New Tax reporting Under IR C section 6039


Amendments to section 6039 were brought about in an attempt to increase compliance, and reporting process easier for participants. These changes were made to business success coming in calendar year 2010 and later, so if you have not already, now might be a good time to start planning how you will deal with these changes. Here’s what you need to know to proceed and how to ensure procedures are consistent.

What is Section 6039

Historically, IRC Section 6039 requires companies that provide ISOs or offer qualified ESPPs send annual statements to participants who a) practiced ISO or b) first transferred ESPP shares in the disposal or re-registration of the calendar year. The purpose of this report was to provide the necessary information for participants to accurately calculate and report income and tax obligations related to measures for greater equity-based plans. These statements were issued on January 31 next year and usually followed basic, flexible format. Despite the penalties for non-compliance, many companies took a relatively relaxed approach to this requirement, movement or purchase confirmations or year-end tax statements to satisfy participant reporting obligation.

What changes were made in 2010?

new 6039 rules are intended to make the reporting process easier for participants and to reduce non-compliance. For tax year 2010, companies are required to report the same data transaction to the IRS and data elements that need to be reported have changed, especially in the ESPP side. The IRS has issued Forms 3921 (ISOs) and 3922 (ESPPs) guidance for participants reporting; companies can choose to use this format, or “substitute format” that gathered together many transactions in a single report to make participant reporting more user friendly.

IRS filing must be done electronically if the total number of individual forms of 250, although the IRS recommends e-filing regardless of the total number. There is no change in participant reporting deadline January 31; E-application must arrive until March 31, similar to the Form W-2 reporting for IRS. Penalties for non-compliance can start up to $ 250,000 / year for late or non-reported transactions and there is no maximum amount for willful disregard.

What You Should Do

If you have not already, start learning and planning now.

• Familiarize yourself with the new rules and understand the requirements. Also, it is important to understand what events trigger this reporting. Read Publication 1220 for filing claims and check draft versions of Form 3921 and Form 3922 (look out for the last versions coming soon). Talk to track the lawyer for 6039 reporting in specific cases, such as mergers / acquisitions and treatment outside -. US workers

• Understand choice and budget for administration. Discuss your options with internal and external parties.

• Determine if the company plans to release profiles of Forms 3921 and 3922 prepared by the IRS or a substitute statement. If you decide to use instead format, make sure it complies with the requirements specified by the IRS. Decide whether these statements will be mailed or emailed to participants -. Electronic distribution may sound easy, but there are a lot of limitations involved

• Develop participant communications for issuing these statements, to explain the forms, their purpose and how to use them.

• Find out Move Control code for e-filing. This can be accessed through the payroll department or a third party to file Forms W-2.

• Prepare to conduct a test application for IRS filing information Returns Electronically (Fire) system, which will probably be available in Q4 2010.


China Supplier Transformation and Effects on sourcing from China


China low cost, low tech manufacturing powerhouse over

days Chinese suppliers dominating the low-technology, high volume, and minimal skills industries are gone. The same strategy of targeting the lower echelon of production capacity, one that jolted the Chinese suppliers in the world renowned industrial power, has also judged many of the suppliers that once thrived in this environment. With tighter environmental regulations, higher wage standard, more stringent job protection systems, better living standards and rising strength of Chinese Yuan, China, unfortunately, is no longer among the elite low cost countries as a source of employment when sought.

China is losing the battle to lower the cost Asia-Pacific neighbors such as the Philippines, Thailand and Vietnam. This development could spell disaster for the Chinese economy, one has to rely on exports, which generates billions of dollars of surplus each year. To combat this movement, China is going through a “mini-industrial revolution” which is similar to the United States in the 18th century, where significant improvements in social, economic, and technology are realized.

China supplier transformation and those who are left behind

to breaking free from the previous mode, low-tech operation, some Chinese suppliers transforming its facilities to serve the policies controlled, been driven and quality focused high tech industries such as medical, automotive, and industrial. Gone are ISO 9001 and GMP, which has become an unspoken requirement for doing business in China. The new buzz words are ISO 13485 and ISO 14971 for medical devices, ISO 16949 for automotive, and ISO 14001 for environmental management.

For those who have adapted well to the new environment, they are primed to enjoy the next season in the still-thriving economy. Those other comers, unfortunately, are scrambling to play catch up. Some have been involved in not-so-moral-way “buy” themselves into orbit regulatory compliance. For a nominal fee, one could buy a plaque and certification, finished with an official stamp of approval from the author’s institution, and will be “allowed” producer break-neck speed. Unfortunate for sourcing experts, on the well-published issues such as the language barrier, cultural and organizational risks, will also factor in business ethnics when sourcing from China.

