- Be involved in a diversity network
- Do some recruiting
- Make sure you’re a part of the United Way campaign
- Mentor some people in the office
- Make appearances at the office-wide events
— Janice Maiman (@J_Maiman) October 21, 2013
UPDATE: See update below regarding sentencing timing.
It's been quite awhile since we've been on the Scott London beat, but something interesting was brought to our attention late last week that's worth sharing.
In a court filing from last month, London's attorney Harland Braun laid out the arguments against a Presentence Report by the United States Probation Office that recommended a 36-month sentence and a $100k fine for London. The filing says sentencing is scheduled for today, so will update you with that news when we learn it but for now, here are the four reasons offered for why the recommended sentence is too harsh:
1. London couldn't have known his co-conspirator Bryan Shaw was making more illicit profits than he was letting London know about, so the severity of the crime is overstated.
2. The Probation Office said that the insider trading would've continued "unabated" if the sting hadn't been set up. Mr. Braun argues that this wrong because the scam did in fact stop in May 2012 and the next trade was the one that resulted in this:
3. Despite his family's "fairly substantial assets" London's professional future is looking dim, and a fine of $25k is more equitable, the argument says.
4. When confronted by law enforcement, London notified KPMG what the sitch was, thus protecting the firm and taking responsibility for his actions.
If you find legal filings interesting, especially those that involved ex-KPMG partners who make terrible decisions, the whole filing (on the next page) is worth a read.
But there are a couple of things we read that are especially noteworthy. The first is assertion that the biggest victims in this case are the two idiots that perpetrated it:
It could certainly be argued that the two people who were most seriously harmed were the participants, Mr. London and Mr. Shaw, who now both have felonies on their records.
The other fascinating aspect of the argument is the financial repercussions for London, most notably:
1. Loss of annual income of $900,000 for next 10 years.
2. Loss of continued pension asset growth for the next 10 years (~$2,000,000).
3. Subject to substantial civil claims from KPMG.
All for some cash, jewelry, and Springsteen tickets. Jesus, it still boggles the mind.
We'll keep you updated, for now, discuss how you think the sentencing will go, what the appropriate punishment is, etc.
UPDATE: While the filing is dated 9/23 and states that sentencing was scheduled for yesterday, there hasn't been a peep about London's sentence. This Bloomberg post from the 27th says sentencing is scheduled for December 9th as does this Encino Patch article so I guess we'll have to wait until then.
As a voice of both accountant advocacy and accountant mockery, we feel a bit torn by this predicament.
— ThisWayToCPA (@ThisWayToCPA) October 21, 2013
On the one hand, we can't help ourselves but point and laugh at some accountants (or firms) because it's just too easy. On the other, nothing is more irritating than a halfwit who thinks all accountants can navigate 1040s.
That should be plenty of time for the tryptophan comas to subside:
— NASBA (@NASBA) October 18, 2013
The extension is available globally, according to NASBA's website so our international friends may experience 'Merica! at its best if they so desire.
Accounting News Roundup: Risks in Big Data; Deloitte Acquires Digital Agency; Count on More Accounting Firm M&A Deals | 10.21.13
The Risks of Big Data for Companies [WSJ]
[I]n our rush to embrace the possibilities of big data, we may be overlooking the challenges that big data poses—including the way companies interpret the information, manage the politics of data and find the necessary talent to make sense of the flood of new information. Big data, in other words, introduces high stakes to the data-analytics game. There's a greater potential for privacy invasion, greater financial exposure in fast-moving markets, greater potential for mistaking noise for true insight, and a greater risk of spending lots of money and time chasing poorly defined problems or opportunities.
Despite Legal Marijuana Rules In 20 States Feds Won't Play Ball [Forbes]
[T]he tax problems of the industry are one of the major impediments facing the industry. And the main culprit is Congress, not the IRS. Section 280E of the tax code denies even legal dispensaries tax deductions. In the past the IRS has said it has no choice but to enforce the tax code passed by Congress. “The federal tax situation is the biggest threat to businesses and could push the entire industry underground,” the leading trade publication for the marijuana industry reported. One answer has been for dispensaries to deduct expenses from other businesses distinct from dispensing marijuana. If a dispensary sells marijuana and is in the separate business of care-giving, the care-giving expenses are deductible. If only 10% of the premises are used to dispense marijuana, most of the rent is deductible. Good record-keeping is essential. See Medical Marijuana Dispensaries Persist Despite Tax Obstacles. And even if one is aggressive in allocating expenses between business, there is only so far one can go. Another idea is for marijuana sellers to operate as nonprofit social welfare organizations. That way Section 280E shouldn’t apply.
