the remaining deductions for corporations. Some of the key international tax provisions contained in the Senate bill relating to the establishment of

a participation exemption for taxation of foreign income include rules relating to (i) a dividend exemption system which generally provides for a 100 percent dividend received deduction for the foreign-sourced portion of dividends received by a domestic corporation from specified 10-percent owned foreign corporations with respect to which the domestic corporation is a U.S. shareholder when certain conditions are satisfied, (ii) certain sales or transfers involving specified 10-percent owned foreign corporations (including rules designed to limit losses on certain sales or exchanges of such foreign corporations in situations involving a domestic corporation eligible for the dividends received deduction), (iii) requiring branch loss recapture when substantially all of the assets of a foreign branch are transferred by a domestic corporation to specified 10-percent owned foreign corporations with respect to which the domestic corporation is a U.S. shareholder, and (iv) a transition tax requiring U.S. shareholders of certain foreign corporations to include as subpart F income their deferred foreign income of such foreign corporations (the tax rates for such inclusion have changed in the final Senate bill—for instance, a U.S. corporation with the mandatory inclusion would be taxed at a 14.5 percent rate with respect to E&P represented by cash or cash equivalents and a 7.5 percent rate with respect to illiquid assets). There are also provisions in the Senate bill addressing passive and mobile income, including rules relating to (i) taxing U.S. shareholders of CFCs on their portion of amounts treated as “global intangible low taxed income” through a complex calculation, (ii) permitting a deduction for domestic corporations for certain specified percentages of foreign-derived intangible income of the domestic corporation and global intangible low-taxed income, which is included in income of such domestic corporation (subject to limitations), and (iii) permitting transfers of certain intangible property from CFCs to U.S. shareholders in a tax efficient manner for a three-year period of time. Additionally, the Senate bill includes a number of significant modifications to the CFC subpart F rules, including (i) the elimination of an inclusion of foreign base company oil-related income, (ii) an inflation adjustment of the de minimis exception for foreign base company income, (iii) the repeal of an inclusion based on the withdrawal of previously excluded subpart F income from qualified investment, (iv) the modification of the stock attribution rules for determining status of a foreign corporation as a CFC (this modification would make it more likely for a foreign corporation to be treated as a CFC as a result of stock of certain related foreign persons being attributed downward to a U.S. person), (v) the modification of the definition of U.S. shareholder by incorporating a 10-percent value test in determining who is a U.S. shareholder (thus, making it more likely for a person to be a U.S. shareholder and a foreign corporation to be a CFC), (vi) the elimination of the requirement that a corporation be a CFC for 30 days before subpart F inclusions apply, (vii) making the CFC look-thru rule of section 954(c)(6) permanent, and (viii) the modification of section 956 (which deals with investments in U.S. property) to provide that corporations that are eligible for a deduction for dividends from CFCs will be exempt from a subpart F inclusion for investments in U.S. property. Moreover, the Senate bill includes a number of provisions designed to address base erosion, including rules relating to (i) limiting the deduction for interest expense of domestic corporations that are members of a worldwide affiliated group with excess domestic indebtedness when certain conditions apply, (ii) limiting income shifting through intangible property transfers (including treating goodwill and going concern value and workforce in place as section 936(h)(3)(B) intangibles), (iii) disallowing a

deduction for certain related party interest or royalty payments paid or accrued in certain hybrid transactions or with certain hybrid entities under certain circumstances, (iv) not permitting shareholders of surrogate foreign corporations to be eligible for reduced rates on dividends under section 1(h), and (v) providing for a base erosion and anti-abuse tax which requires a corporation to pay additional corporate tax in situations where the corporation has certain “base erosion payments” and certain conditions are satisfied (a complex formula is used for determining this tax). Very generally, these rules can apply to corporations (other than a RIC, REIT or S corporation) where the average annual gross receipts of which for a three tax year testing period are at least $500 million and the “base erosion percentage” for the tax year is four percent or higher. Base erosion payments generally are certain deductible payments to related foreign persons and certain amounts paid or accrued to related foreign persons in connection with the acquisition of depreciable or amortizable property, as well as certain payments to expatriated entities. There are several definitions, special rules and exceptions in applying this provision. The Senate bill also modifies the foreign tax credit system in several ways, including (i) repealing the section 902 indirect foreign tax credit and providing for the determination of the section 960 credit on a current year basis, (ii) providing a separate foreign tax credit limitation basket for foreign branch income, (iii) accelerating the election to allocate interest on a worldwide basis, (iv) sourcing income from the sales of inventory solely on the basis of production activities, and (v) modifying section 904(g) by providing an election to increase the percentage of domestic taxable income offset by overall domestic loss treated as foreign source. Finally, the Senate bill also contains rules relating to (i) restricting the insurance business exception to the PFIC rules, (ii) repealing the fair market value method of interest expense apportionment, (iii) modifying the source rules involving possessions, and (iv) codifying Rev. Rul. 91-32 relating to a foreign person’s sale of a partnership interest where the partnership engages in a U.S. trade or business.

