Gramm-Leach-Bliley Act (GLB Act or GLBA)

  • By proadAccountId-371192
  • 13 Jul, 2017

Aberdare Business Solutions is Compliant !!

The Gramm-Leach-Bliley Act (GLB Act or GLBA) , also known as the Financial Modernization Act of 1999, is a federal law enacted in the United States to control the ways that financial institutions deal with the private information of individuals. The Act required the Federal Trade Commission (FTC) and other government agencies that regulate financial institutions to implement regulations to carry out the Act's financial privacy provisions.

Who Does GLBA Apply To?
All organizations, regardless of size, that are providing financial products or services to consumers. This includes check cashing businesses, payday lenders, mortgage brokers, non-bank lenders, personal property or real estate appraisers, retailers that issue branded credit cards, professional tax preparers, and courier services. The law also applies to companies that receive information about customers of other financial institutions, including credit reporting agencies and ATM operators.
The main focus of the GLB Act is to expand consumer data privacy safeguards and restrictions. The primary concern of professionals and financial institutions is to secure and ensure the confidentiality of customers’ private and financial information. Maintaining compliance is critical for any financial institution, as violations can be both costly and detrimental to continued operations. However, by taking steps to safeguard NPI (Nonpublic Personal Information) and comply with the GLBA, organizations will not only benefit from improved security and the avoidance of penalties, but also from increased customer trust and loyalty.

The Act consists of three sections:

1. The Financial Privacy Rule : This requires institutions to provide particular notices and to comply with certain limitations on disclosure of nonpublic personal information. An institution must provide notice of its privacy policies and practices with respect to both affiliated and nonaffiliated third parties, and allow the consumer to opt out of the disclosure of the consumer’s nonpublic personal information to a nonaffiliated third party if the disclosure is outside the exceptions.

2. The Safeguards Rule : This requires financial institutions under the jurisdiction of the FTC (Federal Trade Commission) to have measures in place to keep customer information secure. It also requires such companies/entities to develop their own safeguards. Companies covered by the rule are responsible for taking steps to ensure that their affiliates and service providers safeguard customer information in their care.
07-10-17 GLBA

3. The Pretexting Provisions : This prohibits the practice of accessing private information using false pretenses.
GLBA also requires financial institutions to give customers written privacy notices that explain their information-sharing practices.
Being noncompliant calls for severe civil and criminal penalties including fines and imprisonment. If a company or institution is found noncompliant, it will be subjected to a civil penalty of not more than $100,000 per violation. Officers and directors of the institution will be subject to, and personally liable for, a civil penalty of not more than $10,000 per violation. The institution and its officers and directors will also be subject to fines in accordance with Title 18 of the United States Code, imprisonment for no more than five years, or both. If the act is violated at the same time that another federal law is violated, or as part of a pattern of any illegal activity involving more than $100,000 within a 12-month period, the violator's fine will be doubled and he or she will be imprisoned for up to 10 years.

Need more information?  Know that Aberdare Business Solutions is COMPLIANT and can assist you in safeguarding your data.  Call one of our professionals today for additional information 281-599-3380.

Gambling Winnings

By proadAccountId-371192 24 Oct, 2017

Victims of hurricanes Harvey, Irma, and Maria get relief from Congress. They can take casualty losses from the storms even if they don’t itemize. They’re able to deduct uninsured personal losses more than a $500 threshold without regard to the 10%-of-AGI offset that generally applies to the deduction.  2016 income can be used to figure the 2017 earned income tax credit. The same applies for the child tax credit. This will prevent a cut in these tax breaks for lower-incomers whose jobs have been suspended or lost due to the hurricanes.

 

The 10% penalty on pre-age 59½ payouts from retirement accounts is waived, if the IRA or retirement plan withdrawals are not greater than $100,000. The income tax due on such distributions can be spread over a three-year period. Amounts recontributed to the plan or IRA during that span will be treated as rollovers, and tax paid on those amounts can be recovered by filing an amended Form 1040.

 

Victims can borrow more from company retirement plans such as 401(k)s, up to the lesser of $100,000 or 100% of the account. Loan repayments can be deferred. The 50%-of-AGI limitation on charitable donations is suspended for any cash donations to qualified charities that aid victims of Harvey, Irma and Maria.