How Twitter Hopes To Reduce Its Tax Bill (In 140 Characters Or Less) [Forbes]
KPE: "Twitter can sum up its new tax reduction strategy in 140 characters or less: Double Irish and Dutch Sandwich. (Yes, that leaves 110 characters to spare)."
Deloitte Digital Acquires Digital Agency Banyan Branch [AdAge]
Deloitte is the latest consulting giant to interrupt the agency landscape with its acquisition of Seattle-based digital shop Banyan Branch. The company's Deloitte Digital group will completely absorb the Banyan brand, as well as its 50 employees. The move is in line with parent Deloitte's strategy to add "a full suite of digital marketing services" to its existing business and technology services and capabilities, according to a statement.
A Grov-o-lantern [Twitter]
— Grover Norquist (@GroverNorquist) October 21, 2013
Illinois high court rejects 'Amazon' sales tax [AP]
The Illinois Supreme Court threw out a state law Friday that taxes certain Internet sales, saying the so-called "Amazon tax" violated federal rules against "discriminatory taxes" on digital transactions. The 6-1 ruling represented the first time a court had invalidated an Internet sales tax law among 18 states that have them. It brought an immediate cry from traditional, store-based retailers for Congress to step into regulating taxes on web sales.
Emanuel wants 75 cents a pack cigarette tax increase [CT]
Mayor Rahm Emanuel plans to propose increasing the city cigarette tax by 75 cents to help plug a budget gap and provide more free vision care for low-income Chicago Public Schools students, a City Hall source said Saturday. The increase would leave Chicago with the nation’s highest total cigarette taxes. The administration expects to collect an additional $10 million, with $8 million going toward the budget shortfall and $2 million to expand a program that provides free eye exams and glasses to students who fail vision screenings, the source said.
Accounting M&A deals are adding up [Crain's]
While presenting at a conference of the American Institute of Certified Public Accountants in January, Mr. Koltin asked the room of CEOs, who represented roughly 75 of the largest accounting firms in the country, three questions. How many of you count mergers and acquisitions as part of your strategic growth plan? Almost every hand went up. [...] “What that's telling me is mergers and acquisitions of the larger CPA firms (are) going to continue at the record pace they're at,” said Mr. Koltin, CEO of Koltin Consulting Group Inc., a Chicago-based consultant to many of the nation's Top 500 accounting firms. Already, Mr. Koltin said, M&A activity has become “absolutely unprecedented.” “And I think we're at just the tip of the iceberg,” he said.
Walmart gives good Samaritan job back after firing him for helping woman being assaulted in the parking lot [DM]
'We looked into the situation, reviewed the facts, talked to witnesses,' Walmart spokeswoman Brooke Buchanan said Friday. 'While Mr Oswald broke a policy of ours - a policy put in place to protect our associates and our customers ... we realize Mr Oswald's intentions were good.' The company said it has called Mr Oswald and told him he can come back to work for Walmart.
Footnotes: Should the Big 4 Spin Off Audit?; A Slightly Narrower Expectations Gap; Ex-Refco CFO Is a 'Big Deal' | 10.18.13
— IMA (@IMA_News) October 18, 2013
Drunken Driving Arrest for Ex-Refco Financial Officer The former chief financial officer of Refco, the collapsed brokerage firm, offered a Florida state trooper $1,000 to let him go after being pulled over for drunken driving earlier this week, according to a police report. Robert C. Trosten, the former financial chief, told the trooper that the federal government would be angry “about his arrest because he was a big deal,” the report says. He also said that his arrest, which occurred on Tuesday night, would “make the front page of the newspaper” and the trooper would be “a big shot.” [DealBook]
Same-Sex Marriages in New Jersey Can Begin, Court Rules [NYT]
IRS Reduces Tax Return Photocopy Fee [AT]
Wal-Mart Worker: Fired for Helping Assaulted Woman [AP]
Men may face felony charges after toppling Goblin Valley formation [SLT]
Now that our elected officials have finished not doing anything about the budget and debt ceiling, they have ample time to get back to not doing anything about other things. Like tax reform!
Senator Max Baucus is the chairman of the Finance Committee meaning he's responsible for getting a bill out of the upper chamber. He's been pret-tay, pret-tay, pret-tay confident that he'll be able to get a bill together before he retires after his term ends, but as you may or may not know, tax reform is a delicate process.
You see, most people want tax rates to come down. That means less revenue for the government. Since Majority Leader Harry Reid is having none of that, that means getting rid of a lot of expenditures (i.e. deductions and credits). Most people think that's a worthy goal of tax reform also because tax expenditures are, broadly speaking, what make the code so mind-numbingly complex. No, really. For those of you that haven't taken a look at it, it's god-awful.
