Will Your Company Be Eligible For Federal Contracts?

If your construction company is planning on tapping into that vast pot of stimulus money offered by the federal government you need to be aware of the newest obstacle which you will need to navigate in order to be eligible for federal contracts. See below: "Department of Homeland Security (DHS) Secretary Janet Napolitano today strengthened employment eligibility verification by announcing the Administration’s support for a regulation that will award federal contracts only to employers who use E-Verify to check employee work authorization. The declaration came as Secretary Napolitano announced the Department's intention to rescind the Social Security No-Match Rule, which has never been implemented and has been blocked by court order, in favor of the more modern and effective E-Verify system....." After a careful review, the Administration will push ahead with full implementation of the rule, which will apply to federal solicitations and contract awards Government-wide starting on September 8, 2009. If you haven't already signed up for the E-Verify system and you want to be eligible for federal contracts you should consider signing up now. Entire article can be found at http://www.dhs.gov/ynews/releases/pr_1247063976814.shtm More information about E-Verify can be found at www.uscis.gov/everify

7 Tips When Starting a Business

Last week, the IRS published the top seven things it wants you to know if you plan to start a new business:

• First, decide what type of business entity you are going to establish.
• Identify which taxes you must pay and how you pay them. The four general types of business taxes are income tax, self-employment tax, employment tax and excise tax.
• Obtain an Employer Identification Number (EIN).
• Implement a good recordkeeping system.
• Determine your company's tax year end.
• Determine your accounting method for calculating income and expenses. The most commonly used accounting methods are the cash method and an accrual method.
• Visit the Business section of IRS.gov for resources to assist entrepreneurs with starting and operating a new business.

The page includes links related to starting a business, operating a business, and closing a business. As unexciting as these issues seem, it's a good idea to take care of them. When it comes to taxes, an ounce of prevention is worth a pound of cure - and then some.

We Made it Through Our First Peer Review!

Yesterday was the last day of our peer review process and we are very pleased with our passing results. Since we are a newer firm and this was our first peer review, we were uncertain of what to expect. By subjecting ourselves to the peer review process we can ensure that we are consistently providing services in compliance with the latest standards and requirements of our industry. The AICPA defines the program as follows: "The Peer Review Program is dedicated to continually enhancing the quality of accounting, auditing and attestation services performed by AICPA member in public practice. To protect public interest, the AICPA's Peer Review Program is driven by adherence to the highest possible professional standards and understanding of changing business and regulatory environments." As soon as we recieve our peer review report from the independent reviewer we will post a copy on our website.

Important issues when selling a business

CPA and Tax Attorney Peter Pappas suggests 10 important issues to consider when selling you business:

1. Asset or Stock Sale
2. Employee Retention
3. Vendor Relationships
4. Non-Compete Agreement
5. Indemnification and Hold Harmless Clauses
6. Consulting Agreement
7. Allocation of Sales Price
8. Unpaid States Sales Taxes
9. Owner Versus Third Party Financing
10. Intangible Assets

He further lists the basic legal documents required in a typical asset sale transaction:

• Asset Sale and Purchase Agreement
• Bill of Sale
• Promissory Note (if partly financed by seller)
• Non-Competition Agreement
• Employment/Consultant Agreement
• Security Agreement
• Lease assignment or sublet agreement

In closing, he advises: "Finally, you should never try to sell your business or buy a business without first consulting with an experienced business transaction lawyer."

How healthy are your finances?

As the big banks undergo stress tests, we are reminded that our personal finances could always use a check-up. If you're interested in a short pop quiz, CNNMoney provides a simple online stress test for your personal finances.

California issues IOUs

California taxpayers who are waiting on refunds will continue to wait. The Franchise Tax Board has announced: "all requests for direct deposit of a State income or franchise tax refund will be issued as a paper registered warrant." If you receive a registered warrant in lieu of payment, the State Treasurer will not redeem it for cash until it matures on October 2, 2009. However, some banks will accept registered warrants as cash, so you may be able to deposit it into a bank account (and let the bank deal with redeeming the warrant in October). FAQs about registered warrants are available on the State Controller's website.