Accounting News Roundup: Max and Dave's Mission Impossible; Jeff Skilling Sets a Good Example; Colorado's Pot Taxes | 05.10.13
‘Max and Dave’ Start Public Campaign for Simpler Tax Code [Bloomberg]
Getting a tax law that would accomplish their objectives is “going to be very, very difficult,” said Don Susswein, a principal in the Washington national tax office of the accounting firm McGladrey LLP. Just asking for public comments and suggestions isn’t enough to rally the country behind the effort, he said. “They need something specific that will be perceived as yes, gee, that would make my life simpler,” Susswein said. “You’ve got to propose something that’s going to capture the imagination.”
Ernst & Young Seizes Tax Transparency Issue But Advocacy May Break SEC Rules [Forbes]
FM: "Ernst & Young is preparing clients for a service that will audit their tax transparency reporting similar to what is developing around corporate social responsibility reporting. If the rules do change and bring more required disclosures to traditional financial statement quarterly and annual reporting, Ernst & Young as your auditor can help you with that, too."
Jeffrey Skilling, a Model Convict in More Ways Than One [Bloomberg]
If [Skilling] gets out four years from now, he will have served more than 10 years in prison, a long stretch. There's no reason to feel sorry for him: His crimes eroded faith in the integrity of corporate financial statements. He serves as a reminder, and exemplar, of how the system is supposed to work.
Colorado Lawmakers Set Taxes And Rules For Marijuana Sales [NPR]
Colorado is set to become the first U.S. state to regulate and tax sales of recreational marijuana, after lawmakers approved several bills that set business standards and rules. Legislators expect enforcement of the rules to be paid for by two taxes on marijuana — a 15 percent excise tax, and a 10 percent sales tax. Other measures included in the package set limits on how much marijuana visitors to Colorado can buy (a quarter of an ounce), as well as a limit on how many cannabis plants a private citizen can grow (six).
Marijuana taxes as a cash cow? Think again [CNN]
Taxing pot could raise hundreds of millions of dollars but still not be the moneymaker states were hoping for. Colorado and Washington State are launching their legal recreational marijuana industries, and both are coming to terms with scaled back expectations. Washington had projected up to $450 million in annual tax revenue, but the state's new pot consultant figures it could be little more than half that. In Colorado, the Colorado Futures Center think tank forecasts $130 million in taxes but thinks that won't even cover the cost of regulating the new industry.
Get excited. Accountant Faces Heat From Teed Off Golfer [CNS] In 2004, [Hank Kuehne] hired Thomas Bertsch, then an employee with McCormack Advisors International, to take care of his finances. Bertsch formed his owned company, FSM Capital Management, in 2007 and brought Kuehne over as a client. The relationship ended in 2011 after Kuehne allegedly learned he had racked up over $500,000 in income-tax liabilities and penalties for 2006 and 2007. He also discovered Bertsch had offered the Internal Revenue Service $90,000 to settle the debt, according to Kuehne's complaint. The IRS allegedly countered with a $342,000 settlement offer, which expired after Bertsch failed to respond. To make things worse, Kuehne said he learned that he still owed state taxes for 2006 because Bertsch included gambling income on his California return. Bertsch allegedly never communicated any of these problems or concerns about Kuehne's tax returns to the client and refused to give Kuehne a direct answer about the situation. Business Men [Tumblr]
An untold number of CPAs can be seen here.
Footnotes: You May Now Follow Tax Reform on Twitter; Jim Turley on the Boy Scouts' Gay Ban; Let's Go 990 Hunting | 05.09.13
Ernst & Young's Jim Turley on the Boy Scouts Reassessing Their Gay Ban There are many challenges to the current policy. It’s not in keeping with the thinking of the majority of Americans. And I don’t think it will lead the Scouts to be as robust and successful for the youth of the country as it can be. It’s not a policy I subscribe to. It’s something we know we need to wrestle with. [...] I came to the conclusion that the controversy risked damaging Ernst & Young’s brand. I felt I needed to speak out. [BBW]
FASB Requesting Participation in FASAC Survey [AWEB]
ProPublica has rolled out a Nonprofit Explorer that will allow you to examine file 990s. [ProPublica]
The two Europes, in one chart This is a thing that one might describe as not good. [Wonkblog]
Cyberthieves Looted A.T.M.’s of $45 Million in Just Hours [NYT]
No Bang for the Buck New York's hocus pocus math doesn't fool DCJ. [Tax Analysts]
Book On New Jersey Wines Does Not Support Deducting Trips To France [Forbes]
Deloitte to pay Xplore $700K to settle negligence suit [ABJ]
As we're sure you already know, Tax Prof has been on the vanity license plate beat this week. Naturally, one of our readers had a spotted plate to throw in the mix:
"Saw this little beauty walking out of work about a year ago"
Now, it's entirely possible this license plate is one of those co-dependent we-share-an-email-address-and-a-Facebook-account plates people get of their initials so everyone -- EVERYONE -- knows they're married and love each other. More likely, however, we have a CPA Diva on our hands.
