Tuesday, December 29, 2009

CPA For Head of GAO?

NOTE: Happy New Year!! This probably will be my last post in 2009.

Collin Peterson (D-MN) and Mike Conaway (R-TX) have introduced legislation (HR 4410)which would require that the Comptroller General (CG), who heads up the General Accountability Office, be a Certified Public Accountant. The bill would also require that those nominated as Comptroller General have considerable management experience, including some experience managing in governmental sector, significant governmental accounting and auditing experience and a post-graduate degree. In endorsing the idea, AICPA President Barry Melancon called on the Comptroller General to be an advocate for taxpayers and steward of national resources. The two most recent Comptrollers General, David Walker and Charles Bowsher, had CPAs while interim CG, Gene Dodaro, has an accounting degree but not a CPA.

I am fully a fan of the intent behind HR 4410 and believe that the Comptroller General needs the stature of professional licensure. In some ways, it would seem that the skills of a Certified Internal Auditor or Certified Management Accountant would also be valuable in the CG position; perhaps either allowing the CIA or CMA to substitute for the CPA OR requiring the CPA plus either the CIA or CMA would improve an already well-thought out piece of legislation.

Thursday, December 24, 2009

"I Bring You Tidings of Great Joy"

[Post #1040) Merry CHRISTmas to all and hope you have a great weekend as well.

Wednesday, December 23, 2009

Form 706 (Estate Tax) Is Hard Enough WITHOUT Guessing

Political gridlock has caused a lot of uncertainty as to the future of the estate tax, with Democrats at cross purposes on how to proceed and some Republicans desiring the total repeal of the tax. The House had come up with at least a temporary fix but the Senate could not settle on how estate tax issues squared with deficit control legislation. Meanwhile, short-term fix attempts by Democratic leaders hit Republican opposition. As a result, the present scenario is total repeal of estate tax for 2010 and reinstitution at probably stricter rates in 2011.

With busy season for income tax coming, the last thing that tax preparers need is estate tax preparation complications. As desirable as repeal of the estate tax might be, repealing it for just one year cannot be good tax policy nor is it helpful to professional tax preparers. Many years ago, I believe that I suggested instituting a unified credit (to be indexed for inflation) at about $2.5-3 million as a long-term solution--the idea still makes sense to me.

A Recap of the 2009 Twelve Blogs of Christmas

Moved from Personal Finance to Accounting: Accounting WEB Blogger's Crew
Reinstituted in Accounting: Neil McIntyre
Added in Personal Finance: Two Pennies Earned
Wisdom from Wenchypoo's Mental Wastebasket
New Accounting Blogs: Farm CPA Today
Jeremy Newman (UK)
The Summa
Reed Tinsley
New Tax Blogs: A Taxing Matter
Bed Buffaloes in Your Tax Code
Roni Deutch: Tax Lady
Federal Tax Crimes
Stacie's Tax Tips
Tax Mama

Congratulations to all and may next year have as many fine new accounting and tax blogs!

Tuesday, December 22, 2009

The Tax Question: What to Do with Charitable Contributions?

Last week, I threw out as a discussion question an auditing issue: whether significant doubt about a business's ability to continue should be marked by qualifying the audit opinion or by the present practice of using an explanatory paragraph. This week's tax-oriented issue has more possible directions: eliminate deductibility of charitable donations to reduce tax code complexity; make donations an "above the line" deduction to encourage greater giving; convert the deduction to a nonrefundable credit to reward low-income taxpayers for their generousity, cap deductibility of charitable donations at perhaps $100,000 per year to prevent tax subsidiation of "memorizing oneself" through large donations and probably other possibilities which I have not thought of. Please feel free to comment and give your ideas on this topic.

Better Late than Never (I Hope): Tax Mama Wraps Up the "Twelve Blogs of Christmas" (with a Bow and Everything)

Eva Rosenberg's "Tax Mama" has been around for a number of years and considered for the "Twelve Blogs" for at least two previous years. Eva mixes tax advice with some gentle humor and now provides material in the "AccountingWEB Bloggers' Crew" as well as her own site. A sample post linked in the headline above is "Per Diems on 1099s." It should be noted that you can access her posts within her blog either by going to "taxquips.com" or by going to "taxmama.com" and pressing the "This Week's Issue" tab. Congratulations to Eva and keep up the good work!

That Muse Named Monica: Tax CPA Makes the "Twelve Blogs"

California CPA Monica Lawver (tricky, that last name) has published "Tax CPA" since April and addresses tax policy from what seems to be a macro-perspective of how taxes fit in with the rest of life. A recent post was "Just to Make a Point," which discussed a potential "war tax" to pay for the extra troops sent to Afghanistan. Monica has a chance to be the first blogger with two blogs in the "Twelve Blogs" in the next year or two as she also publishes an accounting-oriented blog called "Confessions of a CPA." Congratulations to Monica and keep up the good work.