The problem with eliminating expenditures is there are large groups of tax lobbyists (we're still looking for a collective noun) working on the Hill to ensure their clients' precious deductions, credits, gaping loopholes, etc. are preserved. In other words, they and their clients prefer that the tax code is complex and they have the money and the access to prevent any meaningful tax reform from occurring.
Oh, yeah. It's a complete fuckshow.
To make matters even more complicated, this past summer, Baucus announced that the Finance Committee would be going with a "blank slate" approach to tax reform. That meant that all the provisions -- even the most popular and entrenched ones -- would be on the table for elimination. You can imagine how this could intensify the lobby frenzy that was already going on and it also got people wondering which deductions would survive the process.
Today, Baucus gave us a good indication of three biggies that aren't going to be touched:Baucus, 71, said he’d like to get the top corporate tax rate into the ‘‘high 20s,’’ down from 35 percent currently, though higher than the 25 percent target set by his House Republican counterpart, Dave Camp. Obama has called for a 28 percent rate for most companies and 25 percent for manufacturers. Baucus said his plan would provide a ‘‘permanent solution’’ to U.S. international tax rules that encourage companies to leave profits outside the country. "Frankly, the failure to do reform is hurting the economy," he said. "There’s no question of that." He was less specific about a rate target for individuals. Camp, chairman of the House Ways and Means Committee, has proposed a top rate of 25 percent, down from today’s 39.6 percent. "Look, it’s hard, because there are a lot of provisions that people like a lot, whether it’s charitable deduction or mortgage or state and local, whatnot,” Baucus said. "But, still, I do believe that we can dramatically simplify the code." There you have it. Three deductions that aren't going anywhere. Collectively, the charitable, mortgage interest, and SALT deductions cost the government about $170 billion in 2011 according to the stats in this Washington Post report from that year. And if you feel like speculating on the "whatnot" Baucus threw in there -- I'm going with the property tax deduction (worth about $19 billion in '11) -- that will add to the pile of money being left on the table. So if we can keep it to those 3-4 deductions, then yeah, the code is going to get simpler. It's the "whatnot" that could be a problem. [Bloomberg]
The shutdown/debt ceiling crisis may be over for now, but danger is everywhere. Luckily, Open Items is a happy place.
Feel free to discuss careers, accounting firms, regulators, recruiting, cafeteria quality. You can solicit advice, vent a little, ponder the similarities between Rasputin and the Red Sox. Whatever you like.
Just try to pick up after yourselves. Enjoy.
Accounting News Roundup: A New Study on Audit Results; Who Shoulders Corporate Taxes?; Bad Bosses Make You Better | 10.18.13
Behind Debt Deal: Silence, Distrust and Hardball [WSJ]
The budget fight that ended Wednesday night marked a new low in an increasingly dysfunctional capital. Interviews with more than a dozen lawmakers, congressional aides and administration officials about what transpired behind the scenes revealed that the traditional back-channel negotiations and 11th-hour bartering that produce most legislative deals didn't happen. Instead, both parties focused mostly on trying to kill any plans that emerged—both from the opposing party and their own colleagues.
Republican Civil War Erupts: Business Groups v. Tea Party [Bloomberg]
“We are going to get engaged,” said Scott Reed, senior political strategist for the U.S. Chamber of Commerce. “The need is now more than ever to elect people who understand the free market and not silliness.”
Study Says Results Improve When Auditors Cut Ties [CW]
A group of academics out of MIT and Harvard have published the results of a two-year study on environmental audits for industrial plants in India after regulators there decided to change the way auditors are engaged and compensated to check a plant's compliance with environmental and pollution standards. The India state of Gujarat wanted to end the conflict of interest inherent when a company hires and pays its own external auditor. The study looked at audit results for companies that continued to retain their audit firms and compared them to outcomes where auditors were assigned randomly to plants and paid fixed amounts out of a common pool. The study found the status quo audit system appeared to be corrupt, with auditors “systematically underreporting the pollution emissions of control plants at levels just below the regulatory standard,” the authors wrote. The more random, fixed-fee audits, on the other hand, led to more truthful audit reports and a reduction in the percentage of plants that were falsely reported as compliant with pollution standards.
Shutdown Forces IRS to Delay PTIN Renewals for 2014 [AWEB]
JCT: Corporate Tax Falls Partly on Labor [TF]
They've settled on 25%.
