“Going global” is one of the key focuses for many companies nowadays. Accordingly, cross-border mergers and acquisitions (M&A) has been on the rise, and the trend is expected to continue. Considering post‐merger integration (PMI) plans during the M&A process is as important as considering purchase pricing and financial risks.
PMI encompasses everything from financial reporting integration, which includes the integration of the accounting system and internal controls, to cultural integration. Every organization has its own culture – the set of norms, values, and assumptions that govern how people act and interact every day. Needless to say, the cultural difference would be much larger when the target company is in a different country.
Laying out a specific implementation plan for PMI is a crucial piece of the M&A’s success. There have been instances where a failure of PMI has resulted in losing key employees from conflicting culture, weakening the merged company’s strengths. For successful integration, it is key to set a realistic time frame and implement it accordingly.
Have you thought about how to implement a succession plan? Have you thought about the realistic time frame to make the integration go smoothly from Day 1? Hiring outside consultants to assist with the PMI can significantly ease the burden and shorten the transition period.
Oops! The IRS Did It Again! OVDP-2014 Announced
The IRS does not seem to be able to leave well enough alone for more than a year or two at a time. While the last change, in 2012, is only a couple of years old, the IRS announced new revisions that took effect on July 1, 2014. The difference with this change is the IRS may have actually improved the program for taxpayers, after having made the rules more difficult and the penalties harsher in the last three sets of revisions.
Key improvements in OVDP-2014 include:
- It applies to everyone – U.S. persons both in the United States and living outside of the United States
- The $1,500-per-year limit for underpaid taxes has been lifted
- Penalties have been reduced to 5 percent for residents and waived for nonresidents
- The risk questionnaire has been eliminated
In exchange for these benefits, taxpayers must:
- Submit a statement that certifies their noncompliance was not willful
- Pay the penalty with the OVDP submission
- Submit all supporting documents with the OVDP submission (though it can be done electronically)
In addition to these changes. the IRS has also, apparently, removed the ability to file information returns (like Forms 5471, 5472, 8865, and 926) late with no penalties. Taxpayers may now be subject to $10,000 (or more) in penalties for information returns filed late.
For more information, please see - http://www.plantemoran.com/perspectives/articles/2014/Pages/irs-announces-revisions-to-its-offshore-voluntary-disclosure-program.aspx