Monday, December 21, 2009

Stacie's Got It Going On (in a Tax Sense): Stacie's Tax Tips is the Fifth Tax Blog in the "Twevle Blogs"

"More Tax Tips" by Stacie Clifford Kitts, though started in 2007, got going in earnest (and I do mean earnest, over 200 blogs this year) in 2009. Stacie and Mary O'Keffee have done their best to make a recent tax on cosmetic surgery a topic of interest to the whole tax blogosphere and not just women tax bloggers--one of Stacie's posts on the topic is linked in the title above. Congratulations to Stacie and keep up the good work!

Thank You, You are Very Kind

A very nice write-up in the Summa. I hope I am worthy.

P.S. Thanks also to Kay Bell for my inclusion in the Stuffing Stuffers edition of Carnival of Taxes and Robert Flach for including me in his most recent "Buzz."

One for the Guys: Jack Townsend Gives Us the Legal Scoop on Tax Scofflaws

The tax blogosphere has been spoiled for many years by the fine reporting of bloggers like Russ Fox and Joe Kristan on cases involving tax crimes. To better understand the rationale behind court decisions, however, it is hard to match the postings of Jack Townsend at "Federal Tax Crimes." Jack is a tireless poster with five major posts since last Thursday. An example of his postings is "Civil Law Statute of Limitations on Fraudulent Tax Shelters." Congratulations to Jack and keep up the good work.

The Tax Lady Brings It: Roni Deutch Becomes the Third Tax Blog Added to the "Twelve Blogs" in 2009

Roni Deutch's Tax Lady Blog is an interesting combination of practical tax advice and considering political implications of tax law. One of her practical posts on surviving an IRS audit (a popular topic in the tax blogosphere recently) is linked in the title above. Congratulations to Roni and keep up the good work!

Saturday, December 19, 2009

Back to Back Blog Women: Mary O'Keeffe Found "Bed Buffaloes in Your Tax Code"

One of the most popular new tax blogs (and the humor found in its unquestionably helps) has been "Bed Buffaloes in Your Tax Code." Mary O'Keeffe teaches tax law at Union University in New York and also directs the VITA (volunteer tax preparation for low-income and senior taxpayers). A sample of her posts includes a salute to Nina Olson, the IRS Taxpayer Advocate who has been praised in Tick Marks on a number of occasions. Congratulations Mary and keep up the good work!

Give Lefty Linda a Listen: A Taxing Matter Starts the Seven Tax Blogs of the "Twelve Blogs"

Law Professor Linda Beale and her tax blog "A Taxing Matter" provides a useful view of the liberal perspective on tax policy. Her recent post on lobbying efforts of the American Banking Association (an easy target for liberal commentary) is indicative of her insights. Congratulations to Linda and thanks for providing a counterpoint to the Kerry Kerstetters of the tax blogosphere.

Thursday, December 17, 2009

Discussion Question: Going Concern--Now a Explanatory Paragraph; Should It Be a Qualification on an Audit Report?

A question came to mind while working on the accounting part of the Twelve Blogs of Christmas this week--at present, auditors may (and usually do) provide an unqualified opinion with additional explanatory paragraph to businesses with significant uncertainties as to whether they are a going concern. While auditors are allowed to disclaim an opinion on going-concern grounds, there is little evidence that this happens with any regularity.

Is this sufficient warning to financial statement users or should material likelihood of noncontinuation of the business be grounds for a minimum of qualifying the opinion on the financials? I'd like to hear your thoughts--and I'll try to come up with a comparable question for the tax readers of Tick Marks.

Reed Tinsley Diagnoses Ailing Financial Statements (Fourth and Final Accounting Blog for Twelve Blogs)

Reed Tinsley, CPA practices primarily in health care and medical accounting out of the Houston area and has an impressive list of articles (more than many accounting faculty). A sample post from his blog (linked in title above) covers charging of interest on loans to employees. Congratulations to Reed and keep up the good work!

This concludes the accounting/auditing additions to the Twelve Blogs. Now, I need to find (starting this weekend) SEVEN tax blogs to add.

Wednesday, December 16, 2009

Income Tax Preparation: How Much Does a "Typical" Client Pay?

A survey of 8,000 tax preparers over a two-year period found that the average charge for a Form 1040 plus Schedule A plus state tax return was $229; a return without the itemizing of deduction run exactly $100 less. "Large" firms (those with over $400,000 in gross income) charged almost double ($305 vs. $174) what "tiny" firms (firms with gross income under $50K) charged. Geographic region also mattered, with Pacific firms at the high at $292 and West South Central (Tennessee plus three other states) at the low end of $193. Average charge per type of return varied dramatically from $58 for a Form 940 (unemployment) to over $2,000 for a Form 706 (estate tax). Credentials of preparers surveyed varied with some respondents clearly having more than one credential. Among credentials included: about half of respondents were EAs and about a quarter were CPAs.

