Legislation

Technology

California Enacts Strict Anti-Spam Law

With half of all e-mail now estimated to be unsolicited spam mail, California is getting tough with Gov. Gray Davis signing the nation’s strictest anti-spam law on Tuesday. A key provision of the law is that unsolicited mail can’t be sent to anyone who doesn’t "opt in" to the mailing. In the past, the mail could be sent unless a recipient had "opted out." This is a key difference to those who use e-mail to market everything from prescription drugs, discount travel, low mortgage and insurance rates to pornography.
Technology

House Passes Internet Tax Moratorium

On Wednesday, the House of Representatives passed the Internet Tax Non-Discrimination Act, the bill that imposes a permanent ban on taxes on Internet services. The current moratorium, set to expire on November 1, 2003, was a temporary fix installed two years ago, providing legislators with time to debate the issues of the permanent moratorium.The bill, H.R.
Community News

CFOs Name Top Sarbanes-Oxley Challenges

The Sarbanes-Oxley Act is presenting chief financial officers (CFOs) with significant challenges beyond the well-publicized executive certification and internal control requirements, according to a study released by Protiviti Inc., a leading internal audit and business and technology risk consulting firm.
Tax

PCAOB Tackles Tax Shelters

In its top to bottom review of all aspects of the auditing business, the Public Company Accounting Oversight Board (PCAOB) has turned its attention to tax shelters.Created in the wake of corporate scandals at Enron, WorldCom and others, the PCAOB is charged with reforming the auditors who oversee publicly held companies. Most of those audit firms have until October 22 to register with the PCAOB, which will guarantee an inspection by the board.To date, just 440 audit firms—half the number who audited public companies last year—have registered.
A&A

CFOs Measuring Cost of Sarbanes-Oxley Implementation

A recent survey of corporate chief financial officers by CFO magazine found that most of corporate America’s top finance officers believe the Sarbanes-Oxley Act regulations have been a boon for attorneys and auditors and have caused "sticker shock" for companies.Many of the CFOs surveyed said they think Congress acted too hastily in response to the corporate meltdowns of Enron, Tyco, WorldCom and others.
A&A

Grant Thornton Ends Select Services For Audit Clients

Grant Thornton LLP, the nation’s fifth largest accounting and business advisory firm and one of the seven global accounting organizations, announced that it will not provide a number of services for its public audit clients that it believes is in keeping with the intent of the Sarbanes-Oxley Act of 2002."Just as we believe that the accounting industry should accept a principles versus rules based approach to accounting, we believe the same should be the case in adhering to the Sarbanes-Oxley Act," said Grant Thornton CEO Ed Nusbaum.
Community News

BDO Seidman's Clients Try to Rescue Accounting Firms

Last month, the Chicago-based U.S. Court of Appeals for the Seventh Circuit ruled that accounting firms cannot hide behind the cloak of client privilege and must disclose information to the Internal Revenue Service about participation in certain types tax shelters that are considered to be abusive.

Banking Regulators Adopt New Rules For Accountants

The banking industry is getting into the reform act with new rules that reflect those the accounting sector has adopted—by October 1, auditors who have been disciplined by the Securities and Exchange Commission (SEC) or Public Company Accounting Oversight Board (PCAOB) can be prohibited from auditing banks. According to a release from the Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency and Office of Thrift Supervi
Community News

PCAOB Begins Collecting Fees to Fund Its Operations

The bill is in the mail. The Public Company Accounting Oversight Board (PCAOB) has begun mailing invoices to the nation’s 5,200 publicly held companies as well as another 3,300 investment firms and issuers of equity, all of whom will foot the bill for the board’s $68 million operating budget.Created by the Sarbanes-Oxley Act of 2002, the PCAOB was created to oversee the audits of publicly traded companies.
Technology

Another Blow is Struck Against Internet Taxes

The Senate Commerce Committee voted last week to make the ban on Internet access taxes permanent. This vote came close on the heels of action in the House of Representatives the previous week where the House Judiciary Committee also voted to make the ban permanent.Under the Senate version of the bill, nine states currently imposing taxes on access fees will have to end that taxation within three years.
Tax

