Tax Consulting Services

PKM believes in helping clients maximize assets by minimizing tax liability. Our tax professionals consult with you to set goals and objectives and monitor your progress in achieving those goals. We work with you to match your financial strategies to your financial objectives, analyze and manage risk and take advantage of tax law changes that affect your business.

Tax Controversy

At PKM, we analyze the nature of issues at the center of tax controversy, including the applicable policy and law, practical precedence, and potential cost-saving solutions.  We have the resources and experience necessary to address controversies presented by the IRS and various state departments.  Our staff will work diligently to research your unique facts and circumstances in a timely manner to avoid the build-up of penalties and interest, and to settle outstanding tax matters before property seizure.  The key to dealing with tax controversy is immediate and decisive communication, and our professionals are committed to acting quickly on your behalf and being available to address your concerns.

• Revenue Agent's Report (RAR) Analysis and Consulting
  A RAR can significantly change your tax position if an examiner finds that you paid too much or too little tax. PKM can prepare you for the process of an examination and advise your actions in response to the examiner’s report.

• Information Document Requst (IDR) Response
  In 2002, the IRS formalized the IDR process and mandated a 20-day initial response time. Delinquency in response can lead to severe penalties for the taxpayer. The inflexibility of these deadlines requires early and frequent communication between the taxpayer, the taxpayer’s representative and the IRS examiner.
  

PKM also advises clients with issues in other tax controversy areas, including response to state notices and the preparation of amended returns.

Transaction Consulting

• E&P and Tax Basis Studies
  PKM has experience performing the complicated computations necessary to calculate stock basis and E&P for domestic consolidated groups.  Our deep comprehension of FAS 109 will also allow us to assist you with the tax provision calculation and required disclosures for this study.  We have the resources to carefully analyze years and years of previously filed tax returns to sort out the relevant information and build entity-by-entity schedules that will help you track basis and E&P for an ongoing period of time.  PKM can also help you evaluate the necessity of tax adjustments, return amendments, and can analyze the consequences of various structure changes and stock transactions.

• Merger and Acquisition (M&A) Planning and Due Diligence
  M&A are a primary growth vehicle for many companies and have the potential to enhance the strategic position of a business overnight. M&A activity also can be extremely complex with profound implications – both short- and long-term – to a company’s financial performance and profile. PKM can provide a seasoned analysis of the accounting issues involved in such transactions and assist with financial due diligence. Our experience includes helping clients merge with shell companies registered with the SEC in order to gain fast access to public market funds, as well as helping clients with rollup acquisitions by acquiring and moving multiple smaller companies into a single larger public company for future acquisition. We also are experienced with reverse mergers, whereby larger private companies take the form of smaller SEC registrants to gain access to public investors. 

  On the tax side, tax merger rules frequently are as mystifying as a bowl of alphabet soup. Our corporate tax team can help you structure a transaction that will be advantageous to your shareholders or help analyze a deal that is presented by a potential suitor.

• Transaction Cost Analysis
  Depending on various factors, transaction costs may be currently deductible, or may require capitalization and amortization over a period of time.  PKM will analyze the applicable regulatory guidance to your transaction costs to determine the appropriate timing, nature and treatment of this tax issue.
  

Research and Experimentation Credit Analysis

The Research and Experimentation credit was extended through 2009 by the Emergency Economic Stabilization Act of 2008.  To take advantage of this credit, you must have qualified research expenses in 2009.  Increased scrutiny of these expenses by the IRS requires consultation with a knowledgeable tax adviser that can help to organize and document your work-papers for audit support.

Retraining and Other Tax Credits

Many states, such as Georgia, offer state tax credits to companies that invest in new technology and employee training on these new technologies. The credits are designed to encourage businesses to further develop their workforce, which in turn will make Georgia employees more successful. By helping to offset the cost of training and technology, the company has the opportunity to increase profitability and competitiveness. Trying to identifying these tax credits on your own, amidst ever-changing laws and regulations, can be cumbersome, confusing and time-consuming. PKM tax professionals have the necessary experience to help businesses identify these tax credit opportunities, implement them and capitalize on the tax advantages the credits can deliver.