CPA Diva Clue #1: It appears this person is so much of a big deal silly things like white lines on the pavement that signify where one parking space ends and the next starts mean nothing to this individual. NOTHING, you hear me?! Divas can park however they want thankyouverymuch, especially if they've disclaimed their superior status with a vanity license plate.
CPA Diva Clue #2: Miss CPA Diva requires extreme window tint, presumably because she's such a big deal she could cause an accident if common, non-diva folk are allowed to see her in her full glory.
Here's my license plate*, what's yours?
*Yeah right, like I'd give you stalker vultures my real license plate.
Considering the lengths that some companies go to manipulate massage their revenue, this passage from Tesla's Shareholder letter is rather refreshing:During Q1, we consistently produced 400 or more Model S vehicles per week, for a total of over 5,000 during the quarter. We recognized 4,900 vehicles as revenue, exceeding our initial Q1 guidance of 4,500, despite physically delivering a higher number of vehicles, as the standard for revenue recognition was extremely high. Even if a car was received, fully paid for and signed off as good by a customer, we did not recognize the revenue if the paperwork was incorrect. Incorrect paperwork? I'll bet Groupon wishes things were that easy. [via CI]
With full-time personnel already on notice, E&Y figured any interns not already familiar with insider trading should be made aware that material, non-public information about a client should not be used to trade securities. Nor should you pass it to your golfing buddy, local jeweler, or connection for hard-to-get concert tickets.
A tipster sent us the Q&A below, saying "Got this in a newsletter from EY for interns."
The takeaway being this -- if any of you grasshoppers out there use insider knowledge in the ways mentioned above that can result in 1) the end of your career at Uncle Ernie and 2) an all expenses-paid holiday to Club Fed.Insider trading: the hard facts At EY, it will cost you your job – and you could end up in prison. As media reports of insider trading increase, we ask Q&RM Leader Victoria Cochrane for her views. Q: What's insider trading? VC: Buying or selling securities – stocks, shares or options – when you possess information that's not available to other investors and the public. This includes passing what you know to others, except those who need to know because they are working on the same engagement. Q: Why is this important? VC: Insider trading breaches our clients' trust and is a criminal offence. Our clients trust us to keep their confidential information private. It's vital to our business and each of us personally that we handle confidential information with great care. If you’re in any doubt about what constitutes confidential information, consult your engagement leader. Q: Why are we seeing an increase in violations across the business world? VC: It’s difficult to say, but there’s no doubt that regulators around the world are cracking down hard on this sort of activity. These high-profile incidents are a warning. We must all understand what’s expected of us. Q: How are we protecting our business? VC: Our Insider Trading Global Policy says it all. It applies to all of us and makes our obligation not to trade with insider information absolutely clear. Read it now if you want to know more about insider trading, who to contact if you're unsure about what to do or how the policy applies in different situations. Q: What if I suspect something? VC: Contact your Regional Q&RM team or General Counsel immediately. Or contact our EY/Ethics Hotline anonymously to report any concerns about ethical, legal or professional issues. There's only one thing you should not do, and that’s ignore it. Consider bookmarking this page for future reference.
The following video from the New Jersey Society of CPAs features Marty Abo, CPA giving a tour of his hilariously awesome house. This house is great because it is the complete opposite of every CPA house I have ever been inside. It's kitschy. It's unpractical. IT'S FUN. Just watch and try telling me you don't feel the same way:
Personally, I could never live in such a place because clutter makes my skin crawl, BUT I do enjoy the following thins from Chez Abo:
- The red leather catsuit lamp.
- The Abo's Pizza box is a nice shout-out to Colorado.
- "Of course she's got Chardonnay."
- That TP roll mount is frightening.
- "Tell 'em it was the best minute-and-a-half of your life!"
Marty could chain his employees to their desks during busy season, feeding them only bagels and urine-temperature coffee and I'll still work for him so I could party at this house. He'd need to get better beer than Heineken, though.
Accounting News Roundup: KPMG Has a Few UK Problems; Useless Use Taxes; About Those Q1 Expat Numbers... | 05.09.13
Fannie Mae to Send $59.4 Billion to U.S. Treasury [WSJ]
Fannie Mae said Thursday it would make a $59.4 billion payment to the U.S. Treasury next month after reporting a $58.7 billion first-quarter profit thanks to a big tax benefit the bailed-out mortgage-finance company booked after determining it would generate profits in the coming years. Fannie recognized $50.6 billion in tax benefits during the first quarter, in addition to pre-tax income of $8.1 billion during the period. That compared to a $2.7 billion gain during the year-earlier period. The tax boost stemmed from reversing write-downs of its deferred-tax assets, which are unused tax credits and deductions that can offset future tax bills but which are worthless if a company isn't expected to turn a profit and have taxable income. The mortgage-finance company began writing down the tax benefits in 2008 as rising mortgage defaults threatened to wipe out thin capital reserves. Some assets had also counted towards the company's capital, further squeezing the company as the financial crisis deepened. Fannie reclaimed the deferred-tax assets during the first quarter because the company concluded it is likely to be profitable for the foreseeable future. The turnaround has been led primarily by the housing market's broad rebound over the past year and a continued decline in the share of homeowners that aren't making their mortgage payments.
