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Personal Finance

Tax

Senate Tackles ‘Son of Boss’ Tax Shelter

Two members of the Senate Finance Committee signaled this week that they plan to revise tax shelter laws to ensure that those who took advantage of the "Son of Boss" tax shelter don’t slip through the fingers of Internal Revenue Service prosecutors.The Wall Street Journal reported that Senate Finance Committee Chairman Charles Grassley, R-Iowa, and Sen. Max Baucus, D-Mont., said they intend to rewrite tax shelter provisions in a pending corporate tax bill.

Financial Planners Sue SEC Over Lax Standards for Stock Brokers

The largest professional association for financial planners sued the Securities and Exchange Commission Tuesday to force stock brokers to be held to the same standards as financial planners.The Financial Planning Association (FPA) contends that stock brokers who act as financial planners should not be exempt from the fiduciary duties and disclosure rules required by the federal Investment Advisers Act, TheStreet.com reported."The SEC has given brokers a wholesale exemption from the Advisers Act that Congress never intended," said Barbara Roper of the Consumer Federation of America, which
Tax

Treasury and the IRS Finalize 'Deemed IRA' Rules

On Wednesday, the Treasury and the IRS finalized regulations regarding "deemed IRAs" in employer-provided retirement plans. A deemed IRA is an important retirement savings tool that was added to the tax code by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). Deemed IRAs have been effective since January 1, 2003. A deemed IRA allows an employer to offer to employees the ability to keep their IRA assets in the employer's tax-qualified retirement plan as a separate IRA account within the plan.

Widow Leaves $1.1 Billion to Her Accountant

In a move that stunned her surviving family members, one of India’s richest women left her entire estate to her accountant, who was also in the possession of the will at the time of her death last week, the British Broadcasting Company reported.

Online Salary Survey for Accounting, Finance and Banking Launched

Accounting, finance and banking professionals have a chance to voice their experience and opinions about salaries in this year’s survey from CareerBank.com. The survey, which covers everything from how people are finding jobs to how large raises have been in the past year, is now online and accepting responses throughout the summer. A report on the results will be released by CareerBank.com in the fall. CareerBank.com has conducted this survey for five years; last year more than 2,900 professionals took part in the survey.
A&A

Business Survey Finds Health Care Costs 'Out of Control'

In a survey of health care decision-makers at 200 area employers, 92 percent said health care costs are out of control, but only 35 percent are considering taking any additional action to address the situation. Harvard Pilgrim Health Care CEO Charlie Baker discussed the results of the survey during a speech to business leaders at the Greater Boston Chamber of Commerce today.
A&A

SEC Says Mutual Funds Must Have Independent Chairmen

After a vigorous debate, the Securities and Exchange Commission squeaked through a rule change that will require mutual-fund companies to have independent chairmen.The changes approved Wednesday, on a 3-2 vote, will also require 75 percent of fund seats be filled with independent directors, who must hold meetings separate from fund management, the Wall Street Journal reported.
A&A

FASB Offers Guidance for Conditional Asset Retirement Obligations

The Financial Accounting Standards Board (FASB) has published an Exposure Draft, Accounting for Conditional Asset Retirement Obligations, an Interpretation of FASB Statement No. 143, in response to the diverse accounting practices that have developed with respect to the timing of liability recognition for conditional asset retirement obligations.
Practice

Many Companies Fail to Achieve Success with Pay-for-Performance Programs

Companies nationwide are placing greater emphasis on performance-based pay (in both salaries and bonuses), yet most have done little to ensure this approach to compensation is successful in meeting their goals, according to a new study from Hewitt Associates, a global human resources consulting and outsourcing firm and WorldatWork, the leading association for total rewards professionals.

Mutual Fund Agrees to Pay $100 Million to Settle Improper Trade Practices

This week, Pilgrim Baxter & Associates, investment advisor to the PBHG Funds, confirmed that the firm has reached agreements with the U.S. Securities and Exchange Commission (SEC) and the Office of the New York State Attorney General to settle charges related to past trading activity. The settlement agreements address past trading activity in the PBHG Funds, which led to the appointment of new leadership at Pilgrim Baxter in November 2003.

Financial Planners Say SEC Brokerage Proposal Unfair

Financial planners are urging the Securities and Exchange Commission to fix a problem it created when it developed a proposal allowing brokers to act as financial advisors in some cases.That was in 1999.
A&A

Study: Credit Report Errors Common, Damaging

One in four credit reports contain serious errors that could lead creditors to believe that a consumer is over-extended or delinquent on loans, according to a new study.The study, conducted by the Public Interest Research Group (PIRG), defined "serious" errors as ones that could result in an automatic denial of credit, CNN/Money reported."It is outrageous that inaccurate credit reports could damage one in four consumer's ability to buy a home, rent an apartment, obtain credit, open a bank account, or even get a job," Ed Mierzwinski, director of consumer programs at consumer group PIRG, s
Tax

Treasury, IRS Withdraw Proposed Cash Balance Regulations

This week, the Treasury Department and the IRS announced the withdrawal of proposed regulations on cash balance pension plans and cash balance conversions.The regulations are being withdrawn to provide Congress an opportunity to review and consider a legislative proposal on cash balance plans that was included in the Administration's Budget for Fiscal Year 2005.
Tax

Treasury, IRS Finalize Defined Benefit Plan & Annuity Distribution Rules

Today, Treasury and the IRS finalized regulations regarding minimum distribution rules for defined benefit plans and annuity products purchased with account balances in other types of qualified retirement plans and IRAs. This completes the comprehensive update and simplification of the minimum distribution rules that began in 2000. The regulations finalized today were originally issued as proposed and temporary regulations in 2002.
Education & Careers

Graduates May See Student Loans Tied to Variable Rates

A proposed change in how much interest should be paid on federal student loans has divided education groups as well as congressional Democrats and Republicans.The proposal, which is part of the reauthorization of the Higher Education Act, would tie federal student loans to interest rates as they change each year.
A&A

SEC, NASD Release Report on Broker-Dealer Sales of Variable Insurance Products

The Securities and Exchange Commission (SEC) and NASD today released a joint staff report on the findings of their examinations of broker-dealer sales of variable annuities and variable life insurance.
Community News

Tyco Faces Follow-On Suit over Settlement

As part of their 2001 settlement with Tyco International Ltd., an investor group was given company shares.
A&A

Tax Law Changes Drive Higher Error Rate on 1099s

The Securities and Industry Association says that 9.5 percent of dividend tax forms sent by major Wall Street firms this year were wrong.The error rate is usually 5 to 8 percent, the Washington trade group says, but the new tax law created difficulties in reporting the corporate-dividends tax rate correctly this year.
Tax

Former IRS Officer Sentenced for Looting Grandmother’s Estate

A former Internal Revenue Service employee will go to prison after she admitted to abusing her position as trustee of her grandmother’s estate to divert funds to herself.Sandra J. Valencia, of Goodsprings, NV, was sentenced last week to 33 months in prison and three years supervised release after pleading guilty in January to six counts of mail fraud, five counts of wire fraud and four counts of tax evasion, the Associated Press reported, adding that U.S.
A&A

Student Loan Interest Rates to Fall to All-Time Lows

Interest rates on federally guaranteed student loans will drop to historic lows again this summer, potentially saving both new and current education loan borrowers thousands of dollars in interest over the life of their loans. These record-low rates will help families and students finance college this fall. "College financing has never been more affordable," said Tom Joyce, Vice President of Corporate Communications for Sallie Mae.

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