The House proposed tax changes – What should individual taxpayers consider? 

On September 12, the House Ways and Means Committee outlined various proposed income and transfer tax increases on high-income individuals, estates and trusts as part of their plan to generate the necessary revenue to support their reconciliation bill spending. While the proposal does raise revenue through new taxes and curtailing tax benefits, many anticipated changes are absent from the proposal. These omissions highlight the challenges the Democratic leadership will face in pushing through the reconciliation bill. Key points are summarized below along with potential planning strategies to consider. It is crucial to note, these tax law changes may not become part of the final bill or may change over the next few weeks or months. 

Increase in top income tax rate (effective for years beginning after Dec. 31, 2021) 

The top marginal tax rate for individuals, estates and trusts would increase from the current 37% to 39.6%. For individuals, the income level at which the top rate takes effect is reduced to $450,000 for married individuals filing joint and $400,000 for single taxpayers. For estates and trusts, the level is unchanged at $13,450. 

RSM insight:

As a result of the proposed increase, it may be favorable to accelerate income into 2021 or delay deductions into 2022 and beyond due to the rate increase. For those persons that intend to make large charitable gifts in 2021, consider deferring the gift until 2022 when the deduction can be taken in a higher income tax year, but remember when making these considerations that the ability to deduct cash donations to certain public charities of up to 100% of income before deductions does not currently exist in 2022. 

The rate increases could also make Roth conversions especially enticing in 2021 before the increased rates take effect. Also, if a taxpayer reached age 72 during 2021 and is now required to take his or her first required minimum distribution (RMD), it may be beneficial to take it in the current year instead of delaying it until 2022 as is permitted for first year RMDs. 

Any time you defer deductions or accelerate income, keep in mind the opportunity cost of this sort of tax planning. You may be accelerating spending so the investment returns on these expenses need to be considered. 

Increase in top capital gains tax rate and limitation of the small business gain exclusion (1202) (effective for transactions after Sept. 13, 2021) 

The proposal increases the top long term capital gains tax rate from the current 20% to 25% for those individuals in the new 39.6% ordinary income bracket. There is no change to the unrecaptured section 1250 gain rate (25% gain on real estate depreciation) or the collectible gain rate (28%). 

The proposed effective date for the increased capital gains tax rate would be for transactions after Sept. 13, 2021. The proposal also lays out a transition rule for 2021 requiring a separate accounting for gains and losses incurred before, on or after the Sept.13, 2021 effective date. The determination of when to account for pass-through gains and losses will be made at the entity level. In addition, the proposal includes a safe harbor provision for written binding contracts made on or before Sept. 13, 2021. 

Qualified small business stock (1202 exclusion) (more on definition and exclusion) will only receive a 50% gain exclusion for high-income individuals with adjusted gross income (AGI) of $400,000 or more. Estates and trusts will only receive a 50% gain exclusion with no income threshold. This removes the 75% and 100% exclusion rules currently available. This is effective for sales or exchanges on or after Sept. 13, 2021 with an exception for written binding contracts in place prior to this date. 

RSM insight:

Some taxpayers may want to taking advantage of the of the broader 15% capital gains bracket in 2021 by accelerating any planned sales. In 2021, a married couple filing jointly does not reach the top capital gains rate until they have $501,600 (married filing jointly) of taxable income. Under the proposal, beginning in 2022, the threshold at which long-term capital gains are subject to the highest rate is $450,000 (married filing jointly). 

Next, we will cover the proposed increase in the net investment income tax and the new high-income surtax. Both are effective for tax years beginning after Dec. 31, 2021, so there is an opportunity to save up to 6.8% of the gain on the sale of a business where you materially participate (3% for passive assets) by accelerating a 2022 transaction into 2021. The effective date of the capital gains rate increase could also move to a later date after legislative negotiations, which could result in additional tax savings if the sale occurs before a revised effective date. 

Net investment income tax (3.8%) (effective for years beginning after Dec. 31, 2021) 

The proposal would expand the reach of the net investment income (NII) tax to include trade or business income for high-income individuals. The general result would be that all income above a threshold amount would be subject to self-employment tax (SECA), employment tax (FICA) or net investment income tax except for growth in a qualified retirement plan. 

