Bramwell’s Lunch Beat: Former SEC Member Harvey Goldschmid Has Diedby
House tax panel votes to expand 529 plans in reply to Obama
The House Ways and Means Committee on Thursday voted to expand college savings tax incentives that President Obama proposed limiting earlier this year, wrote Richard Rubin of Bloomberg. The bill would let people use so-called 529 accounts to buy computers as well as tuition, books, and other expenses. It also would make it easier for people to put refunds from colleges back into tax-advantaged accounts without penalty. The committee backed the bill on a voice vote, after Republicans rejected an amendment that would have limited 529 plans for people earning more than $3 million a year. Contributions to 529 plans are made with post-tax money and withdrawals aren’t subject to income taxes. The measure is scheduled for a vote by the full House later this month.
Former SEC commissioner Harvey Goldschmid dead at 74
Former SEC member and prominent Columbia University law professor Harvey Goldschmid died on Thursday at the age of 74, wrote Sarah N. Lynch of Reuters. Goldschmid served as a Democratic commissioner at the SEC from 2002 to 2005. Before that, he also worked as the agency's general counsel from 1998 to 1999, and served as a special advisor to former SEC Chair Arthur Levitt. Goldschmid's SEC term coincided with the implementation of the 2002 Sarbanes-Oxley law, which was passed by Congress in the wake of high-profile accounting scandals at Enron and Worldcom. He had a reputation for being a crusader for investor rights and was frequently quoted in the press for his views on financial regulation. “He did everything one could have done as a leading figure in securities regulation despite having not been appointed chair,” said Joel Seligman, the president of the University of Rochester and an expert on securities law.
Reaction to the passing of Harvey Goldschmid
SEC Chair Mary Jo White issued the following statement on the passing of Harvey Goldschmid: “Harvey J. Goldschmid had an outstanding career as a lawyer, educator, and public servant. He served the SEC with great distinction as a commissioner, general counsel, and as a special senior advisor to Chairman Arthur Levitt.
“Among his many accomplishments at the commission, he was the primary architect of Regulation FD (fair disclosure), which promoted full and fair disclosure by prohibiting selective disclosure of nonpublic information. He also promoted the importance of auditor independence through the commission’s rulemaking efforts and spearheaded the commission’s efforts to improve audit committee disclosures.
“Harvey was an accomplished man of considerable talents who touched many lives throughout his illustrious career. His dedication to Columbia University School of Law and its students was inspiring. He was a true public servant, whose commitment to this agency lived long past the days he spent working here. The SEC mourns the loss of one of its own. Our thoughts and prayers go out to Harvey’s family and loved ones.”
Center for Audit Quality (CAQ) Executive Director Cindy Fornelli had this to say about Goldschmid, who served on the CAQ Governing Board: “The CAQ mourns the passing of Harvey Goldschmid, a true leader and a great friend to the CAQ.
“The rangeof Harvey's professional accomplishments is astonishing. He put his formidable legal skills to work in so many contexts: as commissioner and general counsel at the SEC, as a teacher, as an author, and as an attorney in private practice. His contributions to the body of knowledge in corporate, securities, and antitrust law have been significant.
“Harvey alsoplayed a crucial role at the CAQ from its very inception. The CAQ Governing Board, on which he served as co-vice chair, benefited enormously from his insights, experience, and spirit.
“Our thoughtsgo out to Harvey's family and loved ones at this difficult time. At the CAQ, we will always remember and value his life and contributions to the auditing profession, the capital markets, and investors.”
American Institute of CPAs (AICPA) President and CEO Barry Melancon issued the following statement about Goldschmid: “I was saddened to learn of Harvey Goldschmid’s passing. He traveled in or near the CPA profession’s orbit for many years. Known as a friend to investors, he brought intelligence, common sense, and candor to everything he did, in roles that included SEC commissioner and law professor. Harvey was a former member of the institute’s Professional Ethics Executive Committee. In recent years, he and I served together on the CAQ’s Governing Board. Harvey will be missed both personally and professionally by all of us who were fortunate enough to know him.”
Utah firm settles SEC accounting case over Chinese poultry company
Salt Lake City-based accounting firm Child Van Wagoner & Bradshaw PLLC and one of its partners agreed to pay a total of more than $130,000 to settle SEC allegations that they botched the audits of a chicken company based in China, wrote Michael Rapoport of the Wall Street Journal. Child Van Wagoner and its partner Russell E. Anderson agreed to pay a total of $90,506 in disgorgement and interest, and Anderson agreed to pay a $40,000 fine, according to a settlement order filed on Wednesday. The SEC had alleged in an administrative proceeding last year that the firm was deficient in its 2009 and 2010 audits of Yuhe International Inc., a Chinese provider of broiler chickens. Anderson agreed to be barred from auditing public companies for at least three years. A second partner, Marty Van Wagoner, also agreed to a similar bar to settle the SEC’s case.
House passes bill to extend charitable-giving tax credits
The House passed legislation on Thursday that would permanently renew three tax credits for charitable giving, wrote Cristina Marcos of The Hill. The measure extends three tax credits: the deductions for contributions of food inventory, allowing tax-free distributions from individual retirement accounts for charitable purposes, and the deduction for contributions of conservation easements to preserve land. Republicans said making the tax credits a permanent part of the tax code, rather than renewing them every year, would provide more certainty. Democrats largely supported the underlying tax breaks. But the vote fell generally along party lines, 279-137, because many Democrats didn’t think the credits should be made permanent without offsets. In total, 39 Democrats joined with all but one Republican in support of the bill.
