If public company auditors are required to communicate more information in their reports, there will be more material to second-guess them on if the company they are auditing takes a fall. That is a concern about a new PCAOB proposal that calls for enhanced communication from auditors—in addition to the
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FASB proposes VIE alternative for private companies
FASB on Thursday formally issued for public comment a proposal that would exempt many private companies from the requirement to apply variable-interest entity (VIE) consolidation guidance to lessor companies under common control. The proposal, which was originally advanced by the Private Company Council (PCC), would create an alternative within U.S.
U.S., U.K. audit regulators to continue cross-border cooperation
Audit regulators in the United States and the U.K. agreed to continue cooperating on cross-border supervision of audit firms, the U.K. Financial Reporting Council (FRC) announced Thursday. The agreement between the FRC and the PCAOB does not contain an expiration date, but follows recent European Commission decisions that allow such
Tenth Circuit throws out decision striking down Colorado’s Amazon law
The permanent injunction that a federal district court issued in March 2012 enjoining Colorado from enforcing its Amazon law requiring remote sellers to report sales in the state has been dismissed by an appeals court. The Tenth Circuit held on Tuesday that the Tax Injunction Act (TIA, 28 U.S.C. §
How critical access hospitals might choose to recognize revenue from meaningful-use incentive payments
In the absence of authoritative GAAP on the subject, a diversity in practice has been observed with respect to how critical access hospitals (CAHs) recognize revenue from meaningful-use incentive payments. Various viewpoints exist on how to account for the economic substance of these arrangements. This article describes three of them—although
GASB risk financing standards get positive review
Accounting standards for risk financing and insurance-related activities of state and local governments, including public risk pools, achieve their purpose, according to a Financial Accounting Foundation (FAF) review report released Tuesday. GASB Statements No. 10, Accounting and Financial Reporting for Risk Financing and Related Insurance Issues, and No. 30, Risk
Revised proposal would clarify which projects GASB can consider
The Financial Accounting Foundation (FAF) on Tuesday issued a revised proposal describing a process that would decide which information GASB could consider for its standard setting for state and local governments. Under the proposal, GASB would consult with the FAF trustees’ Standard-Setting Process Oversight Committee to determine whether particular information
Online FATCA registration system launched
The IRS on Monday announced the launch of an online system that foreign financial institutions (FFIs) can use to register with the agency to meet their obligations under the Foreign Account Tax Compliance Act (FATCA) (IR-2013-69 (8/19/13)). The system allows institutions that must register with the IRS to create an
PCAOB calls for more care in audits of brokers and dealers
The PCAOB is urging auditors of broker-dealers to conduct audits with due professional care and skepticism after PCAOB inspectors identified deficiencies in 57 of the 60 audits of broker-dealers reviewed during the final 10 months of 2012. A report on the PCAOB’s interim inspection program for broker-dealer audits, which was
Amounts on late-filed S corporation return were not disclosed on taxpayer’s return
For purposes of determining whether there had been a substantial understatement of gross income on a taxpayer’s return, the IRS Office of Chief Counsel determined that amounts on a Form 1120S, U.S. Income Tax Return for an S Corporation, filed after the three-year statute of limitation expired, were not considered
IRS issues draft FATCA report form
On Thursday, the IRS released a draft Form 8966, FATCA Report, which will be used by foreign financial institutions (FFIs) and withholding agents to comply with their FATCA reporting and withholding requirements. Under the Foreign Account Tax Compliance Act (FATCA), enacted as part of the Hiring Incentives to Restore Employment
Revenue procedure provides liberal relief for late S corp. elections
On Wednesday, the IRS consolidated the provisions of a number of previous revenue procedures for requesting relief for late S elections under Sec. 1362, late qualified subchapter S trust (QSST) elections, late electing small business trust (ESBT) elections, late qualified subchapter S subsidiary (QSub) elections, and late corporate classification elections
Final rules issued on IRS disclosure of tax return information under health care law
The IRS issued final regulations about how it will release certain tax return information to the Department of Health and Human Services (HHS), as required by 2010’s health care legislation (T.D. 9628). The final regulations, which will be effective Wednesday, describe certain items the IRS will disclose in addition to
PCAOB proposes sweeping changes to the auditor’s reporting model
The PCAOB on Tuesday proposed sweeping changes to the auditor’s reporting model for U.S. public companies that would include a requirement for auditors to identify and describe “critical audit matters.” In addition, new standards and related amendments proposed by the PCAOB would require: A statement of auditor independence. This would
CAQ provides guidance to audit firms for reporting on policies and practices
Six possible elements of audit quality are highlighted in a report released Tuesday by the Center for Audit Quality (CAQ). The report describes elements of audit quality that audit firms could consider in refining or developing their own reporting regarding their public company audit practices. The elements are: Firm leadership
Disclosure Authorization and Electronic Account Resolution e-services get three-week reprieve
On Friday, the IRS announced that it is delaying the retirement of the Disclosure Authorization (DA) and Electronic Account Resolution (EAR) electronic services for three weeks (e-News for Tax Professionals, No. 2013-32 (8/9/13)). They were scheduled to be suspended on Aug. 11, but instead they will be available until Sept.
Proposed rules reset limitation for pursuing equitable innocent spouse relief
On Monday, the IRS issued proposed regulations under Secs. 6015(f) and 66(c) changing the deadline for taxpayers to request innocent spouse relief from joint liability (REG-132251-11). The proposed rules generally adopt new time limitation rules announced in Notice 2011-70, and, as a result, the regulations are effective the date the
“Private attorney general” can deduct his lawyers’ fees as trade or business expenses
In a case of first impression, a federal district court held that a taxpayer who zealously and single-mindedly pursued False Claims Act lawsuits against his former employer was engaged in the trade or business of prosecuting those lawsuits and he could deduct legal expenses related to that trade or business
Six areas where new revenue recognition standard will require judgment
The new, converged revenue recognition standard will include substantially less industry-specific, “bright-line” guidance than many U.S. companies are accustomed to. The standard that FASB and the International Accounting Standards Board are expected to issue this year will create the need for new judgments to be reached by financial statement preparers
PCAOB to consider proposing new auditor’s reporting model
The PCAOB will meet Tuesday to consider proposing a new auditor’s reporting model as well as new auditor’s responsibilities for other information in an annual report that contains audited financial statements and the auditor’s report. The contents of the auditor’s report have been the subject of significant activity by standard
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