In a private letter ruling released on Friday, the IRS’ Office of Chief Counsel allowed a private bank catering to high-wealth individuals to deduct as ordinary and necessary trade or business expenses the payments it made to settle lawsuits arising from criminally fraudulent activities by one of the bank’s fund
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AICPA Recommends Ways IRS Could Reduce Schedule M-3 Burdens
In a letter to Heather Maloy, commissioner of the IRS’ Large Business and International Division, Patricia Thompson, chair of the AICPA’s Tax Executive Committee, encouraged the IRS to collaborate with external stakeholders in revising Schedule M-3, Net Income (Loss) Reconciliation, and suggested some revisions to reduce taxpayers’ compliance burdens. The
U.K. Bribery Act Requires New Precautions for Global Companies
The U.K. Bribery Act 2010 taking effect July 1 represents one of the biggest changes in global anticorruption law since the USA Patriot Act in 2001, but awareness of its provisions remains very low, according to a Deloitte webcast poll. While 78% of respondents who participated in the poll said
SEC Report Recommends No New SOX 404(b) Exemptions
An SEC study of Section 404(b) of the Sarbanes-Oxley Act recommends no new exemptions to the requirements. The study by the SEC’s Office of the Chief Accountant was mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. Its scope was restricted to companies with a market capitalization between
FASB Issues Goodwill Impairment Proposal
FASB issued an exposure draft of a proposed Accounting Standards Update intended to simplify how businesses are required to test goodwill for impairment. “Nonpublic companies have expressed concerns to the Board about the cost and complexity of performing the goodwill impairment test,” FASB member Daryl Buck said in a press
IASB and FASB Report Progress on Convergence
FASB and the International Accounting Standards Board (IASB) on Thursday published a progress report on their joint convergence projects. Since their previous report in November, the boards have: Completed five projects. In the next few weeks, the IASB will issue new standards on consolidated financial statements (including disclosure of interests
SEC Forum to Address Benefits, Challenges of IFRS for U.S.
The SEC on Wednesday said it is hosting a round-table meeting July 7 to discuss benefits or challenges in potentially incorporating IFRS into the financial reporting system for U.S. issuers. The SEC said in a press release that the meeting will include three panels representing investors, smaller public companies, and
IRS Issues Proposed Regulations on Controlled Group Deferred Losses
On Wednesday, the IRS issued proposed regulations on the time for taking into account deferred losses on the sale or exchange of property between members of a controlled group (REG-118761-09). Generally, for any loss on the sale or exchange of property between certain related persons, no deduction is allowed, except
FASB, IASB Want Feedback on Convergence Burden, Timeline
FASB and the International Accounting Standards Board (IASB) posted a survey online to collect views from users about the time and effort that will be involved in adopting several new standards and when those standards should be effective. The boards are seeking further input on these issues because, they said
IRS Extends, Modifies Program Allowing Truncated Social Security Numbers on Information Returns
The IRS announced that it is extending and modifying a pilot program designed to deter identity theft (Notice 2011-38). Under the program, which was introduced in 2009, filers of certain paper information returns are allowed to truncate the payee’s Social Security number on the payee statement. The notice extends the
President Signs Repeal of Expanded 1099 Requirements
On Thursday, President Barack Obama signed into law the Comprehensive 1099 Taxpayer Protection and Repayment of Exchange Subsidy Overpayments Act of 2011 (HR 4; 1099 Act), which repeals both the expanded Form 1099 information reporting requirements mandated by last year’s health care legislation and also the 1099 reporting requirements imposed
FASB, IASB Announce Delay on Priority Projects
The heads of FASB and the International Accounting Standards Board (IASB) on Thursday announced they will take “a few additional months” beyond their June target date to complete priority joint convergence projects on revenue recognition, leases, financial instruments and insurance. “Our next step is to lay out the plans for
Podcast Summary of the Joint IASB/FASB Board Meeting, April 12–14, 2011
Editor’s note: The heads of FASB and the International Accounting Standards Board (IASB) announced they will take “a few additional months” beyond their June target date to complete priority joint convergence projects on revenue recognition, leases, financial instruments and insurance. Below is a summary of their discussion. Also read “FASB,
AICPA’s Call for AMT Repeal, Simplification Strikes Chord With Lawmakers
Annette Nellen, chair of the AICPA Individual Income Taxation Technical Resource Panel, pleased some members of Congress when she repeated the AICPA’s support for repeal of the alternative minimum tax (AMT) in testimony before the House Ways and Means Committee on April 13. “That’s music to my ears,” veteran congressman
IRS Extends Guidance on Trustee Fees
The IRS announced that it is extending interim guidance on the treatment of investment advisory fees and other costs subject to the 2% floor under IRC § 67(a) (Notice 2011-37). Under the notice, nongrantor trusts and estates will not be required to unbundle their fiduciary fees to determine what portion
Discharge of Indebtedness Rules Clarified for Grantor Trusts and Disregarded Entities
On Tuesday, the IRS issued proposed regulations (REG-154159-09) that provide rules regarding who is the “taxpayer” for purposes of applying the IRC § 108 discharge of indebtedness rules to a grantor trust or disregarded entity. IRC §§ 108(a)(1)(A) and (B) exclude discharged debt from a taxpayer’s income if the discharge
IRS Issues Foreign Financial Account Reporting Guidance
The IRS issued a second notice giving guidance on various reporting requirements under the Foreign Account Tax Compliance Act (FATCA, part of PL 111-147) (Notice 2011-34). The notice responds to concerns raised by commenters following the issuance last August of Notice 2010-60, which contained preliminary guidance on implementation of the
FASB Challenged With Prioritization
In part five of this exclusive JofA interview, FASB Chairman Leslie Seidman shares her challenges of prioritizing projects. JofA: What’s been the greatest challenge so far as chairman, and what do you expect your greatest challenge to be over the course of the next year? Seidman: It became clear last
Federal Budget Deal Avoids Tax Season Disruptions
White House and congressional negotiators reached an agreement on funding the federal government ahead of a midnight Friday deadline and averted a shutdown of all nonessential government functions. Under the agreement, the federal government will be funded by a continuing resolution through next Friday. By Friday, Congress plans to pass
IFRS Foundation to Add Common-Practice Tags to IFRS Taxonomy
The IFRS Foundation said it will publish supplementary tags for the IFRS Taxonomy that reflect disclosures that are commonly reported by entities in their IFRS financial statements. The foundation, the International Accounting Standards Board’s parent organization, said the common-practice tags will enhance the comparability of information by enabling entities to
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