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The Unique Alternative to the Big Four®
Tax Planning Opportunities for Manufacturing and Distribution Companies
Audit | Tax | Advisory | Risk | Performance
Table of Contents
Federal Tax Services ...................................................................5Accounting Methods Consulting ......................................................................................5
Captive Insurance Solutions.............................................................................................5
Cost Segregation ..............................................................................................................5
Domestic Production Deductions ....................................................................................6
Environmental Remediation Taxation ...............................................................................6
Income Tax Accounting Services .....................................................................................6
IP Migration ......................................................................................................................7
Pass-Through Planning ....................................................................................................7
Research Credits ..............................................................................................................7
Tangible Property Regulations..........................................................................................8
Tax Compliance Services .................................................................................................8
Tax Due Diligence and Structuring ...................................................................................8
State and Local Tax Services .....................................................9Credits and Incentives ......................................................................................................9
Property Tax Assessment Reviews ..................................................................................9
Sales and Use Tax ............................................................................................................9
State Income Tax Review ...............................................................................................10
State Income Tax Structural Planning ............................................................................10
Unclaimed Property Risk Mitigation ...............................................................................10
International Tax Services ........................................................11Foreign Tax Credit Maximization ....................................................................................11
Interest Charge Domestic International Sales Corporation (IC-DISC) ............................11
International Assignment Services .................................................................................11
Transfer Pricing ...............................................................................................................12
Other Tax Planning Services ....................................................13Benefit Plan Consulting ..................................................................................................13
Compensation Consulting ..............................................................................................13
Employee vs. Independent Contractor...........................................................................13
Employment Law Compliance Audit ..............................................................................14
ESOP Consulting Services .............................................................................................14
Succession Planning ......................................................................................................14
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Tax Planning Opportunities for Manufacturing and Distribution Companies
Seven Decades of Industry DedicationCrowe Horwath LLP is a powerful ally for manufacturing and distribution (M&D) organizations of all sizes in key industry sectors and can help identify opportunities to improve cash flow and financial management, reduce tax burden, and better manage risk and compliance. The M&D team within Crowe tax services assists more than 1,700 M&D clients annually, ranging from Fortune 500 to middle market companies with domestic and overseas operations – and foreign-based companies operating in the United States.
Market pressures for the diverse industry sectors of M&D are immense. Diligence in operational effectiveness, including tax efficient strategies, is critical in the rebounding global economy. Crowe offers M&D organizations the very rare combination of specialized industry knowledge, a comprehensive range of business competencies, and the ability to enhance solutions through advanced technology.
We put our experience to work to provide cost-effective tax compliance, tax planning, tax risk assessment, and tax consulting services tailored to your needs. Our specialized services include providing assistance with the following federal, state and local, international, and related consulting services.
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Crowe Horwath LLP
5www.crowehorwath.com
Tax Planning Opportunities for Manufacturing and Distribution Companies
Federal Tax Services
Accounting Methods ConsultingA change in your tax accounting method could optimize your company’s tax position to defer revenue or accelerate deductions. Our M&D tax specialists can help you choose methods for recognizing income by analyzing current practices and recommending potentially beneficial changes that can help you maintain compliance with federal laws.
Potential Benefits
■ Increasing cash flow
■ Maximizing deductions
■ Reducing taxable income
■ Enhancing cost recovery for capitalized items
Contact
Dave Strong 616.752.4251 [email protected]
Captive Insurance SolutionsPlanning for an effective captive insurance company solution includes evaluating business objectives for ideal coverage, domiciles, and vendors. Our captive insurance specialists can work with you to determine the most appropriate structure for optimum tax advantages and federal compliance.
Potential Benefits
■ Managing the impact of fair value, OTTI, and disclosures
■ Creating additional cash flow
■ Reducing effective tax rates
■ Increasing shareholder value
Contact
Lynn McGuire 615.515.5695 [email protected]
Cost SegregationWhen companies make large capital expenditures related to purchases, construction, or expansion, a significant portion of the costs may be eligible for accelerated depreciation deductions. Crowe tax specialists can analyze appropriate investments to identify and segregate costs into more favorable tax classifications that can result in time value of money.