Insights

The Senate’s passage of its tax reform bill paves the way for the House to choose to either move forward with the Senate version of tax reform or request a conference committee to reconcile the House’s and Senate’s bill. If the House moves forward with the Senate version or a reconciled bill can garner the support of a majority of the Senate, it may receive quick passage by both the House and Senate, leading to enactment before the end of the year.

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What Happens Next with Tax Reform?

What happens next with tax reform? On Dec. 2, the U.S. Senate passed the Tax Cuts and Jobs Act in a 51-49 vote. Many changes were made to the bill in order to win over the Senators who opposed parts of it, including a provision to keep the current individual alternative minimum tax (AMT), but with a higher exemption threshold. (The corporate AMT would also be retained.) An earlier version of the b ill repealed the AMT. The Senate and the House must now “reconcile” the bill by agreeing to the same version before it can go to the President to sign into law.

Stay tuned here and on our social media sites for more information as it is released.

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Thank you.

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Can the Cats/Can the Griz Food Drive Contest

A few years ago the Anderson ZurMuehlen Missoula and Bozeman offices decided to place a “friendly” wager on who could raise the most food donations for the Can the Cats/Can the Griz food drives surrounding the Brawl of the Wild.

Last year, the Missoula office was the victor with a 1,090 lb. win over Bozeman office’s 925 lb. donation. This year both of the offices really upped their game and Bozeman came back with a vengeance! Missoula raised a total donation of 2,160 ($861.00 cash and 1,299 lbs. of food) but Bozeman reigned victorious this year with their 3,698 lb. donation!

Here are some pics of this year’s donations (and also Bozeman’s loser picture from last year that we just wanted to make sure everyone was able to enjoy!)

These donations contributed to the overall total of Missoula’s 391,000 lbs. to Bozeman’s 389,000 lbs., which broke records for both communities. Awesome job to both of the offices with some great participation for such an amazing cause.

Here is the Missoula’s office contributions with Megan Auclair, administrative professional:

Missoula Office with their food donations

Here is the Bozeman office with their whopping 3,698 lbs. of food donations!

Here is the Bozeman office last  year when they “lost” the food drive and had to root for the Griz!

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Anderson ZurMuehlen Announces Promotions for 2018

 

Anderson ZurMuehlen announces the promotion of Kapri Byrne, CPA, QPA, QKA, to shareholder. Her experience includes defined contribution plan design and administration for the firm’s sister company, Employee Benefit Resources. Byrne has a Master of Professional Accountancy and a Bachelor of Science in Business from Montana State University. She has been with the firm since 2005 and is a member of the American Institute of Certified Public Accountants and the Montana Society of Certified Public Accountants.

Erin Furr, CPA, to shareholder. She specializes in tax consultation, including individuals, partnerships and corporations. Furr has a Master of Professional Accountancy and a Bachelor of Science in Business with an Accounting Option from Montana State University and joined the firm in 2001.

Heather Walstad, CPA, to shareholder. Walstad specializes in audit examinations, evaluation of internal accounting control systems, financial statement preparation and review, compliance audits, and tax planning and preparation for individuals, corporations, partnerships and nonprofit organizations. She has a Master of Accountancy and a Bachelor of Science in Business with an Accounting option from Montana State University. Walstad joined the firm in 2005.

