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NEW PAYROLL \ W-2 SCAM MAKING THE ROUNDS….BEWARE!

Recently the Internal Revenue Service (IRS) issued an alert to payroll and human resources professionals to warn them about an email scam.  In our effort to keep our customers protected and informed we are passing along this information.  Also, please note that all W-2 forms should be distributed in California no later than January 31.  If your w-2 is returned by mail as undeliverable, do not open the envelope. The sealed envelope with its postmark serves as proof that you attempted to send the Form W2 on time. Make a copy of the envelope and keep the copy in your records for 4 years.

The IRS is urging company payroll officials to double check any executive-level or unusual requests for lists of Forms W-2 or Social Security numbers (SSNs).

In this scam, cybercriminals attempt to trick payroll and human resource officials into disclosing employee names, SSNs and income information. The thieves then use the stolen personal information and data to try to obtain money, including filing fraudulent tax returns for refunds.

The criminals send a fake or “spoofing” e-mail pretending to be from the actual CEO or CFO of the company. In the email, the “CEO” requests a list of employees and information about the employees, including their SSNs, from company payroll officers or human resource employees.

The following are some of the details that may be contained in the emails:

  • Kindly send me the individual 2016 W-2 (PDF) and earnings summary of all W-2 of our company staff for a quick review.
  • Can you send me the updated list of employees with full details (Name, Social Security Number, Date of Birth, Home Address, and Salary).
  • I want you to send me the list of W-2 copy of employees wage and tax statement for 2016, I need them in PDF file type, you can send it as an attachment. Kindly prepare the lists and email them to me ASAP.

The IRS warns that cybercriminals are using more sophisticated tactics to try to steal even more data that will allow them to impersonate taxpayers.

Concerned employers can visit the IRS website to get assistance with reporting phishing and other online scams.

For more information on protecting personal, financial and tax data, see IRS.gov/taxessecuritytogether for additional steps businesses and individuals can take. Businesses that retain sensitive financial data are also encouraged to review and update their security plan. Safeguarding Taxpayer Data, A Guide for Your Business, provides a starting point and recommendations from the IRS.

Starting July 1, 2015, Obamacare will punish businesses who help employees with health care

Blog writer’s note: The following is an article Posted By Eric Boehm On July 1, 2015 @ 4:00 am at Watchdog.org.  More information can be obtained at the end of this article. While this article may affect some of our readers, we caution you not to overreact to its contents. Instead, we suggest you contact your tax professional or accountant to inquire about your possible exposure to this issue.

By Eric Boehm | Watchdog.org

Employers who reimburse their workers for health care costs will face massive tax penalties beginning Wednesday.

Prior to the passage of the Affordable Care Act, with its mandate that all Americans purchase insurance and requirement for businesses to offer employees insurance plans, many small companies provided coverage by directly reimbursing medical costs or for the cost of private insurance plans. Businesses do it because that’s a less complicated process than dealing with an official health insurance plan, but continuing to do so after July 1 could cost them hundreds of dollars in fines each day.

IF YOU LIKE YOUR INSURANCE…: Businesses that offer reimbursement for health care costs could face massive IRS penalties beginning on Wednesday. Business groups say many small businesses might be unaware of the risk.

Business groups are calling attention to what they say is an obscure part of Obamacare that could crush small businesses who are unaware of it.

“It’s the biggest penalty that no one is talking about,” said Kevin Kuhlman, policy director for the National Federation of Independent Businesses, on Tuesday.

The penalties will only affect businesses with less than 50 employees. Those with more than 50 employees are already required to offer a health insurance plan.

The new rule is the result of an Internal Revenue Service interpretation of part of the ACA. It seems intended to force employers to offer a group health insurance plan (or leave their employees to fend for themselves on the health insurance exchanges).

The IRS says those reimbursements — technically known as “employer payment plans” [2] — are “considered to be group health plans subject to the market reforms, including the prohibition on annual limits for essential health benefits and the requirement to provide certain preventive care without cost sharing.”

The end result?

“Such an arrangement fails to satisfy the market reforms and may be subject to a $100/day excise tax per applicable employee (which is $36,500 per year, per employee) under section 4980D of the Internal Revenue Code [3],” according to the taxmen.

Business groups say the punishment doesn’t fit the crime.

Even though the total fine is capped at $500,000 per year, that’s still miles ahead of the $2,000 fine that could be waiting for larger companies (those with more than 50 employees) that fail to comply with the individual mandate part of the ACA.

The NFIB says 14 percent of their members do not provide health insurance plans, but instead offer reimbursement.

The owner of a Minnesota-based company with 17 employees told NFIB [4] the new rules would require health benefits to go through the payroll process. That means it is subject to taxes, which reduces employees’ benefits and increases the business’ costs.

“Reimbursing employees for the cost of insurance or medical services is a way for small businesses to help their workers without the administrative headache of setting up a costly group plan,” said Kuhlman. “Most small employers don’t have HR departments or benefits specialists, so this is a simpler, easier way to help their employees.”

The prohibition on employer reimbursement was supposed to start last year, but the IRS postponed implementing it until July 1.

There has been bipartisan support [5] in Congress [6] for eliminating the harsh penalty on small businesses, but bills have not advanced.

“This would be devastating to small businesses and impose hardships on their employees,” said U.S. Sen. Chuck Grassley, R-Iowa, in January, referring to the potential $100-per-employee-per-day fine. “Congress has to fix this problem. [7]”

Note from HR Mobile Services, Inc.

Article printed from Watchdog.org: https://watchdog.org  If you would like more information about this organization or about the author or article, please visit their website .

 

URL to article: https://watchdog.org/226796/obamacare-punishes-small-businesses/