Retirement Plan Audits

jones-roth-retirement-plan-auditsOur team performs employee benefit plan audits every year for all types of retirement plans across the Pacific Northwest.

We take our commitment to quality service, cost efficiency, timely communication, and technical expertise seriously. Our client promise is to issue benefit plan audits within 60 days of the information being provided and are willing to guarantee a delivery date in most situations. Serving all regions of Oregon from our offices in Bend, Eugene, and Portland, we provide audits for 401(k), 403(b), ESOP, Defined Benefit, and Health & Welfare plans.

We are a member of the American Institute of Certified Public Accountants Employee Benefit Plan Audit Quality Center. Our clients are as small as 100 participants and as large as 14,000.

Contact us for a no-obligation fee quote for your retirement plan audit and/or a second opinion on your current services.

Read our recent post about Retirement Plan Audits.

Jones & Roth Retirement Plan Audits are lightning fast and stress-free.

“As one of the leading Retirement Plan Audit Firms in the Pacific Northwest, our promise is to deliver high quality work, on time, with efficiency that is cost effective.”

— Evan Dickens, CPA

Retirement Plan Audits Team

Evan Dickens, CPA

Evan Dickens, CPA

Partner and Shareholder

Jon Newport, CPA

Jon Newport, CPA

Partner and Shareholder

Mark Reynolds, CPA

Mark Reynolds, CPA

Partner and Shareholder



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Recent News

FAQ: New Oregon Transit Tax

FAQ: New Oregon Transit Tax

Frequently Asked Questions about the New Oregon Transit Tax

Does my employee who lives out of state still have to pay this tax?
The new statewide transit tax requires all employers to withhold, report, and remit one-tenth of one percent (0.001) of wages paid to their employees to the Department of Revenue. The tax is withheld from the wages of:

  • Oregon residents (regardless of where the work is performed)
  • Nonresidents who perform services in Oregon


Does the statewide transit tax affect wage garnishments calculations?
Yes, the statewide transit tax must be deducted from gross wages to determine disposable earnings for wage garnishments.


How does the department plan to notify employers and employees about this new statewide transit tax before it starts in July?
The ODR is sending a letter explaining the requirements of the new tax to each employer registered to file and pay income tax withholding in our system. This initial letter will include information about:

  • The statewide transit tax in general
  • Reporting and paying the tax
  • Important due dates
  • How to register for Revenue Online to report and pay taxes electronically

Additionally, the department is continually updating its website with new information related to complying with the statewide transit tax. Please check the website regularly for updated information:


If a domestic worker is under the limit for filing a W-2 (a house cleaner for example), does the employer still have to withhold the statewide transit tax?
If the domestic worker’s wages don’t meet the exemption in OAR 150-316-0237(3) or the general exemption in ORS 316.162(2)(c), the employer is required to file statewide transit tax returns/reports and withhold the tax from their wages.


If an employee is subject to a transit payroll tax (Lane or Trimet), will they also be subject to the statewide transit tax?
These two taxes aren’t related. Employees are not subject to the transit payroll tax; employers are The transit payroll taxes are imposed on the employer based on the amount of payroll. The statewide transit tax is imposed on the wages of each employee. The employer is responsible for withholding, reporting, and paying the statewide transit tax just as they are for state income tax withholding.


Is the statewide transit tax withheld from bonus payments? If so, will it be taxed at the same rate?
Yes, bonus payments are considered remuneration under ORS 316.162(2). Therefore, bonus payments are subject to the statewide transit tax and are taxed at the same rate as regular wages (one-tenth of one percent). This also is true for tips, fees and commission payments to employees.


Is the statewide transit tax withheld from military pension income?
As a result of HB 4059 (2018), military pension income is not subject to the statewide transit tax.


Is there a minimum dollar threshold for filing the statewide transit tax return? If so, is the threshold quarterly or yearly?
There is no minimum dollar threshold for filing and remitting the statewide transit tax, even if the amount of statewide transit tax withholding is minimal. Employers will need to file the return and remit the amount of tax withheld each quarter unless they are an annual filer (agricultural or domestic employers).