The survey results were fascinating--my biggest surprise was the relatively low cost of tax preparation. Clearly, professional tax preparation (for this sentence, I will use a definition closer to Robert Flach than Peter Pappas) is a real value!

Summa Cum Blog: Professor Albrecht Becomes the Third of the "Twelve Blogs"

Professor David Albrecht of Bowling Green University has published "The Summa" for slightly over one year and has been a tireless opponent of IFRS as well as a valuable voice for academic accountants. I recommend his "Two Weeks in the Life of an Accounting Professor" (linked above) as insight into the professional experiences of accounting faculty. Congratulations and keep up the good work!

Big News from the Little Three: Jeremy Newman Updates Accounting "Across the Pond"

Jeremy Newman of BDO Seidman provides both a British and a large (but not huge) firm perspective on major financial accounting issues. Indicative of his posts is the pre-Thanksgiving comment linked in the title which criticizes UK banks for "Big 4 only" audit clauses. Congratulations to Jeremya and keep up the good work!

Monday, December 14, 2009

Go Forth and Multiply: Farm CPA Serves Its Niche Well (First Accounting Blog for Twelve Blogs)

Hansen Neiffer CPA Firm established Farm CPA today to address issues faced by farmers and agricultural economists and appears to be doing a good job. A recent article on land prices (referenced in the post title) talks about prices of Illinois land which had stabilized after large increases earlier in the decade and warns that land prices could be inflated unless harvests are good in upcoming years. Congratulations and keep up the good work!

Resetting the "Twelve Blogs"

A reminder that the Bold-faced blogs at right plus ALL linked Personal Finance Blogs have been selected in "Twelve Blogs of Christmas" in previous years. I have linked to the November 14 adjustments to the blogs (including the newly included status of Tax Policy Blog, Two Pennies Earned and Wisdom from Wenchypoo's Mental Wastebasket). Sadly, today I honored the dying Benefits Blog (and the hopefully NOT dying author of the blog). Therefore, over the next several days (hopefully by Christmas, certainly if the Good Lord wills by January 6, the traditionally twelfth day of Christmas), I will select four additional accounting blogs and SEVEN additional tax blogs (no personal finance blogs this year) for inclusion.

Apologies (Burnout Happens)

I almost went two weeks without posting for the first time since I started blogging in spring 2005. A combination of travel, very busy end of semester and some level of burnout were contributing factors; nevertheless, my apologies to my regular readers and those bloggers who link here. For the next month, my primary focus will be the fifth edition of "Twelve Blogs of Christmas," though I hope to get at least one timely post about accounting or tax topics per week between now and ML King Day. After Dr. King's holiday, I hope to return to the more standard 2-3 posts per week.

A Final Salute to Benefits Blog

The excellent Benefits Blog of Janell Grenier is being discontinued because of a serious cancer. While the start of the second paragraph of her final post indicates that Ms. Grenier has very good very long-term prospects, her short-term diagnosis is markedly more dire; she may not survive the present crisis. I would like to thank Ms. Grenier for covering the tax and accounting aspects of pensions, something I claim no expertise in whatsoever. Additionally, Benefits Blog had an excellent blogroll and was among the first blogs to link to Tick Marks. Certainly, Ms. Grenier is worthy of the thoughts and prayers of all those in the accounting, legal and tax blogosphere.

The suspension of Benefits blog does open an additional slot for the 2009 "Twelve Blogs of Christmas," which I intend to start later today.

Wednesday, December 02, 2009

Taxpayers Get that Hope (Tax Credit) less Feeling

The Treasury Inspector General for Tax Administration (TIGTA) asserted that the Hope credit for underclass (freshman and sophomore) college students probably allowed hundreds of millions of dollars in undeserved credits because of two significant defects in the administration of the credit. The first defect is that a given taxpayer could in practice claim the credit for the same student for more than the two permissible years. TIGTA estimates that nearly $600 million in excess credits were taken based on that defect. A second flaw is that many colleges failed to report the amount of tuition and other school-related expenses that qualified for the credit; allowing taxpayers to claim more than the permissible amount. TIGTA recommended that the IRS be given math error authority to challenge claims for the same student covering three or more years and that schools report amounts paid for tuition and that the reporting forms tie more clearly to Form 8863, the annual reporting form for the Hope credit.

The TIGTA did a good job of catching the defective reporting procedures--though one wishes this had been caught sooner. One concern--can the IRS find a simpler procedure for universities to report tuition on this credit--5 million processing hours seems like a lot of "busy work" for clerical staffs of universities.

NOTE: This will be one of the last topical posts in December--most of my other posts this month will center on the "Twelve Blogs of Christmas."

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