The Truth About Bad Bosses [At Work/WSJ]
"A bad boss can help you become a great manager because you learn how you don’t want to be.”
BART strike underway (again) in San Francisco [CSM]
So that's fun.
Bourbon heist | Pappy Van Winkle stolen in apparent inside job [CCJ]
Roughly 65 cases of 20-year-old Pappy Van Winkle bourbon were stolen in what looks to be an inside job from a secure area at Buffalo Trace Distillery’s Frankfort facility, according to Franklin County Sheriff Pat Melton. Melton said the theft was reported Tuesday and appears to have occurred over the past couple months. Detectives are investigating but have no suspects. The thief or thieves made off with about $26,000 of the limited stock, which Melton said consists of about $25,350 in 3-bottle cases of 20-year-old Pappy and about $675 in nine cases of 13-year-old Van Winkle Family Reserve rye.
Footnotes: Brits Back Off a Bit on Auditor Rotation; IRS Employees Are Back; Buy a Piece of a Running Back | 10.17.13
Prosecutors and SAC Head Toward a Possible Record-Breaking Settlement [WSJ]
Obama Calls for New Spirit of Cooperation in Washington [NYT]
U.K. Watchdog Softens Stance on Auditor Rotation [CFO]
IRS employees are back, but temporary shutdown deal could mean 2014 tax filing season trouble [DMWT]
Thousands of Threats Made Against IRS Employees [NBC]
Fantex Offering Stake in Texans’ Arian Foster Starting at $10 [Bloomberg]
The Great American Menu: Foods Of The States, Ranked And Mapped [Deadspin]
We've been keeping an eye on the story of the murder of David Locey, a CPA in Sturgis, Michigan and his former employee is now being charged with the crime.
Andy Brown was initially charged with embezzling $100k from Locey's firm but now he's accused of first degree premeditated murder and felony firearm.
Locey was found on October 2nd, shot once in the head and the embezzlement charges against Brown came on the 3rd, but the prosecutors have dropped that case for now until further investigation can be made.
You're sitting there, bored. Dejected. STOP IT. You're awesome, so start acting like it.
"But I have a soul-sucking job that I hate," you say.
Again, we say, "STOP IT." You deserve better. What it is exactly, we're not sure, but, at the very least, we insist you drag your lifeless hand to use the mouse to click over to Going Concern Jobs to see what's happening over there. Or set up some email alerts for yourself. That won't take a lot of energy at least.
Although, if you're feeling inspired after watching Rocky or Rudy or another sports movie that begins with "R" then you'd do well to create a profile, upload a résumé, etc. etc. Do we need to get all Mickey Goldmill on you?
If you have any questions along the way, email us. We're here to help. Good luck out there.
- Be involved in a diversity network
- Do some recruiting
- Make sure you’re a part of the United Way campaign
- Mentor some people in the office
- Make appearances at the office-wide events
This video is a couple years old, but for whatever reason it was just dropped in the tip box today and we are oh-so glad because it's so frightening it's hilarious.
Is it the wedding cake adorned with roses and Patrick Coxes? Is it the carousel of voices? Is it the ginormous Patrick Cox head with the mini-Patrick Cox growing out of his suit? Is it the close-up of Patrick Cox's bearded piehole? Is it the close-ups of Patrick Cox's jowly neckbeard? IS IT THE BRILLIANT USE OF NEGATIVE SPACE? What about the rapid speaking in tongues? And the close-up of Patrick Cox's tongue? GAHHHH! I can't keep talking about it. Just watch.
Accounting News Roundup: Crisis Averted...er...Delayed; Deal Includes One Tax Tweak; KPMG (Italy) to BlackBerry's Rescue | 10.17.13
Republicans Back Down, Ending Crisis Over Shutdown and Debt Limit [NYT]
Congressional Republicans conceded defeat on Wednesday in their bitter budget fight with President Obama over the new health care law as the House and Senate approved last-minute legislation ending a disruptive 16-day government shutdown and extending federal borrowing power to avert a financial default with potentially worldwide economic repercussions. With the Treasury Department warning that it could run out of money to pay national obligations within a day, the Senate voted overwhelmingly on Wednesday evening, 81 to 18, to approve a proposal hammered out by the chamber’s Republican and Democratic leaders after the House on Tuesday was unable to move forward with any resolution. The House followed suit a few hours later, voting 285 to 144 to approve the Senate plan, which would fund the government through Jan. 15 and raise the debt limit through Feb. 7. Mr. Obama signed the bill about 12:30 a.m. Thursday.
House Stenographer Seizes Microphone In Bizarre Rant [NPR]
You'd snap too if you had to listen to every word spoken on the House floor.
