Tax plan a test of House GOP’s ambition?
House Ways and Means Committee Chairman Dave Camp (R-MI) is expected to release his comprehensive tax reform plan this week, but will House Republicans embrace it?
Camp’s push to rewrite the tax code will test the GOP’s stated desire to offer up a conservative vision that’s more than merely bashing President Obama, Russell Berman and Bernie Becker of The Hill wrote yesterday.
“Lobbyists, leadership aides, and lawmakers are skeptical that Camp’s plan will make it anywhere close to the House floor, but policy-minded members of the Republican conference say there’s a chance, however slim, that the sweeping proposal will inspire a party that has already begun hunkering down for the midterm campaign,” the article stated.
According to Berman and Becker, Republicans want the tax code simplified in a way that would lower rates and generate economic growth, but party leaders have doubted whether rank-and-file members are ready to defend the elimination of popular, but costly, tax breaks it would take to do so without exploding the deficit.
“Close observers of the process have described Camp’s move to release his plan as something of an experiment,” they wrote.
Securities regulators go big on big data
The US Securities and Exchange Commission (SEC) is making greater use of big data, using economists and data-driven decisions to improve examinations, monitor market risks, complete stress tests, and select enforcement cases, Emily Chasan, senior editor of the Wall Street Journal’s CFO Journal, wrote on February 21.
During the Practising Law Institute Conference in Washington, DC, on Friday, SEC Chair Mary Jo White said, “To be an effective 21st century regulator, the SEC is indeed using 21st century tools,” according to the article.
For example, the agency is working to identify accounting fraud faster by focusing on patterns of conduct that are risks in areas like revenue recognition or management estimates, Chasan wrote. Also, economists are generally brought in earlier now into the SEC rulemaking process, rather than being asked to perform cost-benefit analysis after a rule has already been written.
For budgeting, tough accounting for ‘gimmicks’
The conservative Heritage Foundation and left-leaning Center on Budget and Policy Priorities both derided a recent proposal by Senate Democrats to offset the cost of extending emergency unemployment benefits by temporarily reducing companies’ pension payments. Both groups said the idea, called “pension smoothing,” would result in some short-term budget gains that would quickly turn into costs, wrote Paul M. Krawzak of Roll Call on February 21.
“In other words, it was another in a line of gimmicks, the groups said, aimed at jerry-rigging the numbers to make this year’s budget work out, sort of, while leaving the real impact to be considered sometime later,” the article stated.
“The use of pension payments, budget watchers say, is one of an array of tweaks, adjustments, forecasting modifications, and accounting maneuvers Congress seems to be turning to more frequently as lawmakers wrestle with the demands of popular programs and projections that project a rapidly growing cumulative deficit over the next decade.”
Medical marijuana dispensary takes on IRS over what it calls ‘punitive’ taxes
On February 25, the US Tax Court in San Francisco is due to hear Canna Care’s challenge over whether the IRS can impose an $873,167 tax penalty under a 1982 law intended to close a loophole that allowed a Minneapolis cocaine and methamphetamine dealer to claim tax deductions for a scale, his apartment rent, and telephone expenses, according to a February 23 article in the Washington Post.
In the case of Canna Care, an evangelical medical marijuana provider renowned for doling out buds with Bibles, the IRS has refused to accept $2.6 million in business deductions for employee salaries, rent, and other costs after auditing 2006, 2007, and 2008 federal tax returns for the north Sacramento, California, dispensary, the article stated. However, the IRS did allow the dispensary, which handles about $2 million in medical marijuana transactions a year, to deduct the costs of the marijuana itself.
According to court papers, the IRS demanded that Canna Care pay $229,473 in additional income taxes for 2006, $304,090 for 2007, and $339,604 for 2008.
Sylvia Dion CPA asks – where are the women?
After taking six years off from public accounting to be a stay-at-home mom, CPA Sylvia Dion landed a senior manager job at a not-quite Big Four firm in 2007. During a meeting heralding the new leadership team of the firm’s sub-region, Dion shocked the leadership group by saying out loud, "Where are the women? I mean, why are there no women in the leadership group?”
According to an article by Forbes contributor Peter J. Reilly on February 22, Dion has some thoughts on how large firms can do a better job of retaining talented women.
“I also very strongly believe that in general, the accounting profession needs to take a cold, hard look in the mirror and ask why women (and why mostly working mothers) are still continuing to leave public accounting – why it is that by the time you reach the partner and leadership ranks in this profession, women are missing,” she said, according to Reilly.
“You see, when a working mother leaves a firm – her exit is often simply ‘justified’ by statements like, ‘She wanted to spend more time with her family, etc.,’ and then nothing more happens,” she continued. “But the firm should be asking itself, ‘What could we have done differently to retain that talent?’ or ‘How did we make that working mother feel?’ On that point, I think an accounting firm’s leadership – the partner group, those in leadership positions – should be evaluated on their ability to retain women.”
Should women use female financial advisors?
Geoff Williams of US News and World Report tackles this question in a February 19 article.
“Female investors and advisors have been asking this question for some time now, most recently in a book coming out in June, Finerman’s Rules: Secrets I’d Only Tell My Daughters About Business and Life, by Karen Finerman, a panelist on the CNBC show Fast Money, as well as co-founder and president of Metropolitan Capital Advisors Inc. in New York City,” Williams wrote.
“You wouldn’t let a man tell you where to live, how to vote, or what to wear,” writes Finerman. “Then tell me why 80 percent of women have a man in charge of their money?”
Kevin Durant dismisses lawsuit against accountant
The NBA star had alleged that his California-based accountant, Joel Lynn Elliott, deducted some personal expenses as business expenses on Durant's taxes without proper documentation, according to an article in the USA Today. It also alleged professional negligence, breach of fiduciary duty, and breach of contract and sought $200,000 for each of the three counts.
However, a two-page filing dated February 21 says only that Durant and his company – K. Durant Enterprises LLC – stipulated to dismiss the lawsuit filed by Durant in December against Elliott in federal court in San Jose, California. The filing does not say whether there is a settlement in the case, the article stated.