NII tax would be imposed on the greater of ‘specified income’ or ‘net investment income’ for taxpayers above the high-income threshold. The term ‘specified income’ includes income from a trade or business not subject to payroll taxes regardless of a taxpayer’s activity level. The high-income threshold is $500,000 for married individuals filing jointly and $400,000 for single filers. There is a gradual phase-in for income levels between $500,000 and $600,000 (married filing joint). The proposed expansion of the NII tax base most notably captures income from S corporations, limited partnership interests and some LLC interests that are currently not subject to self-employment taxes. 

RSM insight:

The expanded definition of net investment income to include active trade or business income could have a material impact for many business owners. The NII tax is in addition to regular income taxes so taxpayers should consider both tax increases in determining whether to accelerate income or delay deductions. You could also consider maximizing contributions to qualified retirement plans to further reduce income. 

This may also be a suitable time to reconsider your choice of business entity type. Depending upon the way you operate your business, converting to a C Corporation may be a logical decision. 

Limitations on excess business losses (effective for years beginning after Dec. 31, 2020) 

The proposed tax bill would make permanent the excess business loss limitation that under current law was set to expire in 2026. The limitation under the current law caps losses from a trade or business at $500,000 for a married couple but allows them to be treated as net operating losses (NOLs) in future years. Under this proposal, disallowed excess business losses would no longer receive NOL carryforward treatment and would instead continue to be subject to the excess business loss limitations in subsequent tax years. This change would require sufficient business income in future years to be able to deduct disallowed losses. 

RSM insight:

Due to its retroactive nature, there are limited opportunities to avoid the impact of this provision. Planning that would increase business income may also protect you from excess business loss limitations. Also, for some taxpayers this may mean a reevaluation of 2021 estimated taxes will be required should this become law. 

Surcharge on high-income individuals, estates and trusts (effective for years beginning after Dec. 31, 2021) 

The proposal imposes an additional 3% tax on AGI (as modified for the investment interest expense deduction) above $5 million ($2.5 million for married filing separately). Of note, estates and trusts only have an income threshold of $100,000 before the surtax applies. The additional 3% tax will not apply to trusts where all interests are devoted to, among others, a religious, charitable or educational purpose. 

RSM insight:

The threshold imposed on estates and trusts is significantly lower than the threshold for individual taxpayers. This lower threshold will make normal income distributions and distributions made under the 65-day rule more critical in future years. 

This new tax would not be effective until years beginning after Dec. 31, 2021. This provides an opportunity to increase income during 2021 to avoid the new tax. For individuals in future tax years, the plan could be to limit taxable income to dollar amounts below $5 million through limiting controllable income items. 

Estate and gift tax exemption reduced (effective for decedents dying or gifts made after Dec. 31, 2021) 

The temporary increase in the estate tax exclusion enacted under Tax Cuts and Jobs Act (TCJA) is set to expire in 2026. This provision would result in a reduction of the exemption returning it to the previous level as indexed for inflation. The estimated exemption amount for 2022 would be $6,020,000. 

RSM insight:

Some taxpayers may want to consider using their remaining exemptions by making completed gifts or transfers to trusts before year end to take advantage of the current, much higher, estate and gift tax exemption amount of $11.7 million. There may be limitations to the type of planning strategies available considering the proposed changes to grantor trusts and valuations that are addressed below. 

The early bird gets the worm. There are a limited number of qualified professionals able to effectuate this sort of planning; therefore, waiting may put you in a position where you are unable to plan. Some taxpayers are planning to create the necessary trusts now and then fund them closer to enactment date so they have more time to perfect the transaction. 

