Taking Stock of the U.S. Chamber

As the holidays rapidly approach and I start looking ahead to the New Year, something that I am really excited about is my new found relationship with the United States Chamber of Commerce. Last May, I was invited to attend their 2009 Business Civic Leadership Center’s (BCLC) Annual Conference in Chicago. That’s where I witnessed firsthand, what can happen, when dedicated and committed professionals from the public and private sectors come together and work as one. While the wheels were spinning off the bus on the U.S. and world economy, the BCLC was already rolling out a program called “Together for Recovery.” Its focus was helping businesses, individuals and communities do more than just survive, but actually fight back and prosper, as opposed to becoming victims of their circumstances. Since attending this event, I have been drinking U.S. Chamber and BCLC Kool-Aid by the case.

The conference moves to Houston, TX for 2010 and I am honored to have been asked to be a member of the Working Group that is planning it. This National Conference on Corporate Community Investment is a “must attend” for leaders of their communities: business leaders, chamber executives, bankers, investors, elected officials, non-profits, educators. Any stakeholder in a leadership role in his or her community should plan to be in Houston, May 12-14, 2010. This year’s theme will be: PROVIDE and PROSPER: Corporate Citizenship and Competiveness in the 21st Century.

As unprecedented challenges and opportunities continue to reshape how our businesses compete and our communities live, The Chamber, the BCLC and its members continue to pioneer innovative, sustainable solutions to these real-world challenges. At the 2010 BCLC National Conference on Corporate Community Investment, you'll meet and interact with the nation's top corporate, government and non-profit thought leaders as they address solutions to America's most vexing competitive challenges: “Energy and the Environment,” “Health and Wellness,” and the one that’s nearest and dearest to my heart, “Job Creation.”

Before I close, I’d like to sincerely thank Stephen Jordan and Katie Loovis at the BCLC and U.S. Chamber, for so generously featuring RetroTax and me in their year-end report and video, Together for Recovery: “Business is Part of the Solution.” This is a compilation of stories about how the business community is helping individuals, non profits, communities, and small businesses weather the ongoing economic storm.

Link to report: http://www.uschamber.com/bclc/together_retrotax.htm

Link to video: http://www.youtube.com/civicleadership#p/u/0/ANliWoKks50

Finally, let me wish you all a very Merry Christmas, or your appropriately “PC” Happy Holiday Greeting of choice.

Let's Hear it for the House

While Congress remains polarized regarding health care, last week the House managed to pass HR 4213, the Tax Extenders Act of 2009. This will extend the life of certain expiring tax provisions that were set to sunset on 12/31/09. Included in this bill are the EZ/RC credits that are our life’s blood. This bill now passes from the House Ways and Means Committee, to the Senate Finance Committee for further disposition. In plain English, that means “business as usual” for RetroTax. The Senate Finance Committee will now have until 12/31/10 take this up and get it to the full Senate for a vote, keeping the credits and incentives that we administer alive, until the Way and Means Committee gets around to the business of HR 1677 and the Senate to S1222. When passed, these bills will expand the value proposition of the services that we provide for our clients and extend the legislation to the end of 2016.

Atlanta Business Radio Franchising Special

I'd like to express my thanks and appreciation to Amy Otto and Lee Kantor, hosts of Atlanta Business Radio, for inviting Jim Squire and me, to co-host a one hour broadcast, dedicated completely to franchising. These invitations were extended to us, because Jim and I each chair one of Atlanta's two franchise membership forums. Jim, The Southeast Franchise Forum and yours truly, The Atlanta Franchise Alliance. The two of us then, invited an outstanding line up of guests, to talk about the state of franchising in this challenging economic and political climate. We were joined first by David French, VP of Government Relations at the International Franchise Association, followed by Geoff Seiber, CEO of FranFund, Ron Feldman, CEO of Siegel Financial Group (and RetroTax franchisee) and Michelle Belinfante of The Leasing and Management Group.

The link that follows, will take you to more about the program and to yet another link, that will

enable you to stream the program's audio. http://atlantabusinessradio.libsyn.com/

To all of those that I will not see or speak with in the next few weeks, I wish you and your families a very safe and Happy Holiday season.

No Need to Break the Bank

While recent and ongoing economic concerns have forced many businesses into a state of retreat, with regard to hiring and employee retention, there can be a brighter side to these issues and concerns, especially in times like these. An often overlooked opportunity to offset these concerns can be found in the identification and administration of wage based tax credits costs. Surprisingly, many companies look past these opportunities, or fail to maximize on their full potential. In many case, the administrative burden required to claim these credits is why they are left unclaimed.

