Government

Tax

LIFO Effect on Oil Company Profits Draws New Scrutiny

Last week’s drop in oil prices resulting from the terrorist plot against airliners bound for the U.S. is likely to prove temporary, as economists predict continued escalation in global demand for fuel. And U.S.
Tax

Prosecutors: Former Media Baron Lying about Finances

Indicted newspaper publisher Conrad Black enjoys a “free flow of millions of dollars," from his wife's private company, say federal prosecutors, who want Barbara Amiel-Black to reveal her finances under oath.Advertisement

Pension Overhaul Bill Heads to Bush

The Senate passed legislation Thursday that, if signed by the president, will make U.S.

Students Getting Sticker Shock from Textbook Prices

Students entering college in 2006 can expect to pay more than $500 for textbooks for their first semester courses, a huge outlay of cash for many who have already taken out student loans to pay for tuition and fees. University of Connecticut freshman Ben March returned to UConn’s Co-op bookstore for an accounting textbook last February, after having already spent $400 on other textbooks. The book cost $101. “I was trying not to buy it, but I ended up needing it," March said, according to boston.com.
Tax

Wealthy Tax Cheats Getting Away with Billions

The Internal Revenue Service (IRS) commissioner admits it—superrich taxpayers are using accounting tricks to avoid paying their full share of taxes, and they’re getting away with it.Advertisement
Tax

Judge Targets Improper Government Pressure in KPMG Case

KPMG created tax shelters that were later declared illegal, but Judge Lewis Kaplan has ruled that the government used improper coercion in seeking KPMG cooperation. The New York Times reports that the statements made by two KPMG partners will not be used at their trials.KPMG vice-chairman Richard Smith and former partner Mark Watson were financially pressured to waive their Fifth Amendment rights and speak with federal prosecutors as well. When they spoke with prosecutors without these rights, they were exposing themselves to legal risk, according to the Assocated Press.
Practice Management

Reports Detail Massive Abuses at Homeland Security

A congressional report released Thursday slammed the Department of Homeland Security (DHS) for wasting hundreds of millions of dollars in hurricane relief and national security money on frivolous purchases and mismanagement of contracts.The report, prepared by staff of the House Committee on Government Reform, echoed an investigative report issued last week by the Government Accountability Office (GAO). It highlighted several examples involving the agencies within the massive department formed after 9/11.
Tax

Verbal Agreement Found in Pension Bill Negotiations

Negotiators have been seeking concessions on compromise legislation to help America’s stressed employer-based pension system. Last week a verbal agreement on parts of the bill was reached. One hanging issue is a proposal backed in the Senate bill giving special relief to financially strapped airlines. GOP leaders are pressing negotiators for a cut in estate taxes as well, according to the Associated Press.

Airlines Facing Protectionist Threat To Foreign Investment

The Bush Administration wants to change the percentage of foreign investment in U.S. airlines, but the Senate Appropriations Committee voted 19-6 last week to bar the rule starting in the year beginning Oct. 1. This action may threaten an aviation agreement with the European Union, according to Bloomberg.Sen. Ted Stevens (R-Alaska) proposed a question to Bloomberg. He asked if a U.S. airline, owned in part by foreign interests, would allow the transportation of U.S. troops in wartime. Stevens added, “They’re not just carriers.
A&A

Retailers Say Visa and MasterCard Violate Antitrust Laws

Antitrust attorney W. Stephen Cannon, representing the Merchants Payments Coalition, a group of about 20 retail trade associations, in written testimony before the Senate Judiciary Committee last week accused Visa and MasterCard of violating federal antitrust laws through their practice of setting the interchange rates charged by banks to complete consumer transactions. The interchange fee, now close to 1.74 percent, is charged every time a consumer uses a credit or debit card to pay for a purchase.
Tax

Tax Practitioners Question Planned Methods to Curb Malpractice

A wide-ranging Internal Revenue Service (IRS) proposal to strengthen malpractice enforcement has sparked objections from tax practitioners and attorneys.The agency would publicly list the names of tax attorneys and accountants who are under investigation for alleged violations of IRS professional practice rules, according to Tuesday’s Wall Street Journal. Current rules say the names are kept private until the IRS Office of Professional Responsibility formally investigates and assesses a penalty.
Community News

