Revisiting the 2005 Twelve Blogs of Christmas: Beyond the "Piano Keys"

Five blogs in the 2005 Twelve Blogs group came after the letter F, most were tax blogs. Villanova law professor James Maule probably averaged the most extensive posts in Mauled Again. The professor might be slightly on the conservative side, a la George Will, but he was equally adept at skewering Bush administration proposals and critics of those proposals depending on the content. A sample post is http://www.mauledagain.blogspot.com/#116463556662487422.

Joe Kristan of Roth CPA Updates is not only a very talented observer of events in the taxation field, but he has been personally helpful, both in linking to this blog and periodically providing helpful hints. Joe also has a second blog, Joe Says So, which gives him a forum for family and political topics. A sample of the CPA Updates blog is http://www.rothcpa.com/archives/002290.php#002290.

Paul Caron's Tax Prof has become a linking post to well done tax posts. A University of Cincinnati law professor, Paul emphasizes legal tax blogs but does note tax blogs of non-lawyers as well. A sample post from Tax Prof is: http://taxprof.typepad.com/taxprof_blog/2006/11/tax_court_relea.html.

Russ Fox at Taxable Talk is an expert on California tax law and tax protestors, among other tax topics. He also is the envy of many bloggers in that he is a successful poker player and author and has blogged on several occasions on the tax aspects of gambling. A sample of Russ's work would be http://www.taxabletalk.com/posts/1164081781.shtml.

Sadly, Vanilla Accounting has not published since April. Hopefully, Will Keller is doing okay and will eventually return to blogging.

Next week, the four Accounting blogs for the 2006 edition of the Twelve Blogs of Christmas will be chosen. Nominees are: Benefits Blog, Big4Guy, BSG CPA Trendlines, Corporate Governance, Fraud Files, Neil Mc Intyre and Tech Gap.

Comptroller General David Walker's Priorities for 2007

Deficit hawk David Walker, Comptroller General of the U.S., submitted to Congress in mid-November a list of 36 topics for investigation and hearings by the 110th Congress. The top ten items on his list include: reducing the tax gap, addressing federal acquisition and contracting issues, improving business performance of the Department of Defense, transforming Homeland Security, improving information sharing by the CIA and related government agencies, strengthening border security, improving security for the American transportation system, reducing the risk of use of biological and nuclear weapons, reducing risk of accidents involving nuclear activities and improving computer security.

General Walker has set an ambitious agenda; doubtlessly parts of his program will draw flak from the powers that be in Washington. Nevertheless, most if not all of his goals are worthwhile; some are highly worthwhile.

Revisiting the 2005 Twelve Blogs of Christmas: The F-series

Four of the cited blogs from last year started with the letter "F"; most were of a personal finance nature. Financial Rounds was a blog which started as a personal finance blog but seems to have evolved into a finance teaching blog. "The unknown professor" still links to Carnivals and web stories, but the blog probably would not be up for consideration this year. Nevertheless, Financial Rounds was one of the first blogs to link to Tick Marks; for that reason alone it will remain on my blogroll for a while to come. Best of the recent Financial Rounds material: http://financialrounds.blogspot.com/2006/11/milton-friedman-rip.html.

Perhaps the most cited financial-oriented blog in the financial press is Found in the Footnotes--and for good reason. Michelle Leder is very talented at finding interesting tidbits in the most obscure parts of the SEC form 10-K. A good recent example: http://footnoted.org/just-before-the-presses-rolled/.

The anonymous author of Free Money Finance has been an important force in the growth of personal finance blogging. One of the founders of the Money Blog Network, FMF often hosts personal finance carnivals and often has multiple posts in a single day. A recent example of FMF: http://www.freemoneyfinance.com/2006/11/how_to_pay_your.html.

Frugal for Life briefly left my blogroll this summer--then I returned to my senses. Dawn is a frequent host of personal finance carnivals and one of the pioneers in frugality blogging. A sample post from her blog: http://frugalforlife.blogspot.com/2006/11/5-frugal-questions.html.

Revisiting the 2005 Twelve Blogs of Christmas: A-C

As a prequel to December's Twelve Blogs of Christmas, here is the start of a review of last year's cited blogs--at least 10 of which would be seriously considered this year except that my guidelines are to include different blogs each year and therefore in effect begin an accounting, personal finance and tax blog Hall of Fame. Alphabetically first is the Accounting Observer blog, which continues to be a very impressive blog about financial accounting and corporate governance. Jack Ciesielski is one of the more prolific bloggers in the accounting community--one of his best recent posts is http://www.accountingobserver.com/blog/2006/11/the-pcaobs-niemeier-defending-sarbanes-oxley/. Flexo and Consumerism Commentary was recently reviewed in either Kiplinger's or Money; additionally, Flexo has played an important role in increasing the visibility of personal finance blogs with initiating the Carnival of Personal Finance and as a founding member of the Money Blog Network. Try http://www.consumerismcommentary.com/2006/11/22/us-mint-will-try-dollar-coins-again/ to get a sample of the blog. Brian Tankersley continued his CPA Firm Technology Blog and was more consistent in his posting this year. A recent example from his blog was http://blog.bftcpa.com/2006/11/windows_vista_o.html.