KPMG Faces Two Investigations From U.K. Accounting Regulator [Bloomberg]
The U.K.’s accounting watchdog placed KPMG LLP under two separate investigations, examining its audits of a car seller and the conduct of one of its partners. The Financial Reporting Council will investigate whether KPMG “was independent” when it audited the annual accounts of Nottingham, England-based Pendragon Plc (PDG) for 2010 and 2011. The regulator is also probing the conduct of a KPMG partner in relation to a “non-timely disposal of a share-holding in a client entity,” the FRC said in separate statements on its website today. The probes mean the accounting firm could face three FRC inquiries as the regulator decides whether to investigate the audits of HBOS Plc. (LLOY) The FRC is waiting on reports from the U.K. Parliament and financial regulator to consider whether it has a case, spokeswoman Sophie Broom said last month. KPMG was the auditor for HBOS before it was taken over by London-based Lloyds Banking Group Plc in a government-backed deal in 2008. KPMG said it would cooperate with the investigations.
Musicians demand sports star tax breaks [AWEB] You see what happens? News Corp. Posts $42 Million Charge on Phone-Hacking Scandal [R&CJ]
Altogether, $390 million so far. Six Components of a Great Corporate Culture [HBR]
A solid offering of coffee options is a good start. Turn Bad Stress Into Good [WSJ]
That is, if you're experiencing any stress. Giant Swamp Rats Are Literally Eating Louisiana [Yahoo!] On the southern edge of Louisiana, there is almost as much water as land. You can't drive to anyone's house, you have to travel by boat, and sometimes there are hours of water between neighbors. It takes a special breed to make a home here, in the swamp, amongst the mosquitos and almost annual hurricanes. But those who do call it home, love it. They see a magical space of strange stillness and subtle rippling greens and grays where time worries no one and the freedom of the water is at your doorstep. But this Huck Finn way of life is being attacked on multiple fronts. Climate change's stronger storms are beating away at the fragile coastline, and the oil and gas industries are scarring the skyline while luring younger generations away from the local farming and fishing way of life. As if that weren't enough, 20-pound, semi-aquatic rodents, called nutria, which are native to Argentina, are taking over the marshes, devouring the native plants that hold the soil in place, and causing massive coastal erosion. Chris Metzier, an independent documentary filmmaker, has spent months in these swamps on the front lines of this battle, filming his upcoming documentary Rodents of Unusual Size.
Jeff Skilling might be out of prison sooner rather than later [AP]
A guy named Dick told Nikki Haley she needs to "go back to being an accountant in a dress store rather than being this fraud of a governor that we have" [TPM]
The "CPA Caucus" is in ur financials, fuxin wif ur reservez [Watchdog.org]
Silvio Berlusconi sentenced to 4 years in prison after tax fraud verdict upheld [AP]
679 people renounced their US citizenship in 1st quarter of year, IRS says [Fox]
Mary Jo White came out swinging in her first testimony before Congress as SEC chair, insisting the agency needs a 26% budget increase. Someone tell her Youporn is free! [Compliance Week]
Analysis: Immigration bill would add millions of US taxpayers A new analysis by the Social Security Administration (SSA) estimates that a bipartisan immigration reform proposal introduced in the Senate would increase the number of workers paying taxes by millions. "We estimate a significant increase in both the population and the number of workers paying taxes in the United States as a result of these changes in legal immigration," SSA Chief Actuary Stephen C. Goss writes to Sen. Marco Rubio (R-Fla.), one of the “Gang of Eight” who negotiated the proposal, in a letter that refers to the assessment. [The Hill]
The good news for ex-Enron CEO Jeff Skilling is that he'll be released from prison almost 10 years earlier than his original sentence of 24 years. The bad news is that the release date is still four years away and while his attorney appreciates the closure, he feels there's still some injustice:"The proposed agreement brings certainty and finality to a long painful process," said Skilling's longtime defense attorney, Daniel Petrocelli. "Although the recommended sentence for Jeff would still be more than double any other Enron defendant, all of whom have long been out of prison, Jeff will at least have the chance to get back a meaningful part of his life." [CNBC]
Groundbreaking CFO.com Survey Reveals Accounting Professionals Desperately Need Communication Skills
Make sure you're sitting down before you read this incredible news courtesy the CFO.com March survey of 422 public and private CFOs, controllers, chief accountants and other senior finance executives [note: free subscription required to read the article]:
The results show that today’s accounting and finance staffs have more than enough data skills. But they often lack the ability to wade through the numbers successfully to communicate with senior management, according to the respondents, who represent U.S. corporations with sales of between $50 million to over $1 billion.
