If your company’s retirement plan isn’t following the rules, the IRS is increasingly likely to notice. That’s the conclusion of a recently released report by the Treasury Inspector General for Tax Administration, or TIGTA. Given the nearly 900,000 retirement plans in existence today, that’s key.

The Employee Plans function within the IRS is charged with determining if retirement plans are complying with the tax-exempt provisions of the Internal Revenue code, as well as according to the terms of the plan document. For instance, they check that plan sponsors are making contributions as required and that assets exist to satisfy the liabilities. This is important both for corporate finance execs who want to be confident that their plans are operating legally, as well as for employees participating in the plan. more

Many companies have automated their sales and use tax processes to cut the effort required to execute them and to reduce the number of errors and their cost in dealing with a fiendishly complex set of rules and rates. This is one step in bringing tax into the mainstream of finance, which we advocate. Most people are familiar with sales tax; a “use tax” is a form of excise tax assessed on otherwise tax-free goods purchased by a resident of the assessing state regardless of where it was purchased. The use-tax rate is usually the same as the sales tax rate that would have been applied to an in-state purchase and is designed to serve the same purpose of generating revenue.

Corporations can benefit by managing taxes and tax processes more intelligently. Years ago, automation of sales and use tax (SUT) was available only to the largest companies that could afford the expensive software. Today, though, the all-in cost has declined enough so that it is practical for many more companies, and the market for such software has grown accordingly. The need to automate tax accounting also applies to other transaction-related tax regimes such as value-added tax (VAT) and goods and services tax (GST). It’s likely, in my opinion, companies will continue to increase their use of automation in alleviating all the onerous aspects of managing tax. more

Commercial property values in most parts of the country have seen a precipitous decline since the market peaked in 2007. The latest figures from Moody’s, released last week, show a 3.7 percent fall in actual transaction prices in April, bringing the firm’s national all-property aggregate index down to around 50 percent of its value at the peak. That’s the lowest point since the company started tracking the data in 2000. (Real estate consulting firm Real Capital Analytics offers the full Moody’s report here in pdf form.)

The news is not all bad; Moody’s sees strong signs of recovery in major markets such as San Francisco, New York, and Washington. And transaction volume nationwide is on the increase — a very good sign for a potential broad recovery.

The other silver lining in all this, of course, is the opportunity for companies to press for lower property taxes. After all, taxes steadily increased when the market was booming — why shouldn’t they go down now that property prices have declined? more

As we head into the second half of 2011, the economic recovery here in the US and abroad is taking hold much more slowly than most expected. Given the modest recovery, some executives may be looking to slash expenses to boost profitability and achieve their near-term goals. However, while tempting, cutting staff and investment in the wrong areas may prove to be a company’s undoing. For financial services companies, this is particularly true in the area of risk management because they are still mending their practices in the wake of the recent financial crisis. more

In a press conference earlier this week, White House press secretary Jay Carney discussed LIFO, or the method of accounting for inventory in which the last products in are considered the first out. His remarks indicated that this is one area the Administration is looking to change, given that it can allow companies to report lower profits than they otherwise would. “So what we’re calling for is an end to a provision that would allow, for example, an oil — an energy company to sell a barrel of oil today, for the sake of argument, for $100, even though it bought that oil two years ago or three years ago for $40. Okay, that’s fine, $60 profit — but only report the profit as $2 because the last time they bought a barrel of oil it was $98,” he said.

Businesses that use LIFO accounting aren’t too thrilled with the idea. In March, The LIFO Coalition, representing more than 100 trade associations and companies, wrote to Congress, urging them to reject any repeal of LIFO. “LIFO is a well-accepted method of accounting used by hundreds of thousands of businesses to track their inventory costs and accurately measure their income for tax and financial reporting purposes, and repeal would have a severe, unfair, and long-lasting negative impact on economic growth and job creation,” their letter said. Among the members of The LIFO Coalition are the American Forest & Paper Association, the National Association of Manufacturers and the U.S. Chamber of Commerce.

The proposal isn’t playing well with Republicans, either, as this Dow Jones story points out. more