Sorry I've Been Missing and Happy Thanksgiving!

My apologies for recent lack of posting--I have had some health issues, especially sinus distress. Am feeling a little better and thankful that my health has to date usually been good. Speaking of Thanksgiving, several of my wife's family will be in for the next several days, so I hope that you have a great holiday weekend. Next week, I plan to refer back to last year's "Twelve Blogs of Christmas" and see what has happened with those blogs since 2005.

Milton Friedman, R.I.P.

About a year ago, I wrote a mini-eulogy at the death of tax policy expert Boris Bittker. Similarly sad news comes today as economics (and statistics) stalwart Milton Friedman, often considered the father of monetarist economics, has died. My sympathies to his family, friends and students.

Baucus and Dems Focus on Long-Term AMT Fix

Max Baucus (D-MT), soon-to-be chairman of the Senate Finance Committee has received support from Charles Rangel (D-NY), soon-to-be House Ways and Means chair and House Democratic Whip Steny Hoyer (MD) to emphasize a long-term solution to the alternative minimum tax creeping toward middle income taxpayers. Baucus, along with departing Finance chairman Charles Grassley (R-IA), sponsored a bill to repeal the AMT last year. The AMT has threatened to increase taxes for middle-income taxpayers for a number of years, with one-year fixes through increased exemptions being the approach used in practice by Grassley and the Republicans.

A sizable adjustment in the AMT is needed--either in the form of a sizable increase in the exemption, reduction in AMT tax rate or outright repeal. Given the reluctance of Democrats to repeal the estate tax, my guess is a sizable increase in exemption (perhaps $40,000 for MFS; $60,000 for single; $80,000 for MFJ), either combined with eliminating the 28% rate OR establishing the lower third AMT rate (perhaps 20%) for the first $100,000 subject to the AMT (the 26% rate might be reduced to 24% and cover the next $150,000 or so subject to AMT).

IRS Per Diem Rules You Need to Know

Employers who pay travel expenses in excess of federal per diem rates need to monitor transportation spending and require employees either to return excess amounts or include excess amounts in compensation. Otherwise, employers can be held liable for income and unemployment taxes on the ENTIRE allowance. This is the result of Revenue Ruling 2006-56, which labels nonreporting of excess travel allowances as an abuse of travel reimbursement rules--though a grace period exists through the end of 2006 to reset monitoring of expense accounts. Additionally, the IRS will not contest rates at or below the Federal per diem rates.

I personally have never worked for a employer which paid travel in excess of federal per diem. However, CPAs should alert clients whom they know use a generous travel reimbursement policy to consider the impact of this Revenue Ruling.

Slowdown Coming?

I hope to post 3-4 times this week, but a major deadline looms in mid-January. Therefore, posting other than the "12 Blogs of Christmas" during the first three weeks of December might at times be down to as little as one post per week between now and mid-January.

Do Financial Reporting Professionals and Tax Specialists Understand Each Other?

A recent research study on improving tax effectiveness in businesses by CFS Research Services and Hudson Financial Solutions found surprisingly large gaps between perceptions of tax specialists and financial reporting professionals. On two financial reporting issues, financial reporters felt that SOX had little impact on tax professionals, while about half of tax professionals believed SOX to have a great impact; additionally, over 80% of tax executives saw the avoidance of preventing financial restatements as a major priority while less than half of financial experts expected tax cohorts to have that level of concern. On other issues, tax specialists were more harried for time and saw greater need for improved processes in tax accounting and contingencies than financial reporters expected. Finally, over 80% of respondents felt that tax compliance dominated tax planning in use of tax department resources.

A truly scary article for tax professionals; if people in financial reporting, an area not far removed from tax activities, has a skewed perception of tax processes; imagine what executives without an accounting or finance background might believe.

Cox Goes for Moderation in IC Audit Standards

Apparently inspired by the moderate-oriented election results last Tuesday, SEC Chairman Christopher Cox says that a new audit standard to support internal control requirements of Sarbanes-Oxley for smaller public companies will be issued soon and that he is seeking a "happy medium." The new standard is likely to emphasize areas of greatest risk and the $75 million capitalization appears to be a threshold. Cox also indicated that smaller companies would have to self-evaluate internal controls, but would not be REQUIRED to have them audited for the two years preceding full implementation of the new standard.

