A Colorado-based design-build firm specialized in creating parking structures and other facilities for government entities, such as libraries, hospitals, and administrative buildings. Known for taking projects from concept to completion, the company handled both the design and construction phases. But because they didn’t own the completed structures, they assumed they couldn’t benefit from related tax incentives. 

Challenge 

While the firm regularly incorporated energy-efficient features into its designs, leadership was unaware that the energy efficient commercial building deduction under IRC Sec. 179D (179D) allowed primary designers of government-owned buildings to receive the tax benefit — even if they didn’t own the property. Without this knowledge, the company was missing out on valuable tax savings that could directly impact their bottom line. 

Approach 

Introduced to the company through a banking contact, MGO identified the opportunity and explained the 179D deduction in plain terms. At the time, the deduction offered up to $1.80 per square foot for energy efficiency improvements across three building systems: 

• Building envelope: Structural, exterior materials and insulation to optimize energy performance 

• HVAC: Systems meeting high efficiency ratings 

• Lighting: Energy-efficient lighting such as LED installations 

Because the firm acted as the primary designer for government-owned facilities, the government entity could allocate the deduction to them. MGO guided the client through the certification process — reviewing designs, materials, and energy calculations to confirm compliance with the required standards. 

Value to Client 

The project yielded approximately $250,000 in tax deductions — savings the company could reinvest in future projects. Beyond the immediate benefit, the engagement opened the firm’s eyes to an incentive they had never considered. They continued to apply 179D opportunities to other qualifying projects, creating an ongoing tax savings strategy that complemented their core business. 

Helping You Capitalize on Hidden Opportunities 

Tax incentives can be complex — and easy to overlook without the right guidance. MGO’s tax credits and incentives professionals can help you identify and claim the benefits you’ve earned.  

Contact our team today to find out how we can help you uncover savings to strengthen your business. 

The post Case Study: Unlocking Tax Savings for a Government Structure Designer  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

Section 1202 of the Internal Revenue Code offers a powerful tax incentive for investors in qualified small businesses: the potential to exclude up to $10 million — or 10 times their adjusted basis — from capital gains tax. Despite being on the books for over three decades, this provision is still underutilized, largely due to its complexity and lack of detailed IRS guidance.  

Challenge 

A New York-based advisor reached out to MGO for a second opinion. Their client, a company founder, had recently undergone a recapitalization transaction involving a conversion of common to preferred shares and a partial redemption. A tax attorney had advised the client to claim a $5.8 million gain exclusion. 

The situation raised several key questions under Section 1202: 

• How and when did the client acquire their shares? 

• Does the company meet the definition of a “qualified small business”? 

• Has anyone calculated the actual gain eligible for exclusion? 

Approach

MGO conducted a deep-dive analysis of the transaction and the company’s qualification status under Section 1202. The team verified the business met IRS criteria for a Qualified Small Business. We also walked the client through the full implications of the LLC-to-C corporation conversion and confirmed the funding event had triggered a significant step-up in basis. This meant that instead of being capped at $10 million, the client was eligible for a 10 times basis exclusion — resulting in a $100 million gain exclusion shared between the founder and his business partner. 

Additionally, the team evaluated the structure of past and future share sales — including those involving preferred shares. As a result, the client was able to exclude all gains from the reported transactions and still retain $26 million in gain exclusion potential for future stock sales. 

Value to Client 

MGO transformed a narrowly scoped tax filing into a massive win: 

• $100 million in total gain exclusion identified 

• $0 in capital gains tax on current transactions 

• $26 million in future tax exclusion potential preserved 

By leveraging in-depth knowledge of Section 1202, MGO helped the client turn a limited exclusion into a far more advantageous result.  

Don’t Miss Out on 1202 Opportunities 

If you or your clients hold shares in a small business, don’t leave money on the table. Our professionals can help you evaluate 1202 eligibility, calculate your true gain exclusion, and build tax strategies that protect your wealth. Reach out to our team today to explore your options.

The post Case Study: Unlocking a $100 Million Gain Exclusion Under Section 1202  appeared first on MGO CPA | Tax, Audit, and Consulting Services.

MGO’s clients need a trusted partner to handle their 401(k) plan audits. We provide cost-effective, efficient service while offering insights into broader financial knowledge and regulatory complexities unique to each client’s business model. Our clients span industries ranging from manufacturing, technology, and apparel to food and beverage, professional services, and more. 