Estate tax inclusion of grantor trusts and gain recognition on sales to grantor trusts (effective on the date of enactment) 

A grantor trust would be includible in the grantor’s gross estate if the taxpayer is a deemed owner for income tax purposes. In addition, sales or exchanges between a grantor and a grantor trust would no longer be disregarded for income tax purposes. This change would be effective for trusts created on or after the date of enactment, and contributions after enactment for trusts that were created prior to the law. Grantor trusts created and funded before enactment would be unaffected. This provision has potentially far-reaching consequences that will impact the future of Grantor Retained Annuity Trusts (GRATs), Irrevocable Life Insurance Trusts (ILITs), Spousal Lifetime Access Trusts (SLATs), Intentionally Defective Grantor Trusts (IDGTs), Grantor Charitable Lead Annuity Trusts (CLATs) and other planning strategies. 

RSM insight:

The far-reaching impacts of this provision on GRATs, IDGTs, SLATs, ILITs and CLATs and other planning techniques is concerning. Taxpayers currently considering transactions or making annual contributions involving grantor trusts should be aware of the limited period in which they may have to complete those transactions without adverse estate consequences. A simple gift to an ILIT could result in partial estate inclusion for the grantor under these rules. 

The wording of these provisions is peculiar, referring to a ‘contribution’ to a trust. The use of this word is not common with reference to transactions involving trusts. This leaves open the possibility of including transactions with grantor trusts not commonly thought of as contributions such as sales, asset swaps, and refinances of old debt or installment obligations. The effect could be inclusion of a portion or all the trust assets in your estate. Planning around these rules may require relinquishing certain powers to ‘turn off’ the grantor status of a trust or considering certain trusts ‘off limits’ for future ‘contributions’. 

Before the date of enactment, you may want to consider gifts, sales, swapping assets, extending or accelerating existing installment sale obligations, or extending loan terms. 

Valuation rules for certain transfers of nonbusiness assets (effective on the date of enactment) 

Under the proposal, valuation discounts would be disallowed for nonbusiness assets held by an entity. Nonbusiness assets are passive assets held for the production of income but not actively used in the trade or business. These types of assets would include, but are not limited to, cash, stock or securities, an equity, profit, or capital interest, real property, personal property, and various other types of investment assets. This definition excludes reasonably required working capital used in the trade or business. 

There is also a look-through provision that applies if an entity holds at least a 10% interest in another entity. The entity would be required to ‘look-through’ to the assets held by the underlying entity and be deemed to own a direct proportional share of the assets in making a valuation determination. 

RSM insight:

This bill would dramatically decrease those assets that are eligible for a valuation discount. For example, only a select group of people termed ‘real estate professionals’ would be eligible for discounts on rental real estate assets. Transactions involving valuations of entities that hold nonbusiness assets should be completed before the date of enactment to take advantage of discounts still temporarily available. 

Limit on qualified business income (QBI) deduction (effective for years beginning after Dec. 31, 2021) 

The deduction for qualified business income under 199A will be capped at specified amounts, $500,000 for married filing joint, $250,000 for married filing separate, $10,000 for estates and trusts and $400,000 for all other taxpayers. The current phase-outs of the deduction would remain the same. 

RSM insight:

Taxpayers should consider accelerating income or delaying deductions when possible if this will affect their eligibility for the QBI deduction. QBI is also still available on section 1245 depreciation recapture if the transaction is completed by year-end. 

Takeaways 

These proposed changes would have a material impact on the tax burden for high-income individuals as well as the estate and trust planning that has been previously done. Surprisingly, the proposal had no mention of other anticipated changes. These omissions underscore the difficulty the Democrat leadership faces in advancing many of the proposals sought by the Biden administration. The absent provisions include: 

• No change to step-up in basis at death, the imposition of capital gains at death or any changes to the generation-skipping transfer tax 
• No relief from the $10,000 cap on state and local tax deduction 
• Carried interest tax break made more restrictive, but not eliminated 

While the Ways & Means Committee approved the current draft, largely upon party lines, there are still several steps that will shape the final legislation. The current bill will be sent to the Budget Committee, which packages this, and other House committee reconciliation bills, into a single bill that is reported to the House Floor. Limitations on debate and offering amendments while reconciliation measures are being considered are typically set by the House Rules Committee. A similar process unfolds in the Senate, where the relevant committees, such as the Senate Finance Committee if the measure involves taxes, will draft its own version of the reconciliation bill and submit to the Budget Committee for further action. Senate rules under reconciliation require that amendments be germane and limit the time allowed for debate. Any differences emerging between the House and Senate bills must be resolved through a conference report, which will require approval again from both the House and Senate to the modified measure. 