Conrad Hewitt To Be Next Chief Accountant

Securities and Exchange Commission (SEC) Chairman Christopher Cox has announced that Conrad Hewitt, a distinguished leader of the accounting profession and former chief financial regulator for the State of California, will join the SEC as its next Chief Accountant.
Tax

Before Coming to America

American taxpayers going abroad have tax responsibilities here in the U.S. This is because our country taxes Americans based on their citizenship and even those with “green card” residency, according to ExpatExchange.com. Tax residency is determined by circumstance tests combined with the determination of residency facts, as well as tax ties to other countries.Worldwide income is the extent of income taxes in most countries where one is a resident or citizen, according to ExpatExchange.com.
Tax

Extra Funding Leads to Layoffs at IRS

On the heels of winning extra funding for enforcement and taxpayer services from a Senate panel last week, the New York Times is reporting that nearly half of the lawyers responsible for auditing the tax returns of wealthy American taxpayers may be losing their jobs.The Senate Appropriations Committee has voted unanimously to approve a 2007 fiscal year budget of $10.7 billion for the Internal Revenue Service (IRS). The IRS budget is part on a larger $69 billion bill funding the Treasury, Judiciary, Transportation and Housing and Urban Development departments beginning October 1.
Tax

Undisclosed Marriage Causes Problems For Couple

Carolyn Branan and Ralph Lovejoy were married, but they didn’t tell their clients. After their separate companies were found guilty of selling abusive tax shelters, along with KPMG, by the Internal Revenue Service (IRS), this former power couple is finding life difficult, being named in about a dozen lawsuits initiated by former clients, according to the Charlotte Observer. Although not indicted by the IRS directly, the couple became key players in the tax shelter market in their own respective firms.
Tax

Judge Approves $36M Settlement Balance in PNC Scandal

A federal judge in Pittsburgh has approved the last part of a settlement involving more than 73,000 shareholders who lost money in a PNC Financial Services Group Inc. accounting scandal.The shareholders are ready to receive about $2,600 each, for a total of $36.6 million, based on the $193 million settlement and interest. That amounts to 68 cents per share, the Pittsburgh Tribune-Review reported. It's not clear when settlement money will be distributed, and the final amount will be reduced by attorneys' fees.The last remaining portion of the class-action lawsuit was approved by U.S.
Tax

Tax Update: Motor Vehicles

The high cost of fuel is a popular topic these days. The debate over oil prices, however, obscures the fact that considerable legislative, regulatory, and legal action has been taken over the last year affecting motor vehicles, including the Energy Tax Incentives Act of 2005, the Safe, Accountable, Flexible, Efficient, Transportation Equity Act: A Legacy for Users (SAFETY), Rev. Proc. 2006-15, 2006-5, IRB 387, Rev. Proc. 2006-18, 2006-12 IRB 845, and Notice 2005-44, 2005-25 IRB 1287.
Tax

Audits Find Problems with Use of Government Vehicles

Recent audits at state, local and national government departments have revealed weak controls over personal use of government–owned vehicles by employees, government failure to report personal use as a taxable benefit, underutilization of government owned vehicles and inadequate control of employees’ access to government-owned fuel.

Governance, Risk and Compliance Survey Pinpoints Keys to Operational Success

Results from a recent survey, by Axentis and the Open Compliance and Ethics Group (OCEG), pinpoints key technology considerations in developing and implementing successful and sustainable governance, risk and compliance (GRC) initiatives.“GRC processes impact all large corporations regardless of their industry or geographic location. Effective management of these mandates, whether Sarbanes-Oxley or COBIT, will greatly determine the ongoing success of each organization,” Ted Frank, president of Axentis and co-chair of the OCEG Technology Council, said in a prepared statement.
Tax

Nonprofits, Government Entities Wearing Their Own SOX

Four years after its enactment, the Sarbanes-Oxley (SOX) accounting reform law, designed primarily for public company reporting, is having major impact on the nonprofit sector and on state and local governments.“Sarbanes-Oxley’s impact has been far broader than its supporters intended or envisioned,” James K. Gentry, a professor and former dean of the School of Journalism and Mass Communications at the University of Kansas, writes in a posting on the businessjournalism.org Web site. The impact has been especially pronounced on nonprofits.

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