Report Warns Retirees about Potential Downsides of Reverse Mortgages
Reverse mortgages have been around for years. But they’re getting a new spin: Some senior homeowners are tapping into their home equity to “bridge the gap” until the time they’re ready to apply for Social Security benefits. However, an independent consumer agency — the Consumer Financial Protection Bureau (CFPB) — is cautioning retirees against using…
Are You Prepared for a Contractor Business System Audit?
Government auditors evaluate the adequacy of a contractor’s internal controls to provide a basis for establishing the scope of subsequent audits of cost representations. The internal controls are those attributes that, through the normal course of day-to-day business, result in either the prevention or timely detection of any errors or irregularities. Contractor cost representations include…
Making Commercial Item Determinations
Prime Contractors are expected to use the same or similar procedures as government buyers to make “commercial item determinations.” Under U.S. government cost-based contracts, prime contractors and all of their subcontractors are required to purchase supplies and services from responsible sources at fair and reasonable prices, including those determined to be commercial items. The U.S….
To Forgive Is Not Always Divine
For tax purposes don’t think that you’re off the hook if another party forgives or cancels a debt. Under the “cancellation of debt” (COD) provision in the tax law, this seemingly generous act could result in an unexpected tax bill. Basic rules: If an amount you owe is forgiven or canceled, you must generally report it…
What Does it Mean if the IRS Files a Lien?
It’s bad enough when borrowers can’t pay off amounts owed to commercial creditors such as banks and other financial institutions. But people can find themselves in really hot water if they owe the IRS money. What could happen? The IRS can establish a legal claim to a person’s property, including a house or car, as…
Inadequate Records Lead to Unfavorable Results for Taxpayers
Federal tax law allows deductions for many items, such as legitimate business expenses and charitable donations. But, if you claim deductions on your tax return, you also must maintain adequate records to support them. If your tax return is audited, missing or incomplete records could lead to additional taxes, interest and penalties, as these three…
A Simple Step to Cutting Costs
At the time, the vice president of manufacturing at Hyde Manufacturing, in Southbridge, MA, said he thought “we were under-utilizing our people’s skills.” It was in the late 1980s and the vice president was Ken Rizner. His thoughts then led to a transformation in work in the 300-employee plant. “I always thought we were using…
Keep Your Database Clean
This is one of those Believe It or Not stories: Years ago, a charity generated solicitation letters from a computerized database. One letter addressed to a state Humane Society stated: “Dear Miss Society.” Whoops! On the surface, member or database management may seem like an impersonal clerical function, but how it’s handled can have a…
How the IRS Proves Fraud and Why It Can Be Devastating
In general, a tax assessment by the IRS is presumed to be correct. A taxpayer can overcome the presumption with proof. That situation is reversed when the IRS asserts fraud. In those instances, the IRS must prove, by clear and convincing evidence, that fraud exists. Badges of Fraud Tax fraud is a very serious issue….
When Divorced Empty Nesters Remarry
Later-life remarriages differ from earlier-life remarriages — especially when adult children factor into the equation. If you or your parents plan to tie the knot again, here are some roadblocks that might stand in the way of your family’s happily-ever-after. Emotional Issues Marriage is a life-altering commitment. You’re not just merging lives with your spouse…