What skill is most lacking in today's finance and accounting professionals? “Communicating with other groups” tied for first place among the respondents with “thinking about the company’s goals and focus as a whole.” Each answer drew a 29 percent response rate, followed by 25 percent who said “displaying abilities to take charge of situations,” 9 percent who chose applying IT skills, and 8 percent who said “traditional finance understanding.”
Here's the chart:
Gud riting skillz won't just help you pass BEC, they are essential to moving through the ranks. “The people that rise to the positions of senior team leadership or controllership typically have [verbal and written communication] skills,” said CBIZ CFO Ware Grove:
Focusing on data is a typical quality of most accountants, from entry level on up, says Grove. But they often underestimate the importance of softer skills like effective communication. “If people are frustrated with the controller, it’s not that the controller isn’t working until 8 p.m. or attending to details, it’s because he perhaps doesn’t communicate well,” he says.
Or he spends all day on Going Concern practicing his communication skills on trolls instead of mentoring young staff and writing killer memos?
You can find related survey results from CFO.com on Non-U.S. CFOs Donning Green Eyeshades and New Hires: A Skills-and-Demand Balancing Act here.
Ed. note: The following was written exclusively for Going Concern by a Big 4 auditor who wished to remain anonymous.
The PCAOB is turning into our parents. Or at least they are using the same tactics in handing out punishment. “We know you were up to no good last night, so if you just tell us what you did we’ll take that into consideration when deciding how long to ground you.”
I can understand where they are coming from. They want to make their jobs easier and they want to form a more cordial relationship with audit firms by cutting them some slack when the firms volunteer issues or resolutions. The problem is the PCAOB is a bit like Lucy holding the football -- we want to kick it but we’re afraid we’re going to end up like Charlie Brown on our backs.The best chance the PCAOB has of making this work is with the “voluntary and timely remedial or corrective actions.” At that point the PCAOB has already decided you’ve done something wrong so you might as well be cooperative when it comes to fixing the problems. However there are several problems with the voluntary reporting piece that I don’t see partners being able (or wanting) to overcome in the near term. The first is that engagement teams, partners and firms themselves don’t always agree with the PCAOB on what the issues are (act surprised). I had a job reviewed by the PCAOB in middle of the financial crisis. By all accounts everyone in the room was an intelligent person but none of us could agree on what issue they had with some of our fair value testing. Most of us in the profession still aren’t on the same page as the PCAOB when it comes to what does or does not constitute proper auditing of financial instruments. In addition, the PCAOB rarely tells you what’s right, only what’s wrong (like porn, they know it when they see it). This results in an interesting situation. It’s likely that if we do self-report we’re not going to bring up the issues they expect. This means we will bring to their attention something that might not have been on their radar. Doesn’t seem to be a good play. This isn’t to say we won’t admit when we’re wrong or offer to clean up the mess (see above) but it’s hard to lead the way in admitting what’s wrong when you don’t know what “wrong” is. A corollary to the above is that in a review the perception is that everything is negotiable. Every issue that the PCAOB finds turns into hours of review, meetings, document digging, expert gathering, whatever it takes to talk your way out of the issue. Most of us would rather take our chances with that process than lay it all out and beg forgiveness. Forget pleading guilty, we want the jury trial. There is also the question of “timeliness” when it comes to self-reporting. I’m not sure there would be many folks willing to report a potential violation unless they already knew they were picked for PCAOB review that year. Given that these reviews generally happen soon after the audit finishes, I’m not sure how much a team would be willing to discuss anything earlier. You're in a position of saying, “Yeah, we just did the audit but here’s what we screwed up.” Overshadowing everything is that the stakes are simply too high. This “extraordinary cooperation” “may” influence the PCAOB depending on facts and circumstances. I’m not the first auditor to say that I don’t exactly trust the PCAOB. I wouldn’t want to be the first team to test these waters. They aren’t looking for us to report the little things that went wrong in an audit; they want the big ticket items. You won't be sent to bed without dinner if you bring up an issue that could potentially lead to an audit failure. The PCAOB seems to like making examples out of firms when they screw up and I’m not sure firms playing nice in the sandbox will change that. It may be that I’m too cynical. PCAOB reviews come after an already exhausting busy season and lump on additional hours of prep and meetings on top of our other client responsibilities. It’s hard to look at them in a favorable light after having gone through a review. I also know I’m not the only one that feels that way in the firms. I’m sure folks higher up the food chain may feel a little different since it’s their jobs to make nice with our regulators. I just know those of us in the trenches aren’t going to be too willing to stick our necks out until we know the real consequences of “voluntary reporting." We’re told to exercise professional skepticism; I think we are when it comes to leniency of the PCAOB.