Kendra Freeck, CPA, QuickBooks ProAdvisor and Not-for-Profit Certificate II, to senior manager. Freeck has experience with tax return preparation financial statements, audits, and QuickBooks®. She has a Master of Professional Accounting and a Bachelor of Science in Business with an Accounting Option from Montana State University. Freeck joined Anderson ZurMuehlen in 2006.

Steven Johnson, CPA, to senior manager. His experience includes tax planning and compliance reporting for individuals and businesses. He also consults for litigation cases on economic damages, forensic accounting, and liability issues. Johnson has a Master of Science in Economics from the University of Oregon and a Bachelor of Arts in Economics and Political Science from the University of Montana. He has been with the firm since 2007.

Kiely Thoen, CPA, was promoted to senior manager. She has tax, audit and accounting experience related to financial statements, audits, and tax return preparation. Thoen has a Master of Accountancy and a Bachelor of Science in Business Administration – Accounting from the University of Montana. She joined the firm in 2007.

Kelsey Crampton, CPA, was promoted to manager. She has accounting experience related to financial statements, audits, and tax return preparation for individuals and businesses. Crampton has a Master of Accountancy and a Bachelor of Science in Business Management from Rocky Mountain College and joined the firm in 2010.

Ashley Curry to Client Success Manager. Curry works with clients and Anderson ZurMueheln Technology Services staff to ensure maximized value in services thru project management, communications, and training. She has a bachelor degree in business from Montana State University and has been with the firm since 2012.

Caitlin Derry, CPA, has been promoted to supervisor. Her area of expertise includes tax planning and preparation for corporations, partnerships, and individuals. Prior to becoming a CPA, she founded and managed a small business for nine years. Derry has a Bachelor of Arts in Biology from Colorado College and a Master of Science in Environmental Studies from the University of Montana. She joined the firm in 2013.

Jan Higgins has been promoted to manager. She specializes in full charge bookkeeping services, financial statement preparation, and consulting with clients to improve internal accounting operations. Higgins also assists with the preparation of individual and entity tax returns and has been with the firm since 1997.

Anna Horne, CPA, has been promoted to manager. Her experience includes accounting, financial statement analysis, tax consultation and preparation, and succession planning for corporations, partnerships and individuals, specializing in agriculture-based clients. Horne has a Bachelor of Arts in Accounting from Carroll College and has been with the firm since 2010.

Grace McKoy, CPA, to manager. Her experience consists of attest engagements including audits, compilations, and reviews for insurance companies, government entities and for both for-profit and nonprofit organizations. McKoy has a Master of Accountancy and a Bachelor of Science in Accounting from the University of Montana and joined the firm in 2012.

Kelsey Mundt has been promoted to manager. Mundt works for Upstream Academy, a division of Anderson ZurMuehlen that provides consulting services for CPA firms across the country on career development, leadership skills and management training. Her position focuses on the Emerging Leaders Academy for new managers. Mundt coordinates conferences and webinars for 2,000 participants annually. She has a Bachelor of Arts in Anthropology from the University of Montana and has joined the firm in 2007.

Laura Craft (Gittens), CPA, has been promoted to supervisor. Craft’s experience includes accounting and audit examinations for government agencies, nonprofits, insurance, and employee benefit clients. She also evaluates internal accounting control systems and tax preparation for individuals. She has a Bachelor of Arts in Accounting from Carroll College. Craft joined the firm in 2010.

Carolyn Yampradit, Advanced QuickBooks ProAdvisor®, was promoted to supervisor. She facilitates classes and workshops on QuickBooks accounting software and consults with entrepreneurs and small businesses to configure and troubleshoot their accounting systems. She has a Bachelor of Science degree from Eastern Montana College and has been with the firm since 1999.

Megan Adams, CPA, has been promoted to senior. Adams’ experience includes accounting, financial statement analysis, tax consultation and preparation for corporations, partnerships and individuals, specializing in captive insurance clients. She has a Master of Accountancy and a Bachelor of Arts in Anthropology from the University of Montana and joined the firm in 2015.

Jerraca Allhands, CPA, to senior. She has experience in auditing for governmental and nonprofit agencies as well as tax preparation for corporations, partnerships and individuals. Allhands has a Bachelor of Arts in Accounting and Business Administration with Concentrations in Finance and Management from Carroll College and joined the firm in 2015.

