Legal issues

Practice

GM Restructures Controller’s Office; Hires Outside Financial Advisor

General Motors (GM) announced last week that it will combine the positions of Corporate Controller and Chief Accounting Officer as part of a restructuring of the Corporate Controller’s office. The company’s current controller, Paul W. Schmidt, will retire later in the year. Peter Bible, chief accounting officer, will resign effective June 1st but will assist the company during the transition to the new structure.

May 23 2006

235

Tax

Prosecution, Defense Wrap in Enron Trial; Case Goes to the Jury

Enron Task Force prosecutor Kathryn Ruemmler wrapped up the government’s case against Kenneth Lay and Jeffrey Skilling, former chief executives of the bankrupt company, in a four-hour presentation on Monday in Houston, asking the jury to hold both men accountable for the choices they made and the lies they told. Defense attorneys, who presented their arguments on Tuesday, admitted bad business judgment on the part of their clients but emphatically denied criminal intent or conduct that would support the government’s charges of conspiracy and securities fraud against the two men.

May 17 2006

348

A&A

Hartford Introduces Professional Liability Insurance for Private Accounting Firms

Accounting firms with up to 50 accounting professionals on staff can now look to the Hartford Financial Services Group, Inc. for their professional liability protection as well as their general business insurance needs and financial services products. The Accountants Professional Liability product provides coverage for certified public accountants and other accounting professionals, including public accountants, enrolled agents, tax preparers and bookkeepers.

May 16 2006

1366

A&A

FASB Mulls Change to Rule on Pending Lawsuits

The Financial Accounting Standards Board (FASB) is considering lowering the threshold for recognizing a public company's potential loss from pending litigation, a board member disclosed in a recent forum.Advertisement

May 10 2006

664

Tax

Seller-Funded Down Payment Assistance Programs are Not Tax Exempt

The Sacramento, California-based Nehemiah Corp., a nonprofit mortgage assistance program, and 184 similar programs around the country, have been accused by the Internal Revenue Service (IRS) of operating a down payment scam and are no longer eligible for tax exempt status, the Sacramento Bee reports.

May 9 2006

575

Ken Starr to Lead Legal Challenge to the PCAOB

In the latest in a series of attacks on the Sarbanes-Oxley Law of 2002, Kenneth Starr, the former special prosecutor in the Whitewater and Monica Lewinsky investigations, has mounted a lawsuit challenging the authority of the Public Company Accounting Oversight Board (PCAOB) on behalf of the Free Enterprise Fund, a business conservative group.

May 4 2006

1019

Tax

Testimony Ends in Enron Trial

Testimony has ended in the trial of former Enron executives Jeffery Skilling and Ken Lay. Both are facing multiple counts of fraud and conspiracy. Lay faces six counts, while Skilling faces 28 counts, in addition to insider trading and lying to auditors, according to the Associated Press.

May 2 2006

267

A&A

Small Businesses Saved $6.6 Billion in 2006 Thanks to Advocacy

The Office of Advocacy of the Small Business Administration (SBA), the “small business watchdog” of the government, saved small businesses more than $6.6 billion during fiscal year 2005, according to a statement released last week.

Apr 25 2006

241

Tax

Skilling Cross Examination Ends with Challenge, Denial

On Wednesday, the final day of cross examination in the trial of Enron’s former CEO Jeffrey Skilling, for conspiracy and insider trading, Federal prosecutor Sean Berkowitz surprised the Houston court when he suggested Skilling had lied about the reasons he resigned as Enron’s CEO in August 2001, the New York Times reports. Berkowitz asked Skilling whether he had told a friend, Dick Foster, in October 2001, that he was considering a chief executive position at Lucent Technologies.

Apr 21 2006

221

A&A

Bankruptcy Filings Rebounding Despite Intention of New Law

The new bankruptcy legislation enacted on October 17, 2005, apparently only had a temporary effect on the number of bankruptcy filings.

Apr 19 2006

296

Tax

Refund-Anticipation Loans Under Fire

Widely advertised and promoted by U.S. tax preparation companies, refund-anticipation loans are a $1.6 billion market in this country. Jackson Hewitt has seen their latest quarter, ended January 31, beat their quarter revenue estimates. The Asbury Park Press reports that their Money Now loan program has helped the price of its shares swell by more 8.8 percent in a year.

Apr 13 2006

164

Community News

Enron's Skilling Denies Conspiracy

Former Enron Chief Executive Jeffrey Skilling attempted to undercut the government's case against his role in the fall of Enron by telling the jury he was not motivated by greed.Advertisement

Apr 13 2006

248

Tax

Former Ernst & Young Clients Sue Over Tax Shelters

A Florida couple has sued their former accountants for selling them tax shelters that were rejected by the Internal Revenue Service (IRS).The suit contends that Ernst & Young defrauded Rocco and Mary Abessinio and other wealthy taxpayers, out of $5.9 million in fees for the bogus tax shelters, Reuters reported.

Apr 12 2006

641

Tax

Intuit Sues H&R Block for Copying TV Ads; Experts Explore Legal Protection for Online Content

Intuit Inc. sued H&R Block for copyright infringement, on Monday, in San Jose, Calif., charging that the tax preparation company has aired television commercials that copy commercials for Intuit’s TurboTax software.

Apr 7 2006

369

Chinese Companies Readying for Tough U.S. Audit Rules

Chinese companies listed in the United States are pouring time and money into preparations to comply with Section 404 of the Sarbanes-Oxley Act.Advertisement

Apr 5 2006

225

Capital Gains Law, Investment Values Drive Second Home Market

The annual number of second homes purchased in the United States doubled between 2000 and 2004, from 405,000 to 881,000, according to research conducted by the National Association of Realtors (NAR).

Apr 5 2006

343

Tax

Court Orders IRS to Turn Over Statistical Data by April 17

A federal court, on Monday, ordered the Internal Revenue Service (IRS) to turn over extensive statistical information to Susan Long, the co-director of the Transactional Records Access Clearinghouse (TRAC) and a professor at Syracuse University. The decision comes a week after TRAC released a report stating that only 30 of the nation’s 180,000 millionaires were subject to face-to-face audits during fiscal year 2005.

Apr 4 2006

142

Tax

Accountants Can Help Identify Alter-Egos

Piercing the corporate veil is a law doctrine recognized throughout the country to prevent the abuse of corporations and protect creditors who might otherwise not be paid. When the veil is pierced, the courts will disregard the separate legal existence of corporations (including LLCs) and its shareholders or members.

Apr 3 2006

156

Community News

Ex-Qwest Accountant Accuses SEC of “Abuse of Process”

The lawyer for former Qwest accountant James Kozlowski alleged in a suit filed in U.S. District Court in Denver last week that the the Securities and Exchange Commission (SEC) charged Kozlowski with fraud in March 2005 because he wouldn’t “spill the beans” on ex-chief executive Joe Nacchio. Eleven other ex-officials of the company were charged along with Kozlowski and Nacchio.

Mar 31 2006

242

Practice Management

More Setbacks for H&R Block as it Launches New Bank

Within the last few months, H&R Block Inc., which is preparing to open H&R Block Bank in April, has been challenged in the courts on several fronts, admitted to mistakes on its own taxes, and acknowledged that it mailed out free software with the recipient’s Social Security number on the label.

Mar 29 2006

297

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