Blog Archives: 2018

Beyond the Triangle: The Other Shapes of Fraud

The fraud triangle is the cornerstone to occupational fraud theory and illustrates the three elements that need to be in place for a perpetrator to successfully execute a fraud scheme. This concept, and its three major tenets, have been at the heart of fraud theory for over 40 years. Those three tenets are pressure, opportunity, and rationalization.

The Association of Certified Fraud Examiners has a very effective graphic that provides additional detail into the definition of these three areas. While the fraud triangle is well-recognized by fraud investigators, some argue that additional focal points are essential to this analysis and other shapes have emerged that merit further discussion.

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The Seattle Head Tax – What You Need to Know

On May 14th, 2018, the Seattle City Council, after much political wrangling and public debate, enacted a new employee hours tax (referred to as the “head tax”) on businesses in the city. The ordinance was signed by Mayor Durkan on May 16th and the tax will take effect on January 1, 2019. The revenue generated from the new tax is to be used to combat the issue of homelessness and the lack of affordable housing in the Seattle metropolitan area.

The new tax is imposed on businesses earning Seattle gross taxable income in excess of $20 million per year. For purposes of this threshold,

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Update: Federal R&D Credit and the Tax Cuts and Jobs Act

With the passage of the 2017 Tax Cuts and Jobs Act (TCJA), many clients want to know if the tax benefit of the federal research credit (R&D credit) is still available.

The TCJA did not directly change the general rules related to the R&D credit.  The R&D credit is available to taxpayers who develop new or improved products, processes, and formulas.  The R&D credit can be used to directly reduce income tax liabilities for C corporations, individual owners of businesses structured as pass-through entities (i.e., S corporations and limited liability companies), and individual proprietors.

In some cases, employers may reduce a portion of their share of payroll taxes for start-up companies.

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A Chocolate-Covered Fraud: Manufacturing and Fraud Risks

When it comes to fraud and theft, manufacturers are inherently at risk because of the nature of their operations. Not only do manufacturers have traditional fraud risks associated with cash management processes as well as cyber-security risks facing everyone today, they also have non-cash assets that can be valuable.

In this article, a manufacturer carried inventory that is enjoyed by consumers far and wide – chocolate bars. A risk assessment for this company would highlight several issues, but without a formal assessment it would be easy to miss some of the key risks featured in this case.

Several prevention techniques unique to a manufacturing operation are discussed in the article,

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Washington Department of Revenue Annual Tax Incentive Reports and Surveys Due May 31

Taxpayers taking advantage of any one of the available State of Washington tax incentives – including tax deferrals, reduced B&O tax rates, exemptions, and credits – may be required to file an Annual Report or Annual Survey.

Some incentives require that both the report and the survey be filed, while other programs do not have a reporting requirement.

For tax incentives taken in 2017, the due date for the Annual Report and Annual Survey is May 31, 2018.

There are over 50 different tax incentive programs in Washington. A partial list of common incentives includes:

  • High Technology B&O Tax Credit for R&D Spending
  • High Technology Sales &

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