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Is Your Practice At Risk?

February 14, 2012 By Leave a Comment

Given the current state of the economy fraud and embezzlement is on the rise.   Most medical practices rely on a single individual, typically a practice administrator or office manager, and do not have adequate financial controls or safeguards in place to protect the practice’s assets. Accordingly, these medical practices are susceptible to fraud, embezzlement and theft. 

Internal controls have always played a strong role in preventing fraud.  Now more than ever it’s important to establish procedures in your practice that will mitigate your risk of loss. 

ELLS CPAs has been engaged on numerous occasions to investigate the circumstances and damages resulting from employee fraud or embezzlement.  These cases have cost the medical practices anywhere from several thousand to over a million dollars.   Many of these frauds were perpetrated by the physician’s most trusted employee.

Don’t wait until you are a victim to take action.  We have developed a two page “Risk Assessment Checklist” that will enable us to determine many of the weaknesses you have in your practice. Once these risks are assessed we can recommend and help you incorporate procedures and/or safeguards into your practice to lessen your risk of fraud and embezzlement.  

Please contact ELLS CPAs  for the checklist, call 714.569.1000.

By Gregory N. Lewis

Filed Under: Certified Public Accountant, Medical Practice Consulting Tagged With: ,

Medical Office Embezzelement

November 10, 2011 By Leave a Comment

Recently one of ELLS CPAs’ Tax Managers was called for jury duty. This is a pretty normal occurance but the irony was in the nature of the case, medical office embezzlement. Check out this blog about how internal controls can help safe your money and in this case legal fees. Click here.

ELLS CPAs & Business Advisors can help you safegaurd your practice by placing financial controls in your practice. For more information call ELLS at 714.569.1000.

Filed Under: Certified Public Accountant Tagged With: ,

Anaheim Enterprise Zone

September 15, 2011 By Leave a Comment

ELLS CPAs & Business Advisors shares great news for businesses and practices located in Anheim. Check it out, here.

Filed Under: Certified Public Accountant, Tax Planning

Employee or Independent Contractor?

August 4, 2011 By 1 Comment

The IRS estimates that millions of workers are misclassified as independent contractors, costing the federal government huge sums of tax revenue due to underreported income and related unpaid employment taxes.

If the IRS reclassifies a worker as an employee, the employer:

  1. Becomes liable for:
    1. Employment taxes that should have been withheld from workers pay, such as FICA, federal and state income taxes.
    2. The employer’s share of FICA taxes,
    3. State and federal employment taxes,
    4. Penalties and interest for failure to (a) pay these taxes, and (b) file payroll tax returns and
    5. May have a retirement plan retroactively disqualified, which could cause all vested accrued benefits to become taxable for employees in the plan.

 

In the past the Internal Revenue Service used a “Twenty Factor Test” to determine whether or not an individual could be categorized as an independent contractor. The factors have since been consolidated into eleven main tests and organized into three primary groups: behavioral control, financial control and the relationship between the parties.

Behavioral Control

This is based on the facts and circumstances that show whether the business has a right to direct and control the performance of the individual in question.  The behavioral control test is separated into two items:

  1. Instructions the business gives the worker.
  2. Training the business gives the worker.

Financial Control

Showing that a business has a right to control the business aspects of the individual’s job include:

  1. The extent to which the worker has unreimbursed business expenses. 
  2. The extent of the worker’s investment.
  3. The extent to which the worker makes services available to the relevant market.
  4. How the business pays the worker.
  5. The extent to which the worker can realize a profit or loss.

Type of Relationship

Factors showing the type of relationship between the parties include:

  1. Written contracts describing the relationship the parties intended to create.
  2. Whether the business provides the worker with employee-type benefits such as insurance, a pension plan, vacation pay, or sick pay.
  3. The permanency of the relationship.
  4. The extent to which services performed by the worker are a key aspect of the regular business of the company.

If you have questions about employees vs. independent contractors please call Greg Lewis at 714.569.1000.

Filed Under: Certified Public Accountant, Medical Practice Consulting

Small Employer Health Insurance Tax Credit

March 2, 2011 By Leave a Comment

By Greg Lewis, ELLS CPAs & Business Advisors
www.ellscpas.com

Small employers are eligible to get tax credits for providing health insurance to employees. For more information please click here or call 714.569.1000.

Filed Under: Certified Public Accountant, Industry Updates

Small Business Job Act Creates Opprotunity for SBA 504 Loans

October 3, 2010 By Leave a Comment

By Greg Lewis, ELLS CPAs & Business Advisors
714-569-1000
www.ellscpas.com

The Small Business Job Act that we signed September 27, 2010 was created as a means of stimulating the economy and helping to provide support for small businesses. The Small Business Administration 504 Loan program is just one of the programs that will be given a shot in the arm.

The Small Business Jobs Act will have a 504 Refinance programs and the details and regulation will be release in the coming weeks. We do know business owners can refinance an their owner / user real estate under this program if the loan to value is 90% including costs, you must have owned the property for at least 2 years and you must be current on your payments.

There are no Certified Development Company (CDC) fees 4.5% and the .5% bank fee is waived through December 31, 2010.