This process will take time, and RSM will be monitoring this situation closely as it plays out over the next few weeks and months to provide further insights.

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This article was written by Andy Swanson, Carol Warley, Rebecca Warren and originally appeared on 2021-09-21.
2022 RSM US LLP. All rights reserved.
https://rsmus.com/insights/tax-alerts/2021/the-house-proposed-tax-changes-what-should-individual-taxpayers.html

The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.

When an employer sponsors a retirement plan for its employees, it must carefully consider, and continually monitor, the plan provisions. Employers need to step back periodically, perform a plan checkup and ask if the plan is accomplishing their goals while maintaining compliance with all regulations. Is the plan working for the employer as plan sponsor, as well as for the participants?

Is your plan healthy?

Evaluation of several areas can help determine the health of the plan: 

• Average participation rate: Are the majority of eligible employees actively engaged in the retirement plan?
• Average deferral rate: How much of their compensation are eligible employees deferring into the plan for their retirement?
• Industry averages: How does the plan compare to the industry averages for employee participation and contribution amounts?

If the answers to these questions are less than optimal, a variety of options can help boost participation and savings levels:

Auto-enrollment and auto-escalation: With this option the plan automatically enrolls newly eligible participants at a stated rate for deferring compensation, then automatically escalates that rate at a specific interval—for example, by one percentage point at an anniversary. Participants may also opt out of these features.

Strategic use of technology: Utilizing current technology can help employees enroll, readily access information, communicate with the plan sponsor and stay informed about the plan’s benefits.

Tools for financial literacy and wellness: Providing employees with tools for budgeting, saving for emergencies and education expenses, basic financial planning, etc., can increase interest in the retirement plan as well.

Higher employer match threshold: A plan sponsor can motivate eligible employees to increase their participation and deferral rate by offering a higher employer match contribution. An employer match may also be a tool to boost employee retention and hiring.

Simplified investment options: For employees uncertain about how to invest, there is value in simplicity. Simplified investment options, like target date funds, can help participants feel more comfortable with a retirement plan.

Diversification: Target date funds are also popular because they enable participants to determine the appropriate mix of investment options. An increasing number of contributions and elective deferrals are going into these funds, which can be a great way to diversify plan assets and provide adjustability as participants move closer to retirement.

Enhanced plan design:  Utilizing plan limits to maximize benefits for targeted personnel can be an effective tool for rewarding key staff and attracting talent. Benefits might include advanced profit sharing options and coordination with defined benefit and executive compensation plans.

Highly compensated vs. non-highly compensated employees

The IRS uses compliance tests to make sure a plan does not favor highly compensated employees (HCEs) over non-highly compensated employees (NHCEs).

One example is the coverage test, which looks at how many HCEs are benefiting under the plan compared to NHCEs. Does the plan cover enough of the latter group?

The plan can exclude certain classifications, such as union (collective bargaining) employees and non-U.S. residents, without affecting its coverage test results. However, if the plan excludes other classifications of otherwise-eligible participants, the plan sponsor must show that it still passes the coverage test. The actual deferral percentage test and actual contribution percentage test are additional annual compliance tests that may apply as well.

Among the options that can satisfy the nondiscrimination requirement, while also motivating individuals to participate, is the safe harbor contribution. This contribution can take the form of either a mandatory employer match or a nonelective contribution, in which the employer contributes at least 3% of an employee’s compensation regardless of whether the employee makes contributions.

Is your plan in compliance?

Three regulatory agencies provide oversight of retirement plans: the IRS, the U.S. Department of Labor and the Pension Benefit Guaranty Corporation. Because retirement plans must comply with a long list of rules under these agencies, administrative errors sometimes occur.

