House ready to OK government-wide $1.1 trillion budget
Congress is set to approve a massive $1.1 trillion spending bill for this year, a compromise financing everything from airports to war costs and brimming with victories and setbacks for both parties, Alan Fram of the Associated Pressreported on January 15.
The Republican-led House was expected to approve the sweeping measure today, with the Democratic-run Senate following suit by the end of the week.
“The IRS, a pariah agency for Republicans after revelations that it targeted Tea Party groups for tough examinations, would get $500 million less than last year,” the article stated. “It also was receiving none of the $440 million extra [President] Obama wanted so the agency could help enforce Obama's health care law, another favorite GOP target.”
[Colleen Kelley, president of the National Treasury Employees Union (NTEU), which represents IRS employees, commented yesterday about the spending bill and the funding the IRS would receive. Click here to see AccountingWEB’s article.]
Two more Cincinnati accounting firms merge as trend continues
The recent merger between Flynn & Co. and Shoemaker & Co. marks at least the fourth such transaction involving Cincinnati-area accounting firms in the past two months, Steve Watkins of the Cincinnati Business Courierreported.
Steve Hube, managing director at Barnes Dennig, which recently acquired Bertke, Sparks & Kremer, told Watkins a lot of Cincinnati firms are merging because of the need for added expertise. Tax and accounting regulations and areas, such as health care, have become so complex that firms need to find people who specialize in each area.
“Often the best way to do that is by acquiring talent that comes from buying or merging with other firms,” Watkins wrote. “And smaller firms boost their available expertise by joining a bigger company.”
Hube also told Watkins succession planning is another big reason for mergers, with 100,000 baby-boomer CPAs nationally who are about to retire.
Merger of Saginaw and Southgate companies means good things for Ann Arbor
While we’re on the subject of mergers, here’s another article, this one on the union between Saginaw, Michigan-based accounting firm Yeo & Yeo and Southgate, Michigan-based firm Hungerford & Co.
“With the merger, Hungerford & Co. will consolidate its Southgate location with Yeo & Yeo’s existing Ann Arbor operation, a move that will more than double its footprint in the region,” Jeremy Allen of MLive.com reported on January 14.
The accounting wizardry behind banks’ strong earnings
It’s been a good fourth quarter earnings-wise for Wells Fargo and JPMorgan Chase. Wells Fargo reported a personal-best $5.6 billion in earnings, overtaking JPMorgan as the most profitable US bank. JPMorgan didn’t do too bad either, reporting $5.3 billion in income and $17.9 billion for all of 2013, despite spending $23 billion on legal settlements.
But upon further review, these profits don’t look quite as robust, wrote Dawn Kopecki of Bloomberg.
“More than 31 percent of JPMorgan’s 2013 earnings, or $5.6 billion, and about 10 percent of Wells Fargo’s $2.2 billion weren’t really earned last year,” the article stated. “That money came instead from the banks’ so-called loan-loss reserves, an accounting accrual that’s kind of like a rainy-day fund.”
Obama website fixer has thing for tax havens
“If you had to hire an outside company to run the Patient Protection and Affordable Care Act's enrollment website, which would you rather have: a goody-two-shoes outfit that doesn't know what it's doing or a competent, well-known consulting firm that makes liberal use of offshore tax havens?” asked Jonathan Weil of Bloomberg, in a January 14 column about Accenture Plc taking over construction of HealthCare.gov.
Camp: Pause IRS regs on nonprofits
Richard Rubin of Bloombergreported on January 15 that House Ways and Means Committee Chairman Dave Camp (R-MI) wants to “press the pause button” on IRS regulations that will shape how nonprofit groups can engage in politics.
Camp proposed a bill that would prevent the IRS from issuing regulations that clarify or change whether groups qualify for tax exemption under Section 501(c)(4) of the tax code. The moratorium would last for one year, the article stated.
“The IRS proposed regulations last year as part of its response to the controversy surrounding its treatment of Tea Party groups seeking tax-exempt status,” Rubin wrote. “The rules, which aren’t expected to affect the 2014 election cycle, would set a clearer definition for political activity, including campaign ads, voter registration drives, and events featuring candidates.”
Same-sex Idaho couples must file taxes separately
The Idaho House Revenue and Taxation Committee said on January 14 that same-sex couples legally married in other states but living in Idaho must file state income taxes separately, according to an article in the Idaho Statesman.
“Same-sex couple living in Idaho but legally married in fourteen states that allow such unions will still be able to file joint federal taxes, according to an IRS decision last year following the landmark US Supreme Court decision in June invalidating parts of the federal Defense of Marriage Act,” the article stated. “With this new Idaho tax rule, however, those same couples now must recalculate their federal taxes as individuals before filing state returns.”