A&A news

A&A

Don't Wait for Tax Time to Look at the Bottom Line

By C.J. Hayden, MCCA curious thing happens to entrepreneurs in the spring of every year. They wake up one day and realize they had better figure out how much money they made last year so they can pay their taxes. But wait, shouldn't a business owner already KNOW how much money he or she made last year, last quarter, or last month? If you don't keep track of how much money you're making, you have no idea whether your business is successful or not. You can't tell how well your marketing is working.
A&A

Franchise Tax Board Announces Latest Tax Shelter Crackdown; Targets Promoters

The Franchise Tax Board (FTB) announced this week that it is sending another 10,000 notification letters to both the taxpayers who may have used illegal tax shelters and to the businesses that sell them. This latest effort is on top of the 18,000 letters already sent as part of a continuing effort to crackdown on this costly problem. California has obtained thousands of abusive tax shelter leads from the IRS, states, and other sources of information. These leads identify taxpayers, promoters, and tax schemes involved in sheltering income.
A&A

'How Do We Do That Around Here? A Question of Policies & Procedures'

By Kenneth M. McCall, MBA, MCPPut yourself in the position of a newly hired staff accountant in your firm. You’ve just completed the Human Resources orientation, received network login credentials from the computer department, and even had a little orientation training on the software that the firm uses for various job functions. Now it’s time to go to work!Will it be clear to you how the job functions of the firm are carried out? Whether you’re an auditor or assigned to the tax department, will it be clear to you how the firm expects you to do your job?
Tax

Industry Issue Resolution Program Seeks New Applicants

Business taxpayers are encouraged to submit tax issues they believe could be resolved more efficiently with new or improved guidance for the Industry Issue Resolution Program (IIR) by March 31, 2004, to be considered for the next selection process.Under the IIR Program, taxpayers, industry associations, and other interested parties submit business tax issues for possible resolution through published or administrative guidance.
A&A

FASB Stock Option Rules Subject of House Bill

If RSA Security Inc. had to record the stock options it gives to 80 percent of its workers as expenses, its $14 million profit in 2003 would have instead been a $21 million loss. If the Financial Accounting Standard Board (FASB) prevails with new stock option rules, that’s exactly what will happen to some companies.This month, FASB is expected to propose new rules to require options be shown as an expense as opposed to a footnote in financial reports, the Wall Street Journal reported.
A&A

CBIZ Announces Tender Offer to Repurchase Stock

CBIZ (Century Business Services, Inc.) announced this week that it has commenced a tender offer to purchase up to 7,500,000 shares of its outstanding common stock at a price per share of $5.00. On March 3, 2004, the Board of Directors authorized a share repurchase of up to 8,500,000 shares, 7,500,000 of which are being sought in the offer.
A&A

Former WorldCom CFO Charged in Multi-Billion Dollar Financial Fraud

The Securities and Exchange Commission (SEC) filed a civil enforcement action this week against Scott D. Sullivan, the former Chief Financial Officer of WorldCom, Inc. The Commission charged Sullivan with engaging in a fraudulent scheme to conceal WorldCom’s poor financial performance.
A&A

Small Businesses Ripe for Insurance Fraud: What Your Company Needs to Know

Health insurance scams are a real threat for small business employers and employees. Insurance failures hurt real people – workers and their families – who are seldom equipped to absorb large dollar losses. Small-business owners are often the targets of such scams, which resulted in at least $252 million in unpaid medical claims from 2000 through 2002, says the GAO, an investigative arm of Congress.Health insurance scam artists steal from the most vulnerable consumers," Assistant Secretary of Labor, Ann Combs testified.
A&A

FleetBoston’s Specialist Unit Settles With SEC, NYSE

FleetBoston Financial Corp. has disclosed that its Fleet Specialist Unit will pay $59.4 million in a settlement with the Securities and Exchange Commission and the New York Stock Exchange.The settlement stems from an investigation of the NYSE’s five largest specialist firms, who were accused of failing to oversee traders who improperly traded ahead of their customers. In a preliminary agreement announced Feb.
A&A

State Farm Launches Online Financial Education Program for Students

State Farm(R) this week unveiled a new financial education website that provides fun ways for K-12 students to learn basic principles of financial responsibility and money management.With only a handful of states requiring students to complete a personal finance course before graduating high school(1), the State Farm "Common Cents"(TM) online program can help parents and educators give children the real-life skills they need to become smart consumers, sensible savers and responsible investors. Located in the "Kid Stuff" section of State Farm's website at
A&A