Challenge:  

When a company has 100 or more participants with balances in a 401(k) plan, it requires a 401(k) audit. A company needs an employee benefit plan audit provider that understands its unique business model and can help them navigate evolving regulatory requirements while maintaining transparency for employees and stakeholders. This calls for a nuanced understanding of employee classification, contribution eligibility, and plan participation rules.  

Additionally, with federal regulations governing employee benefit plans constantly evolving, a company needs an auditor with deep experience in ERISA, IRS, and DOL compliance standards for full regulatory adherence. 

Approach: 

When it comes to 401(k) audits, efficiency is key. By leveraging extensive industry knowledge and a thorough methodology, our team provides a seamless 401(k) audit experience that meets compliance and financial reporting requirements.  

Our risk-based approach addresses the complexities of a company’s diverse workforce and definitions of compensation — supporting proper classification and compliance with evolving ERISA, IRS, and DOL regulations. This approach allows us to provide cost-effective 401(k) audits to our clients. 

Value to Client:  

Our efficient approach provides a thorough and timely 401(k) audit, strengthening a company’s financial oversight and reinforcing trust among employees and stakeholders. By delivering a compliance-focused 401(k) audit, we help companies navigate complex regulatory compliance with confidence.  

Beyond the 401(k) audit, our insights into plan administration and financial controls highlight our deep understanding of employee benefit plan audits. Our strategic guidance positions us as a trusted advisor — often leading to invitations to bid on a company’s full-scale financial audit as well as other services. 

Need Help with Your 401(k) Audit? 

At MGO, we offer comprehensive audits covering all aspects of your 401(k) plan to help you achieve compliance and transparency. Reach out to our team today to learn about our Employee Benefit Plan Audits. 

The post Case Study: Simplifying 401(k) Compliance for Plan Sponsors appeared first on MGO CPA | Tax, Audit, and Consulting Services.

One of the nation’s largest nonprofit organizations failed to close their books for more than a year following a change in their accounting system in July 2022. After the departure of key financial personnel, including the controller and CFO, the organization was left without completed financial statements and was at risk of losing critical funding. 

Challenge 

The organization needed immediate intervention to close their books, complete their FY2023 audit, and maintain compliance with regulatory requirements — including single audit compliance standards. With no trial balance available and basic accounting processes like bank reconciliations left undone, MGO was engaged to help restore order to their financial operations. 

Approach 

MGO’s team developed a comprehensive roadmap to address the crisis. The team began by creating detailed account-by-account action plans with specific deadlines to guide the recovery process. Working systematically, they reconstructed financial records while establishing new accounting procedures and controls.  

Throughout the engagement, MGO’s professionals served as audit liaison while simultaneously closing the books, providing technical support and documentation for auditors. The team also assisted in interviewing and hiring a new accounting team to support long-term stability. 

Value to Client 

The team successfully closed FY2023 books and secured an unqualified audit opinion with no adjusting entries — a remarkable achievement given the complexity of the situation. By meeting regulatory reporting requirements, the organization maintained its essential funding and preserved crucial relationships.  

The establishment of proper accounting procedures and a qualified accounting team positioned the organization for future success. With MGO providing continued consulting support, the organization now has a strong foundation for sustainable financial management. 

Protect Your Organization’s Financial Future 

Whether you’re struggling with system transitions, personnel changes, or compliance concerns, our experienced professionals can help restore stability and confidence to your operations. Reach out to our team today to learn how we can help you get back on track.  

The post Case Study: Rescuing a National Nonprofit’s Financial Operations appeared first on MGO CPA | Tax, Audit, and Consulting Services.

Challenge 

A long-established California county retirement system faced an unexpected challenge when their fiscal manager and two key accounting staff members departed shortly after year-end. This left the organization without the necessary personnel to close their books, reconcile investment manager statements, or prepare financial statements for their June 30 reporting deadline. Compounding the challenge, they needed assistance preparing a 120-page annual financial report in compliance with Government Finance Officers Association (GFOA) guidelines. 

Approach 

Having previously worked with MGO as an audit client, the organization turned to our team for immediate support. MGO quickly mobilized, taking a systematic approach to identify and address the plan’s challenges: 

1. Understanding needs: Initial meetings with senior leadership clarified their priorities and outlined the scope of work. 

2. Assessing the situation: Our team analyzed where prior staff had left off, identified missing information, and developed a roadmap to close the gaps. 