Accounting News Roundup: KPMG Shares Settlement in Fannie Mae Lawsuit; Rand Paul Going After FATCA; TAXSTUD | 05.08.13
Investors Get a Settlement by Fannie Mae [NYT]
Fannie Mae, the government-sponsored mortgage finance company, and KPMG, its former auditor, have agreed to pay $153 million to investors who bought Fannie’s stock from 2001 to 2004, a period when Fannie’s regulator determined the firm had overstated its income and violated generally accepted accounting principles. [...] The settlement stemmed from a time when Fannie Mae was led by Franklin D. Raines, a former director of the Office of Management and Budget under President Bill Clinton and a man who was deemed to be quite powerful in Washington. The regulator of Fannie Mae had usually deferred to it, and Mr. Raines initially insisted the regulator was wrong about the accounting issues. He drew support from both the Fannie Mae board and from KPMG, the auditing firm that had certified the books that the regulator criticized. Mr. Raines asked that the staff of the Securities and Exchange Commission review the accounting, but stuck to his position even after the S.E.C. concluded Fannie had erred. It was not until the regulator, then known as the Office of Federal Housing Enterprise Oversight, demanded his ouster that the board fired him. At the same time, it dismissed KPMG.
Rand Paul Introduces Bill to Repeal Parts of FATCA [AT]
Sen. Rand Paul, R-Ken., has introduced legislation to repeal provisions of the Foreign Account Tax Compliance Act that he contends undermine the privacy of U.S. citizens. FATCA was included as part of the HIRE Act of 2010 and would require foreign financial institutions to report on the account holdings and assets of U.S. taxpayers to the Internal Revenue Service. The law has provoked controversy abroad from U.S.-born expatriates and dual citizens, as well as foreign governments that argue the law violates their own privacy and banking secrecy laws. In response, the Treasury Department has been signing and negotiating intergovernmental agreements with other countries to implement the FATCA provisions, including Switzerland.
Deal on taxes and spending in Kansas could be near [KCS]
Even with deeply rooted differences over renewing a sales-tax hike, key lawmakers say a bargain could crystallize as early as this weekend. “I have been very optimistic all along,” said Rep. Richard Carlson, a St. Marys Republican and one of the key budget negotiators. “We intend to find an amicable solution that benefits all the taxpayers in Kansas.”
Five taxes you didn't know you were paying, in GIFs [Marketplace]
Deloitte Ranks 11th on DiversityInc's Top 50 Companies for Diversity [Deloitte]
And there was much rejoicing [twirls finger in the air].
More on Tax License Plates [TaxProf]
A TAXSTUD in a Toyota.
Harrisburg: The City that Couldn’t Shoot Straight? [CFO]
The SEC uses the alleged incidence of fraud in Pennsylvania's state capitol to lecture public officials on their reporting responsibilities when issuing municipal bonds.
PCAOB reproposes related-parties auditing standard [JofA]
The PCAOB on Tuesday reproposed an auditing standard and amendments designed to improve the quality of auditing of related-party transactions and significant unusual transactions. The reproposed standard is designed to increase the auditor’s focus on the evaluation of how a company identifies, accounts for, and discloses its relationships and transactions with related parties. The reproposed amendments, meanwhile, are intended to help the auditor identify and evaluate a company’s significant unusual transactions. In addition, the reproposed amendments would require the auditor to perform new procedures as part of the process to assess the risk of material misstatement in the financial statements.
“There’s no doubt that as you look at balancing budgets to the degree you need more revenue” that lawmakers will need to look to the wealthy “to get a little bit more from them proportionately than you get from people as a whole,” Gates said in an interview with Bloomberg Television before speaking at the Peterson Foundation fiscal summit in Washington today. “I think that’s pretty likely.”
The former chair of the South Carolina Democrats thinks Governor Nikki Haley should "go back to being an accountant in a dress store." [TPM]Ja Rule has been released from prison after serving time for tax evasion. [TMZ] Boehner suggests House will take its time on Internet sales tax [The Hill]
The Joint Committee’s Report on Tax Reform: Must-read for Policy Geeks [TaxVox]
Will DOMA Issues Doom Tax Reform? [Clint Stretch/Tax Analysts]
Council Proposes Accounting Standards Modifications for Private Companies [AT]
Deloitte to create 177 technology jobs in Belfast [BBC]
A Practical Challenge to Stand-Alone Corporate Tax Reform Leaders in both parties appear to favor revenue-neutral corporate tax reform that would lower today's 35 percent tax rate while slashing corporate tax breaks. Individual tax reform appears much more contentious, so some observers wonder whether Congress might pursue corporate tax reform by itself, separate from any individual reforms. Such reform faces a big practical challenge, however. Many corporate tax breaks also apply to noncorporate businesses, which are taxed under the individual income tax. Efforts to broaden the corporate base could therefore have significant effects on individual income taxes, making it difficult to pursue corporate reform separately. [TPC]
Matt Groening's Mother's Obit Reads Like a Who's Who of Springfield [Gawker]
Former Vice President Al Gore recently became a very wealthy man (well, wealthier). Good for him, right? This is America after all, where the rich are important and the important are rich and if you're neither then, well, you're probably not working hard enough.
