Retirement Plan Forfeiture Suspense Accounts

Doryanne Hamel, CPA, Manager

By Doryanne Hamel, CPA, Manager
Contact information: doryanneh@pgco.com
401-831-0200

Many defined contribution plans include a period of service requirement prior to a participant becoming fully vested in the employer contributions. Therefore, when an employee is terminated prior to meeting the full vesting requirement their non-vested account will be forfeited. Often, these forfeited account balances are transferred to a plan suspense account.

IRS Revenue ruling 80-155 states that a defined contribution plan will not be qualified unless all funds are allocated to participant accounts in accordance with a formula defined in the plan’s document. Therefore, plan administrators who allow the plan’s suspense account to accumulate forfeitures for a number of years may be risking the plan’s qualified tax-exempt status.

Employee or Independent Contractor? IRS Offers Amnesty

Partner John Mathias

One of the more difficult questions facing a business is whether a service provider is an employee or an independent contractor. Answering this question requires an interpretation of both individual facts and circumstances and common law. If the business decides that the service provider is an independent contractor, the obligation to remit income taxes and pay employment taxes falls squarely on the independent contractor. If the business, however, considers the service provider an employee, the business assumes all obligations to remit income, social security and Medicare taxes as well as the liability for matching payroll taxes.

Is your Business Separating Credit Card Sales? New Requirements Effective with 2011 Tax Year

Beginning in 2011, businesses will need to start paying much closer attention to their credit card sales! Credit card companies will be issuing Form 1099-K to merchants detailing these transactions starting in January 2012. Businesses must report sales included in the 1099-K, sales not included in the 1099-K and returns, allowances and "cash back" on three separate lines on their business tax returns beginning with the 2011 tax year. Be sure to keep a close eye out for these important tax documents! More information will be available as the IRS finalizes the rules regarding these requirements.

Fox Network "The Rhode Show" Spotlights P&G



Partner Rich Sullivan has raced

in every Downtown 5k

 since its start.

  Piccerelli, Gilstein & Company, LLP has a long association with the CVS Caremark Downtown 5k. The Firm is featured on Fox Providence's "The Rhode Show". Click here to view the story.






Partner Rich Sullivan has raced in every Downtown 5k
since its start.





RI Sales Tax Changes Begin October 1st

You can expect more than just fall color changes in RI over the next few weeks. New provisions to Rhode Island's sales tax take effect October 1, 2011.  The changes are a result of the legislation approved by the General Assembly and signed into law on June 30, 2011 by Governor Lincoln Chafee.  Click here to read the Division of Taxation's Advisory.  Do not hesitate to contact your P&G professional if you have any questions.

Tax Partner Pat Thompson Provides Testimony on the IRS Paid Tax Return Preparer Program

On July 28, 2011, Tax Partner Pat Thompson, Chair of the AICPA Tax Executive Committee, testified to the U.S. House of Representatives Committee on Ways and Means Subcommittee on Oversight regarding the implementation of the IRS paid tax return preparer program. 

The AICPA has been a steadfast supporter of the IRS' overall goals of enhancing compliance and elevating ethical conduct in the tax preparer community.  To read Pat's testimony, click here. 

Governor Chafee's 2012 Budget Addresses State's Structural Deficits

Governor Lincoln Chafee signed the fiscal year 2012 budget on June 30, 2011. The $7.7 billion plan begins to address the state’s structural deficits and includes expense reductions, revenue increases (rather than tax increases) and repays the rainy day fund. Click here to read highlights of the budget.