Cherry Bekaert: Professional Services

There has been considerable consolidation in the marketplace over the last 18 months. Covid has created challenges causing owners to consider earlier exits than planned, PPP and other government subsidies have infused some firms with excess cash and Private Equity firms are buying smaller professional services firms and rolling them into a larger platform. If your company has a potential deal or if you have closed a deal, what should you be thinking about from a valuation perspective before year end?

From diligence to performing your own quality of earnings analysis on your financial statements so there are no surprises throughout a transaction, to understanding the tax implications for the buyer and seller, the structure for what's being acquired, and how that's going to impact the accounting and potentially any existing or future bank covenants, we cover the questions you should be asking before year end. If you have acquired another firm and the dust has now settled there are a number of things that have to happen in a relatively short period of time, including potentially a whole new set of reporting requirements, covenant considerations, opening balance sheet preparation, purchase price allocation values, earnout calculations and rollover equity considerations.

Listen to Scott Duda, Leader of Cherry Bekaert’s Professional Services Industry practice and Anna Townsend, a partner in the Firm’s Valuation Services group, as they discuss what you need to think about as you go down the diligence and deal path. 

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The COVID-19 pandemic has resulted in enabling employees to work remotely and many professional services companies are now looking at potential hybrid workplaces or a virtual workforce. What are the tax ramifications for professional services companies transitioning from a traditional office environment to a virtual work environment? How does having remote employees in different states or countries impact a company’s tax filings?

Listen to Scott Duda, Leader of Cherry Bekaert’s Professional Services Industry practice, Dorita Calderon, a State & Local Tax Manager, Will Hooker, Director, International Tax Services and Kirk Hesser, Transfer Pricing Leader, as they discuss the potential state & local tax implications, including state income tax filings, state franchise tax filings, payroll withholding and sales tax filings, as well as international tax implications for employees crossing borders.

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The Infrastructure Investment and Jobs Act is expected to pass and become effective in January 2022, igniting a surge of business for Architecture and Engineering (A&E) firms as the United States embarks on bridge repairs, road improvement projects, transit rail and airport modernization, infrastructure expansion and more. How can A&E firms prepare for this growth opportunity? What steps should be taken now to secure the capital for this stream of new business? Cherry Bekaert’s Scott Duda, Leader of the Professional Services Industry Practice, and Ron Wainwright, Leader of the Firm’s Credits & Accounting Methods team, answer these questions and discuss the two key R&D credits that will help innovative A&E firms become leaders in this new age of infrastructure expansion.

Related Guidance:

Podcast: R&D Tax Credits for Architectural and Engineering (A&E) Firms: Opportunities, Expectations and Eligibility

Podcast: How A&E Firms Generate Cash Flow from the 179D Energy Tax Deduction

Digest: A&E Quarterly Regulatory Round Up

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It’s not too late for law firms to qualify for tax credits due to partial shutdowns or declines in gross receipts during 2020 and 2021. Law firms may qualify as an eligible employer for purposes of the credit if they had or were subject to government mandates by virtue of certain courts being closed during the period of 2020 and potentially into 2021. Law firms can file amended payroll tax returns to claim ERC benefits.

Listen to Jamie Walker, a leader in our Professional Services Industry practice and Martin Karamon, a Tax Services Principal and leader of Cherry Bekaert’s ERC Team as they give an update on the ERC, including Rev. Proc. 2021-33, issued by the Department of Treasury and the Internal Revenue Service, which provides a safe harbor that allows employers claiming the ERC to exclude forgiven Paycheck Protection Program (“PPP”) loans from the definition of gross receipts, solely for determining eligibility for the ERC, and how law firms qualify for the ERC.

Law firms have worked to document the fact that they were eligible employers tied to the mandates that were restricting access to the courts. And it's not just court closures. Firms also should think about court restrictions, delays specific to trials where there was a prohibition on having in-person juries, as well as restrictions and/or disturbances changing the way that law firms could operate that were tied to government mandates specific to the way that the courts were allowing firms to address matters before the Court.

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The architectural and engineering (A&E) industry is evolving at record speed, fueled by the Administration’s pending infrastructure legislation that prioritizes the design of energy-efficient commercial and residential structures. To take advantage of these opportunities, A&E firms need to stay on the cutting edge of innovation by investing in emerging technologies and actively pursuing mergers & acquisitions. R&D credits provide the funding needed to subsidize these investments. 

Cherry Bekaert’s Scott Duda, leader of the Professional Services Practice and Ron Wainwright, National leader of the Firm’s Credits & Accounting Methods Team, discuss how R&D credits are helping A&E firms become leaders in their industry, and they share guidance about securing these lucrative incentives. 

TOPICS COVERED:

• What to expect in 2022 and beyond
• Impact of the pending infrastructure legislation
• How to qualify for the R&D tax credit 
• Technology investments to stay competitive
• Eligibility requirements and filing tips
• Addressing a common misconception

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The A&E industry is leading the way in constructing energy efficient commercial building properties. Firms are seeking funds to invest in R&D and grow through profitable mergers and acquisitions. Find out how to cash in on the 179D Energy Tax Deduction by reducing tax bills and making more money available to grow your business. 

Cherry Bekaert’s Scott Duda, leader of the Professional Services Practice is joined by Ron Wainwright, National leader of the Firm’s Credits & Accounting Methods Team, for a discussion about this lucrative energy tax incentive. Topics covered include:

• Qualifying for the 179D Energy Tax Deduction 
• The relationship between the 179D deduction and LEED incentives
• The truth about carryback periods
• Three myths that may be costing your firm money
• Scott and Ron’s favorite success stories 

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