Anyway, if you're wondering how Vice Prince Albert made his fortune, Bloomberg has some details:
[Gore] made an estimated $100 million in a single month. In January, the Current TV network, which he helped to start in 2004, was sold to Qatari-owned Al Jazeera Satellite Network for about $500 million. After debt, he grossed an estimated $70 million for his 20 percent stake, according to people familiar with the transaction. Two weeks later, Gore exercised options, at $7.48 a share, on 59,000 shares of Apple Inc. stock that he’d been granted for serving on the Cupertino, California-based company’s board since 2003. On paper, it was about a $30 million payday based on the company’s share price on the day he claimed the options. [...] Gore isn’t finished exercising his Apple stock grants. Those 59,000 are part of 101,358 Apple options and shares of restricted stock Gore has amassed, according to company filings, giving his total holdings a gross value of more than $45.6 million today.
The 'Berg puts Gore's wealth at somewhere north of $200 million -- nearly double of what the New York Times reported last August --which puts him in the company of another failed Presidential candidate:
That’s close to the $250 million net worth of 2012 Republican presidential nominee Mitt Romney, whom President Barack Obama and Democrats targeted in ads and speeches as being out of touch with most Americans.
Now that Al is in Mitt's range, he could probably use an upgrade in his estate and tax planning services. And Willard seems pretty happy with his team, even if the security of a nearby facility is questionable.
Annual review time one of the most critical activities at Deloitte..
— Life at Deloitte (@lifeatdeloitte) May 7, 2013
This is a perfect opportunity to reflect on the year that was at the Green Dot. Whether it was the five brisket sandwiches you put away in an hour at DU, the audit clients you are no longer serving or how much you miss the free time you had as an independent foreclosure review consultant, it's important that you go into these meetings prepared.
This little yellow guy is Dexter. I don't know why or how he got into an accounting class, but I can't blame him for nodding off, especially if it was Cost Accounting. That class was the worst.
The frightening moment at the end when Dexter is disoriented and almost accidentally commits adorable duckling suicide is too much. Luckily, his handler was there to catch him. We all would have been rendered useless for the rest of the day if the worst had happened.
Accounting News Roundup: E&Y: Come Clean on Taxes or It's Curtains; Prepare to Hate Airfare a Little More; Scott London: Watershed for Auditors? | 05.07.13
Senate Passes Wal-Mart Backed Bill for Taxes on Web Sales [Bloomberg]
The U.S. Senate voted to let states collect taxes on out-of-state Internet and catalog sales, sending the proposal to the House, where the issue is dividing Republicans. The measure, passed yesterday on a 69-27 bipartisan vote, would end the era of tax-free Internet shopping. It is backed by Wal-Mart Stores Inc. (WMT) and other retailers that say it’s unfair that out-of-state sellers don’t have to collect sales taxes on purchases. “It’s a rare opportunity for us to have Republicans and Democrats together on the floor to support a bill that has the endorsement of business and labor and local officials all across the United States,” said Senator Richard Durbin of Illinois, the chamber’s second-ranking Democrat and a co-sponsor of the proposal.
Ernst & Young: Come clean on corporate tax or face the consequences [The Times]
Big companies have been urged to be more open about their tax affairs if they are to head off legislation that would force them to. John Dixon, Ernst & Young’s head of tax in Britain, said that companies must respond to demands for greater transparency amid growing public concern over tax avoidance and secrecy. “Doing nothing is not an option. Companies need to do something and they need to do it now.”
Another Vote Ahead For Pot In Colorado: This Time, On Taxes [NPR]
No one knows how many of Colorado's 108,000 medical marijuana patients will hold on to their medical license for the cheaper pot it offers. And that's made dispensaries cautious about moving to recreational sales. Norton Arbelaez is a co-owner of RiverRock Wellness in Denver, where customers browse dozens of jars packed with bright green marijuana buds. Medical shops like this one get first crack at becoming recreational, possibly as soon as January. Arbelaez says his business will cater to both types of buyers, kind of like a chain drugstore. "And so, if anything ... think about a Walgreens, where part of the Walgreens is over-the-counter and part is a controlled substance," Arbelaez says. "That is more or less what, conceptually ... it's going to look like."