3. Streamlining processes: We reconciled complex investment manager statements, cleaned up financial records, and verified data accuracy for June 30 reporting. 

4. Producing the annual report: Leveraging our extensive knowledge of GFOA standards, we prepared the comprehensive annual financial report and facilitated its review. 

By working closely with the organization, we provided continuity, confirmed compliance, and minimized disruptions during a critical reporting period. 

Value to Client 

Our assistance delivered immediate and lasting benefits, including: 

• Timely reporting: The pension plan met its fiscal year-end deadlines without compromising accuracy. 

• Operational continuity: MGO’s support bridged the gap created by staff departures. 

• Experienced guidance: The team gained confidence in meeting reporting standards and implementing succession planning strategies. 

The organization is now better equipped to address future staffing transitions and maintain uninterrupted financial operations. 

Future-Ready Planning for Pension Plans 

Leadership turnover is a growing trend in the pension industry, with many experienced professionals retiring over the next decade. Succession planning and flexible financial support can help your organization stay resilient in the face of these challenges. 

Reach out to our team today (and subscribe to our newsletter) to learn how MGO can support your pension plan’s financial and operational success. 

The post Case Study: Bridging the Gap for a Pension Plan in Transition appeared first on MGO CPA | Tax, Audit, and Consulting Services.

An entity owning multiple franchises of a prominent hotel chain was experiencing rapid growth. While business was thriving, the expansion exposed gaps in their accounting operations. Their small accounting team, consisting of just two accountants, relied on QuickBooks for bookkeeping and Excel for managing sales and expenses. This approach, though functional initially, began to break down under the weight of their expanding operations. 

Challenge 

The organization faced a trio of key challenges:  

(1) the accounting team was overwhelmed and struggled to close the books in a timely manner;  

(2) the absence of standard operating procedures (SOPs) led to missed vendor payments and process inconsistencies; and  

(3) management lacked access to accurate and timely financial and management reports, hindering their ability to make informed business decisions.  

Approach 

MGO conducted a thorough analysis of the entity’s accounting processes and systems. Recognizing the need for a scalable solution, we recommended transitioning from QuickBooks to a more advanced accounting system. The goal was to automate processes, enhance efficiency, and provide management with the financial insights required to drive strategic decisions. 

We implemented Sage Intacct as the general ledger system and integrated it with the entity’s banking systems. We also incorporated a series of new tools to address: 

• Sales processing, forecasting, and budgeting 

• Accounts payable and bill processing 

• Expense management  

• Payroll

In addition, we established SOPs and controls to streamline workflows and facilitate adequate review and approval processes. To further bolster the team’s capabilities, we recommended outsourcing a controller and a senior accountant. These professionals provided critical support, addressed the growing needs of the business, and trained the existing accounting team. 

Value to Client 

The transformation delivered immediate and measurable benefits: 

• Faster closings: The accounting team now closes the books within 3-5 business days of month-end. 

• Informed decisions: Management receives timely and reliable financial reports, empowering strategic decision-making. 

• Scalable support: Outsourced professionals provided experience and continuity during a period of rapid growth. 

With streamlined workflows, improved financial reporting, and enhanced operational controls, the organization is well-positioned to manage its expansion and capitalize on new opportunities. 

Take Control of Your Accounting Operations 

Don’t let operational challenges slow your growth. Our outsourced accounting solutions can help streamline your processes and provide the knowledge and experience you need when you need it. Reach out to our team today to learn how we can help your business thrive.

The post Case Study: Streamlining Accounting Operations for a Growing Hotel Franchise appeared first on MGO CPA | Tax, Audit, and Consulting Services.

Businesses benefit from having key professional relationships with investment bankers, lenders, and attorneys. 

With deep industry knowledge and an expansive professional network, MGO provides a strategic advantage to businesses navigating challenges and seizing opportunities — delivering value far beyond traditional tax and accounting services. 

Challenge

An apparel distributor with $100 million in annual revenue approached MGO because they faced significant operational challenges. The business struggled to optimize its financial position without the right processes or relationships. Its factoring agreements were too costly, duties processes were inefficient and at risk for audits, and they lacked key relationships with professionals such as investment bankers, bookkeepers, and attorneys. Without these critical partnerships, the company could not grow or make long-term strategic decisions. 

Approach 

MGO took a holistic approach to serving the client and identified areas where the business could improve — including factoring agreements and duties management.  