Types of errors commonly discovered in retirement plans include:

• Document format or execution: In this type of error, a plan document does not comply with IRS or DOL requirements—e.g., by failing to execute legislative amendments in a timely manner or by containing errors or omissions—resulting in a plan document failure.
• Operational: Plan terms are not followed on an operational or administrative level. For example, if a plan document provides for auto-enrollment, but the plan is not set up to auto-enroll eligible employees on a timely basis, an operational failure has occurred. A plan must pass annual tests every year to show it operated in compliance with the terms of the plan document and with IRS and DOL rules.
• Fiduciary: The plan fails to operate exclusively for the benefit of participants, or the plan sponsor fails to perform duties at the level of a “prudent expert.” A sponsor is a fiduciary to the plan, and must maintain a certain level of compliance with applicable rules.
• Nonexempt transaction: One or more transactions between the plan and a party-in-interest take place without an applicable exemption.  Again, a retirement plan is required to operate for the exclusive benefit of plan participants.

What happens if a plan is not in compliance?

The IRS may disqualify a plan from tax-exempt status if it fails to comply with the rules. Plan disqualification results in all of the following:

• The employer loses its tax deduction for its contributions to the plan.
• Income from the plan’s trust is taxable.
• Participants must include in taxable income any employer contributions made to the trust for their benefit to the extent they are vested in those contributions.
• All or a portion of the fully vested account balance of participants is taxable.

The IRS may disqualify the plan retroactively from the plan’s inception or another specified date, or for a specific number of years.

How are plan errors corrected?

In general, correction of a plan error requires repositioning participants and the plan as they would have been had the error not occurred. The IRS Employee Plans Compliance Resolution System (EPCRS) allows plan sponsors to correct plan errors under the Self-Correction Program, the Voluntary Correction Program or the Audit Closing Agreement Program.

Best practices for a healthy plan

Best practices to follow include:

• Review plan documents and compliance annually.
• Ensure a sound risk mitigation process.
• Benchmark periodically.
• Understand and maintain an appropriate balance of plan service and participant fees.
• Measure employee participation periodically and take action to increase it as needed.
• Integrate education about retirement with other financial wellness topics such as debt management and emergency savings.
• Leverage technology to enhance the user experience of plan participants.
• Improve diversification through a plan refresh or a re-enrollment initiative.

By adopting these best practices and committing to regular plan checkups, an employer can comply with all regulations while optimizing plan benefits for employees.

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This article was written by Eric Carroll and originally appeared on 2021-09-16.
2022 RSM US LLP. All rights reserved.
https://rsmus.com/insights/services/audit/performing-a-401k-retirement-plan-self-checkup.html

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.

Senate Finance Committee Chair Ron Wyden has released a ‘discussion draft’ of legislation that, if enacted, would dramatically change the tax rules that apply to partnerships. It is key to note that this is only draft legislation and as such, it is difficult to anticipate whether these ideas and proposals will be considered in any ultimate tax legislation. However, it seems likely Senator Wyden will pursue these proposals, and with a $172 billion revenue estimate, it may be safe to assume at least some of these proposals will receive consideration.

Senator Wyden’s ‘discussion draft’ includes an array of changes to Subchapter K of the Internal Revenue Code (IRC) – the major proposals contained therein are discussed in more detail below. In reviewing some of these proposed changes, taxpayers and their advisors may find that the proposals appear quite substantial but are actually more problematic in theory than in practice. Other proposed changes may appear minor, but would completely reshape the way partnerships are formed and operate.

For example, many may find the proposals to limit or prohibit ‘special allocations’ to be the most dramatic of the proposed changes. However, the language itself may not be as far-reaching as it may initially appear. On the other hand, the proposed changes to partnership debt allocations may, at first blush, appear to be of limited impact – indeed, these proposed changes were not even highlighted in Senator Wyden’s summary. However, if enacted, they would dramatically alter the current regime.

The proposed changes include, among other things:  

Requiring that partnership debt is allocated in accordance with profit

While some partnerships may already allocate debt in accordance with profit sharing ratios, many utilize allocation methods designed to align tax and economic treatment. If enacted, this proposal would result in a change in debt allocations for certain partnerships, leading to unexpected taxable gains to certain partners.