President Bush Urges Congress to Make Tax Cuts Permanent

President Bush last week called on Congress to make his tax cuts permanent and discussed with taxpayers his plan to create jobs in America and to continue to grow and strengthen the economy. New figures released last week by the Treasury Department demonstrate the real benefits of the President's tax relief for all Americans. Last July and August when tax relief checks went out, families with children received up to $400 per child ¡V in all, 24 million families received tax relief totaling $14 billion.
A&A

Treasury and IRS Issue Depreciation Regulations

Last week, the Treasury Department and Internal Revenue Service issued proposed and temporary regulations that provide guidance for computing depreciation deductions under the Modified Accelerated Cost Recovery System (MACRS) in section 168 of the Internal Revenue Code when property is acquired in a like-kind exchange or as a result of an involuntary conversion. "Previously, the depreciation rules for MACRS property acquired in a like-kind exchange or involuntary conversion transaction were unclear.
A&A

SEC Proposes Mandatory Redemption Fees for Mutual Fund Securities

The Commission voted this week to propose new Rule 22c-2 under the Investment Company Act of 1940. Redemption FeeThe rule would require all mutual funds to impose a 2 percent fee on the redemption proceeds of shares redeemed within 5 days of their purchase. The fund itself would retain the proceeds from the redemption fees. The rule is designed to require short-term shareholders to reimburse the fund for the direct and indirect costs that the fund pays to redeem these investors’ shares. In the past, these costs generally have been borne by the fund and its long-term shareholders.
A&A

Small Firms Getting Big Slice of Sarbanes-Oxley Pie

When Frank Lordi started getting calls from accounting giants PricewaterhouseCoopers and KPMG, he knew he was onto something big.Lordi’s small financial consulting firm, Lordi Consulting in West Chester, Pa., had developed an expertise in helping companies comply with the Sarbanes-Oxley Act. In the fall of 2002, the phone started ringing."They were asking us to come help their clients because they didn't want the other big firms to make inroads with them," Lordi told the New York Times.
A&A

Atlanta, Tampa Rank Least-Expensive Large U.S. Cities for Business

Low labor and tax costs make San Juan, Puerto Rico the least-costly place to do business among 24 U.S. and affiliated cities with populations exceeding 1.5 million, according to a study by KPMG LLP, the audit, tax and advisory firm. San Jose, Calif., and New York were the most expensive places to do business among large U.S. cities.In the continental United States, Atlanta and Tampa, Fla., emerged the most cost-competitive locations behind San Juan, closely ranked second and third, respectively, in the large-cities category. Other large cities with business costs below the U.S.
A&A

Tax Tip: Early Distributions From Retirement Plans

An early distribution from an Individual Retirement Arrangement (IRA) or a qualified retirement plan need not be a “taxing” experience.Any payment that you receive from your IRA or qualified retirement plan before you reach age 59½ is normally called an “early” or “premature” distribution. As such, these funds are subject to an additional 10 percent tax. But there are a number of exceptions to the age 59½ rule that you should investigate if you make such a withdrawal. Some of these exceptions apply only to IRAs, some only to qualified retirement plans, and some to both.
A&A

Company to Offer Free Access to Credit Scores, Advice

Credit card issuer Providian Financial Corp. plans to offer all its customers free online access to their credit scores, with tips on how to improve them.The program, called "Real Information," allows cardholders to see their FICO credit score online. FICO is the most widely used score, which is computed from monthly credit data. Customers can plug hypotheticals into a score simulator to see how actions such as a missed payment or payoff of a balance can affect the score.Customers can look at their scores anytime they like, as often as they like, at no charge.
A&A

More Errors in 1099s Expected Due to Confusing Dividend Tax Cut

A tax cut that was welcome nine months ago is now creating confusion and hassles for financial companies and taxpayers.Last week, the Treasury Department and the IRS agreed to make certain provisions of the Tax Technical Corrections Act of 2003 related to dividend income available to taxpayers in advance of its passage.
Technology

Companies Lose Revenue Due to Network Downtime

Companies participating in a new study by Infonetics Research experience an average of 501 hours of network downtime every year, and as a result are losing millions of dollars in annual productivity and revenue losses, study results show."Overall downtime costs average 3.6% of annual revenue, a significant number, and one likely to surprise many large organizations," said Jeff Wilson, principal analyst of Infonetics Research and author of the study, titled The Costs of Enterprise Downtime, North America 2004.
A&A

Regulators, Specialists Reach Tentative Agreement

The New York Stock Exchange's five largest "specialist" firms reached a preliminary agreement Tuesday to pay about $240 million to settle a civil case claiming they failed to oversee traders who improperly traded ahead of their customers, The Wall Street Journal reported.The Journal reported that the deal could still unravel at the 11th hour, but if it stands, it would represent the biggest fine involving Big Board specialists ever.

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