KPMG's Insider Trading Scandal: A Watershed for the Auditing Profession? [YouTube]
Tax Proposals Open a Debate on Airline Industry’s Troubles [NYT]
A $300 domestic airline ticket now includes about $60 in taxes — or 20 percent of the total fare — which pays for things like air traffic controllers, airport improvements, customs and immigration inspections and checkpoint screening. President Obama, in his 2014 budget request, has proposed increases in many of those taxes, a move that the airline industry opposes, arguing that passengers are already overtaxed. The recipients of these taxes counter that many of these fees have not increased in years, contributing to outdated systems, flight delays and long lines. This is not the first time similar tax increases have been proposed — and usually rejected. But given the current fiscal climate, and the recent sequestration-imposed furloughs of air traffic controllers, some aviation experts say it is time for a broader overhaul of air travel financing and oversight. The debate largely centers on two questions lawmakers and industry representatives will have to wrestle with in the coming months: who should pay for the essential functions of the aviation system — travelers or all taxpayers? And could tax increases be avoided if the money collected were spent more efficiently?
Leniency for Offshore Cheats [WSJ]
U.S. courts are doling out more lenient punishment to tax evaders hiding money offshore than to other tax cheats. Despite a high-profile government crackdown on secret offshore financial accounts since 2009, the average sentence in those cases has been about half as long as in some other types of tax cases, according to a comparison of Internal Revenue Service statistics and data compiled by former U.S. Justice Department lawyer Jack Townsend. In many cases, judges are also opting for shorter sentences than recommended under federal guidelines.
Cris Carter Q&A: If not for football ... maybe accounting? [MST]
CFOs most crave these 2 nonaccounting skills [JofA]
Baking and glassblowing.
A new study says politicians don’t favor the rich. That’s debatable. [WaPo]
Oh, there's a study.
When that first huge chunk of money hits your bank account, you may just get stars in your eyes. The accountant in you is screaming, be smart, but this ability to finally afford those expensive meals out, your brand-new apartment, and new corporate duds is oh so appealing and finally within reach.But think back to the, no doubt, countless conversations you have had with your company about spending smart. They rely on you to translate the numbers and tell a story so that they can make sound business decisions – when to hire, when to take on new clients, when to invest in capital. It’s crazy how money can be spent unwisely if companies didn’t have people like you on their side, right? Your personal finances are no different. To avoid the same fate that would plague a company without an accountant, take this quick crash course in how to divide up your earnings like a boss—ahem, CFO? For starters, let’s discuss some general guidelines, which make up what we like to call the 50/20/30 Rule: 50% Should Go Toward … Essentials At LearnVest Planning, we define essentials as the stuff you need to live, so cocktails with coworkers don’t count. This category includes housing (e.g. rent on your swank digs or mortgage payments), transportation (gas, public transportation, car insurance), utilities (electric, gas, water) and groceries (anything that comes from the grocery store). So you should aim to spend no more than half of your take-home paycheck—that’s after taxes—on these things. In other words, if your rent is equal to 45% of your take-home pay, then you should probably downgrade.
20% Should Go Toward … Financial Priorities Is your dream to someday quit accounting and open a farm-to-table restaurant? Or maybe you’re hoping to take an amazing trip around the world . . . when you finally retire. These all fall into the financial priorities category—along with those crippling student loan payments. Bottom line: At least 20% of your take-home pay should be set aside to reach your major financial goals. 30% Should Go Toward … Lifestyle Choices Now for what you’ve really been waiting for … After you’ve paid for the essentials, and set aside money for financial priorities, you should aim to use no more than 30% on whatever else your heart desires. This includes—but is not limited to—happy hours, work clothing, travel, takeout, HBO and the gym membership that you’ll probably never have time to use. What’s That? This Isn’t At All Realistic? Yeah, we hear you. Especially those of you who are laboring under large student loan payments that make up 20% of your paycheck alone. Here’s what you need to keep in mind: The 50/20/30 Rule is a broad guideline, so you might have to tweak it to line up with your individual situation. Notice how we said at least 20% on financial priorities, and no more than 50% on essentials. So if you have big loan payments, you may have to get a roommate or live without cable for a bit to make it work. And note that even if your debt repayment is bordering on 20%, you also need to be saving for emergencies and retirement! Why It May Be Time to Call in a Pro … Since you’re an accountant, you feel like you can and should tackle this on your own without consulting a financial planner. Of course you wouldn’t because so many money advisors work on a percentage model. Translation: “You give me assets, and I’ll charge you 1% of your assets to give you financial advice.” But there is something to be said for the accountability and support only another person can provide. To get you on the right track—i.e. paying down that student loan debt in a manageable way, while also saving for a condo or a house—you need advice on budgeting and building out a 5-year plan and the accountability to stick with it. Lucky for you, LearnVest Planning offers fee-based financial services for a fraction of the average monthly gym membership* that you’re not using. Intrigued? Start with a free financial consultation by filling out this quick profile. The opinions expressed in this article are that of LearnVest Planning Services, a registered investment adviser. The advice provided may not be suitable for your individual situation and you should discuss your situation with a financial professional. LVPS is not responsible for any third party advertisements or opinions on this site. * Source: http://www.statisticbrain.com/gym-membership-statistics/