 

Corporations can fully deduct cash donations for hurricane relief. The usual 10% of taxable income limit does not apply to such contributions. There’s a special break for hurricane-affected firms that keep paying workers even though business operations have been suspended in the wake of the storms. They get a 40% tax credit for up to $6,000 of wages paid to each idle employee.

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By proadAccountId-371192 24 Oct, 2017

IRS’s simplified per diems for lodging, meals, and incidentals are going up. In high-cost localities, employees can get up to $284 each day free of tax. In other areas, their daily stipend is capped at $191. Both amounts are up $2. 

 

Businesses using this method have the choice to use these higher rates as of Oct. 1 or wait until Jan. 1, 2018. Firms can opt instead to use these higher rates as of Oct. 1 or wait until Jan. 1, 2018. Firms can opt instead to use federal per diems separately figured for hundreds of cities.

 

No change to the rates for meals and incidentals only, this stayed at $68 per day in high-cost areas and $57 in other locations. Self-employed individuals on travel can use these rates in lieu of keeping receipts, but their lodging expenses must be sustained separately. They cannot use the full $284/$191 per diems. The per diem rate solely for incidentals is also unchanged at $5 a day.

By lemaster 17 Oct, 2017
Harris County residents experienced one of the worst flooding disasters in U.S. history when Hurricane Harvey impacted the region late August 2017. Dozens of lives were lost and thousands of homes were destroyed as catastrophic rainfall devastated Harris and surrounding counties.

As communities continue to reclaim normalcy from Harvey, the Harris County Office of Homeland Security & Emergency Management is working in collaboration with the State of Texas, the Federal Emergency Management Agency (FEMA) & non-profit partners to help with the recovery process.

This Harvey Recovery Resource Guide offers important information about available resources and assistance available to residents affected by the floods.

All individuals impacted by flooding should apply for FEMA assistance at 1-800-621-3362 or online at www.DisasterAssistance.gov by October 26, 2017.

The Office of Ted Heap, Harris County Constable Pct. 5 continues to patrol those neighborhoods that were devastated by flooding. Contract neighborhoods received more coverage than normal as a result of diverting all the department’s resources to a law enforcement function. We hope this guide will help provide answers for those that were impacted by the storm.
By proadAccountId-371192 29 Sep, 2017
Donating leave for Hurricane Harvey.
Under new IRS guidance for leave-based donations, employers can make cash payments to qualifying charities that match vacation, sick, or personal leave forgone by employees. The donations are not income to these employees— but they are not charitable deductions either. The cash payments must be made to organizations qualified under code §170, Charitable, etc., contributions and gifts, before Jan. 1, 2019.

Key point: Employers can choose to deduct the payments as charitable contributions or as business expenses and should not include the payments as income on the contributing employees’ W-2s. [Notice 2017-48; 2017-39 IRB 10]
By proadAccountId-371192 29 Sep, 2017

A Senate proposal on worker classification is drawing praise from business.

 The bill from Sen. John Thune (R-SD) would provide a new safe harbor based on three criteria that, if met, would qualify workers as independent contractors:

  •  The relationship between the respective parties, the existence of a written contract, and the location of the services or how the services are provided. The measure lists objective factors that would satisfy each of these categories.
  •  Additionally, the proposal makes changes to the Form 1099 reporting rules. Currently, the 1099-MISC is required when payments to a nonemployee exceed $600. Third-party networks must send a 1099-K to payees who have over 200 transactions and were paid more than $20,000. Compliance with these rules is haphazard at best. Many third-party networks file 1099-Ks. Others use the 1099-MISC. Some send both.
  •  Thune would have third-party networks in the gig economy use the 1099-K, while payers in traditional independent contractor relationships would file the MISC.
  •  Reporting on the 1099-K would be required on annual payments over $1,000 to contractors. This idea would raise a significant amount of money, something that tax writers will look on favorably on as they eye revenue-raisers to offset lower tax rates in tax reform.   Additionally, the threshold for filing the 1099-MISC would increase to $1,000.

By proadAccountId-371192 29 Sep, 2017

You won’t automatically be audited for having above-average deductions; however, if your write-offs are excessively large, your audit risk can go up because that is a key factor in the Revenue Service’s return selection process. 