Get to know your supplier, evaluate them

to fight things out, general wisdom and usually strategy companies need to send elaborate group Quality , engineering, and supply chain experts, to physically assess suppliers. Obviously, this is not cost effective methods, especially for companies without financial support to hire a dedicated team in the targeted country. Another method is to hire an independent vendor evaluation consultant who is familiar with the local shopping industry, and preferably on or close to suppliers interested. In the assessment, management will not only be able to make an informed decision, but also reduce the risk factor in the future.

In the era of strategic sourcing, including supplier relationship management, product life management, spend analysis and vendor rationalization has become the front runner in sourcing profession, should one pay particular attention when finding suppliers in China. While conversion supplier has brought many exciting source of opportunity for the technology sector unnoticed in recent years, it has also spread generation inferior suppliers pretend to be top shelf, which should be weeded out in the early phase of the sourcing process.


Using SPC to Create a visible competitive edge


Manufacturers who want to achieve outstanding efficiency, quality and customer satisfaction is measured by utilizing statistical process control to provide real-time visibility into manufacturing operations. It is one of the main results of a comprehensive study Boston-based Aberdeen Group, a research organization that benchmarks best practices of the leading manufacturers of

According to the report, “Operational Excellence in the Process Industries :. Driving Performance through Real-Time Visibility,” SPC is an important tool to provide real-time information to help management monitor and improve the important functions of production, a key benchmark of best in class companies.

Conclusion of the study do not surprise Stephen A. Arnett, CEO Datanet quality standards.

“With companies facing increasing pressure to produce high quality products and meet complex customer and regulations, there is no room for error,” Arnett says. “Therefore, the SPC is used by most competitive company.”

It is also why in real time SPC software as WinSPC Datanet is increasingly important solution for manufacturers.

“The proactive quality control and real time SPC system built in WinSPC have helped hundreds of companies dramatically improve quality and efficiency in production activities in the process, WinSPC gave these companies a significant bonus: competitive advantage ..”

A competitive advantage is all the more important, Aberdeen report says, because “manufacturing companies are aware that if they can not match the price or global competitors do not have enough differentiation in other sizes, they can quickly lose market share.”

According to the report, the top four voltage before manufacturers are:

* Reduce operating costs (76%)

* Reducing process operations variability (41%)

* Competing with low-cost global competition (29%)

* Meeting regulatory compliance, such as the FDA, EPA, OSHA, PHMSA and the EU (19%)

not surprising, four key performance metrics that characterized the best-in-class manufacturers averaged :. 99% manufacturing schedule compliance, 99% perfect orders, 97% overall yield and 94% overall equipment efficiency (OEE)

None of the four performance conveyed best in class companies might be possible without applying SPC, the study notes.

“SPC is used especially in the operation of a group to monitor and control the physical property values ​​and characteristics of the material produced,” the report notes, “but can also be used as a quality measure to ensure that samples measured from a product stream stay on target proposed design specifications. ”

The Aberdeen report can be viewed at:


Business Aviation Part 91 Operational Control


As FAA defines it aboard the flight management means “the exercise of authority over initiating, conducting or terminate the flight.” The FAAS definition of work is to “use, cause to use or permit the use of aircraft, for the purpose of air navigation … including piloting aircraft, with or without the right of legal control (as owner, lessee, or otherwise).”

Therefore Part 91 employees, including aircraft owners use service management, need to ask themselves the following questions for each flight

– What entity makes a decision on the aircraft will be used for the flight?

– What entity makes the decision to assign flight pilot / s and crew?

– For what party do pilots work as direct employees or, alternatively, as drugs?

– What unit makes the decision to initiate, manage, and say aviation

same answer each question identifies the person who has operational control ?. It is not usually an aircraft management company. According to FAA requirements and rules, it is usually the owner of the aircraft.


Safety is the most important consideration in all flights. Clear, unquestioned power line helps avoid misunderstanding or confusion while at the same time to achieve the highest level of security possible for air travel.

Anyone who has operational responsibility FAA regulatory compliance flight also. With employees, management company’s aircraft or other authorized agents, the person with operational needs to be able to control all security responsibility and control and knowledge of all aspects of aviation, including flight crew qualification.

liability (if an accident) for the operation of the aircraft is the responsibility of the person with operational control. This requires that the person with operational control has up-to-date insurance, make sure that the required permits are valid and that the aircraft is operated in accordance with its stated use.

Aircraft Management Organizations

A common misconception is that self-control aircraft company (if one is held), has operational control of the aircraft. This is not true unless the management company

– A Part 135 certificate

– agreed with the owner to operate all passenger flights including for the owner of that business under Part 135.

consideration control are important for the intended (Part 91) Operators of commercial (Part 135) operators. This is especially important in situations where the aircraft company is regulated by Part 135 holders and used for the team both company’s 91 operations and Part 135 operating certificate of authorization.

Please note that this type of arrangement is not typical in the aircraft management company and are the exception rather than the rule.

This article should only be viewed as an overview of operational control. Always seek the advice of knowledgeable aviation assume specific questions on how management can apply to your situation.