Is there a penalty if an employer doesn’t withhold, file a return for, or pay the statewide transit tax? What about employees who don’t include the tax when they file and pay their personal income taxes?
There are penalties for Oregon employers who don’t file and/or pay the new transit tax timely. These penalties are the same as penalties for failure to file report for or failure to pay income tax withholding. In this instance, the employee would not be penalized because they’re not the party responsible for filing or paying under the law. There is also an additional penalty that may be imposed for knowingly failing to deduct and withhold the statewide transit tax from employee wages. However, if an Oregon resident works for an out-of-state employer who doesn’t fall under Oregon’s taxing jurisdiction, the Oregon resident is responsible for reporting and paying the tax and can be penalized for not doing so.


The 2018 Form OR-WR, the annual withholding reconciliation report, has been updated with additional boxes to report the statewide transit tax. Will there also be changes the forms used for quarterly reporting?
There is a quarterly requirement to report the subject wages and statewide transit tax withheld for every employee. Employers will use the new statewide transit tax employee detail report that is similar to the Form 132, which captures information by employers who pay unemployment insurance and are subject to state income tax withholding. Statewide transit tax forms (quarterly return, annual return, employee detail report, and payment voucher) are on the “Forms” page of the ODR website.


Is there a yearly reconciliation filing requirement for the statewide transit tax?
Yes. The current Form OR-WR (Oregon Annual Withholding Tax Reconciliation Report) was amended to include annual reporting for the statewide transit tax. The new form is now available in the “Forms” section of the ODR website.


The statewide transit tax is based on gross wages, which include retirement income contributions. Wouldn’t the eventual retirement distribution from those contributions also be taxed under ORS 316.189. Isn’t this double taxation?
The new tax mirrors current income tax withholding laws and regulations. It’s up to each employer or tax practitioner to ensure that pre-tax contributions are subtracted from subject employee wages prior to calculating the statewide transit tax. Some examples of pre-tax contributions are deductions for:

  • Insurance, cafeteria, or flex spending plans (section 125 plans)
  • Retirement plans (e.g. section 401k)
  • Health savings accounts


How will out-of-state payers know to withhold the statewide transit tax from retirement income (1099-R)?
As a result of HB 4059 (2018), retirement income distributed as a periodic payment under ORS 316.189 is not subject to the statewide transit tax. Therefore, payers are not required to withhold from periodic payments or report and remit the statewide transit tax. Additionally, as a result of HB 4059 (2018), retirement income is not subject to the statewide transit tax and the statewide transit tax applies only to wages as defined in ORS 316.162.

Nonprofit Q & A: Unrelated Business Income

Nonprofit Q & A: Unrelated Business Income

Q: We are a small 501(c)(3) public charity that helps children develop reading and math skills. For Federal income tax compliance, we only file the e-postcard. We also publish an annual calendar and bi-monthly newsletter about our activities and other newsworthy information relevant to our exempt purpose. In these publications, we’re selling advertising space to our sponsors and neighborhood businesses. Our accountant says that we may need to pay Unrelated Business Income tax or at least file a Form 990-T to report the advertising income. Since we don’t charge tuition for our programs, and this sponsorship revenue helps us buy books and materials for the children, isn’t this revenue related to our exempt purposes?

A: Advertising usually generates unrelated business income (UBI). This is because advertising usually meets all three UBI tests: It is (1) regularly carried on, (2) it is a trade or business, and (3) it is substantially unrelated to the organization’s exempt purpose, aside from the need to generate income. That said, there can be exceptions and exclusions.

For this writing, let’s assume you have determined that your advertising activities meet the first two basic UBI tests mentioned above: It is (1) regularly carried on, and (2) it is a trade or business. Let’s assume it’s also carried on to produce revenue, is conducted with the same frequency and continuity, and is pursued in a manner similar to commercial nonexempt businesses.

Now, let’s explore the rare circumstances wherein an advertising activity can be related to the exempt purpose. To be so related, the revenue-generating activity must contribute importantly to accomplishing the organization’s exempt purpose, other than the organization’s need for acquiring funds to further its exempt purpose.

For example, even though the substantive content of your calendar and newsletters, such as articles, news, and events; may be related to helping children with reading and math, the advertisements are extremely unlikely to significantly further this purpose.