Mandating revaluations and the use of the ‘remedial’ method under section 704(c) 

Several options exist with respect to how and when unrealized gain is taxed when partners contribute appreciated property to a partnership. If enacted, the proposal would mandate the use of the remedial method in all cases.  

Moreover, partnerships currently have flexibility regarding whether or not to ‘revalue’ their assets. If enacted, the proposal would eliminate that flexibility, and (as discussed above) require the use of remedial allocations with respect to the ‘reverse’ 704(c) layer. 

Eliminate ‘Safe harbor’ and ‘Substantial Economic Effect’ methods of allocating income 

Although more complex ‘target’ allocation methods are increasingly common in the middle-market, many taxpayers still utilize ‘safe harbor’ agreements. The proposal targets perceived ‘abuses’ that can arise under this method, and while it is not certain that this change would result in a change in allocations for all partnerships, it may increase the complexity of the required computations and add administrative burdens.  

Mandate pro-rata income allocations for partnerships owned by related corporations

The proposal also includes language requiring partnerships owned by two or more corporations under common control to allocate income in relation to each corporation’s share of capital ownership. While this provision appears limited to a very specific subset of partnerships, the proposal also suggests that this group would be expanded further in the future via regulation.

Requiring section 734 and section 743 basis adjustments

Partnerships are generally required to make downward basis adjustments upon the sale or redemption of a partnership interest (and upon the death of a partner) when unrecognized losses above a certain threshold exist. However, if unrecognized gains exist, this basis adjustment is generally optional. The proposal would make these upward adjustments mandatory.  

End guaranteed payments for current and retired partners  

Payments to partners would either be taxed in a non-partner capacity (e.g. treated as interest, fees, wages, etc.) or as allocable shares of income.

Changes to ‘mixing bowl’ and ‘disguised sale’ rules

The distribution of assets that were previously contributed by a partner can often generate gain, but this rule does not apply if the asset is held by the partnership for more than seven years. The proposal would remove the exception for assets held more than seven years, resulting in the potential for gain any time such an asset is distributed.

Align treatment of inventory in sales and redemptions

Under current law, gains related to partnership inventory are taxed as ordinary income when an interest is sold. In a redemption, ordinary income treatment only applies if the inventory is ‘substantially appreciated’. The proposal would remove the ‘substantially appreciated’ limitation and tax redemptions similar to sales. 

Elimination of Publicly Traded Partnership status 

Under current law, certain publicly traded companies are allowed to elect to be taxed as partnerships (so-called, publicly traded partnerships or PTPs). The proposed change would repeal this exception for all publicly traded partnerships.

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This article was written by Nick Passini, Kyle Brown, Lauren Van Crey and originally appeared on 2021-09-12.
2022 RSM US LLP. All rights reserved.
https://rsmus.com/insights/tax-alerts/2021/senator-wydens-draft-proposals-target-partnership-tax-rules.html

The information contained herein is general in nature and based on authorities that are subject to change. RSM US LLP guarantees neither the accuracy nor completeness of any information and is not responsible for any errors or omissions, or for results obtained by others as a result of reliance upon such information. RSM US LLP assumes no obligation to inform the reader of any changes in tax laws or other factors that could affect information contained herein. This publication does not, and is not intended to, provide legal, tax or accounting advice, and readers should consult their tax advisors concerning the application of tax laws to their particular situations. This analysis is not tax advice and is not intended or written to be used, and cannot be used, for purposes of avoiding tax penalties that may be imposed on any taxpayer.

RSM US Alliance provides its members with access to resources of RSM US LLP. RSM US Alliance member firms are separate and independent businesses and legal entities that are responsible for their own acts and omissions, and each are separate and independent from RSM US LLP. RSM US LLP is the U.S. member firm of RSM International, a global network of independent audit, tax, and consulting firms. Members of RSM US Alliance have access to RSM International resources through RSM US LLP but are not member firms of RSM International. Visit rsmus.com/aboutus for more information regarding RSM US LLP and RSM International. The RSM(tm) brandmark is used under license by RSM US LLP. RSM US Alliance products and services are proprietary to RSM US LLP.