Bramwell’s Lunch Beat: Labor Dept. Extends Comment Period for Fiduciary Ruleby
Hertz accounting fix keeps CFO in financial no-man’s land
Among restatements since 2011, just 20, including Hertz Global Holdings Inc.’s, entailed investigations that were pending for more than 170 days, according to research firm Audit Analytics, wrote Maxwell Murphy of the Wall Street Journal’s CFO Journal. Nut-and-snacks-producer Diamond Foods Inc. currently holds the crown among actively-traded companies, at 379 days, according to Audit Analytics. But for those of you keeping score, Hertz will likely take the top spot in less than two weeks. Hertz will ultimately restate results for the years 2011 through 2013. But so far, 367 days have passed since it announced that it would restate results. On May 14, the company disclosed it had again found additional errors that would add at least another $30 million to the non-cash charges.
Labor extends comment period for financial advisor rule
The US Labor Department is allowing additional time for comment on the agency's controversial proposed regulations aimed at self-serving financial advisors, wrote Kevin Cirilli of The Hill. The agency is extending the public comment period for the so-called fiduciary rule by 15 days, after moderate Democrats and Republicans in both chambers criticized the original comment period window. In April, Labor Department officials proposed increasing disclosure requirements for financial advisors, which they say will help consumers understand more clearly how their financial advisors get paid. Supporters of the regulations argue that the new rules are needed so that financial advisors can't sell faulty financial advice while profiting off commissions from the banks for peddling their portfolios. But moderate Democrats and Republicans – backed by the business community – argue that the new regulations would end up costing low-income Americans from receiving financial advice.
Health law tax passed along to states
A tax on health insurers is helping to pay for President Obama's healthcare overhaul. But it's proving costly to state governments, wrote Carla K. Johnson of the Associated Press. The burden on states could add up to $13 billion in less than a decade, due to the private sector's growing role in Medicaid. The Health Insurance Providers Fee was aimed at insurance companies. Insurers raised prices for individuals and small businesses to cover the new tax. As it turns out, they are raising their prices to state Medicaid programs, too. The federal government issued guidance in October requiring states to build the tax into what they pay for-profit Medicaid health plans. The first year's tax was due to the IRS in September, and state governments are now settling up with insurance companies. State governments wind up losing 54 cents for every dollar of the insurance tax. State taxpayers end up the biggest losers, without any added benefit to their state's low-income Medicaid patients.
Finter Bank Zurich to pay $5.4 million in deal with US over tax offenses
Finter Bank Zurich AG has agreed to pay $5.4 million in a deal with the US Justice Department to resolve tax-related offenses, becoming the third Swiss private bank this year to reach a settlement to avoid US prosecution over helping Americans evade taxes, wrote Lindsay Dunsmuir of Reuters. Two other Switzerland-based banks, BSI and Vadian, have settled in the past couple of months, and dozens more are expected to reach such settlements. Finter helped US clients open and maintain undeclared bank accounts with them from 2008 to 2011, and took on US account holders who fled other Swiss banks in 2008, including UBS AG after it announced it was being criminally investigated by US authorities over tax evasion in August that year, prosecutors said. Finter provided a range of services to help US clients hide undeclared assets and income from US tax authorities, including providing services to eliminate a paper trail and helping clients set up sham entities, they said.
IRS technical guidance roundup (week of May 11)
The IRS issued the following technical guidance last week:
Notice 2015-39 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under § 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under § 431(c)(6)(E)(ii)(I). The rates in this notice reflect the application of § 430(h)(2)(C)(iv), which was added by the Moving Ahead for Progress in the 21st Century Act, Public Law 112-141 (MAP-21) and amended by section 2003 of the Highway and Transportation Funding Act of 2014, Public Law 113-159 (HATFA).
Recent AccountingWEB Articles That You Can’t Afford to Miss:
The IRS Doesn’t Take Pity on Home Sellers Who Suffered a Loss
The tax code bars deductions for losses on sales of things considered personal assets, such as principal residences.
PCAOB Highlights Key Issues for Audit Committees in New Communication Tool
Audit Committee Dialogue gives committee members insight on key recurring areas of concern and emerging audit risks.
Sage Adds Bank Recs, Free Version to Sage One
Sage North America has upgraded its US version of Sage One Accounting, including full bank reconciliations and new pricing that includes a free version.
Technology a Core Asset for CFOs, Research Says
Economic volatility and competition for the smartest staff will also have a big effect on finance departments, according to a study from the IMA and ACCA.