Many don’t realize either, that many of these tax credit programs are both for the current year, as well as for years retroactive. C corporations redeem these credits corporately, while they pass through to principal owners of S-corps, LLCs, partnerships et al, as dollar for dollar credits against personal tax liabilities. In any case, it’s usually nothing more than a lack of knowledge that prevents many business owners from redeeming what could otherwise be a windfall for their businesses.

In the current economic environment, anyone with a fiduciary responsibility should do whatever possible, to help enhance bottom line opportunities for their companies and shareholders. Finding incremental opportunities to enhance the bottom line and operating as soundly as possible is not a luxury in today’s economic environment – it’s a necessity. The amount of money that these credits could potentially represent is significant and substantial.

What tax credits are available?
From the Federal Empowerment Zone Wage Tax Credit Program, to Renewal Community Initiative, and the Work Opportunity Tax Credits, the options are many. While the suggestion of tens if not hundreds of thousands of dollars, or more, sitting unclaimed, may sound too good to be true, it is nonetheless, entirely possible. In fact, it is safe to say that 10-15 percent of all of W2s generated in a given year could be worth on average, $1,500 per employee (depending on the tax credit program) per year.

The Federal Empowerment Zone (FEZ) Wage Tax Credit Program is an incentive program created to revitalize the economies of select communities across the country. These zones are located in many of America's biggest cities. Specifically, the FEZ program provides employers with a federal income tax credit of up to $3,000 per qualifying employee per year and offers three years of retroactivity.

Because of geographic constraints, the FEZ credits will not apply in all cases. Another credit opportunity is the Renewal Community Initiative (RC), which mirrors the FEZ credit in terms of rules and retroactivity. The significant difference between them is that the RC credit provides a federal income tax credit equal to $1,500 per qualified employee, per year, but the qualifying geographic areas are usually much larger. In all other ways, the RC credit program is basically the same.

The Work Opportunity Tax Credit (WOTC) program is a program that provides businesses with a federal income tax credit that can be as high as $9,000 per eligible employee. Unlike the FEZ or RC program, this program has no geographic restrictions or boundaries. Also unlike the FEZ or RC program, it only allows a one-time credit for new hires, on a go-forward basis. There is no opportunity for retroactivity with WOTC. These credits are available if your new hires fall into any one of nine different categories, including qualified veterans or disconnected youth.

Identification and administration of these programs is not a simple process. It takes time and the procedures are onerous, which is why so few undertake this task without the help and assistance of professionals.

When to begin capitalizing on these tax credit and incentive programs?
Right now! All tax credit programs have deadlines. Retroactive tax credit programs allow you to capture credits in the open tax year as well as from the 3 prior years. For example, once you close the books on 2009, you will no longer be able to claim credits from 2006.

How are these credits generated?
Eligibility for redemption of these credits is determined through client qualification interviews, including discussions with client’s internal and outside tax counsel, regarding the implications of these potential tax credits. This enables and empowers the tax preparer to optimize the value of these federal or state income tax credits, as part of the client’s overall tax strategy.

Several of these programs provide retroactivity and actually allow the recapture of overlooked credits from past tax years. Excess credits can be carried forward as many as 20 years. Many of these tax credit programs can be combined to increase the value of benefits (i.e. special hurricane related credits, GO Zone, etc.). Once the client’s “appetite” for these credits has been determined, the process of administering, optimizing and delivering value from each of these programs begins.

Historically, the majority of our client business is generated directly, or through alliance partnerships with professional service firms. Many of these relationships are at the local and regional levels, but a growing number are national alliances, with companies like Ceridian, Ryan and RSM McGladrey.

PUTTING ALL OF THE PIECES TOGETHER
ACI/RetroTax® is a full service tax credit administrator of federal and state tax incentive programs. We specialize in identifying both demographic and geographic federal and state tax credits. During our 12 year history, we have produced significant financial gain for our 1,500+ nationwide clients, by administering millions of dollars in wage-based tax credits annually.

We provide tax credit administration services for clients of all sizes, small entrepreneurs to Fortune 500 companies. In addition, we serve as “behind-the-scenes” tax credit administrators for large accounting firms, payroll companies, and professional employment organizations (PEOs).