MGO connected the client with a new factor, successfully renegotiating contracts to reduce interest rates and improve cash flow, and a duties attorney, confirming the correct calculation of duties and minimizing the risk of a costly audit. Recognizing the importance of long-term planning, MGO also introduced the client to investment bankers to provide strategic advice on the potential sale of the business. While the owner ultimately decided not to sell, they now had the resources to make an informed decision. 

Value to Client 

Working with MGO, the company enhanced operational efficiency, reduced financial risks, and improved its overall financial health. The company saw immediate cost savings from the renegotiated factoring contracts and reduced its exposure to duties audits. With the right professionals in place — from bookkeepers to bankers to attorneys — the company could focus on core business operations, confident that its financial and legal foundations were solid. MGO delivered value beyond accounting and tax, helping to transform the client’s business operations and position them for continued growth. 

Your Trusted Business Advisor 

MGO’s Client Accounting Solutions professionals have decades of experience helping clients lower costs, make more informed decisions, and improve overall performance.  

Contact MGO today to learn how we can help you establish strategic relationships to streamline operations and achieve greater financial stability. 

The post Case Study: Helping an Apparel Distributor Improve Operations and Financial Results appeared first on MGO CPA | Tax, Audit, and Consulting Services.

A client preparing to sell their business was advised by a Big Four firm representing the buyer that they faced more than $3 million in local tax liabilities across operations in more than 16 states. Concerned about this assessment, the client engaged MGO’s State and Local Tax (SALT) team to conduct a second review of the due diligence performed by the Big Four firm. 

Challenge 

The initial assessment by the Big Four firm indicated significant tax liabilities that threatened to complicate the sale. The client needed a thorough review to verify the accuracy of these claims and explore potential avenues for reducing the liabilities for both past years and on a prospective basis. 

Approach    

The MGO team conducted a comprehensive deep dive into the state sales and income tax filings, uncovering inconsistencies in the original due diligence assessment. MGO found the client did not have the requisite nexus in several states as claimed by the Big Four firm. Additionally, our SALT team identified tax exemptions, secured resale certificates, and made corrections to transactions for the client’s customers. We provided an extensive workbook that meticulously tracked the resulting tax reductions for each customer transaction over a four-year period. 

Value to Client  

Need knowledgeable and experienced tax guidance to help you navigate complex multi-state tax issues? Reach out to our SALT team today.

The post Case Study: Reducing Tax Liability for a Multi-State Business Sale appeared first on MGO CPA | Tax, Audit, and Consulting Services.

Cash flow is the lifeblood of any business. It enables an organization to meet its financial obligations, such as paying bills and processing payroll, while also planning for future expenses and investments.  

Effective cash flow management is even more critical for financial advisory firms, which often deal with fluctuating income tied to market performance and client transactions.  

MGO offers comprehensive cash flow management services to give businesses a clear view of their financial status and future projections, helping them make informed decisions and maintain financial stability.

Challenge: 

A financial advisory firm with $10-$15 million in annual revenue faced significant challenges due to a lack of visibility into its cash flow. The primary issues included: 

• Unpredictable income — The firm’s income was inconsistent and linked to market performance, net asset value (NAV), and insurance commissions. This unpredictability made it difficult to align revenues with expenses. 

• Vendor payments — Vendors naturally want to be paid as fast as possible. Without proper cash flow management, the company sometimes rushed payments rather than taking advantage of a net 30- or 60-day payment terms, reducing cash flow flexibility. 

• Expense management — The firm’s limited ability to plan for future expenses or manage unexpected costs added financial strain and uncertainty. 

• Tax planning — Without a forward-looking perspective, the firm could only react to tax liabilities after the fiscal year closed, missing opportunities for proactive tax planning and efficiency. 

• Partner draws — Partners were unsure about the amount they could safely draw from the business, which added personal financial stress and impacted overall business planning. 

These challenges resulted in a reactive approach to financial management, with the firm often scrambling to cover expenses and make payroll, leading to sleepless nights for the management team. 

Approach: 

MGO thoroughly analyzed the firm’s cash flow, identifying key inflows and outflows. This included understanding vendor payment schedules, client payment patterns, and the firm’s unique business aspects. 

We developed a detailed cash flow model that projected future cash flows and enabled the firm to plan for upcoming expenses. This model could handle various “what-if” scenarios, such as the impact of a delayed payment from a major client or unexpected expenses. 

We also helped the company leverage net 30 or 60 payment terms with vendors to improve its cash flow flexibility. This approach allowed payments to be made strategically rather than reactively. 

