Posted by: danielrashke | March 14, 2018

TAX AVOIDANCE – Taking the Better Route

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If the option to pay a higher rate to get somewhere quicker existed, many would choose to do so, particularly when time is of the utmost importance.

But what if time is not an issue, you could arrive at the same destination, and for FREE – without breaking the law – one could circumvent the “expensive” route and take a nearby route that costs nothing.

A great example of this “to pay or not to pay” situation is laid out in an essay titled “Thoughts on Legitimate Tax Avoidance” by Louis Brandeis (1856-1941):

I live in Alexandria, Virginia. Near the Supreme Court chambers is a toll bridge across the Potomac. When in a rush, I pay the dollar toll and get home early. However, I usually drive outside the downtown section of the city and cross the Potomac on a free bridge.
“This bridge was placed outside the downtown Washington, D.C. area to serve a useful social service: getting drivers to drive the extra mile to help alleviate congestion during rush hour.
“If I went over the toll bridge and through the barrier without paying the toll, I would be committing tax evasion.
“If, however, I drive the extra mile outside the city of Washington and take the free bridge, I am using a legitimate, logical and suitable method of tax avoidance, and I am performing a useful social service by doing so.
“For my tax evasion, I should be punished. For my tax avoidance, I should be commended.
“The tragedy of life is that so few people know that the free bridge even exists!

Jackie Jacobs, CEO of the Columbus Jewish Foundation adds her thoughts to Brandeis’ essay describing how the act of choosing a free bridge over a toll bridge dating back to the early 1900’s still resonates today. It demonstrates the simplicity of legitimate tax avoidance that can be embraced by everyone:
There are free bridges located within the Internal Revenue Code which allow you to legitimately avoid unnecessary taxes…the key is to know where to find them.” (Ohio Jewish Chronicle, March 26, 2015)

The “free bridge” described above by Brandeis lends itself to a challenge we have now: Navigating the tax code legally and using the “free bridge” whenever possible. Time is of the essence with tax season upon us and President Trump’s attempt to simplify tax reform proving to be a challenge.

So how exactly did we find ourselves in this situation?

Over the years, unpredictable rules and legislation, along with hundreds of products from hundreds of companies, have brought both complexity and confusion to the Third Party Benefits Administration industry that began with the intention of simplicity. It’s an unfortunate truth – but, it doesn’t mean businesses cannot help themselves to a solution.

As a taxpaying community (citizens, employees & employers) need to take action by taking advantage of the tax code. It goes beyond learning and sitting still; becoming informed is not enough. You need to ACT.

TASC exists to take action and help businesses and employees get the most out of finding and going the extra mile to use the “free bridge.”

But how?

While digital and online technology programs (think TurboTax) continue to grow there is never going to be a replacement for the human element when navigating the waters of tax code here in the United States. That “human element” is the key to helping identify and optimize every option possible when it comes to legitimate tax avoidance. We can find these elements present in individuals such as the tax preparer or the insurance broker to the call center or service representative. But people undervalue the value of these resources.

The truth still stands – tax EVASION still must be punished, just as Justice Brandeis stated in the article.

But tax AVOIDANCE should be commended. And with the help of human elements, many more of you can take advantage of the “free bridge” of legitimate tax avoidance by knowing where to look and how to navigate the murky waters and complication of the tax code.

TASC is at the ready to simplify and maximize your tax avoidance efforts.

 

 

shutterstock_106660388Looking back on 2017, there is nothing I am more proud of than TASC’s impact on the community through our employees. Giving — of mind, heart, time, and money — is woven into the fabric of our organization.

In 2017 alone, TASC pledged over $1.5 million in grants to charities, and our employees volunteered over 6,500 hours.

So how did we get to this point?

A culture of giving can create a virtuous cycle for any organization, large or small. Your reputation for community impact will help attract caring, motivated employees, who will dive into your giving programs, creating a highly engaged workforce and incredible impact in your community. At TASC, we use our culture to tell our story, helping us continue to bring in more customers and the best employees.

Philanthropy isn’t just a nice thing to do. It should be part of your business strategy to live at the convergence of social and economic benefit. We approach the movement of corporate social responsibility with esteem. However, our belief is the model should be about shared social responsibility. Meaning, a collective effort exists between employers, employees, and charities. The heavy lift shouldn’t fall solely on the employer – it’s also about engaging the workforce and community.
So many approaches exist to develop a culture of philanthropy that it can be hard to know where to begin. Starting simple, especially if you have limited resources, is all you need. For example, paid volunteer time is a proven way to empower your employees to give back. You can further incentivize a philanthropic mindset by using a program that donates an hourly rate to the organizations your employees volunteer at once they exceed their paid volunteer time – many times referred to as Dollars for Doers.