Potential Benefits
■ Maximizing return on investment in fixed assets
■ Extending the benefits of repairs and maintenance
■ Identifying embedded cost deductions
■ Avoiding duplication of assets reported for property tax purposes
■ Enhancing cost recovery for capitalized items
Contact
Ed Meyette 616.752.4234 [email protected]
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Crowe Horwath LLP
Domestic Production DeductionsManufacturing companies with U.S. production activities might be able to deduct a significant portion of their business income. Our tax specialists can help with the complex calculations to provide the information needed to help realize the maximum eligible benefit for your company.
Potential Benefits
■ Being able to deduct up to 9 percent of business income
■ Reducing your effective tax rate by more than 3 percent
■ Maximizing deductions and permanent tax savings
Contact
David Holets 317.706.2683 [email protected]
Environmental Remediation TaxationFederal, state, and local governments offer numerous tax incentives to promote the cleanup of environmentally contaminated properties. Our tax specialists can provide a comprehensive review of applicable expenses to determine opportunities for deductions, capitalization, and depreciation.
Potential Benefits
■ Uncovering applicable credits and incentives
■ Identifying property tax abatements and exemptions
■ Maximizing cost expensing based on location
■ Being able to take advantage of tax incremental financing (TIF)
Contact
Ed Meyette 616.752.4234 [email protected]
Income Tax Accounting ServicesRequired preparation of quarterly and annual financial statements is complex and time consuming – creating headaches for tax personnel and management. Crowe can help with a range of services and support options including cosourcing, consulting, and outsourced assistance.
Potential Benefits
■ Understanding what drives effective tax rates
■ Avoiding restatements and material weaknesses
■ Improving financial statement accuracy
■ Increasing efficiencies in provision and compliance processes
Contact
Jeff Mull 317.706.2656 [email protected]
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Tax Planning Opportunities for Manufacturing and Distribution Companies
IP MigrationShifting intellectual property to a more favorable jurisdiction could significantly reduce your global effective tax rate. Our tax specialists can provide an analysis of intangibles to determine whether changes to global structuring or transfer pricing strategies would be beneficial.
Potential Benefits
■ Reducing global effective tax rates
■ Increasing cash flow
■ Enhancing shareholder value
■ Improving efficiencies in offshore business expansions
Contact
Barry Freeman 212.572.5597 [email protected]
Pass-Through PlanningIRS scrutiny is increasing for private equity groups, partnerships, LLCs, S corporations, and other complex pass-through entities. Our tax specialists are well versed in the opportunities and pitfalls in tax reporting and use Crowe® K-1 Navigator technology as a more efficient way to capture data, analyze responses, prepare packages, and expedite IRS and state filings.
Potential Benefits
■ Streamlining IRS Schedule K-1 preparation and filing
■ Simplifying data collection and review
■ Improving accuracy and quality control
Contact
Rebecca Jordan 865.862.5212 [email protected]
Research CreditsIdentifying, analyzing, calculating, and documenting research tax credits is complex and requires comprehensive recordkeeping to uncover the best return on research and development expenditures. Crowe tax specialists can assist with research credit studies by using Crowe R&D Navigator to streamline data collection, analysis, reporting, and claim filings.
Potential Benefits
■ Maximizing the benefits of R&D investments
■ Creating dynamic and flexible reporting for IRS exam and claim documentation
■ Developing a tailored methodology
Contact
Lou Miller 574.236.8661 [email protected]
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Crowe Horwath LLP
Tangible Property RegulationsIf your company owns real or personal tangible property, the finalization of the tangible property regulations (TPR) by the IRS will require consideration of elections and changes in accounting methods. Our tax specialists understand this comprehensive set of regulations and can assist with planning, adoption, and implementation to help your organization comply with tax accounting for acquisition, repair, maintenance, and improvement of applicable property.