Some Exceptions and Exclusions
Even though the advertisements are part of the publication, which as a whole may be related to the exempt purpose, the advertising must be evaluated separately. If your school has students sell ads as part of its school newspaper publishing curriculum, it is possible that advertising sales could contribute importantly to furthering the exempt purpose of the school.
Is it possible to exclude the income because it is not advertising? To answer this question, we must determine what constitutes advertising. Advertising is any message that promotes or markets a business, service, or product. Advertising includes qualitative or comparative language, price, value or savings information, an endorsement, or an inducement to buy or use the sponsor’s services or products.

With that definition in mind, which published messages do not count as advertising? Mere acknowledgments do not count as advertising. An acknowledgment identifies the sponsor rather than promotes the sponsor’s products or services. The bare recognition of the sponsor may include sponsor logos and slogans, so long as they do not contain comparative or qualitative descriptions or promote the product or service.

Acknowledgments may also include sponsor locations and telephone numbers, value-neutral descriptions of a sponsor’s products or services, sponsor brand or trade names, and product service listings.

Website links can also count as sponsorships, as long as the link leads to the sponsor’s homepage, or to an information page, and not to a page that is a “checkout” page for purchasing goods or services from the advertiser on your organization’s website.

There is still one other exclusion: If all of your organization’s advertising sales are conducted by volunteers, it is possible the advertising revenue would be exempt from unrelated business income tax under a statutory provision.

How to Report the Unrelated Business Income
A Form 990-T must be filed if it’s determined that (1) the advertising is an unrelated business that does not fit an exclusion, and (2) it generates $1,000 or more of gross income in a tax year. If there is net profit, a tax must be paid. Advertising is entered on Schedule J of the 990-T.

This sounds fairly onerous, however, there is some good news: You may deduct all of the direct and appropriate indirect expenses associated with advertising income to offset the gross revenue. This may result in a net loss.

However, if there is still profit after applying the expenses associated with the advertising, you may also allocate any net circulation losses associated with the publication as an expense to further reduce advertising income, but not below zero.

The circulation expenses may bring the net income down to zero, but are not permitted to generate a loss. Thus, if the publication as a whole is running a loss, the advertising will not result in taxable income.

Speak with your tax advisor and provide her with all the facts. She should be able to advise you regarding what is classified as advertising versus acknowledgment, and what might qualify as an exclusion or exception to unrelated business income. If the advertising is taxable, she should be able to tell you how to minimize the tax with proper allocation of expenses.


Laura McKay, CPALaura McKay, CPA is a manager and key member of the Jones & Roth Nonprofit Team and Assurance Services Department. She has extensive experience working with both nonprofit and commercial businesses and manages many of the firm’s largest and most complex audit engagements. Laura is highly involved in the development and instruction of firm-wide continuing education and the firm’s Form 990 Task Force.

Federal Funding Update for Mental Health and Addiction Programs

Federal Funding Update for Mental Health and Addiction Programs

Recently, Congressional leaders passed a $1.3 trillion spending bill that set government funding through Sep. 30, 2018. The 2018 bill boosts federal health spending by about $10 billion, including increases for the Substance Abuse and Mental Health Services Administration (SAMHSA) and specifically dedicated opioid crisis funding.

The bill provides increased funding for mental health and addiction programs and rejects the cuts to key behavioral health care programs proposed in previous FY 2018 budget. Here is a summary of funding for key programs:


  • Certified Community Behavioral Health Clinics (CCBHCs): Includes $100 million in new funding to support the ongoing Certified Community Behavioral Health Clinic program active in eight states.
  • Primary and Behavioral Health Care Integration and Technical Assistance Center: $49 million, which is level funding compared to 2017.
  • Mental Health First Aid: $19 million, an increase of 5 million over 2017 funding level.
  • Mental Health Block Grant: $701 million, an increase of $160 million over 2017.
  • Substance Abuse and Prevention and Treatment Block Grant: $1.8 billion, which is $3.4 million more than 2017 funding.

We are waiting on further information on how SAMHSA and other agencies will allocate the new funding for CCBHCs and the other funded programs noted above.

A more detailed chart of mental health and addiction 2018 appropriations is available here and provided by The National Council of Behavioral Health.


Mathew Hamlin, CPA is a member of the Jones & Roth Behavioral Health team. He specializes in working with clinics who rely on grants and payer system revenue streams and provides audit, reporting and compliance advisory services for Behavioral Health clinics across Oregon & Southwest Washington.