Thursday, October 28, 2010

"You Mean I Can Actually Understand an IRS Form?" Well, Maybe

President Obama recently signed the "Plain Writing Act", which requires correspondence from federal agencies, such as the IRS, to be written with as little "legalese" as possible. Bruce Braley (D-IA) authored the legalization which passed the House by 341-82, a stunning margin given the present hyperpartisan election climate. After objections by Robert Bennett (R-UT) were overcome, the Senate passed the bill by voice vote. An unfortunate caveat: while IRS forms hopefully will be easier to read, no such law was passed requiring that the IRC, regulations or future tax legislation had to be in "plain writing."

Congratulations to Congress for at least attempting to improve understandably of IRS correspondence. Nevertheless, taxpayers are likely to benefit to a greater degree than tax professionals.

Annual AICPA Tax Award Given to Creighton Tax Professor

My apologies for the long gap between posts.

Thomas Purcell III has been honored with the Arthur Dixon award by the American Institute of CPAs. A former practitioner with Touche Ross, Purcell serves on numerous AICPA committees and the editorial board of The Tax Adviser. Purcell has won a number of important teaching and service awards and has authored a book and numerous articles.

Congratulations to Mr. Purcell on his accomplishment.

Wednesday, October 13, 2010

AICPA Broadens Potential Membership

The American Institute of Certified Public Accountants voted, by about a 9-2 margin, to expand the pool of potential members by mildly relaxing requirements for membership. Potential applicants now can qualify for membership by being a licensed or inactive CPA and two new categories: a previously-licensed CPA who is no longer licensed for reasons other than behavioral sanctions (examples: retirement, health or financial crisis) and those who passed the exam, met educational and experience requirements but never applied for a license. AICPA Chairman Robert Harris said that a major reason for the change is that about half of CPAs no longer work in CPA firms.

An interesting change, to be sure--and one wonders if part of the reason for the change is to compete with an increasingly aggresive Institute of Management Accountants. Will be interesting to see to what degree these changes generate increases in membership.

Friday, October 08, 2010

Dan Alban of the Daily Caller Provides Support for Joe--and for Robert, too

One of the ongoing activities of the tax blogosphere is the debate between Joe Kristan (Roth CPA Updates) and Robert Flach (Wandering Tax Pro) on the merits of the new licensing/identification requirements of the IRS. Mr. Alban weighs in on the side of Joe on the regulation in general, saying that it fixes something that wasn't broke and that the new procedure has potential for political abuse in the future. Mr. Flach does not go away empty-handed, however; the writer criticizes the IRS for favoring attorneys and CPAs (strong implication: connectedness of their lobbyists) over others who have been preparing returns for years and even decades.

The author writes a thought-provoking piece which finds most of the flaws in the new regulation. Time alone will tell whether Mr. Alban's concerns are well-founded.

Monday, October 04, 2010

AICPA Wants New Standards Board for Private Companies

AICPA President Barry Melancon has called for the Financial Accounting Foundation (FAF--parent organization for FASB and GASB) to establish a new accounting board for private companies. Melancon cites preliminary work of the "Blue Ribbon Panel" from members of the AICPA, FASB and NASBA (National Association of State Boards of Accountancy) would lead to standards quite different from either U. S. GAAP or IFRS. It should be noted that the IASB has already published its effort at private-company standards (IFRS for SME) and that a poll of accountants taken by WebCPA opposed separate standards for private companies 55-42.

Oh, the headaches here. Let me start by stating that private companies in excess of approximately $100 million in capitalization should be subject to either full U. S. GAAP or IFRS to be consistent with their large public company brethern. For small-to-medium sized private companies--there are no good options; anything leads to different standards from larger companies and it is not clear how the cost-benefit tradeoff of convenience vs. reduced usability measures out until you get to very small (less than $5-10 million in capitalization) companies. Hope that David Albrecht and the Summa has some thoughts on this.

My blog is worth $7,903.56.
How much is your blog worth?