Potential Benefits
■ Creating dynamic and flexible reporting for IRS exam and claim documentation
■ Taking advantage of the rules to accelerate deductions and optimize cash flow
■ Selecting safe harbor methods and elections to ease administrative burden
Contact
Ed Meyette 616.752.4234 [email protected]
Tax Compliance ServicesDelivering value beyond timely and accurate tax return calculations, preparation, and filings requires a strategic, industry-focused approach throughout the year. Our tax specialists can help ease your tax compliance burden and identify new opportunities for savings by using proprietary technology to facilitate information sharing, increase efficiency, and provide measurable results.
Potential Benefits
■ Streamlining tax provision and tax return preparation processes
■ Improving collaboration and information sharing to avoid disruption
■ Reducing the risk of missed opportunities or noncompliance
■ Completing projects on time and within budget
Contact
Mark Ulishney 954.202.8579 [email protected]
Tax Due Diligence and StructuringIf an acquisition is in your plan, avoid inheriting unexpected federal and state tax liabilities and their negative impact on anticipated revenue. Our services can help you identify tax exposures for target businesses and help minimize post-acquisition liabilities.
Potential Benefits
■ Identifying tax exposures for target businesses
■ Minimizing post-acquisition taxes
■ Maximizing return on investment for expected EBITDA
■ Exploring alternatives such as purchase price reductions and ways to address seller issues
Contact
Steve Lalor 212.572.5549 [email protected]
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Tax Planning Opportunities for Manufacturing and Distribution Companies
State and Local Tax Services
Credits and IncentivesBecause manufacturing companies typically require significant capital and personnel investments, taking advantage of state and local government programs to attract and retain business can improve your bottom line. Crowe tax specialists can help you identify and qualify for withholding tax rebates and credits that can help reduce your income tax liability, free lease payments; grants for equipment, infrastructure, and training; utility rate reductions; and more.
Potential Benefits
■ Achieving savings on planned growth and improvement initiatives
■ Discovering cost-reduction opportunities related to facilities, financing, and containment incentives
■ Identifying annual statutory tax credits
Contact
Scott Tarney 614.469.4001 [email protected]
Property Tax Assessment ReviewsChanges in property tax assessments often are made on a global scale by state and local governments and can lead to overstated tax bills. Using proven tech-nology for property tax compliance and real estate valuation, our tax specialists can perform a review of your real and personal property values to determine if your assessments are accurate.
Potential Benefits
■ Identifying methods to reduce real estate tax costs
■ Minimizing consulting costs based on percentage-of-savings fees
■ Gaining greater control over complex, multistate tax processes
Contact
Dean Uminski 574.239.7865 [email protected]
Sales and Use TaxTax rates and bases vary by jurisdiction, and states are constantly changing the rules to raise additional revenues. Using proprietary technology, our tax specialists can help with an impartial review of refund recovery, nexus, e-commerce transactions, utilities, and more. The results include recommendations for tax minimization and optimization.
Potential Benefits
■ Reducing risks of noncompliance and preparing an audit defense
■ Improving efficiency of multistate tax processing
■ Identifying tax savings opportunities
Contact
Dan Megathlin 404.442.1613 [email protected]
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Crowe Horwath LLP
State Income Tax ReviewState tax laws affecting manufacturing and distribution companies are complex and include the challenges of nexus, apportionment, “throwback sales,” and unitary filings. Crowe tax specialists can provide a review of current and previously filed returns to uncover potential refund opportunities and reductions in future liabilities.
Potential Benefits
■ Minimizing exposure from complex filing requirements
■ Reducing multistate tax processing complexity
■ Identifying tax refund opportunities
Contact
Brian Myers 317.208.2478 [email protected]
State Income Tax Structural PlanningExpansions and acquisitions often result in complex legal structures that conflict with favorable tax strategies. Our tax specialists can analyze, design, and implement tax-efficient structures that can help minimize state income tax liabilities.