Chairman Cox should indeed be happy if he can find middle-ground that will satisfy the large majority of stakeholders in the internal control area. Whether the approach to be proposed next spring will lead to contentment remains to be seen; also, newly empowered Democrats may have their own input to add on small company implementation of the Sarbanes-Oxley internal control provisions.

One Last Chance to Do Tax Returns for Financial Executives of Public Audit Clients (but NO extensions)

The PCAOB has decided to defer Rule 3523 prohibiting PCOAB-registered audit clients from providing tax services to audit client personnel with financial oversight potential for six months. Therefore, CPA firms auditing publicly-held companies can in some situations provide these services until April 30, 2007. Nevertheless, the tax services which qualify for deferral are tricky; get legal advice (which I CANNOT give) if you are not sure whether a given client qualifies.

Don't Mess with Tax Carnivals

Kay's Bell sixth tax carnival at Don't Mess with Taxes has an election theme. Last week's post about the GAO's report on private tax collectors is included.

Presumptious Political Prognostication

(WARNING: On a sports chat room that I sometimes participate in, I have a saying: " These picks plus a dollar will get you four (or perhaps three) shiny quarters at your local bank." The same concept applies here.)

The U.S. "off-year" elections for the House and Senate occur next Tuesday. Despite John Kerry's best efforts, it appears that the Democrats will have a profitable election--though how profitable is still in question. My best guesses (and, remember, I am no Scott Elliott (Election Projection) or Scott Rasmussen (pollster of Rasmussen Reports, not that hill-climbing guy in the Tour de France)).

House: Barring a small miracle, Nancy Pelosi will be Speaker of the House next January. Pundits are calling for Democratic gains of 16-40 seats; I expect about 20 or so to go Democratic. This will leave the Democrats with about a 5-10 seat majority--but the Blue Dog Democrats may limit the effect of this majority.

Senate: Control is nip and tuck. I project two independents (Jeffords and Lieberman), both of whom will tend Democratic. If the rest go 50-48 Republican, Vice-President (liberal Democrats would call him Vice Lord) Dick Cheney could break ties if needed. It appears that Democrats will take Pennsylvania, Connecticut and probably Ohio from the Republicans, while Tennessee now appears to be trending Republican. Maryland and New Jersey races feature slight leads for Democrats attempting to keep seats--if either go Republican, the GOP will almost certainly keep the Senate. This leaves three key states: Missouri (where the election may be decided by less than 2000 votes and post-election acrimony is almost guaranteed), Montana (where Conrad Burns is attempting to rise from political death) and Virginia (where George Allen has brought back memories/nightmares of the Bob Dole campaign of 1996). I may be placing too much weight on the impact of Kerry's gaffe this past week, but my prediction is that the Repubs take two of three and effectively have a 51-49 edge in the next Senate.

Governor races: Another clear call for the Democrats; they will gain about half a dozen governorships, giving them the majority.

If you want some early indications of how things MIGHT go; Indiana, Kentucky and New Hampshire are among the first states to report and they have eight seriously contested House races--four in Indiana (IN 02, 07, 08, 09) and two each in the others (KY 03, 04; NH 01 and 02). All but IN 07 presently are held by Republicans. My projection: if the Democrats end the night with seven or more, expect a 30+ seat House swing and a Democratic majority in the Senate. If the Democrats carry six, the Democrats will gain in the mid to upper 20s in the House and control of the Senate may not be known until all the Missouri lawsuits play out. If the Democrats finish the night with four or five, the House gain will probably be in the upper teens or low 20s and the GOP may keep a tenuous advantage in the Senate. If three or fewer end up Democratic, the best fantasies of Karl Rove where the GOP keep both houses becomes a possibility.

Spike Lee Would Be Proud: H & R Block "Does the Right Thing" on Tax Anticipation Loans

H & R Block announced that they were implementing a plan to provide greater disclosure relating to tax-related debt and the cost of tax refund anticipation loans. Additionally, they announced that a new H & R Block Master Card could be used to reduce costs of tax anticipation loans. Specific items implemented will be a "debt alert" which would indicate to potential refund loan clients the impact of prior tax debt and tax preparation fees, a comparison chart indicating filing options, fees and anticipated time to receipt of refund and a H & R Block Advantage Report providing tax, banking and government benefits information.

I have criticized H & R Block several times over the past year. In this case, however, there is absolutely nothing "blockheaded" about this announcement--unless you count the dubious statement by an H & R Block spokeswoman that the changes were not inspired by litigation.

Walking in an Autumn Carnival-land

My "credit card" post from last week was included in yesterday's Festival of Frugality. The day before, my post about net worth of twenty-somethings made it into the Carnival of Personal Finance (http://itsjustmoney.blogs.com/its_just_money/2006/10/carnival_of_per.html).

Remember, next week marks the monthly return of the Carnival of Taxes at Don't Mess with Taxes. Meanwhile, Tracy continues her Carnival of Fraud at Fraud Files every Monday.