Rand Paul: Scrap the tax code
Responding to a question during a Facebook Q&A session in which he was asked whether Congress should abolish the IRS, Sen. Rand Paul (R-KY) said lawmakers should “scrap” the tax code, wrote Kevin Cirilli of The Hill. “The IRS is too big, too powerful, and we absolutely should scrap the code,” Paul, a prospective 2016 presidential candidate, answered on Thursday. “Look for my tax plan later this spring.” Paul was touting his “Audit the Fed” proposal, which has 30 co-sponsors and would allow the comptroller general to audit the Federal Reserve. Fed officials oppose the policy, saying that it would politicize monetary policy.
Apple deal, tax change could spark corporate solar stampede
Apple Inc.'s deal to buy nearly $1 billion of power from a massive First Solar Inc. plant could be the first of a stampede of contracts driven by the looming change in a solar tax incentive that makes such projects particularly attractive, wrote Nichola Groom of Reuters. Together with a sharp drop in the cost of solar power and corporate efforts to rack up green credentials, the expiring tax subsidies have large energy purchasers taking a hard look at buying solar under big long-term contracts. Apple on Tuesday said it would spend $848 million over 25 years to buy 130 megawatts of electricity from a 280 MW plant – the solar industry's largest-ever corporate power purchase agreement. SunPower Corp., a US solar company, is seeing a rush to get projects done before a critical federal tax credit for solar projects drops to 10 percent from 30 percent in 2017.
Texas woman headbutts tax worker in Wal-Mart brawl
A ticked-off customer cocked back from the waist and headbutted a Jackson Hewitt employee at a Texas Wal-Mart, sparking a hair-pulling, face-pounding scrap inside the store, wrote Doyle Murphy of the New York Daily News. The two women were identified as Jessica Albitz and tax worker Alice Keener. Albitz said she’d argued with Keener the day before at a Jackson Hewitt kiosk in the Wal-Mart in La Porte, Texas. She claims Keener cussed at her and spit in her face when she returned the next day, setting off the showdown. Police issued Albitz a trespassing warning, but neither woman was charged. Jackson Hewitt issued a statement condemning the fight. “We do not tolerate harassment, discrimination, or violence in any capacity,” the company said. “The tax preparer has been placed on administrative leave as we investigate this matter.”
UK closes a tax gap for foreign owners
The British government is acting to close a longstanding loophole in its tax code: In April, for the first time, UK homeowners from overseas will need to pay capital gains tax when they sell their property, wrote Ruth Bloomfield of the Wall Street Journal. The move means the taxman will collect up to 28 percent of the profit earned on a property at the point of sale – the same tax that British home sellers currently pay. The charge is not retroactive and will only apply to the price differential between an official valuation for the property for April and its eventual sale price. The new capital gains tax comes on the heels of an overall increase in stamp duty introduced last year that has increased buying costs for properties priced at £1 million (about $1.526 million) or more.
EU should look at tax, accounting to snap money market impasse – Irish bank official
Europe should follow the United States' lead in reforming money market funds to try to resolve a legislative impasse over how to make the trillion euro sector safer, a senior Irish bank official said on Thursday, wrote Carmel Crimmins of Reuters. One big hurdle to European proposals, which require certain money market funds either to move to a floating price or build up capital buffers, is that corporate treasurers like funds to have a fixed price because it means they don't have to track daily price movements for tax purposes and it is simpler to book in their accounts. Gareth Murphy, director of markets supervision at the central bank of Ireland, said the SEC in the United States simplified the tax and accounting elements of its reforms, which were agreed to last year. “The SEC prioritized, ruthlessly, the fixing of those issues before they finalized their revised rule last year,” he said.
AICPA releases Q&A on effect of new mortality tables for pension plans
To provide nonauthoritative guidance on the Society of Actuaries’ Retirement Plans Experience Committee’s October 2014 RP-2014 Mortality Tables Report, which includes new mortality tables developed for use by pension plans, the AICPA has released Q&A section 3700.01 (AICPA Technical Questions and Answers). The AICPA’s Q&A discusses how and when nongovernmental employee benefit plans and nongovernmental sponsoring entities should consider, for financial reporting purposes, updated mortality tables if their financial statements have not yet been issued at the time the updated tables are published. The Q&A explains that the plans and sponsoring entities should consider the specific requirements of US GAAP, which requires the use of a mortality assumption that reflects the best estimate of the plan’s future experience for purposes of estimating the plan’s obligation as of the current measurement date. The Q&A relates to both employer and plan pension obligations.
AICPA Conflict Minerals Task Force develops two new Q&As and updates CMR depiction
The AICPA Conflict Minerals Task Force (CMR) has developed two new Q&As. They discuss representations that a practitioner might obtain from management in an engagement to perform an independent private-sector audit (IPSA) of a CMR. They also outline the practitioner's responsibility with respect to gaining an understanding of and testing internal controls in performing an IPSA. The new Q&As (Q&As .14–.15) have been developed to provide nonauthoritative guidance to address matters that auditors may wish to cover in management representation letters and auditor responsibility with respect to internal controls. In addition, the CMR Depiction Exhibit has been updated based on CMRs filed and to reflect recent SEC guidance. The “AICPA Conflict Minerals Resources” webpage includes background, previously issued Q&As .01–.13, Q&As on independence, and other useful information about the use of conflict minerals, as well as a “Useful Links” section.