AccountingWEB Weekly News Wrap-Up - Issue 169


This Week's News Brought To You By:

Association of Government Accountants

THIS WEEK'S TOP NEWS

  1. Up to 78 Million Taxpayers Will Be Able to File For Free
  2. PCAOB Challenged, Chair Implicated in Fraud Case
  3. PwC Pays $21.5M to Settle Case With Anicom
  4. California Panel Studies Changing Accounting Profession
  5. O'Neill: Tax Code is "Absolute Gibberish" - Overhaul Pending
  6. California Law Beefs Up Disclosure Requirements
  7. Treasury Releases Rules to Prevent Duplication of Losses
  8. Procedures Clarified For Accounting Period Changes
  9. SEC Moves to Curb Reporting and Trading Abuses
  10. IASB and FASB Tout Their "Norwalk Agreement"

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  1. Resume Fraud More Common Than You Think
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EDITORIAL

Do CPA firms have a future with individual tax return preparation? For many firms, individual tax return preparation services can make up 25-50% of the firm's income, and contributes strongly to the "Tax Season" challenges renowned throughout the profession. Fee pressure has been mounting in this area, with many taxpayers opting to buy inexpensive software to do it themselves, or taking advantage of a growing number of "value added" offers by brokerage companies to have their returns prepared for free.

Adding to those challenges, this week the Treasury Department inked a deal with Free File Alliance, LLC, a consortium of tax software companies, to provide free tax return preparation services for up to 60% of all taxpayers in the United States. That equates to 78 million individuals who may not be a part of your prospect pool for tax preparation. What will this do to your business?

In a post-Enron era where CPA firms are jockeying to redefine their service niches, this new twist puts even more emphasis on firms taking on consultative roles through tax planning services, not simply tax preparation services. High income clients will always need your services, but perhaps there are more planning services that can be offered to middle-income taxpayers who might otherwise opt for the growing number of free filing options. Start planning now for how your firm will replace some of its tax return preparation services with the (hopefully) more lucrative planning services that taxpayers really need.

Find out more about the free filing consortium and share your views by clicking on the "Comment" button.

Michael Platt, CEO
AccountingWEB, Inc.

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THIS WEEK'S TOP NEWS

1. Up to 78 Million Taxpayers Will Be Able to File For Free

The Treasury Department has signed an agreement with Free File Alliance, LLC, an organization representing a consortium of tax software companies, to enable as many as 78 million taxpayers to file taxes online at no cost.

2. PCAOB Challenged, Chair Implicated in Fraud Case

The SEC called for a review of the PCAOB selection process following press reports that newly-appointed Chairman William Webster is implicated in a fraud case against a company whose audit committee he chaired.

3. PwC Pays $21.5M to Settle Case With Anicom

Facing accusations of acting recklessly by certifying the books of Anicom, Inc., PricewaterhouseCoopers has opted to settle a pending lawsuit from shareholders for $21.5 million, rather than seeking a protracted legal battle.

4. E&Y Auditors May be Charged by SEC

The Securities and Exchange Commission has issued Wells notices to three auditors from Big Four firm Ernst & Young. The notice advises the auditors that they are likely to be the subject of civil charges by the federal agency and gives them an opportunity to explain their actions in an effort to show why they should not be so charged.

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5. O'Neill: Tax Code is "Absolute Gibberish" - Overhaul Pending

Treasury Secretary Paul O'Neill is overseeing a team of over 100 tax policy experts at the Treasury Department who are putting together a package of tax reform options to present to the White House right after the first of the year.

6. California Law Beefs Up Disclosure Requirements

Ground-breaking new state legislation will soon require certain corporations doing business in California to disclose more information, including the names of their independent auditors. The information will be available to the public through an online system by the end of 2004.

7. Treasury Releases Rules to Prevent Duplication of Losses

The U.S. Treasury Department has issued proposed regulations to prevent the duplication of losses reported by groups of related corporations. The proposed regulations, issued under section 1502 of the Internal Revenue Code, apply to corporations that file consolidated tax returns.

8. Procedures Clarified For Accounting Period Changes

The IRS has issued Notice 2002-72, which clarifies certain procedures for obtaining approval of an adoption, change or retention of an annual accounting period.

9. SEC Moves to Curb Reporting and Trading Abuses

As part of its efforts to restore confidence in the capital markets, the U.S. Securities and Exchange Commission tentatively approved new curbs aimed at the types of reporting and trading abuses involved in recent accounting scandals.

10. IASB and FASB Tout Their "Norwalk Agreement"

In a surprising and controversial move, accounting standard-setters and regulators in the U.S. and Europe have jointly announced an agreement to stamp out any differences between FASB and IASB standards that may remain by January 1, 2005.

FEATURED RESOURCES

1. AccountingWEB 2003 Tax Tips Ticker

2. The Art of Managing a Group of Professionals - Audio Tape

3. Essentials of Setting Up a Mentoring Scheme

4. The AuditWatch Catalog - Free Download

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