2019 Mileage Rates

The Internal Revenue Service issued the 2019 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2019, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 58 cents per mile for business miles driven, down from 54.5 cents for 2018
  • 20 cents per mile driven for medical or moving purposes, down from 18 cents for 2018
  • 14 cents per mile driven in service of charitable organizations

BREAKING NEWS Regarding the 20% Pass Through Deduction

The Department of the Treasury issued its final regulations providing clarity to the pass through 20% deduction. The final regulations indicate that the origination of a loan is not treated as purchasing securities for the determination of “dealing in securities”. As a result, mortgage bankers qualify for the 20% pass through deduction since they are not a specified service trade or business. Consult your tax professional to ensure this benefit is maximized on your company’s 2018 tax returns.

SAC Forms New Professional Alliance with 5X Solutions

Spiegel Accountancy Corp.  has formed a professional alliance with 5X Solutions, a mortgage research, data analytics technology company. Spiegel Accountancy Corp. is the only accounting firm to have an alliance with the mortgage business intelligence company.

“Over the years our companies have enjoyed great synergies oftentimes working together for the same mortgage banker clients. We decided now was the perfect time to play off each other’s strengths and open the door to provide mortgage bankers with a wider variety of analytical tools coupled with the tax and audit intelligence of our experts,” stated Henry Chavez, Senior Audit Manager at Spiegel Accountancy Corp (SAC).

The collaboration combines SAC’s vast accounting acumen with 5X Solutions’ flagship business intelligence product, Telemetry MBI, to offer mortgage lenders unique financial solutions for optimized performance.

John Beneventi, Co-Founder, 5X Solutions said, “Having worked together in the past, our companies’ close relationship brings added service and benefit to our mutual clients.   We’re looking forward to leveraging our collaborative efforts by providing the mortgage lending community with advanced financial solutions that improve measurement, management, and performance.”

About 5X Solutions

5x Solutions, LLC is an industry leader in research, data analytics, and technology with specific expertise in the mortgage industry. It offers clients both advisory and technology services that optimize resources, improve profitability and increase scalability. Using its cloud based Telemetry MBI-application, clients have 24/7 access to critical key performance indicators, metrics, and financial reports needed to measure and manage their company. Learn more at http://www.5xsolutions.com or http://www.telemetrybi.com

New Professional Alliance with Bedford Cost Segregation

Spiegel Accountancy Corp. announced today it has formed a professional alliance with Bedford Cost Segregation to assist its mortgage lending clients in applying research and development tax credits as a beneficial tax strategy.

While the R&D tax credit has been around since 1981, it was recently made permanent and the incentives were expanded upon to increase opportunities for those who develop “internal-use”  software, which broadens the types of businesses the credit may be applicable for. Now, certain mortgage lenders may benefit from this tax credit.

“We have partnered with the best, Bedford, to help our clients determine their eligibility for these incentives,” stated Jeff Spiegel, CPA, Principal, at Spiegel Accountancy Corp.

The R&D tax credit was designed to encourage economic stimulation and is an incentive for businesses of all sizes to invest in research and development activities and increase technological growth and competitiveness. The U.S. federal tax law provides a benefit up to 20% in the form of a non-refundable tax credit for mortgage companies that engage in qualified research and development activities. The credit, if used, can create immediate cash flow by reducing tax liability dollar for dollar. Mortgage companies that create new or improved products, processes or select technologies have the potential to take advantage of the credit.

Greg Bryant, Managing Partner at Bedford Cost Segregation said, “We’re excited about our partnership with Spiegel Accountancy Corp. and the wealth of opportunities our collaboration offers mortgage lenders.”

About Bedford Cost Segmentation

Bedford is an independent professional services firm specializing in cost segregation and innovative tax and energy solutions for the commercial real estate industry. Its tax team consists of seasoned professionals, who are well versed in the various aspects of tax law pertaining to depreciation, capitalization and expense provisions. More information can be found at https://www.bedfordteam.com/.

2017 Tax Rate Schedule

Please click here to view the 2017 Tax Rate Schedule.Created: February 10, 2016

Head of Household Status

The FTB has made it easier for taxpayers to claim head of household filing status. Beginning with the 2015 tax year, taxpayers claiming head of household filing status must complete and attach form FTB 3532, Head of Household Filing Status Schedule, to their tax returns. The new schedule helps taxpayers determine if they qualify for the filing status at the time of filing their returns, simplifies and reduces the questions asked, and assists taxpayers in completing the form correctly. The new schedule will also substantially reduce the volume of audit letters the FTB sends.

Created: February 10, 2016

Enhanced MyFTB

The FTB has launched its enhanced MyFTB online service, which allows taxpayers, businesses representatives, and tax preparers to view account information, communicate with the FTB, and use new self service tools. If you haven’t registered for your own MyFTB, click here to register.

As an individual, you can use MyFTB to access:
• Account information
• View account balance and tax year details.
• View estimated payments and credits before filing a return.
• View payment history.
• View a list and images of tax returns.
• View a list and images of notices and correspondence.
• View and update contact information.
• View proposed assessments.
• View California wage and withholding information.
• View FTB-issued 1099 information.
• View a list of authorized representatives (tax preparer or a tax preparer with a power of attorney) and manage who can access your account.
• View a list of activities that occurred on your account, such as the last time you or your authorized representative accessed your account.

Online services the FTB provides:
•Calculate a balance due for a date in the future.
• File a power of attorney (POA).
• File a nonresident withholding waiver request.
• Protest a proposed assessment.