Footnotes: Lauryn Hill's Ooh La La La; GT's new South African acquisition; MACPA Innovation Summit | 05.06.13
Mexico aims to overhaul tax system, raise revenue [Reuters]
Grant Thornton has acquired PKF in South Africa. [BDLive]
CPA Trendlines suggests this was the worst tax season ever. Do you agree? [CPA Trendlines]
Opinion: KPMG Insider Trading Scandal Damages the Reputation of the Accounting Profession blah blah blah blah blah [Business Ethics]
Lauryn Hill gets 3 months for failing to pay taxes Ooh la la la... it's the way that we rock, we be doin' our thing [USA Today]
Your boring tax wonk post of the day [Forbes]
DealBook's "Good Luck With That" story of the day [NYT]
Shameless self-promotion: I'll be at the Maryland Association of CPAs' Innovation Summit next Thursday, anyone else? [MACPA]
Lastly, it's my exotic DC street cat Buck's 2nd birthday. Let's give my baby a whoop whoop. [Twitpic]
Naturally, my esteemed colleague Colin sent me this Forbes article to write up, presumably because I am the resident crazy cat lady around here. I'll take it. Fortunately Taxgirl took it before I did:
Birds in Germany are dying by the millions and Peter Berthold of the Max Planck Institute for Ornithology in Radolfzell, Germany, says that cats are to blame. By his calculation, cats kill approximately 50 million birds each year in Germany alone. The solution, he says, to this travesty, is a cat tax.
"Sometimes they kill a wonderful red-coloured bullfinch, or a wryneck, which could be the last in the district," he said. An "ecological compensation tax" could be the answer, he suggested.
Now, as a person who dabbles in cat rescue when I'm not busy correcting Colin's typos here on Going Concern, let me stop this guy right there. How exactly do you collect a tax on the truly wild cats that are just doing what they need to do to stay alive? Cats may passive-aggressively vomit on your pillow at 4am but it doesn't take Jackson Galaxy to tell you they don't kill birds just for fun.
Berthold referred to a study published earlier this year in Nature Communications which found that free-ranging domestic cats kill 1.4–3.7 billion birds (as well as 6.9–20.7 billion mammals) annually: that works out to 40 birds killed per cat every year. Many of those birds represented the end of their species: as many as 33 species of birds are thought to have been eradicated by cats. However, it’s worth noting that stray cats, as opposed to pets, cause most of the damage.
You might assume that only Berthold is passionate about this cause – but the notion is actually spreading in the bird community. Markus Erlwein of the National League for Bird Protection in Bavaria (LBV), has also expressed support for the idea, claiming that the tax wouldn’t be intended as a deterrent to keep cats but rather that the revenue generated from such a tax could be used to protect birds. Protection could extend to new tree plantings or the creation of new habitats where birds could form communities.
Unfortunately, the "science" behind the referred-to study is horribly flawed, so basing any kind of "tax" on its faux conclusions would be reckless to say the least. Plus, who are you going to tax? Feral colony caretakers who spend every penny they have to trap, neuter, return and feed the feral cats they look out for? If that isn't an asshole move, I don't know what is. Those who care for feral colonies - or, as us cat people call it, TNR folks - do often consider their beloved ferals "part of the family" in some respect but these are not licensed domesticated animals a municipality can track and tax, they are still wild animals who just got a break in a human to keep them from over-breeding and toss out some kibble.
The existing dog tax in Germany, or Hundesteuer (literally “dog tax”), is like a license. It’s called a tax, however, because the amount payable is dependent on where the owners live and the breed of the dog; dogs deemed as “dangerous” – like Dobermans and Rottweilers – are taxed at a higher rate (exemptions and exceptions apply). In some cities, like Berlin, a second dog is taxed at a much higher rate so as to discourage taxpayers from owning too many dogs.
The fact that a dog tax already exists – and has for hundreds of years in Germany – may make the idea of the cat tax a little easier to sell. However, while the cat tax idea has garnered a lot of attention, there’s no indication that it has a great deal of support. Germany is one of the top ten cat-owning countries in the world (the United States is tops, besting even China) – and since cat owners tend to have more animals than dog owners on average, the numbers aren’t on Berthold’s side. That won’t keep him from trying, however, from trying to preserve die “attraktivsten Lebewesen, die wir kennen” (the “most attractive creatures that we know”).
That's all well and good except no one owns a feral cat. Maybe someone did once upon a time and it found itself on the edge of a managed colony where there is shelter and a reliable food source but more likely it was born in the wild and not caught young enough to be domesticated. Either way, proposing a tax on these types of cats would be about as effective as taxing kangaroos or giraffes. There is no one to tax!
"Free-ranging cats" covers both ferals and domesticated cats allowed to roam outdoors but if someone is going to toss their cat outside for half the day, what makes you think they're going to pay a tax on that cat when it kills birds? Wake up, bro.