Modelling philanthropy from the top is another must to ensure the culture is lived out. Volunteering time alone is a great thing. Even more impactful is to give your talent and expertise. When that happens, you’ll see a greater return for everyone, including the volunteer.

This past year, my 10-year term on the board of directors the United Way of Dane County came to an end. During that time I led the 2015 annual campaign to record-breaking success, drawing in $19.54 million in donations. I helped developed strategy and operational plans while serving as chair of the Self-Reliance and Independence Community Solution Team. I created “Your United Way,” a special campaign targeting non-traditional United Way donors to give one-time major gifts. And I showed up again and again — over three years on the Campaign Cabinet, I made more than 125 in-person CEO meetings, media visits, speaking engagements, and recruitment calls.

The United Way has long been a champion of workplace giving, and has helped establish a culture of philanthropy at many companies. I wanted to give my time to the United Way because their approach serves a critical role of taking resources plus thought leadership (both volunteered and paid); together those two things equal a more significant impact together than they would on their own in solving some of society’s greatest needs through our communities.

Anyone can create this kind of culture in the workplace. You don’t need to be a Fortune 500 company to help shoulder the burden of our shared social responsibility. Even if you’re a pint-sized operation with just five employees, you can start with one volunteer day, or one donation matching program, or offer a service in-kind.

That’s how we built the incredible culture of giving that we have here at TASC. We didn’t start out with a dozen programs, but we added programs as our success in the industry grew and our employees multiplied.

As we move further into 2018, I’d like to leave you with one thought.

If not you, then who? We all share the responsibility of caring for our communities. We cannot shrug it off and leave it to companies that are big enough, or profitable enough, or to nonprofits, or to the government. We need to join hands and give our time, our money, our hearts, and our minds.

Posted by: danielrashke | December 21, 2017

Why TPAs Must Hire Leaders in Cybersecurity

A few months ago I talked about the importance of investing in cybersecurity with a systematic and thorough approach. Besides stepping up your level of security, I advised you to create a rigorous crisis management plan that’s regularly reviewed, tested, and updated. And while these technical solutions are important, your approach to the human side of cybersecurity is also a vital part of the equation that determines your success when responding to new threats.

Before you put a plan in place or invest in any new tools, be sure you have the right team in place. The occasional security audit and outside security service cannot do what a mature and dedicated security team does: know the business, constantly monitor threat levels, and swiftly respond to challenges and crises.

A recent cybersecurity threat intelligence report makes my message more urgent than ever. According to the report, at more than $37 billion in assets, Health Savings Accounts (HSAs) look like gold mines to today’s criminals, with fraudsters and hackers now zeroing in on accounts they deem likely to be the most valuable. Especially vulnerable are account holders who fail to check their balances regularly, meaning fraud can go undetected for months.

In this watch-your-back atmosphere, third-party administrators like TASC are at a higher risk than ever. And this is why we’ve been investing more and more into our security program. As part of this commitment, we took a few big steps…

We hired an experienced security professional to lead development of a robust program that can respond to new threats as they arise. Tasked with driving the strategy and vision for our security program, our new Director of Information Security, Riad Armo has already created a charter document that describes our security program and how it fits into our organization. And because cybersecurity is not a one-person job, we have also boosted our security team with four additional security engineers and coordinators.

Now that I’ve shared what we’ve done at TASC, what about you? Cybersecurity requires far more than a suite of high-tech monitoring tools you buy from a vendor, far more than junior-level staff working under the IT department. Yet all too often business owners fall for impressive product demos, spend a lot of money on tools, and then enjoy a false sense of security. Only with a strong team in place to manage the tools you’ve invested in can you be sure the countless technical settings are appropriate, adequate, and configured to respond to a security landscape that’s ever-changing and bound to remain so.

A mature cybersecurity program demands a fine-tuned team and deserves the same respect and access to funding as any other department. The severity of the threats we face demands nothing less.

Posted by: danielrashke | November 30, 2017

Workplace Giving

I invite you to read my last blog post, if you haven’t already. In it, I discussed the Greater Give, a new way to make it easier and less expensive for Americans to support charities. This innovation creates Flexible Giving Accounts (FGAs) using existing architecture (i.e. pre-tax payroll deductions for accounts such as dependent-care, transit/parking, etc.). With the FGA, employees will fund their giving with pre-tax payroll deductions, and then direct grants from their accounts to the charities of their choice.

Giving through the workplace is well-proven as a secure and convenient vehicle for charitable giving, and in 2016 accounted for around $4 billion. Besides helping the greater good, companies use workplace giving to communicate the company’s values, promote employee involvement, and attract the best and brightest individuals.

While often perceived as solely the work of large multinational corporations, it’s a mistake to overlook the small and mid-size company’s crucial role in community-oriented giving. When we look at percentage of profits donated, it’s absolutely clear that small businesses are far ahead of their larger counterparts, often making tangible social impact in the community. Also true is that most mid-size companies engage in corporate citizenship for the purpose of impacting their communities, not their bottom lines. Regardless of size, corporate mega-donors and “everyday philanthropists” alike can make meaningful, community-scale impacts.