Potential Benefits
■ Aligning functional and geographic business units with a beneficial tax structure
■ Simplifying corporate structures to lower tax liabilities
■ Reducing administrative costs and compliance burden
Contact
Brian Myers 317.208.2478 [email protected]
Unclaimed Property Risk MitigationMany businesses are at risk for unreported unclaimed property, which includes accounts receivable credits, rebates, unused gift cards and certificates, product and service refunds, and uncashed dividend, vendor, or payroll checks. Our tax specialists can help with planning, exemption analysis, voluntary disclosure agreements, and improvement of policies and procedures to minimize amounts subject to claims by state governments.
Potential Benefits
■ Minimizing unclaimed property exposure
■ Turning existing credit balances into income
■ Reducing the impact of state audits, penalties, or interest
Contact
Shawn Kane 630.586.5250 [email protected]
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Tax Planning Opportunities for Manufacturing and Distribution Companies
International Tax Services
Foreign Tax Credit MaximizationTaxpayers with operations in more than one tax jurisdiction are at risk for overpaying tax on a worldwide basis and negatively affecting financial statement earnings. Crowe tax specialists can analyze your current global tax situation and develop a realistic plan for effective usage of worldwide taxes.
Potential Benefits
■ Avoiding overpayment of taxes worldwide
■ Positively affecting cash flow and earnings
■ Claiming the maximum allowable foreign tax credits
Contact
John Kelleher 630.586.5274 [email protected]
Interest Charge Domestic International Sales Corporation (IC-DISC)Certain U.S. manufacturers of exported goods may be able to permanently reduce their tax liability on the profits generated from export sales. Our tax specialists can determine if foreign sales qualify as export transactions with IC-DISC benefits and can help you establish the proper structure, claim eligible incentives, and prepare the return for filing.
Potential Benefits
■ Identifying savings on export income
■ Discovering management incentive opportunities for current and prior years
■ Increasing cash flow for shareholders
Contact
John Kelleher 630.586.5274 [email protected]
International Assignment ServicesCompanies occasionally need to relocate employees to other jurisdictions based on business needs. Without proactive planning, the cost of these transfers can exceed the salary expense of each resource by two to three times.
Potential Benefits
■ Coordinating tax preparation for home and host country returns
■ Taking advantage of jurisdictional tax treaties
■ Equalize tax consequences with hypothetical calculations
Contact
Margaret Nowak 630.574.1851 [email protected]
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Crowe Horwath LLP
Transfer PricingTransactions or transfers of tangible products, the use of intellectual property, and the provision or receipt of services or financing arrangements between related parties inside and outside the U.S. are highly scrutinized by the IRS. Our tax specialists can help analyze your supply chain, evaluate transactions, and establish a range of prices to maintain compliance.
Potential Benefits
■ Optimizing global effective tax rates
■ Reducing the likelihood of exposure, audits, and penalties
■ Maintaining consistency with U.S. and foreign requirements
Contact
Barry Freeman 212.572.5597 [email protected]
13www.crowehorwath.com
Tax Planning Opportunities for Manufacturing and Distribution Companies
Other Tax Planning Services
Benefit Plan ConsultingIf you have 50 or more employees, the Affordable Care Act might require changes to your medical programs and the associated compliance. Crowe tax specialists work with benefit plan consultants to evaluate compensation programs and help you avoid unnecessary costs and negative consequences.
Potential Benefits
■ Verifying that your retirement and group benefit programs comply with Employee Retirement Income Security Act (ERISA) tax implications
■ Improving program efficiency and cost effectiveness
■ Accomplishing necessary due diligence to help avoid noncompliance and tax risks
Contact
Dave Horvath 630.586.5117 [email protected]
Compensation ConsultingThe costs associated with recruiting and training highly skilled employees make it critical to design and administer pay programs that reward the right people and recognize performance. Our specialists assess current programs to identify ways to achieve the highest human capital ROI for your organization.
