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STRATEGIC ISSUES...ONLINE    
For week of September 5, 2005, Issue #227
 
Featured Articles:
1.  Follow-Up to Energy Tax Incentive Act
2.  Monthly Figures
3.  Focus on Fraud:  Put Your Fraud Knowledge to the Test - Part V
4.  Tech Tip Weekly:  Merging Styles from Other Workbooks
5.  Compliance Calendar
 
 
1.  Follow-Up to Energy Tax Incentive Act
 
Most of America would not be paying much attention to the Energy Tax Incentives Act of 2005, which was signed into law on August 10, 2005, if it were not for two energy credits - the nonbusiness energy property tax credit and the residential energy efficiency tax credit.  These tax credits will be available to individual homeowners during both 2006 and 2007.
 
Residential energy property credit
A tax credit of up to $500 lifetime over the 2006 and 2007 tax years is available to individuals for nonbusiness energy property, such as residential exterior doors and windows, insulation, heat pumps, furnaces, central air conditioners and water heaters.  This credit is equal to (1) the residential energy property expenditures plus (2) 10 percent of the cost of qualified energy efficiency improvements installed during the year at the taxpayer's principal residence in the United States.
 
Credit for solar and fuel cell equipment
A tax credit is available to help individual taxpayers pay for residential alternative energy equipment.  Residential alternative energy credit is 30 percent of the cost of eligible solar water heaters, solar electricity equipment (photovoltaics) and fuel cell plants.  The maximum credit is $2,000 per tax year for each category of solar equipment, and $500 each half kilowatt of capacity of fuel cell plants installed per tax year.
 
Windows, skylights, and doors
Both skylights and windows are restricted to a maximum combined $200 lifetime credit (which represents $2,000 in costs since that part of the credit is based on 10 percent of costs).  However, the expenses qualifying for the credit only include the cost of the new window or skylight; labor costs for installation are not included.
 
Depending upon energy-savings certification, certain garage doors that are insulated may qualify for the credit.  Presumably, storm doors and windows also will qualify under regulations, as they had under the 1978 Energy Tax Act.
 
Labor costs
Do-it-yourself projects are permitted.  However, labor costs are not allowed to be included in any event for energy-efficiency improvements; they are allowed for residential-energy property expenditures and for that credit. 
 
Maximizing Credits
One project may not be split between two years; it qualifies only once, when installation is completed.  However, planning two separate projects, for example, one for solar electricity and the other for solar hot water to end in different years is smart tax planning since a total $4,000 deduction over 2006 and 2007 will be gained rather than just a maximum $2,000 for one of the years.
 
Principal residence/vacation homes
The home on which energy property is installed must be the taxpayer's principal residence at the time the installation is completed for purposes of the envelop and energy-property expenditures.  For the residential energy efficient property credit, only the home in which fuel cell property is installed must be a principal residence.  Qualified photovoltaic and solar water heating property may qualify if installed in a residence of the taxpayer, thus qualifying vacation homes.
 
AMT
While the personal energy credits will offset regular tax liability, they will not be permitted to offset alternative minimum tax.
 
 
2.  Monthly Figures
 
DATA ITEM 1-Sep-05 1-Aug-04
Prime Rate 6.50% 6.25%
Money Market               Mutual Funds (Taxable) 3.00% 2.83%
Mortgage Rates:                30 Yr. Fixed-Rate                       1 Yr. Adjustable-Rate
 
 
5.77%                          4.56%
 
 
5.77%                   4.46%
London Interbank Offered Rate (LIBOR)          12 Month 4.27% 4.13%
U.S. Treasury               Bills (90 Days) 3.50% 3.40%
U.S. Treasury               Bonds (30 Days) 4.26% 4.47%
Tax-Exempt Municipal Bonds 4.21% 4.27%
IRS Under and Over Payment Interest Rate 6.00% 6.00%
Gold, Troy OZ. $433.60 $430.00
 
 
3.  Focus on Fraud:  Put Your Fraud Knowledge to the Test - Part V
 
7.  d. is Correct
In pay-and-return schemes, employees intentionally mishandle payment which are owed to legitimate vendors.  One way to do this is to purposely double-pay an invoice.  For example, in one case a secretary was responsible for opening mail, processing claims and authorizing payments.  She intentionally paid some bills twice, then requested the recipients to return one of the checks.  She would intercept these returned checks and deposit them into her own account.
 
8.  b. is Correct
The Anti-Kickback Act of 1986 outlaws the giving or receiving of anything of value for the purpose of improperly obtaining or receiving favorable treatment in connection with U.S. government contracts.
 
From the ACFE Fraud Info Newsletter:
 
Are you terrified about identity theft yet?  If not, consider this:  It could get you killed.  At least that's what John Gardner, a smooth-talking lawyer and spokesman for a company called Pre-Paid Legal Services, would have you believe:
 
 
 
4.  Tech Tip Weekly:  Merging Styles from Other Workbooks
 
In MS Excel, you may create one or more styles that you use frequently.  Although you could go through the emotions and create these styles for every new workbook, a better approach is to merge the styles from a workbook in which you previously created them.
 
To merge styles from another workbook, open both the workbook that contains the styles that you want to merge and the workbook into which you want to merge styles.  From the workbook into which you want to merge styles, choose Format, Style and click the Merge button.  MS Excel displays a list of all open workbooks.  Select the workbook that contains the styles you want to merge and click OK.  MS Excel copies styles from the workbook that you selected into the active workbook.
 
When you're merging styles, colors are based on the palette stored with the workbook in which you use the style.  Therefore, if the two workbooks involved in the merge use different color palettes, the color used in the styles may not look the same in each workbook.
 
 
5.  Compliance Calendar
 
September 8
-Employers deposit Social Security, Medicare and withheld income tax for payments August 31 and September 1 and 2.
 
September 9
-Employers deposit Social Security, Medicare and withheld income tax for payments September 3, 4, 5, and 6.
 
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