For more information about the Small Business Job Act of 2010 and to find out if your SBA 504 loan is eligible for refinance please call Greg Lewis 714.569.1000.

Filed Under: Certified Public Accountant, Industry Updates

Health Care In A Capsule

April 30, 2010 By Leave a Comment

By Greg Lewis, ELLS CPAS
714.569.1000
www.ellscpas.com

Depending on your circumstances, the newly enacted health reform legislation, formally known as the Patient Protection and Affordable Care Act, can either be a bitter pill to swallow or the new miracle drug. Many of the provisions are phased in over the next five years and may face legal challenges by both individuals and State governments, so don’t increase your blood pressure meds just yet.

Provisions that are effective in 2010 and 2011:

Adults who can’t get coverage because of a pre-existing medical condition can join a high-risk insurance pool (this is an interim step pending the launch in 2014 of competitive health insurance marketplaces and premium subsidies).

Insurance companies will have to issue policies for children with preexisting conditions. They will not be allowed to revoke existing policies if people get sick. Lifetime limits on coverage will be banned in new coverage and annual limits will be restricted. Coverage will be available for dependent children until they turn 27.

People in the Medicare prescription drug program will receive a $250 rebate as the first step in closing the “doughnut hole” coverage gap. In the year 2011, Medicare coverage will be expanded to include free annual wellness visits and discounts on prescriptions for people in the “doughnut hole.”

Certain small businesses, with 25 or fewer full-time employees and average wages less than $50,000, will start getting tax credits to offset the cost of insuring their employees for tax years beginning after 2009. This credit will range from 10% to 35% depending on number of employees and average wages of the employee pool.

In 2011, employer Health Reimbursement Accounts (HRAs), Medical Savings Accounts (MSAs and Archers), and Flexible Savings Accounts (FSAs) will see changes in what qualifies on a tax-free basis.

“Simple Cafeteria Plans” are established so that small businesses can provide tax-free benefits to their employees, including self-employed individuals. Starts in tax years beginning after 2010, but now is the time to check out the possibilities if you fall under this umbrella. This is just a sneak-peak at the over 2,000 pages of the health care reform legislation. As the provisions become effective, we will keep you informed on what changes to expect and explain how they will affect you. If you have immediate concerns, your ELLS adviser is here to listen. We can be reached at 714-569-1000.

Filed Under: Certified Public Accountant, Industry Updates

How can you protect you and your cash from employee theft?

April 13, 2010 By Leave a Comment

By Greg Lewis, ELLS CPAs & Business Advisors
714-569-1000
www.ellscpas.com

The responsibilities of receiving funds, disbursing funds, writing checks, signing checks, and reconciling bank accounts are often given to a single employee when in fact these duties should be separated. Having one employee responsible for all cash-related functions makes your business vulnerable to fraud. We all want to trust employees but often times employees have external pressures that result in workplace theft.

Here are a few steps that you can take to protect you and your company:

1. Have monthly bank statements mailed to the owner’s home.

2. The owner should review each month’s bank statement for unusual transactions such as declining deposits and unfamiliar payees.

3. The owner should also look for signatures or endorsements that look forged, missing checks, check numbers that are out of order, and checks where the payee listed does not match the name in the check register.

Business owners should also consider an independent review of the cash accounts and bank statements by an anti-fraud specialist. For more information about our anti-fraud services call ELLS CPAs at 714.569.1000.

Filed Under: Certified Public Accountant, Industry Updates

Tips for Roth IRA Conversions

December 8, 2009 By Leave a Comment

By Greg Lewis, ELLS CPAs

714-569-1000

For tax years beginning after 2009, the $100,000 modified AGI limit on conversions of traditional IRAs to Roth IRAs is eliminated. Additionally, married taxpayers filing a separate return will be able to convert amounts in a traditional IRA into a Roth IRA. As a result, 2010 will be a pivotal one for retirement planning and poses significant tax planning challenges.

There are certain tax advantages to Roth IRAs. Qualified distributions are tax-free, they don’t enter into the calculation of tax owed on Social Security payments, and they have no effect on AGI-based deductions. These benefits flow through to beneficiaries of Roth IRAs as well.

Unless a taxpayer elects otherwise, none of the gross income from the conversion is included in income in 2010; half of the income resulting from the conversion will be includible in gross income in 2011 and the other half in 2012. A major wild card is the tax-rate picture after 2010. Absent Congressional action, after 2010, the tax brackets above the 15% bracket will revert to their pre-2001 levels. That means the top four brackets will be at least 39.6%, 36%, 31% and 28%. And, it has been rumored Congress is considering adding a new top bracket to the existing structure.

High-income taxpayers who plan to make large conversions in 2010 can elect to opt out of the deferral of tax until 2011 and 2012. In that case, these taxpayers should be considering ways to defer deductions to 2010 and accelerate income from next year into 2009 in an effort to avoid being pushed in the highest brackets by a large IRA-to-Roth-IRA conversion in 2010. Your ELLS advisor still has time to work with you to structure your 2009 tax return to reflect this strategy.

To learn more contact Greg Lewis,

714-569-1000

Filed Under: Certified Public Accountant, Medical Practice Consulting