IBM says the SEC is investigating accounting for revenue recognition
IBM fell to its lowest price in five years after disclosing that the US Securities and Exchange Commission (SEC) is conducting an investigation related to the technology seller's revenue recognition, wrote Jing Cao of Bloomberg. The company said on Tuesday it learned in August that the SEC is looking into the accounting treatment of certain transactions in the United States, the United Kingdom, and Ireland, according to a regulatory filing. âIBM has a rigorous and disciplined process for the preparation of its financial statements and the reporting of revenue,â Ian Colley, a company spokesman, said in a statement. âWe are confident that the results and information we report have been appropriate and consistent with GAAP.â IBM said in the filing that it is cooperating with the SEC. Shares of IBM fell 4 percent to $137.86 at the close in New York.
St. Joe, former CEO settle SEC accounting probe
St. Joe Co. and five individuals, including a former CEO, agreed to settle SEC charges that the Florida developer and landowner improperly accounted for the falling value of its residential real-estate assets after the financial crisis, wrote Jonathan Stempel of Reuters. The civil settlement announced by the SEC on Tuesday was five years after Greenlight Capital Inc. hedge fund manager David Einhorn accused St. Joe of vastly overvaluing its real-estate holdings, saying one site resembled a âmoonscapeâ rather than a luxury development. The SEC said St. Joe will pay a $2.75 million fine, while former CEO William Britton Greene will pay a $120,000 fine and give up $400,000 of gains plus interest. A former CFO, William McCalmont, and a former chief accounting officer, Janna Connolly, also agreed to pay fines and give up gains. Two former accounting directors were also sanctioned. None of the defendants admitted wrongdoing.
IRS would more easily audit large partnerships under proposal
The IRS would have an easier time auditing large partnerships, including private-equity firms and hedge funds, under a provision in the bipartisan budget deal announced late Monday night, wrote Richard Rubin of the Wall Street Journal. The proposal, built on ideas from both parties, would revamp a 33-year-old law that sets the rules for partnership audits and requires the IRS to pass additional taxes to each of the partners. That task has proven difficult for the IRS and has made the biggest and most complex multitiered partnerships extremely tough to audit. Under the bill, the IRS would apply changes in audits to the partnership itself, not individual partners. Small partnerships with fewer than 100 partners could exempt themselves from the new regime, which would begin in 2018. The tax-compliance measures in the budget bill would raise $11.2 billion over the next decade, according to the Congressional Budget Office.
IRS confirms use of surveillance tool
IRS Commissioner John Koskinen told lawmakers on Tuesday that his agency's use of secretive phone-tracking technology was restricted to specific criminal cases, a day after new questions were raised about its surveillance powers, wrote Julian Hattem of The Hill. Before the Senate Finance Committee, Koskinen said that use of the StingRay devices, or âIMSI-catchers,â is limited to the agency's criminal investigations division to track down money laundering, terrorism, and financing of organized crime. âIt's only used in criminal investigations. It can only be used with a court order. It can only be used based on probable cause of criminal activity,â Koskinen told the Senate panel. âIt is not used in civil matters at all. It's not used by other employees of the IRS.â The briefcase-sized StingRay device mimics cellphone towers in order to collect identifying data sent through waves emitted from people's phones, including their location.
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