Ways to communicate with the FTB:
• Chat with an FTB representative about confidential matters.
• Send a secure message with attachments to FTB.
• Choose to receive an email when we send you a notice or correspondence.

Created: February 10, 2016

2017 Mileage Rates

The Internal Revenue Service issued the 2017 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:

  • 53.5 cents per mile for business miles driven, down from 54 cents for 2016
  • 17 cents per mile driven for medical or moving purposes, down from 19 cents for 2016
  • 14 cents per mile driven in service of charitable organizations

The business mileage rate decreased half a cent per mile and the medical and moving expense rates each dropped 2 cents per mile from 2016. The charitable rate is set by statute and remains unchanged.

Created: February 10, 2016

IRS Scams

REMEMBER, the IRS always initiates contact via U.S. mail. Therefore, if you receive an unexpected phone call or email and have not had any prior contact with the IRS, immediately HANG UP the phone and DO NOT RESPOND or click on any links included in an email. If it is a phone call, do not engage the caller even if you know it is a scam, and here’s why…

Thieves and their scamming techniques are very clever. They take advantage of a taxpayer’s fear of the IRS to persuade their potential victim that a significant problem truly exists. Oftentimes, they will have your personal information in advance of calling or emailing such as the last four digits of your Social Security number, current or past addresses, name of your spouse and name(s) of your current employer(s) in an effort to convince you that their phone call or email is legitimate. Oftentimes, thieves manipulate caller ID to show a call from the “IRS” with a toll-free number and the caller will give you a bogus name and IRS badge number. Do not correct any erroneous personal information that the caller recites and do not give them your date of birth. Be smart by NOT “playing along” with their scheme. You may find yourself doubting the situation and divulging information that the thief will further use to influence the conversation and wreak havoc on your finances and credit.

Keep in mind the following about the IRS:
• The IRS will never ask for payment information over the phone. EVER. This includes credit card, debit card, prepaid card or banking account information.
• The IRS will not ever demand or insist upon a certain payment method to satisfy any tax payments due.
• The IRS never requests payment over the phone.
• The IRS does not pursue payment action immediately after a phone conversation. Any action to be taken by the IRS will be sent via written notification via U.S. mail prior to the enforcement, such as liens or levies.

Commons tricks of the scammers:
• Scammers may sometimes send an email following a phone call in an attempt to substantiate the validity of their phone call with the victim.
• Scammers will make it appear they are calling from the IRS by initiating background noises to make it appear they are operating from a bona fide call center.
• Scammers will make threats about potential jail time or revocation of a driver’s license. Their threats will intensify with callbacks posing as local law enforcement or the DMV, and their manipulation of caller ID will make it appear as such.

BEST PRACTICE…If you receive a phone call or email from a person claiming to be an agent or representative of the IRS, under NO circumstances should you release any personal information or give money. HANG UP and DO NOT RESPOND!

Created: February 10, 2016

Impostor Fraud

Businesses are seeing a significant increase in impostor fraud. This type of fraud occurs when an individual posing as a company executive, vendor or even the IRS will request a payment, wire of funds or change to payment instructions. The imposter may make contact by phone, email, fax or mail.

We are aware of several situations of a wire impostor fraud scheme. The company’s system of record was hacked, and an impostor posing as the CEO sent an email to an employee directing him to wire funds to a bank overseas. The employee followed internal disbursement processes, obtained the appropriate approvals, submitted the wire transfer request to the Bank and the funds were disbursed. It was later determined after the funds were deposited in the foreign account that the request was fraudulent.

These incidents are a reminder that impostors are becoming increasingly creative in their methods for committing fraud. Everyone must be alert at all times to unusual or unexplained activity and relationships and to red flags that may indicate fraud. This also alerts us to review company control and authority procedures to avoid, identify and manage unauthorized wires.

How do you prevent fraud?

You and your employees are the first line of defense against fraud.

The only way to lower the risk of being compromised is to be proactive and vigilant in recognizing the signs of fraud. Your fraud program should ensure your team members are aware of what the risks are, how to identify the warning signs and what steps and actions you can take to detect and report fraud.

Authority and Verification

Explore external fraud related to borrower-directed activities, emphasize the importance of taking direction only from authorized persons, and verify the direction with authorized persons.

Verification of an individual’s or requesting party’s authority ensures the individual requesting the service is, in fact, authorized to convey authority on the account. In other words, verify the authenticity of the request.

It would be prudent to review your company controls and authority procedures and periodically audit such procedures for adherence. Consider the following that may be unacceptable forms of both wire request and verification:
– Email address
– Return mail address
– Letterhead
– Fax request
– Text by Phone
– Signatures

Additional red flags to consider to identify impostor fraud may include:
– Requests to bend a rule
– Immediate demand requests
– Threats of reprisal upon failure to act
– Directives from unauthorized persons

Is your team aware of impostor fraud? Impress upon them that they have a responsibility to:
– Protect the assets of borrowers and the company
– Recognize red flags that may indicate fraud
– Take the time to properly process and verify requests from third-parties
– Take directives only from authorized persons acting within their authorization limits
– Escalate verification failure as soon as it is identified
– Escalate disbursement fraud as soon as it is identified
– Identify, escalate and report unusual activity and suspected fraud

It is essential that all companies continually reinforce and review current processes and procedures and provide employees adequate and continual training related to identification and reporting of any potential fraudulent activities.

Created: February 25, 2016