THIS WEEK'S NEWS HEADLINES
April 16, 2014
Court ruling doesn’t stop conflict minerals compliance work
An appellate court opinion struck down part of the SEC’s new conflict minerals rule this week, but experts say companies should continue their compliance efforts as a May 31 reporting deadline approaches.
Taxpayers must reveal tax shelter opinion letters despite attorney-client privilege
Investors in son-of-boss tax shelters cannot invoke attorney-client privilege after they argued that they “reasonably believed” their tax treatment of certain items was more likely than not proper, the Tax Court held.
April 14, 2014
Foreign housing expense limitations issued for 2014
The IRS posted the annual inflation-adjusted limits on foreign housing expenses. The notice includes the list of foreign cities for which an increased limitation is allowed.
GASB establishes approaches for measurement
Two approaches for measuring assets and liabilities were established by the Governmental Accounting Standards Board to guide the board in its standard-setting activities.
LAST WEEK'S NEWS HEADLINES
April 11, 2014
Three ways preparers can reduce disclosure overload
As the SEC contemplates ways to improve its disclosure requirements, its Division of Corporation Finance Director Keith Higgins has tips for preparers to cut the clutter immediately in financial statements.
April 10, 2014
Regulators suggest firms take deep dive into audit quality
The International Forum of Independent Audit Regulators is seeking analysis by audit firms to discover remedies for persistent problem areas that have emerged in audits globally.
FASB changes discontinued operations reporting guidance
FASB issued new financial reporting guidance that will decrease the number of disposals of assets required to be reported as discontinued operations by organizations.
Horse breeder materially participated
This was an unusual horse-breeding case because the Internal Revenue Service did not challenge the taxpayer’s profit motive and did not challenge the expenses as not ordinary or necessary. As a result, the taxpayer could deduct his losses in full.
April 9, 2014
Companies lagging in conflict minerals process
Many companies still are in the early stages of their conflict minerals compliance process, with an SEC filing deadline approaching May 31.
April 7, 2014
Guidance issued on application of Windsor to retirement plans
Administrators of qualified retirement plans must recognize the same-sex spouses of legally married participants as of June 26, 2013, under guidance issued by the IRS but will not be required to amend their plans to retroactively recognize participants’ legal same-sex marriages before that date.
NEWS HEADLINES FOR MARCH 30–APRIL 5, 2014
April 4, 2014
Taxpayers can claim charitable contributions for typhoon relief on 2013 returns
Contributions must be made to qualified charities by April 14 and can be deducted on a 2013 or 2014 tax return, but not both.
April 3, 2014
EU audit firm rotation clears another hurdle
The European Parliament approved a draft agreement that will require public-interest entities to rotate audit firms after 10 years. That period could be extended to 20 years if the audit is put out for bid, or 24 years in cases of joint audits.
Plan administrators can assume certain rollovers are valid
The IRS provided safe harbor due diligence procedures for qualified plan administrators to use in order to be deemed to have reasonably concluded that an amount was a valid rollover contribution.
How would auditors’ reporting affect “other information”?
By reporting on information outside the audited financial statements, auditors could provide investors with valuable perspective, experts told the Public Company Accounting Oversight Board.
April 2, 2014
PCAOB trying to help auditors find their voice
Auditing standard setters are trying to find a way for auditors to communicate with investors but are struggling to find the proper mechanism.
April 1, 2014
Alignment is key for internal audit to deliver more value
As demands on internal audit are rising, a new survey shows that a majority of senior executives do not believe internal audit provides significant value. Learn how internal audit can provide more value to organizations.
AICPA recommends changes to net investment income tax rules
The AICPA submitted a comment letter to the IRS recommending a number of changes to the Sec. 1411 regulations on the application of the net investment income tax to charitable remainder trusts (CRTs), when final regulations are issued.
How to calculate employer health care responsibilities
Two halves do equal a whole as employers calculate their number of full-time equivalent employees for purposes of complying with U.S. health care regulations.
March 31, 2014
PCAOB reaches agreement with Swedish audit regulator
The PCAOB and the Supervisory Board of Public Accountants of Sweden have entered a cooperative agreement in their oversight of audit firms, the PCAOB announced.
NEWS HEADLINES FOR MARCH 23–29, 2014
March 28, 2014
Final rules issued on employment tax responsibilities of designated payer agents
The IRS finalized regulations governing when an agent designated by an employer under a service agreement to pay the employees and to satisfy the employer’s employment tax obligations is liable for the employment taxes.
Trust materially participated in real estate business
The Tax Court rejected an IRS argument that “personal services” performed in real estate activities must be performed by an individual, not a trust.
March 27, 2014
Abuse victims who file separate returns are eligible for premium tax credit
Victims of domestic violence who are afraid or unable to contact their spouse to file a joint return may be able to claim the Sec. 36B premium tax credit using procedures announced by the IRS.
March 26, 2014
Six cybersecurity basics
Experts at an SEC panel discussion talked about best practices for defending sensitive systems and data against cyber attacks.
Gambler’s luck turns in second trip to Tax Court
Because losses from gambling not pursued as a trade or business are limited to the amount of winnings, the taxpayer could not deduct all her losses and had to report her gambling activity on Schedule A, Itemized Deductions.
TPAs address new private company accounting alternatives
Three new AICPA Technical Questions and Answers (TPAs) provide nonauthoritative guidance regarding application of some accounting alternatives FASB issued in January for private entities that are not classified as public business entities.