With improved visibility into future cash flows, the firm could accelerate expenses or defer income as needed to optimize tax liabilities and enhance tax efficiency. 

Value to Client: 

MGO’s cash flow management services gave the firm a clear and accurate view of its cash flow, enabling better financial planning and critical decision-making. 

The management team no longer faced sleepless nights worrying about cash flow issues. They knew exactly how much cash was available, when additional funds might be needed, and how to plan for future financial needs. 

With clear insights into cash flow, partners could make informed decisions about draws, and personal financial planning, reducing uncertainty and stress. 

They could also proactively plan for taxes to reduce liabilities, enhance overall tax efficiency, and free up cash flow. 

Your Trusted Cash Flow Management Advisor 

MGO’s Client Accounting Solutions professionals have decades of experience helping clients’ lower costs, make more informed decisions, and boost performance.  

Contact MGO today to learn how we can transform your approach to cash flow management and tax planning from reactive to proactive and help you achieve greater financial stability, strategic flexibility, and peace of mind. 

The post Case Study: Helping a Financial Advisory Firm Better Manage Cash Flow appeared first on MGO CPA | Tax, Audit, and Consulting Services.

Timely and accurate financial reporting is essential for making informed decisions, complying with regulations, and maintaining investor confidence.  

MGO provides comprehensive client accounting solutions (CAS) to help businesses maintain financial clarity, compliance, and strategic foresight. By offering tailored solutions that meet each organization’s unique needs, MGO empowers companies to focus on growth while maintaining  strong financial foundations. 

Challenge: 

An online pharmacy with approximately $57 million in annual net revenue faced serious weaknesses in its accounting process. The sudden departure of a senior executive created a critical gap in financial reporting. The board of directors and other stakeholders lacked visibility into the company’s financial operations and were unaware of the severity of the underlying problems. Executives hadn’t received accurate financial reports in months, and the company struggled to complete its annual audit requirement.  

The situation was further exacerbated by an understaffed accounting team — with only one accounts payable clerk, one accounts receivable clerk, an assistant controller, and a controller managing an overwhelming volume of transactions and deliverables. 

The company’s leadership knew they needed help but were unsure of the exact nature of the problem or how to solve it.  

Approach: 

MGO stepped in with a swift and strategic approach, providing “boots on the ground” support during this critical period. Leveraging our deep experience in financial reporting, we immediately assessed the company’s entire financial cycle — identifying the root causes of the delays and inefficiencies.  

Understanding the client needed not just temporary relief but a long-term solution, MGO provided a technical director to advise on complex accounting matters as well as junior-level support to manage day-to-day tasks like bank reconciliations and cash management. This allowed the controller to spend more time on areas of highest impact to the company, such as providing timely financial reporting to the board of directors and executives. 

MGO’s team worked closely with the client for over eight years, becoming a constant and reliable presence through multiple CFO and controller changes. By understanding the company’s unique needs, we implemented processes for financial reporting, reduced the time required for the monthly close, and provided audit readiness services. Our continuous involvement helped keep the company’s financial operations stable and compliant during periods of leadership transition, preserving institutional knowledge throughout the process. 

In addition, MGO played a crucial role in rebuilding the company’s internal accounting and finance department. We not only provided technical support but also helped with identifying and interviewing candidates, and training new hires to preserve and pass on institutional knowledge. 

Value to Client: 

MGO’s involvement was transformative for the client. With our guidance, the company overcame the immediate crisis, successfully navigated its annual audit, and implemented processes that laid the groundwork for future growth — including potential public offerings. Timely financial reporting gave the owners the visibility they previously lacked, allowing them to make informed decisions with confidence. 

The company now operates with a well-organized and efficient internal accounting team capable of handling its complex financial needs independently. MGO’s ongoing support during staff transitions provided continuity and peace of mind, preventing the loss of critical financial knowledge. By addressing both immediate and long-term needs, MGO helped the company overcome its financial challenges and empowered it to build a sustainable and self-sufficient financial operation. 

Your Trusted Cash Flow Management Advisor 

MGO’s CAS professionals have decades of experience helping clients improve processes, weather transitions, and boost performance.  

Contact MGO today to learn how we can support your financial reporting processes and increase visibility into your organization’s finances. 

The post Case Study: Navigating Turnover and Enhancing Financial Reporting for a Healthcare Company appeared first on MGO CPA | Tax, Audit, and Consulting Services.