Far too many finance and accounting articles to sort through each week? We’ve got you covered with a curated list of important developments.
Bill.com goes public, IRS convicts more than 90% of tax criminals, and more accounting and finance news.
Bill.com goes public. Bill.com—one of the leading AI-powered payment software options on the market—had its IPO on December 12 under the NYSE stock symbol BILL. Within 48 hours, Bill.com surged to more than $37/share (after opening at $22) and sold almost 10 million shares, raising more than $200 million for the Palo Alto-based company. Read what real users think about Bill.com here.
Tax exempt organizations can no longer file paper forms, says IRS. The IRS recently announced that tax exempt organizations must file their forms electronically, as dictated by the Taxpayer First Act. Form 990-EZ, for small-medium public charities, has a one-year grace period for physical filings, but 990, 990-PF, 8872, and 1065 all must be filed electronically now. Filing electronically makes it easier to find tax credits and deductions, speeds up returns, and is more accurate. Read more small business tax prep tips here.
IRS boasts 91% conviction rate in 2019. If you’re thinking about trying to skirt tax laws to save some money in 2020, the feds urge you to reconsider. The Internal Revenue Service recently announced a 2019 tax crime case conviction rate of more than 90%. The agency identified almost $2 billion in tax fraud crimes. “They took their money offshore and hid around the world, but we found them. They went on the dark web thinking that their actions were anonymous, but they weren’t, and we again found them,” wrote Don Fort, head of IRS criminal investigations. Want to avoid running afoul of the IRS? Here’s our guide.
Gartner survey reveals that finance leaders will prioritize analytics, strategy and structure, and tech optimization in 2020. Gartner recently published the results of its “2020 Agenda Poll”, in which finance leaders reported that finance analytics, finance organization strategy and structure, and finance technology optimization will be their top priorities in 2020. These priorities show that “reports and analyses have insufficient forward-looking information, finance organization structure limits responsiveness to changing business needs and technology investments … have long payback periods for realizing their (ROI),” says Gartner VP Randeep Rathindran.
HSBC pays $192 million to settle Swiss bank tax fraud scheme. After admitting to helping more than 700 clients hide more than $1 billion in taxable assets from the IRS in Swiss banks, HSBC paid a $192 million settlement, ending a decade-long investigation. “HSBC … conspired with U.S. account holders to conceal assets abroad and evade taxes that every American must pay,” said Stuart M. Goldberg of the U.S. Justice Department’s Tax Division. Look out for these red flags to make sure no one at your organization is committing fraud.
Week of Dec. 9, 2019
Silicon six avoid $100 billion in taxes, OECD proposes global minimum tax on MNCs, and more accounting and finance news.
IRS issues final regulations on base erosion and anti-abuse tax. The regulations clarify which taxpayers are subject to Sec. 59A, how to determine base erosion, how to calculate the minimum base erosion amount, and the required base-erosion and anti-abuse tax from that amount. The new provision impacts corporate taxpayers with gross annual receipts averaging $500 million for a period of three years that make deductible payments to foreign parties.
Silicon six avoid $100 billion worth of tax over the last decade. Fair Tax Mark, an organization that certifies businesses on tax conduct, analyzed the 10-K filings of Netflix, Facebook, Google, Apple, Microsoft, and Amazon from 2010 to 2019 and found a combined tax gap of $100 billion. The analyses found that the bulk of the shortfall originated outside the U.S., with foreign tax charges making up only 8.4% of the total profit made overseas. The worst offender of these turned out to be Amazon, which paid 12.7% of its profits as taxes in the last decade, despite the corporate tax rate being 35% (till 2017).
OECD releases global minimum tax proposal for MNCs. The Organization for Economic Cooperation and Development (OECD) released a 186 comment proposal for a global minimum tax on multinational group profits. The tax, also known as the global anti-base erosion proposal (GloBE), aims to deter multinational companies (MNCs) from shifting profits to tax havens and low-tax jurisdictions. The proposal complements OECD’s “pillar one proposal”, which would allocate more profits to countries housing an MNC’s customer base. The GloBE also aims to prevent countries from enacting unilateral taxes on global digital firms.
Week of Dec. 3, 2019
IRS ruling protects large estate gifts, Charles Schwab to acquire TD Ameritrade, and more accounting and finance news
IRS rules to protect large estate gifts after 2025. The IRS recently confirmed that individuals taking advantage of the Tax Cut and Jobs Act’s increased tax exclusion for large estate gifts between 2018 and 2025 will be able to reap the benefits of that exclusion even after it drops back to pre-2018 levels after 2025. Before the TCJA, only the first $5 million of an estate gift was exempt from the 40% estate tax. The TCJA doubled that exemption amount to $10 million (adjusted for inflation), and that’s the rate that will apply to beneficiaries of large estate gifts made between now and 2025, even after 2025.
QuickBooks Online Advanced unveils new AI-powered tools. Intuit recently announced several new AI-powered tools in QuickBooks Online Advanced. The tools include a revenue streams dashboard, a workflow management tool, batch invoices and expenses, and new custom fields. QuickBooks Online Advanced is targeted at rapidly growing and technologically-advanced small businesses.
A brief history of ERP software. Software Advice published an infographic showing the history of enterprise resource planning (ERP) software, at a glance. The graphic shows the roots of ERP software, dating back to 1964 at Black & Decker in Baltimore, all the way through to the advent of “postmodern ERP” solutions, featuring mobile apps and AI.
Charles Schwab will acquire TD Ameritrade to form $5 trillion megapower. Charles Schwab, which pioneered discount stock trading for individuals four decades ago, is now purchasing fellow online brokerage TD Ameritrade for $26 billion, forming a brokerage behemoth. The move is seen as a response to the evolution toward zero-fee trading. This new superfirm would still trail Fidelity in total assets.
More entrepreneurs are turning to small-business loans when angel funding fails. A recent survey from business lending app Lendio found that more small-business owners are giving up on the pipe dream of Shark Tank-style angel funding and turning to traditional small-business loans. The survey results, published in the SMB Economic Insights report, found an increase of 43% in demand for small-business loans over the previous three-quarter average.
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