Potential Benefits
■ Attracting, motivating, and retaining high-performing employees
■ Reducing cost and administrative effort
■ Improving workforce productivity
Contact
Patrick Cole 616.242.6155 [email protected]
Employee vs. Independent ContractorIf you hire workers under varied employment arrangements, misclassification can lead to incorrectly paid payroll taxes and penalties. Our tax specialists can provide a review of employment arrangements to properly identify classes of individuals for tax purposes.
Potential Benefits
■ Avoiding large amounts of incorrect IRS payments
■ Maximizing accuracy of classification
■ Minimizing risk of penalties
Contact
David Holets 317.706.2683 [email protected]
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Crowe Horwath LLP
Employment Law Compliance AuditDepartment of Labor, EEOC, Immigration and Customs Enforcement, and OSHA regulators are coordinating their efforts to respond to a growth in complaints and to exact fines for noncompliance with employment laws and regulations. Crowe tax specialists use proprietary technology to assess an organization’s compliance with applicable federal, state, and local requirements.
Potential Benefits
■ Enabling compliance with important federal employment laws and additional state requirements
■ Reducing the risk of regulator enforcement
■ Demonstrating compliance in response to regulator and litigator scrutiny
Contact
Patrick Cole 616.242.6155 [email protected]
ESOP Consulting ServicesDetermining whether an employee stock ownership plan will provide benefits for business owners and workers is not simple, and the recordkeeping and compliance duties require continual scrutiny. Our specialists conduct feasibility studies, make recommendations for implementation, and provide ongoing support for financial and tax requirements.
Potential Benefits
■ Uncovering significant tax advantages
■ Identifying a cost-effective alternative to succession planning
■ Avoiding the pitfalls of failed implementation
Contact
Lori Stuart 614.280.5229 [email protected]
Succession PlanningPlanning for leadership and ownership succession can help provide a seamless transition and increase the likelihood for the ongoing success of your business. Our specialists can help with ownership transfer strategies, governance issues, IRS requirements, and the special requirements for transfers of S-corporation stock.
Potential Benefits
■ Optimizing the transfer of assets
■ Safeguarding company and personal assets
■ Minimizing estate tax impact
Contact
Patrick Cole 616.242.6155 [email protected]
15www.crowehorwath.com
www.crowehorwath.comWhen printed by Crowe Horwath LLP, this piece is printed on Mohawk Color Copy Premium, which is manufactured entirely with Green-e® certified wind-generated electricity.
Crowe Horwath LLP is an independent member of Crowe Horwath International, a Swiss verein. Each member firm of Crowe Horwath International is a separate and independent legal entity. Crowe Horwath LLP and its affiliates are not responsible or liable for any acts or omissions of Crowe Horwath International or any other member of Crowe Horwath International and specifically disclaim any and all responsibility or liability for acts or omissions of Crowe Horwath International or any other Crowe Horwath International member. Accountancy services in Kansas and North Carolina are rendered by Crowe Chizek LLP, which is not a member of Crowe Horwath International. This material is for informational purposes only and should not be construed as financial or legal advice. Please seek guidance specific to your organization from qualified advisers in your jurisdiction. © 2015 Crowe Horwath LLP
Contact InformationMark Ulishney 954.202.8579 [email protected]
Crowe Horwath LLP, The Unique Alternative®
Crowe Horwath LLP (www.crowehorwath.com) is one of the largest public accounting and consulting firms in the United States. Under its core purpose of “Building Value with Values®,” Crowe uses its deep industry expertise to provide audit services to public and private entities while also helping clients reach their goals with tax, advisory, risk, and performance services. Crowe and its subsidiaries have offices coast to coast with more than 3,000 personnel. The firm is recognized by many organizations as one of the country’s best places to work. Crowe serves clients worldwide as an independent member of Crowe Horwath International, one of the largest global accounting networks in the world, consisting of more than 150 independent accounting and advisory services firms in more than 100 countries around the world.
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