For six straight years, the number of audits conducted by the Internal Revenue Service has decreased. In 2016, the rate at which people were audited fell 16% from the previous year, with about 0.7% of all taxpayers facing higher scrutiny of their returns. Digging deeper into the statistics, one can see that the higher the taxpayer’s income, the greater the chance of being audited. For example, taxpayers earning over $200,000 per year were audited at a rate of 5.8%, meaning they were over eight times more likely to be audited than the population as a whole.
What is fraud? In criminal law, fraud is intentional deception made for personal gain or to damage another individual. Fraud is a crime, but it is also a civil tort under common law. There are two main types of fraud:
1. Occupational Fraud - The use of one’s occupation for personal enrichment through the deliberate misuse or misapplication of the organization’s resources or assets.
2. Consumer Fraud - Schemes devised to defraud individuals, like identity theft, Ponzi schemes, phishing schemes, and advanced-fee schemes.
In Hardy v. Commissioner, an important, recently decided tax case, the Tax Court found that the share of income received by a doctor due to his ownership in a surgery center may not be subject to the self-employment tax. Dr. Hardy was a plastic surgeon specializing in pediatric reconstructive surgery. He bought a minority interest in a surgery center run through an LLC. The opinion in the case held that he did not have self-employment income on his share of the center’s income. It found that Hardy had no meaningful non-surgery related service responsibilities with the surgery center and never managed it, having no day-to-day responsibilities there.
As we discussed in our last article, Current Procedural Terminology Codes (CPTs) are the language with which America’s healthcare billing system communicates. They convey everything from the types of procedures performed to the billing amount for office visits. Another extremely important use for CPTs is that they serve as the basis for calculating Relative Value Units, or RVUs. RVUs are a measure of value used by the Centers for Medicare and Medicaid Services (CMS) in the reimbursement formula for physician services. They can also be used in a number of other ways.
Current Procedural Terminology (CPT) codes are numerical representations of procedures, pharmacological interventions, lab tests and any other service provided by a doctor or other healthcare provider. They are the uniform communicators of medical billing and practice analysis. The codes are broken down into ranges not unlike the Dewey decimal system:
- Evaluation & Management (99201-99499)
- Anesthesiology (00100-01999, 99100-99140)
- Surgery (10021-69990)
- Radiology (70010-79999)
- Pathology & Lab (80048-89356)
- Medicine (90281-99199, 99500-99602)
“Brexit,” though it might sound like some type of medieval disease, is a brand-new word in the English language. To some it may mean “opportunity,” to others “disaster,” yet its dictionary definition will always be “the British withdrawal from the European Union.” The European Union (EU) is basically a club with benefits among 28 (soon to be 27) European nations, based on four freedoms:
- The freedom to move goods
- The freedom to provide services
- The freedom of workers to move between the EU countries
- The freedom to move capital amongst those countries
Service Organization Control (SOC) Engagements Formerly known as the SAS70, the Service Organization Control (SOC®) reports convey confidence in your internal controls over financial reporting of your business to your customers and their auditors. They also can provide information regarding your controls related to security, availability, processing integrity, confidentiality, and privacy. This information is helpful in regulatory, compliance initiatives as well as demonstrating to prospective customers that you care about the security and privacy of the information and tasks they entrust with you.