Legislation

Senate Panel Approves Bill to Tighten Audit Standards

On June 18, 2002, the Senate Banking Committee voted 17-4 to approve a bill to tighten oversight of the audits of publicly-held companies. The approval came despite a strong lobbying effort by the American Institute of CPAs (AICPA) and some of the larger accounting firms who opposed the measure. The approved bill incorporated several last-minute compromises. Full details are not yet available on the Web.
Tax

Supreme Court Rules in Tip Taxation Controversy

Sending a blow to the restaurant industry, the U.S. Supreme Court ruled Monday, June 17 that the Internal Revenue Service has the right to arbitrarily assess Social Security tax to restaurants and other businesses where employees regularly receive tips if the Service has reason to believe employees of the business are underreporting tip income. According to the ruling, the IRS does not have to determine the exact amount of tip income earned to assess the tax, but instead may make what it determines is a reasonable estimate.

Senate Reform Bill Slated For Mark-up June 18, 2002

Senator Paul Sarbanes has announced that the Senate Banking Committee will meet on June 18, 2002 to mark up the "Public Company Accounting Reform and Investor Protection Act of 2002." The American Institute of CPAs (AICPA) called this bill a "de facto government takeover of the accounting profession." The AICPA and some of the large accounting firms have been working through Sen.
Tax

House Votes Down Proposed Constitutional Amendment

Provided by CCHThe House of Representatives on June 12 voted on HJRes 96, a proposed constitutional amendment requiring a supermajority in Congress to pass tax changes that increase revenue beyond a certain amount.
Tax

Senate Kills Death Tax Repeal

Senators supporting the repeal of estate taxes, currently scheduled to be fully reinstated in 2011 after a 10-year phase-out period, were six votes short of their goal when the measure came to a vote on Wednesday, June 12.
Tax

Constitutional Amendment Would Require Supermajority For Tax Hikes

Provided by CCHThe House on June 12 plans to vote on an amendment to the Constitution that would require a supermajority in Congress to change tax laws or significantly increase government spending. The Tax Limitation Constitutional Amendment (HJRes 96) was introduced by Rep. Pete Sessions, R-Texas, on June 6.
Tax

Department of Justice Attempts to Thwart Tax Evasion

The U.S. Department has filed documents in Federal District court in Tampa in an attempt to gain an injunction against tax fraud monger Douglas P. Rosile Sr. of Venice, FL, who has been accused of peddling tax scams. Tax scams take many shapes, and since Congress passed the I.R.S.
Tax

House Votes 'Yea' on Marriage Penalty Acceleration

The House of Representatives has voted overwhelmingly to support an acceleration of the elimination of the marriage penalty from the standard deduction.With a vote of 409-1 - only Representative Alan Mollohan (D-WV) voted against the measure - the House voted to begin eliminating the marriage penalty in 2003 instead of 2005 as originally scheduled.
A&A

The Facts About FASB's Funding Controversy

As part of post-Enron accounting reforms, lawmakers are considering government funding for the Financial Accounting Standards Board (FASB), the organization that sets U.S. accounting standards. This article explains the facts about FASB's funding and asks your input. To help you sort through the issues, below is a summary of the two main concerns, including explanations of FASB's current funding. The explanations incorporate insights provided by spokespersons for the American Institute of CPAs (AICPA) and Financial Accounting Foundation (FAF), the board that oversees FASB.
Technology

Senate Panel Clears Anti-Spam and Online Privacy Bills

On May 17, 2002, the Senate Commerce Committee cleared privacy and anti-spam bills for votes by the full Senate. The timing of the votes by the Senate is unclear, especially for the privacy bill which was opposed by large dot-coms, including Amazon.com, along with businesses in a wide range of industries led by the U.S. Chamber of Commerce. The online privacy bill was sponsored by Sen. Ernest Hollings.

AICPA Warns of 'De Facto Government Takeover'

Battle lines drawn in recent weeks promise a lively debate over audit reforms.
Tax

Accounting Firms Face Penalties Under Tax-Shelter Bill

Senators Max Baucus and Charles Grassley, senior members of the Senate Finance Committee, have introduced tough new tax legislation known as the "Tax Shelter Transparency Act" that would impose penalties on promoters of tax shelters, mainly law and accounting firms.Types of Tax SheltersThe legislation separates transactions into three types: reportable listed transactions, reportable avoidance transactions and a catch-all category for other transactions.Reportable listed transacti

AICPA Issues Update on State Legislative Proposals

State legislative initiatives for post-Enron accounting and audit reforms are proliferating and proceeding at rates comparable to federal initiatives. California held a hearing on May 6, 2002 on a controversial amendment to the state's peer review program. In addition, several bills were introduced over the past month in Pennsylvania, including one that would alter both CPAs' and non-CPAs' responsibility for reporting wrongdoing discovered during employment.
Tax

Supreme Court to Settle Tip Taxation Controversy

The U.S. Supreme Court heard arguments Monday in a case that could change the way the Internal Revenue Service assesses Social Security taxes on tip income. This far-reaching case could affect restaurants, casinos, barber and beauty shops, hotels, and any other businesses where employees regularly receive tips from customers.The case, United States v.
Tax

House Passes Permanent Tax Cut Bill

The House on April 18 approved a measure that would make permanent the tax-cut provisions contained in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) (P.L. 107-16) by a vote of 229 to 198. The bill's fate in the Senate is uncertain, since Senate Majority Leader Thomas A. Daschle, D-S.D. refuses to bring it up for a vote.The legislation, which will cost $372 billion during the next 10 years, was substituted as an amendment to the Fairness for Foster Care Families Bill of 2001 (HR 586) to speed its passage.

POB Calls for New Independent Institute of Accountancy

At Congressional hearings on March 19, 2002, Charles A. Bowsher, the chairman of the accounting profession's Public Oversight Board (POB), and Aulana Peters, a POB member and former Commissioner of the Securities and Exchange Commission (SEC), asked Congress to create an Independent Institute of Accountancy (IIA). Chairman Bowsher is a former U.S. comptroller general and head of Congress' General Accounting Office.
A&A

FASB Endorses Radical Change in Funding

In a significant change for the accounting profession, the Financial Accounting Standards Board released on March 19, 2002 a statement by its chairman, Edmund Jenkins, saying the FASB will support legislation that would replace its private fu

D&T's CEO Argues Against Three 'Quick Fix' Reforms

Speaking at the Senate Oversight hearings, James E. Copeland, chief executive officer of Deloitte & Touche, spoke out against three types of audit reform proposals that some lawmakers see as "quick fixes" to perceived problems with the accounting profession.Mandatory rotation of audit firms.

Senate Hearings Focus on Radical Accounting Reforms

The Senate Banking, Housing, and Urban Affairs Committee has announced that its series of hearings on accounting and investor protection issues is coming to a close. The tenth and final hearing will be held on March 21, 2002, when Securities and Exchange Commission (SEC) Chairman Harvey L. Pitt will testify. The Senate bill attracting the most attention is the Investor Confidence in Public Accounting Act of 2002. This bill is also one of the most radical reform efforts.

Congress Hears Testimony and Criticism of AICPA

Barry C. Melancon, president and CEO of the American Institute of CPAs (AICPA), was a key witness at the March 13, 2002 hearing on the Corporate and Auditing Accountability, Responsibility, and Transparency Act of 2002 (CARTA).

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