RetroTax Procedures
· We work with your CPA to determine the ability for your business or shareholders to utilize credits.
· We research and analyze all information to identify eligible sites and employees.
· We provide reference maps showing the locations of qualified sites and employees within a federally designated Empowerment Zone or Renewal Community. (FEZ/RC)
· We communicate with state Labor Departments, to obtain certifications of eligibility for all eligible employees that qualify for demographic credits. (WOTC).
· We work with your internal and external Finance/HR teams to implement, manage and maximize the redemption of credits from all qualifying programs.
· We keep you abreast of all pending, current and upcoming program legislation.
· Our fees are 100% contingent upon performance.
· Absolutely no set-up fees
· Absolutely no hidden fees
· No credits…no fees

“We do the Work… You take the Credit”

Dwyer-Ownes Testimony Showcases Value to Tax Credits

Kudos to International Franchise Association (IFA) Chairwoman Dina Dwyer-Owens, for her testimony before the United States House of Representatives Committee on Small Business, on Wednesday, September 30, 2009.

As part of her testimony, Dina addressed the importance of extending two categories of the WOTC tax credit program, born out of the Stimulus Bill, until such time as the national unemployment rate subsides. The following relevant excerpt from Dina’s testimony, would certainly favor our business at RetroTax.

“The American Reinvestment and Recovery Act also provided important tax relief to small businesses through the Work Opportunity Tax Credit and capital gains tax relief for businesses organized as S Corporations. The Work Opportunity Tax Credit assists franchise businesses in hiring unemployed veterans or youth who are not in school or already employed. This tax credit should be extended until our national unemployment rate returns to pre-recession levels. Additionally, I believe Congress can do more to assist our returning military veterans with the transition to civilian life, which I will mention in a moment.”

You may read Dina’s testimony in its entirety, at the IFA’s website. You may link to it directly, below.

www.franchise.org/capitalaccess.aspx

Public Affairs Conference Success – On To Franchise Update TODAY

The IFA Public Affairs Conference was high energy and positively charged. IFA’s Conference and Government Affairs team was on top of their game and did a stellar job in keeping the program on track and the speakers relevant. George Will as a repeat speaker worked well for me as well. He was every bit as good this year as we was last. Just as he does weekly on ABC’s This Week with George Stephanopoulos, he breaks down all of the political double speak, to the simplest of common denominators.

More than 400 IFA loyalists attacked the Hill to lobby their members of Congress for the myriad of issues that are important to IFA and its members, predominantly:
· Capital Access
· Card Check
· Health Care

As for me, I broke ranks and instead of joining the rest of the Georgia gang to visit our Peach State elected officials, I spent my time seeking out those Members of Congress and staff that can make the greatest difference with reference to the passage of another issue that IFA has signed on to, one that is near and dear to all of us at RetroTax. I am referring to HR 1677, HR 3500 and S 1222, three bills that are focused upon the extension and expansion of the legislation governing the Federal Empowerment Zones and Renewal Communities and tax credits available to businesses that send resident employees to work in those zones. My time on the Hill was very productive and I am confident that we will prevail in the extension of these benefits.

And, I think other IFA member’s time was productive, too, as there were easily 450 in attendance, a true reflection of the times and how important our collective voices are on the Hill, in these challenging times.

This week, the franchising fun continues, as I will be Networking, networking, networking at the Franchise Update Leadership Conference in Chicago – STARTING TODAY.

I am looking forward to robust conversations with franchisors that can benefit from RetroTax services, to learning as much as possible from my peers and as always, to giving back as much as I can, to those that can benefit from hearing from me. I’m really looking forward to participating in the “pre-conference, CEO Summit again this year. As was the case last year, it is facilitated by the very able Linda Burzynski and is a mindshare session for CEOs and Presidents only. This interactive program is all about "Exceeding Today's Stress Tests for Franchise Growth". How to continue to grow franchise units, where to get the right capital, what your org. chart should look like, how to craft salary and incentive programs and issues like that.

As for the panel that I am speaking on this year, our topic is: Lead Generation Track -- Where Can I Find More Qualified Prospects in this Economy? I join the very capable Paul Mangiamele, President/CEO, Salsarita's Fresh Cantina and Kevin Drudge, Vice President of Franchise Development at Valpak for this session.

Information shared at events like the IFA Public Affairs Conference and Franchise Update’s conference in Chicago this week are validating my belief that the recession has hit bottom, but that there will be a long slog to recovery. It could take years to get there, but barring any unforeseen events, I don’t think that things are geared to get any worse than that which we have already experienced.

If you are at Update – be sure to connect with me (best way if you want to schedule a meeting is by emailing me at stan.friedman@retrotax.com). Can’t wait to see all of you!