Cayley Fish, CPA, has been promoted to senior. Fish specializes in auditing governmental and nonprofit entities. She also does tax preparation for corporations, partnerships, individuals, estates and trusts. Fish has a Bachelor of Science from Montana State University-Billings and joined the firm in 2015.

Jessica Short, CPA, has been promoted to senior. She has experience in audit examinations and internal audits for nonprofits and governmental organizations. Short has a Bachelor of Applied Science in Accounting and Management from Montana Tech of the University of Montana and joined the firm in 2013.

Mandy Smith, CPA, has been promoted to senior. Smith’s experience includes accounting, financial statement analysis, tax consultation and preparation for corporations, partnerships and individuals. She has a Master of Professional Accountancy and a Bachelor of Science in Business Administration with an Accounting option from Montana State University. Smith joined the firm in 2014.

Mari Jean Bellander, has been promoted to staff II. has experience in payroll, accounts receivables. She is a small business owner and has a background in accounting and computer information systems. Bellander has a Bachelor of Applied Science degree in in Management and Technology from Great Basin College in Elko, Nevada. Bellander joined the firm in 2015.

Veronica Carey has been promoted to staff II. She specializes in general bookkeeping tasks including reviewing monthly financial data and preparing financial statements as well as consulting on individual and corporate tax. Carey has a Bachelor of Arts in Accounting and Business Administration from Carroll College and joined the firm in 2012.

Dylan Dahl has been promoted to staff II. He has experience in auditing work including audit examinations, systems design and implementation, evaluation of internal accounting control systems, and financial statement preparation and analysis. Dahl has a Bachelor of Science degrees in Accounting, Marketing and Management from Montana Tech and joined the firm in 2016.

Alyssa Woy Kissell has been promoted to staff II. Her experience includes payroll, bookkeeping, financial preparation and individual tax returns. Kissell has a Bachelor of Science in Accounting from Montana Tech and joined the firm in 2008.

For 60 years, Anderson ZurMuehlen & Co., P.C. has been building relationships and providing valued services and solutions that create better communities. As the largest Montana-owned CPA firm, they serve clients throughout Montana, the U.S. and beyond through seven office locations across the state. They are also an independent member of BDO Alliance USA, a national alliance of CPA firms. The Helena office is located at 828 Great Northern Blvd, 4th Floor. For more information, visit azworld.com.

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Pat Sassano is the Visionary Award Winner for 2017

Pat has provided significant leadership in the Consulting Business Unit and demonstrated the characteristics for which the firm’s Visionary Award program are all about. It was Pat’s innovation, persistence and passion that compelled the firm’s board of directors to approve a significant investment in cloud servers to host data and provide virtual desktop services to the firm, which then led to the roll-out of PwrCloud to third-party enterprises.

This subscription fee business model, and user satisfaction of the firm’s fast-growing PwrCloud consulting practice are no less than visionary. Pat’s ability to communicate the potential of PwrCloud internally and to clients demonstrates the impact of connecting a desktop from any device, anywhere, anytime has provided new opportunities for the firm.​

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Power Townsend Co. Celebrates 150 Years Serving Montana

We would like to congratulate Power Townsend Co for 150 years serving our Montana communities!

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Leave-based Donation Programs Provide Opportunity to Provide Hurricane Harvey Assistance

Due to the extreme need for financial assistance for victims of Hurricane Harvey, the Internal Revenue Service has provided special provisions to allow employers and employees to team up in making charitable contributions for Hurricane Harvey relief through 2018.

Employers can set up leave-based donation programs which allow employees to elect to forgo vacation, sick, or personal leave in exchange for cash payments the employer makes to charitable organizations which are providing Hurricane Harvey relief assistance. From the employee perspective, under the provisions provided by the IRS, no income is recognized for the leave hours donated. The employees cannot claim a charitable deduction for the forgone leave.

The employer is allowed to claim a deduction as a business expense, as opposed to a charitable donation, for the payments made to qualifying charitable organizations for the relief of victims of Hurricane Harvey. Payments must be made before January 1, 2019.

No payroll taxes will be paid by either the employee or the employer for payments made through a leave based donation program.

Contact us if you have questions.

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