The IRS Large and Mid-Size Business Division analyzed implications of FASB Interpretation no. 48, Accounting for Uncertainty in Income Taxes, in an industry directive and field examination guide. The summary and 10 questions and answers of LMSB-04-0507-045 cover some questions extensively discussed elsewhere, such as FIN 48 workpapers falling within
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Car 54, Where Are You?
Police officers and firefighters who are permitted to drive their official vehicles home are exempt from the arrangement’s being considered a fringe benefit includable in income or subject to substantiation requirements of IRC § 274(d)(4), since the vehicles are considered unlikely to be used for personal purposes more than a
Taxpayer Suffers One-Two Punch on Stock’s Decline
The Court of Appeals for the Seventh Circuit rejected a taxpayer’s argument that margin loan financing of nonstatutory employee stock options rendered her exercise of the options not a taxable transfer within the meaning of IRC section 83. Under section 83, non-cash compensation, such as shares of stock, is taxable
Paper or Plastic?
A new Kansas law could lead to the elimination of paychecks—paper ones, anyway. The state’s employers can now require employees to receive their pay either by direct deposit or pay card. And it could save businesses a lot of money. While most states still require that employees have the option
Highlights
Japan and the International Accounting Standards Board (IASB) agreed to accelerate convergence between Japanese GAAP and International Financial Reporting Standards (IFRS). The two boards will seek to eliminate by 2008 major differences between Japanese GAAP and IFRS, with the remaining differences being removed on or before June 30,
Securities
FINRA, operating under SEC oversight, will regulate all securities firms that do business with the public, including with respect to professional training, testing and licensing of registered persons, arbitration and mediation. FINRA also will be responsible, by contract, for regulating the Nasdaq stock market, the American Stock Exchange and the
Government
The OMB/DHS paper on best practices is available at http://csrc.nist.gov/pcig/document/ Common-Risks-Impeding-Adequate-Protection-Govt-Info.pdf. The Identity Theft Task Force Strategic Plan is available at www.idtheft.gov/reports/StrategicPlan.pdf . FASAB is soliciting input on its exposure draft Reporting Gains and Losses From Changes in Assumptions and Selecting Discount Rates and Valuation Dates. The ED proposes changes
TIGTA: IRS Passwords at Risk
Investigators posing as IRS computer help desk personnel were able to persuade 60% of Service employees they contacted to change their password to one the investigator suggested, a violation of IRS computer security rules. The findings by the Treasury Inspector General for Tax Administration (TIGTA) echoed those of a similar
Limit Your Loss
With the holiday shopping season around the corner, Americans will not only stack up gifts, but rack up credit card purchases. As spending increases, so does the likelihood of falling victim to identity theft or fraud schemes. Each payment method—including credit or debit cards, cash, checks or electronic payments—carries varying
“Unique” Trust Costs Exempted From Floor
The IRS and Treasury Department issued proposed regulation amendments intended to clarify how administrative expenses of estates and non-grantor trusts may be deducted. In general, such costs are considered miscellaneous itemized deductions subject to a minimum of 2% of adjusted gross income, similar to individual returns. IRC section 67(e)(1), however,
Cafeteria Plans Get Full-Menu Regs
The IRS updated, clarified and consolidated several previously issued proposed regulations concerning employee benefits under IRC section 125, better known as cafeteria plans. The new sections in REG-142695-05 clarify the definition of a cafeteria plan and guidance changes since the superseded regulations were published (the earliest in 1984) and include
SOX Fears Put at Ease
“I’m confident that once auditors and companies begin to comply with and implement the new standard, costs will be rational and appropriate for smaller public companies. From this point forward, issuers should have nothing to fear from section 404 of the Sarbanes-Oxley Act.” — Former SEC Commissioner Roel C. Campos,
Travel Deduction Gets Bumped
The Tax Court recently held that an airline mechanic could not deduct travel expenses while working in a city to which he was transferred by his employer, even though he hoped to return to his city of residence. The court concluded the mechanic was not “away from home” as required
Internships Let You Try Before You Hire
It’s impossible to learn everything you want to know from a potential employee’s resume and an interview. That’s why internship programs can be a valuable way for students and employers to get to know each other before making a big commitment. But just how effective are internships as a test
Prepare for Cross-Border Investigations
Among 103 senior executives responsible for cross-border investigations, 56% cited proper planning and 40% cited the effective use of internal resources as the primary drivers of successful investigations. Richard H. Girgenti, the Forensic National Practice leader for KPMG LLP, suggests the following tips to improve international fraud investigations: Assess investigation
Institute Names Three to Business and Industry Hall of Fame
Arthur V. Neis, CPA; James W. Noyce, CPA; and Peggy Scott, CPA, MBA, were inducted into the AICPA Business and Industry Hall of Fame, an annual event sponsored by Ajilon Finance. The award honors CPAs who provide insight and vision to their organizations, understand all facets of their enterprise, and
Call in the Pros
Small businesses, payroll companies and tax professionals: The IRS wants to answer your calls. The Service is sponsoring free monthly phone forums—on the national and local levels—covering topics such as withholding requirements for foreign workers, powers-of-attorney, energy credits and identity theft prevention. The presentation is followed by a question-and-answer session.
Overlooked Medical Deductions Abound
While it is common knowledge that taxpayers may deduct qualified medical expenses for themselves and their dependent children, other opportunities to deduct medical expenses are not so widely known. One is the deduction of medical expenses that a taxpayer pays on behalf of others, such as elderly
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