Choice of Entity Election

In general, your choice of entity (C-Corp, S-Corp, LLC, etc.) is the determining factor in how your company is taxed.  Planning for choice of entity is hugely important whether taxes are paid on the entity or the individual level.  Entity selection will affect the character of certain income, how different deductions may be taken, and the reporting requirements for shareholders/partners.  It is crucial to choose the right kind of entity for your business, and PKM will lay out the pros and cons of every option, while staying current on the various filing and reporting requirements.

Once entity selection has been made, PKM will work with you to ensure that you make the most of your organizational decision. While S Corp status, for example, offers many benefits to closely-held business owners, there are a number of financial and tax issues that require proper planning and monitoring. PKM can assist you in maintaining the fine balance that ensures a maximum return on investment.

For more information on starting a new business, including a New Business Start-Up Check List and an Overview of the Benefits of Various Business Entity Types, follow these links.

Recovery

• Net Operating Loss (NOL) Carrybacks
  In November 2009, the Net Operating Loss (NOL) carry-back provisions were expanded to allow a three-, four-, or five-year carry-back for all taxpayers in either 2008 or 2009.  This means that losses taken on 2008 or 2009 returns may be taken against income on returns up to five years prior, and taxes previously paid may be refunded.  If taxpayers took advantage of the extended carry-back in 2008 as an eligible small business, 2009 losses are still eligible for the extended carry-back.  Our staff will help you determine whether to elect three-, four-, or five-year carry-backs for your 2008 or 2009 losses, maximizing your refund potential.  We have experience calculating and filing carry-back forms and determining the consequences a carry-back will have on deferred tax assets and capital ratios.

• Section 382 Analysis
  Section 382(a) of the Code provides that the taxable income of a loss corporation for a year following an ownership change may be offset by pre-change losses only to the extent of the Section 382 limitation for such year.  These limitations can give rise to complications in computing the allowable NOL.  Planning for the tax consequences is essential to avoid any unexpected tax liabilities resulting from a limitation on the use of NOL against taxable income.

• Capital Raising and IRC Section 382
  In today’s environment where capital requirements are increasing and obtaining capital is more and more challenging, many banks are turning to large outside investors who are able to purchase significant ownership blocks of the group. While this is often the best course of action for many banks, there are specific concerns that must be addressed in the transaction. Net operating loss carry-forwards and potentially other built-in losses could be subject to limitations on deductibility after such a capital infusion. This tax rule can significantly reduce anticipated tax benefits following a capital raise. Follow this link to review a series of questions and answers that reflect some of the tax issues that many banks face as they consider raising capital.

Executive Compensation

Recruiting and retaining senior management is a priority for every company. PKM can help analyze deferred compensation plans, various stock plans and executive bonus programs to ensure that benefits are tax deductible and reported appropriately for tax purposes.

PKM will work with you to develop innovative means to motivate and retain key employees. Depending on the structure of your business entity, this can include stock plans, cash and noncash fringe benefits and bonus programs tailored to maximize your business objectives.

• Stock Option Analysis
  Depending on various factors, stock options could have tax consequences for both the company and the employee.  We will help you evaluate these consequences and determine the appropriate filing requirements related to options.

• Golden Parachute Analysis
  The Treasury released certain rules for TARP recipients, limiting executive compensation for certain highly-compensated employees.  These “golden parachute” rules limit bonus payments and set additional standards for the scrutiny of executive compensation plans.  The advisers at PKM are familiar with these rules and can guide you through the new governance over accountability and disclosure.
  

• AMT analysis
  The alternative minimum tax brings a host of separate issues to tax planning for executive compensation.  Don’t let yourself be surprised by an AMT tax liability at year-end by neglecting to consider the AMT impact of stock options and executive compensation.  PKM will consider these issues and inform our clients of any potential AMT effects on stock options or compensation.