March 25, 2014
New guidance clarifies tax treatment of bitcoin and other virtual currencies
The IRS says that virtual currencies are property, not currency, and normal rules for treatment of property apply. The notice discusses topics such as gains and losses from virtual currency and the treatment of wages paid in virtual currency.
The Supreme Court rules severance payments are subject to FICA
The 8-0 decision overturns the Sixth Circuit holding in the case and denies over $1 million in FICA tax refunds to Quality Stores and thousands of its terminated employees.
Regulation demanding increased internal audit focus
Regulatory compliance duties in the wake of the global financial crisis are demanding attention from internal auditors, reducing their ability to focus on strategic business risks.
IASB proposal designed to improve disclosures
Amendments proposed by the International Accounting Standards Board (IASB) are designed to play a role in the board’s effort to reduce disclosure overload.
March 24, 2014
Pension standard remains on schedule after GASB vote
GASB voted not to delay the implementation date of its new standard governing financial reporting for state and local government pensions.
Auditors have important role in cybersecurity
The Center for Audit Quality issued an alert detailing external auditors’ duties in the area of cybersecurity.
Conflict minerals audit guidance available
With the May 31 deadline approaching for companies to file their first conflict minerals reports with the SEC, new guidance is available to practitioners as they perform the required independent private-sector audits of these reports.
NEWS HEADLINES MARCH 16–22, 2014
March 21, 2014
Stop using “audit failure” term in PCAOB reports, Hanson says
Public Company Accounting Oversight Board member Jay Hanson wants the board to stop using the term “audit failure” in its inspection reports of audit firms because he said it appears to be causing confusion and misunderstanding about the severity of PCAOB findings.
IRS clarifies: Electronic signatures permitted for Form 8879
Following the announcement by the IRS that it would allow taxpayers to electronically sign Form 8878 in certain circumstances, the AICPA raised the issue with them that Form 8879, the e-file signature authorization form, should also be included in the expanded electronic signature guidance.
March 20, 2014
Internal auditors racing to keep pace with technology
Mobile applications, social media, and computer-assisted audit tools are among the areas of knowledge internal auditors most hope to improve, according to a new survey.
FASB issues private company VIE alternative
FASB issued a GAAP alternative that will allow private companies under certain circumstances to elect not to apply a requirement to consolidate variable-interest entities in common-control leasing arrangements.
IRA rollover guidance issued: IRS will follow the Tax Court
The IRS announced that it is changing its position on how the annual limit on IRA rollovers is applied to taxpayers who have more than one IRA after a recent Tax Court decision on the topic upheld a more-restrictive interpretation than is found in current IRS guidance.
March 19, 2014
Boards remain split on lease expense recognition
FASB and the International Accounting Standards Board failed to reach a consensus for new lease accounting guidance but vowed to continue working together in pursuit of consistency.
March 18, 2014
No easy answers in key leases standard debate
FASB and the International Accounting Standards Board (IASB) are struggling to find common ground in their efforts to create a converged standard for financial reporting on leases.
March 17, 2014
11 issues that could flare up at the next shareholder meeting
In an environment full of risk and opportunity, here are the questions management and boards of directors should be prepared to answer from U.S. public company shareholders at annual meetings.
NEWS HEADLINES FOR MARCH 9–15, 2014
March 13, 2014
IRS expands use of electronic signatures
The IRS has updated its Handbook for Authorized IRS e-File Providers of Individual Income Tax Returns to allow taxpayers to electronically sign Form 8878, IRS e-file Signature Authorization for Form 4868 and Form 2350, in certain circumstances.
March 12, 2014
Regulatory issues requiring more attention from some CFOs
Twenty percent of U.S. CFOs reported in a new survey that it has become more challenging to manage their firms’ compliance-related initiatives in the past 12 months.
March 10, 2014
New procedure permits automatic recognition of consolidated return filing status
Affiliated groups that fail to file a required Form 1122, by which a subsidiary consents to be included in a consolidated return, will get a break from the Internal Revenue Service.
FASB to research fair value standard’s relevance for certain investors
Some investors told a review team that FASB’s fair value measurements standard produces information that is not relevant or meaningful for employee benefit plans, not-for-profits, or private companies. FASB plans to perform research and outreach on this issue, according to Russell Golden, the board’s chairman.
NEWS HEADLINES FOR MARCH 2–8, 2014
March 6, 2014
U.S. economic sentiment continues incremental rise
Economic optimism among finance professionals in business and industry continued a steady rise in the latest quarterly survey by the AICPA. Regulatory requirements continue to be a concern, but CPA decision-makers are generally upbeat about their organizations’ prospects in the coming 12 months.
March 5, 2014
Simplified employer health care coverage reporting announced
The rules provide for combined reporting of information on employee coverage under Sections 6055 and 6056 and allow certain employers alternative reporting options that do not require monthly reporting of employee-specific information.
March 4, 2014
FASB takes step forward in streamlining of disclosures
FASB is attempting to make disclosures in financial statement notes more useful to investors. The board took a step forward in the project with a proposal that indicates how the board would determine which notes need to be included in financial statements.
How to turn data privacy into a competitive advantage
Amid a barrage of customer data breaches, companies have a chance to create a competitive advantage by building and keeping customer trust with strong data protection policies and controls.