A charitable FGA system would be great for employees and great for employers. Participating businesses will be building a culture that’s sought after by potential employees, with positive benefits appreciated in many communities. The charitable FGA program will make it possible for even the smallest businesses to promote philanthropy and charitable giving. And of course, participating employers will save funds because they’ll offer this simplified program on a pre-tax basis, thereby also enjoying the payroll tax benefit that accompanies cafeteria plan benefits.

Recently, a Los Angeles Times article about workplace giving caught my attention. The authors discuss current trends in workplace giving. (Click here to read the article by Genevieve Shaker of the Lilly Family School of Philanthropy and Robert Christensen of Brigham Young University.) Authors Shaker and Christensen list several ways to ensure the success of a workplace giving program. One item on their list falls right in line with the Greater Give: “Let employees choose from a range of charities.” In fact, that breadth is absolutely core to the Greater Give, via which employees choose from a wide range of pre-vetted and pre-approved charities.

Recent studies* looked at companies that switched to models with more charitable choices for their employees.  These studies revealed that more than 79% of companies increased donor participation rates and 73% raised more money!  TASC has been paying attention… And we’re pleased to be recently on board as service provider for the Combined Federal Campaign (CFC), the U.S. Federal Government’s workplace giving program. Now with a streamlined approach and wider options for giving, we realistically forecast a similar boost in giving for CFC.

I’ll say it again. Workplace giving is good for your employees, your company, and your community.

*(Source: LBG Research Institute, 2010; “Workplace Giving Works! Make it Work for You.”)

Posted by: danielrashke | November 21, 2017

The Greater Give

Give BackOur philanthropy philosophy at TASC is now as it has always been: if more individuals increase giving—even by small amounts—a significant difference can be realized in our communities. Yet the current charitable income tax deduction falls far short of the ideal, and the number of individuals contributing to charities has steadily decreased over the past 35 years. Have Americans become less generous during the past half-century? Have we made it more difficult for Americans to support charities? Can we pinpoint impediments to individual giving? If so, what can we do to get these barriers out of the way?

TASC, with The Greater Give, is proposing a solution to make it easier and less expensive for Americans to support the charities of their choice. By streamlining the gifting process, our plan spurs employees and employers alike to “lean-in.” It simplifies record-keeping, because it uses an existing architecture (i.e. pre-tax payroll deductions for accounts such as dependent-care, transit/parking, etc.). Employers can be confident of their compliance, and more middle-class Americans can become everyday philanthropists.

So what are we talking about? We are proposing the creation of the Flexible Giving Account (FGA), an employee fringe benefit account that’s funded with pre-tax payroll deductions and managed by the gifting employees, who direct grants from their accounts to the charities of their choice. You might ask, “Aren’t charitable donations already tax-deductible?” The answer is “no” and “yes,” because these contributions are deductible only for some taxpayers: those who itemize their deductions. According to a study by the Tax Foundation,* of returns with an Adjusted Gross Income (AGI) below $50,000, fewer than 20 percent itemized. Relegating the deduction to such a small segment of our population—to those who itemize only—is no favor to would-be givers or charities across our nation.

It’s important to clarify that establishing this pre-tax deduction is not intended to change charitable giving’s current tax status. In fact, this change will complement the current system by adding a pre-tax deduction as a new way to realize the tax advantages of charitable giving. (Similar to Section 129 creating the Dependent Care Flexible Spending Account to complement the Dependent Care Tax Credit.)

So you’re thinking, “Hey that sounds great! What now?” The answer is simple yet challenging at the same time. It involves legislative change. To implement creation of an FGA, Congress must amend the regulations governing fringe benefit plans. But the actual change is relatively straightforward. Congress simply needs to add a Flexible Giving Account to the existing list of qualified fringe benefits. That’s it! Easy, right? Then again, considering the current situation in Washington, it seems nothing is easy these days…

Who does this affect? Employees. Employers. Non-profits. Communities. I can think of very few who wouldn’t be impacted by providing charitable tax incentives to significant numbers of non-itemizing taxpayers. And because many non-itemizers have relatively lower incomes and hence pay less tax, donations—subsidized by tax rules—will have tax costs below the revenue loss from taxpayers in higher brackets.

Obviously, the largest impact of the Greater Give would be appreciated by our nation’s charities. With a more predictable income stream, they’ll be able to plan better and do more. Boosting individual giving—at any amount—will foster positive change for people, companies, and society.

So you see, there are no losers in the Greater Give, only winners.

*Source: (Tax Foundation – Most Americans Don’t Itemize on Their Tax Returns – July 23, 2007)

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