House Considers Tax Break For Businesses

House Ways and Means Committee Chairman Bill Thomas (R-CA) has introduced a bill that would provide at least $120 billion in tax relief for businesses over the next 10 years.Congress is under pressure from the World Trade Organization to discontinue a U.S. export credit that provides a subsidy to U.S. manufacturers who sell their goods abroad. Finding a means to replace the advantages provided by the export credit is the impetus for the proposed business tax relief legislation.Representative Thomas's bill, H.R.
Tax

Child Tax Rebate On Its Way

The first wave of checks representing the Child Tax Rebate, a result of the Jobs and Growth Tax Relief Reconciliation Act of 2003, is on its way. Altogether, approximately 25 million checks will be mailed in this rebate program.The tax rebate checks, which represent an advance payment on tax benefits that will be available on next spring's income tax returns, will be mailed in three batches. The first batch goes out this week in Friday's mail.
Tax

Congress Tries Last Minute Push to Expand Child Tax Credit

The Senate is offering a compromise, and Democrats promise negative publicity, but House Republicans appear to be holding out for an expanded Child Tax Credit that seems unlikely to make it into law this summer.The U.S. House and Senate have been at odds over efforts to further expand the recently expanded Child Tax Credit so that it includes low-income families who would receive the credit as a tax refund whether or not they paid tax to offset the credit.
Technology

Internet Taxes on the Road to Extinction

The House Judiciary Committee voted to approve legislation that would permanently extend the moratorium on Internet access taxes. The bill must now be approved by the full House before it proceeds to the Senate.Meanwhile the Senate Commerce Committee indicated it will not attach the issue of sales tax on Internet purchases to the Internet tax moratorium legislation.
Tax

IRS Issues Final Regulations on Catch-Up Contributions

The Internal Revenue Service has finalized its regulations relating to catch-up contributions to employer-sponsored tax-deferred retirement plans for taxpayers over age 50. The final regulations take the place of proposed regulations issued in the fall of 2001.Catch-up contributions to tax-deferred plans were introduced in the Economic Growth and Tax Relief Reconciliation Act of 2001. For 2003, eligible taxpayers may contribute as much as $2,000 as a catch-up contribution. The amount will increase by $1,000 each year until it reaches $5,000 by 2006.

New Overtime Legislation Bill Passes in the House

On Friday, the House of Representatives voted 213-210 to move forward with the Bush administration's proposal to change federal overtime rules.Democrats and labor groups have shunned the legislation, claiming as many as 8 million workers will no longer qualify for overtime compensation should the new rules become law. Friday's close vote, had it passed, would have blocked the overtime legislation.The Bush administration, on the other hand, describes how the legislation will add 1.3 million lower income workers to the overtime rosters if they log more than 40 hours per week.
Tax

IRS Attacked on Interest Reporting Rule

Pressure on the Internal Revenue Service is growing as more lawmakers and lobbyists voice support to withdraw a regulation that would force U.S. banks to declare to the IRS any bank interest paid to non-U.S. citizens.Interest income paid by U.S. banks to nonresident aliens is not taxable in the United States. But a proposed regulation (REG-133254-02) would provide such information to the IRS.

Congress Takes Aim at Fannie Mae and Freddie Mac

With the housing market the only sector of the economy still thriving, Congress has turned its attention to tighter regulation of Fannie Mae and Freddie Mac, which together own or guarantee 47 percent of the nation’s $7 trillion mortgage market.An accounting scandal at Freddie Mac came to light last month, forcing the ouster of the company’s top three executives. The company later admitted to tampering with its accounting to show positive earnings growth and was forced to restate its results. The two companies are shareholder owned and chartered by Congress.Rep.

California Enacts New ID Theft Law, Federal Bill Introduced

In an effort to crack down on identity theft, a new law went into effect in California last week that puts the impetus on businesses to notify their customers in that state if they even suspect that personal information may have been compromised. The law, expected to be a model for pending federal legislation, came in response a hacking incident in which the personal records of 265,000 state employees were compromised last year.
Tax

Illinois to Add $45 Million to State Coffers With Estate Tax

Not waiting for the federal government to make a final decision on the fate of the federal estate tax, the Illinois legislature is preparing to add an estate tax on estates that exceed $1.5 million. The state expects to add approximately $45 million per year to its budget by enacting the estate tax.Illinois Governor Rod Blagojevich contends that the estate tax will only affect 158 Illinois residents. That being the case, the average tax taken from each resident's estate would be between $275,000 and $300,000.

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