Your Official Compilation of This Glorious Shutdown's Best Moments [Atlantic]
Including the little kid staring through the closed National Zoo gates. Squee!
Government shutdown, debt ceiling deal includes one tax provision [JofA]
The change to the health care law under the agreement reached Wednesday sets up a new requirement that the eligibility of people who receive cost-sharing reductions under Section 1402 of the Patient Protection and Affordable Care Act, P.L. 111-148, or the health insurance premium tax credit under Sec. 36B, be verified. Under the agreement, the secretary of Health and Human Services must ensure that health insurance exchanges verify that individuals applying for the credit or cost-sharing reductions are eligible and must certify to Congress that the exchanges are verifying eligibility. The secretary is required to report to Congress by Jan. 1, 2014, what procedures exchanges are using to verify eligibility.
BlackBerry shows flicker of life: KPMG buys 3,500 smartphones [CNET]
BlackBerry said that KPMG's Italian operations have ordered 3,500 BlackBerry 10 devices and have committed to using BlackBerry Enterprise Service 10 to manage its mobile devices.
Deloitte taps Shiry as Pittsburgh leader [PBT]
Dmitry Shiry replaces Bob Denove.
International tax expert joins KPMG [The Hill]
Michael Plowgian is joining the HoK from the Organization for Economic Co-operation and Development.
Nashua gas station clerk halts robbery with handgun, gets fired hours later; police still looking for suspect [NT]
This happened in New Hampshire? "When Shannon “Bear” Cothran was threatened by a knife-wielding robber on Monday morning, he didn’t think twice about what to do. Cothran, who was working after midnight at the Shell gas station at 301 Main St. in Nashua, pulled out his Ruger LCP .380 handgun. The robber turned and walked out the door, and Cothran called the police, bringing a swift end to the robbery attempt. Cothran believes his decision to carry a firearm might have saved his life Monday morning. But the owners of the gas station took a different view. Cothran says he was fired only a few hours later for violating a company policy that forbids store clerks from carrying guns."
Footnotes: Down to the Wire; BDO's Latest Acquisition (or Something); Congress Is a Seinfeld Episode | 10.16.13
BlumShapiro is looking for senior associates in Connecticut, Maine, Massachusetts, New Hampshire, New York, and Rhode Island. [GCJ]
Boehner urges House GOP to support Senate deal [CNN]
Democrats Should Surrender on Taxes [Ezra Klein/Bloomberg]
In other BDO news, they acquiredallowed a firm in Florida to join their alliance or whatever. [BDO]
Carol Frances Omeara, 55, appeared in Yellowstone County Justice Court by video from the county jail on a felony DUI charge. Judge Larry Herman set bond at $3,000 after a prosecutor said Omeara has three prior DUI convictions in California. Omeara was arrested Tuesday at about 10:40 p.m. after a police dispatcher received a call from a woman who said she could not get out of her vehicle, which was parked outside her residence on South 29th Street. "When asked if she was having a medical or mechanical issue, the caller said, `No, I'm just too damn drunk,'" court records state. [BG]
The Un-Default: Congress Has Become A Seinfeld Episode Congress is increasingly about…nothing. [TaxVox]
Mark Cuban Cleared of Insider Trading [DealBook]
UK proposes audit firm bids every 10 yrs. They finally found something more meaningless than their monarchy. http://t.co/VfeuItkH01
— Greg Kyte, CPA (@gregkyte) October 16, 2013
Man Called 911 Over One Cent Beer Overcharge [TSG]
How admirable of Donna Smith to forgo every single meal since October 7th to protest the government shutdown that is keeping her out of the office. Smith, who has worked for the IRS for 12 years (in what function, we do not know), wants to send a strong message to our nation's lawmakers, to show that she is MAD AS HELL AND NOT GONNA TAKE IN FOOD ANYMORE.
But wait a second. Let's look deeper at this "hunger strike," may we?
Smith received mixed emotions from friends and family and said her hunger strike is getting harder with each passing day.
“I kind of feel like I'm finding my spiritual center. I hope they come to some resolution soon. I just want to go back to work. I want to get paid for the work I do,” Smith said.
For her hunger strike, Smith only drinks water, tea and Ensure. With her protest, she said she continues to try and get in touch with our country’s leaders. She even sent a letter to House Speaker John Boehner telling him about her hunger strike and asking him to come to a resolution.
Smith said she had lost about 10 pounds since her strike began.
FFS! You could probably live off Ensure for years and be fine. That's not a hunger strike, it's a diet!
But hey, whatever makes you feel like you are making a difference in the world, I suppose.