Cooperative Tax Consulting Services
Cooperatives are a unique business structure and you need knowledgeable advisors to help navigate the special tax rules in this area. I have been actively involved in advising cooperatives and their tax advisors for over 35 years. I led KPMG’s Cooperative Tax practice from 2000 to 2009, and served over 100 cooperatives in all types of industries during my 32 years with KPMG. Since 2009, I have been providing consulting services to cooperatives and their tax advisors on all types of issues. My approach is to listen carefully to the issues that cooperative management or board members have, and look for proactive solutions to their problem.
For example, in 2005, I led a coalition of cooperatives to lobby Congress for special rules for cooperatives in the Section 199 Manufacturing Deduction by providing Congressional staff with specific items to ensure that the provisions worked for cooperatives, including the attribution rule and add-back of patronage payments. Without this effort, Section 199 would not have worked for agricultural cooperatives. This provision has been extremely beneficial to all agricultural cooperatives. This type of proactive effort ensures that my clients consider all of the options available to them in Subchapter T, even if it means going to Congress to ensure that tax changes that Congress is planning will work for cooperatives as well.
The “Strategies” box to the right highlights some of the specialized work that I have done for cooperatives over the years. These projects along with years of consulting with cooperatives and preparing the returns for many different types of cooperatives have given me a clear understanding of how the unique cooperative tax rules work in a great variety of situations, including mergers and acquisitions, divestitures and sales, handling of losses, implementation of Section 199 strategies, and the like.
• Formulating patronage allocation programs including the use of revolving and targeted equity plans for purposes of promoting the cooperative's capital requirements as well as fair and equitable distribution of capital ownership by members.
• Formulating suggested provisions for cooperative bylaws, articles of incorporation and membership agreements for operating on a cooperative basis and meeting the board and management's objectives.
• Analyzing methods of computing patronage distributions, including book, tax and hybrid methods, including review of implications of the decision.
• Analyzing cost allocation methodologies to determine the best method for patronage and non-patronage purposes.
• Determining patronage/non-patronage allocation of gain on the sale of fixed assets used in the cooperative's business.
• Assistance in California tax matters, including income tax apportionment, special deduction for cooperatives, and Franchise Tax Board exams.
Tax Problems
Professional representation can be vital during an audit, and my experience with tax authorities enables me to guide clients in their dealings with federal and state agencies. If you have been chosen for an audit, the professional representation you will find with me can alleviate your concerns. I am available to help answer questions the IRS or state agencies are asking of you.
One thing is true – it does not pay to procrastinate. If you have missed filing filings for one or more years, have insufficient funds to pay your taxes when due, or have failed to remit payroll taxes, don’t delay! A proactive approach to solving these problems will go a long way with the taxing authorities.
• Timely response to notices from tax authorities
• Assistance with negotiations with tax authorities for payment of taxes due
• Use of the IRS’ Innocent Spouse Relief when a spouse or former spouse fails to report income, reported income incorrectly, or claimed improper deductions or credits.
Entity Selection & Restructuring
Your business entity has a large impact on your taxes and other liabilities. From your company's inception through its growth and development, I can advise you on choosing an entity type and later restructuring if advantageous. With my knowledge and expertise, I will help you to determine the most advantageous entity type for the functions your business performs. In addition to the usual entities (proprietorship, LLC, C and S corporations), I have considerable experience in the cooperative form of business, and can assist companies in determining whether this unique structure would benefit them.
• Consideration of which states the business will operate in, and the implications of the choice of entity on operation in those states
• Consideration of current owners and potential future owners on type of entity selection
• Review of the pros and cons of the various types of entities in your situation
Personal Financial Planning
A better term might be “Life Planning”. I think it is vital for us to plan all of the aspects of our life, and not just financially. Of course, things will not always work out as planned, but with a plan, you have goals and ways to measure your achievement of those goals. A knowledgeable professional who listens carefully to your needs, wants, and desires can help you navigate the “life planning” path. Finances will pay a large part in providing for you and your family, for education, for business, for retirement, for travel or other fun things, and for passing on your estate.
Financial and Retirement Planning
My goal is to help you reach your financial goals and maintain financial independence through a comfortable retirement. I can guide you through tough decision-making processes, such as asset allocation, investment performance monitoring, college education funding, retirement plans, insurance, and tax, estate, and business succession planning. Whether you are developing an investment strategy or evaluating current investments, I can ensure that your portfolio will take into account tax implications for an advantageous after-tax return. The road to retirement is a long one and I can help you to take the proper steps to reach your goals.
Estate, Trust Planning and Tax Preparation
Effective estate and trust planning can ensure financial security for loved ones. For businesses, it can maintain a smooth succession of ownership. My role is to help you navigate the complex and shifting tax laws to facilitate the transfer of assets and minimize the tax liability of your beneficiaries. Everyone should have a well thought out plan as to how to disburse one's estate, so as to avoid complications and to be sure wishes are followed. Having your taxes and estate thoroughly and carefully planned will ensure that your loved ones don't have unnecessary complications to deal with during their time of loss.
• Discussions with you and review of your budget to help you reach your goals
• Review of your investment strategy with you and your investment advisor to determine the tax implications of the strategy and what the actual after-tax return is
• Review of your retirement plans with your employer or ones you can use for your own business
• Discussion of the pros and cons of using trusts for beneficiaries. Even if you won’t have a taxable estate, a good plan for the disbursement of your estate is critical for your family. Consideration of issues, such as whether a beneficiary is capable of managing the money left to him or her, whether the inheritance will cause the beneficiary to lose state benefits, and who in the family should receive your estate.