 Here’s an example where taking large charitable deductions raised a red flag with the agency.  A couple was audited after they claimed total charitable write-offs of $142,250 for property donations to Goodwill. Because they couldn’t prove the value of the items donated, the Tax Court disallowed all but $250 of their deduction and slapped them with the 20% penalty for negligence (Ohde, TC Memo. 2017-137).

 Charitable deductions can sometimes be lost if conditions are attached by the donor. In this case, the owner of a run-down movie theater wanted to transfer it in a bargain sale to an unrelated, newly formed nonprofit. Since the transferee hadn’t yet received its tax exemption, the building’s owner arranged a bargain sale with another charity but agreed that it could direct a subsequent conveyance to the ultimate transferee. This transfer restriction included in the contract of sale caused the Tax Court to rule that the owner didn’t relinquish dominion and control over the building and that no charitable gift was made (Fakiris, TC Memo. 2017-126).

By proadAccountId-371192 29 Sep, 2017

Worker classification remains a priority. The Internal Revenue Service continues to seek back taxes and penalties from firms that wrongly treat workers as contractors. Unreported or underreported employment taxes make up a big chunk of the overall federal tax gap. The Labor and Justice Departments, along with Individual States also have vital roles to play in ensuring that workers are properly classified by the businesses they work for.

 

The stakes have always been high, lost taxes for federal and state governments and fewer benefits for workers who are improperly treated as contractors.  The importance is magnified with the growth of freelance service gigs. Freelance gigs such as Uber, Rover, Grubhub and Fiverr are making up a growing portion of the part time economy.  

 

To classify workers, the IRS uses three tests, each made up of multiple factors.

             

The Behavioral Test focuses on whether the company controls or has the right to control what the worker does and how to do the job. Key factors for employee status include instructions about performing the work, evaluation criteria and training.

 

The Financial Test looks at who controls the economics of the worker’s job. Being able to work for multiple firms and providing your own tools needed for the job are indicative of independent contractor status. Some factors favoring employee status are eligibility for reimbursement of travel costs and payment based on hours worked.

 

The Type-of-Relationship Test examines how the parties perceive each other. Providing paid vacation and retirement benefits indicates a worker is an employee, as does hiring to provide services indefinitely rather than for a specific time. Written language stating the worker is an independent contractor isn’t determinative.

 

Aberdare Business Solutions offers a variety of Lunch & Learn Seminars or on-site seminars regarding the above topics. Additionally, we include information pertaining to the Department of Labor and the Texas Workforce Commission. If you are interested in attending a seminar or having us speak at your company or association please contact our office at 281.599.3380 or info@aberdare.us.com

By proadAccountId-371192 29 Sep, 2017

The cost to become a dog groomer doesn’t qualify for an education tax break through The American Opportunity Tax Credit. The couple in the case has a daughter who after taking one class at a local community college, decided on a different track and enrolled in a dog grooming program with a company aptly named Canine Clippers.

 Only tuition paid to accredited postsecondary institutions is eligible for the AOTC, and the parents provided no evidence that Canine Clippers met that standard or that their daughter attended at least half-time (Martin, TC Summ. Op. 2017-73).

By proadAccountId-371192 29 Sep, 2017

IRS is on the prowl for filers who claim large charitable deductions, as a big-game hunter found out after he took a $1.45 million write-off for animal hides, skulls, horns, and other hunting specimens he donated to charity. He claimed the items he gave were of museum quality, with no market comparables, and should be valued at their estimated replacement cost.

 

The Tax Court disagreed, saying the specimens were commodities, not collectibles, and that fair market value is based on market prices of similar items. The Court allowed a $163,000 deduction, the figure determined by the Service’s appraiser (Gardner, TC Memo. 2017-165).


 

By proadAccountId-371192 29 Sep, 2017
IRS’s efforts at combatting tax identity theft seem to be paying off. Complaints of ID theft fell 46% in 2016 from the previous year, to 376,500.

Additionally, the numbers for the first quarter of 2017 seem to be following that trend. Some of the decline may be because of new antifraud measures the agency is using to filter out returns filed by identity thieves. Last year, IRS computers stopped more than $6.5 billion in fraudulent refunds on approximately 970,000 returns filed under stolen Social Security numbers and tax identification numbers.
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