In proposed regulations issued on Thursday, the IRS provided guidance on the treatment under Sec. 174 of research and development (R&D) expenditures incurred in connection with the development of tangible property, including pilot models (REG-124148-05). The proposed changes would, among other things, settle the question of whether the sale of
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Final rules remove “credit ratings” from regulations
The IRS on Thursday issued final regulations that remove all references to and all requirements of reliance on “credit ratings” from Treasury regulations (T.D. 9637). The regulations provide substitute standards of creditworthiness. They finalize rules that were issued in temporary form in 2011 to meet requirements mandated by the Dodd-Frank
Regulations clarify treatment of a debt instrument under straddle rules
On Wednesday, the IRS issued identical temporary (T.D. 9635) and proposed regulations (REG-111753-12) to clarify the treatment of debt instruments that are part of a straddle. The regulations provide guidance for when an issuer’s obligation under a debt instrument may be a position in actively traded personal property, in which
FASB’s Investor Advisory Committee opposes leases proposal
The converged proposal on financial reporting for leases continues to face resistance with the deadline for comment letters little more than one week away. FASB’s Investor Advisory Committee (IAC) last week declined to support the proposal, stating that the proposal is not an improvement to current accounting. And the Equipment
Final regulations attack artificially generated foreign tax credits
The IRS issued final regulations on determining the amount of taxes paid for purposes of the foreign tax credit (T.D. 9634). The regulations are designed to curb certain transactions that the IRS says “produce inappropriate foreign tax credit results.” They finalize proposed regulations issued in 2011 with no substantive change
FASB releases proposed 2014 U.S. GAAP taxonomy
FASB released its proposed 2014 U.S. GAAP Financial Reporting Taxonomy on Friday. The taxonomy consists of a list of computer-readable financial reporting labels coded in XBRL. The proposal contains updates for accounting standards and other recommended improvements to the official taxonomy, which is used by public issuers registered with the
Which accounting framework should a private company use?
Multiple options for private company financial reporting have emerged this year as standard setters, the AICPA, and other organizations have sought to reduce complexity and costs for small business owners. A new tool developed by the AICPA provides guidelines to help privately held businesses determine which accounting framework best meets
IRS proposes increased user fees for installment agreements, offers in compromise
On Thursday, the IRS issued proposed regulations to raise user fees for installment agreements from $105 to $120 and for offers in compromise from $150 to $186. The new fees are scheduled to take effect Jan. 1, 2014 (REG-144990-12). The user fees have not been raised since 2007 for installment
All legal same-sex marriages to be recognized for tax purposes, IRS says
In the wake of the Supreme Court’s Windsor decision invalidating a portion of the Defense of Marriage Act (DOMA), the Treasury Department and IRS announced on Thursday that “same-sex couples, legally married in jurisdictions that recognize their marriages, will be treated as married for federal tax purposes.” The IRS also
Many U.S. adults don’t understand basic health insurance terms
Many U.S. adults lack a basic understanding of common financial terms found in health insurance plans as they face critical decisions about their future coverage, according to an AICPA survey. More than half of respondents (51%) could not accurately identify at least one of the following terms: premium, deductible, and
Final rules issued on individual health care mandate
The IRS released final regulations Tuesday on the Sec. 5000A shared-responsibility payment—the penalty or tax imposed on individual taxpayers who do not obtain minimum essential health care coverage beginning in 2014 (known as the “individual mandate”) (T.D. 9632). The final rules adopt the proposed regulations issued in January with a
Final regs. adopt differential income stream method for cost-sharing agreements
On Monday, the IRS issued regulations (T.D. 9630) that govern the application of the differential income stream approach to cost-sharing arrangements. The regulations finalized without change regulations proposed in 2012. At the end of 2011, the IRS published final cost-sharing rules under Sec. 482. The goal of the new regulations
Leases case study: How J&J prepared a global inventory
Creating an inventory for all leases is one of the first actions experts say companies should consider in preparation for the converged lease accounting standard proposed by FASB and the International Accounting Standards Board. Johnson & Johnson (J&J), the global health care products company, has received two distinct benefits from
Proposed small employers’ health insurance premium tax credit rules issued
On Friday, the IRS issued proposed regulations governing the Sec. 45R credit for small employers that offer health insurance coverage for employees (REG-113792-13). The proposed rules incorporate the provisions of Notices 2010-44 and 2010-82 (which were issued to provide guidance for employers claiming the credit between its original 2010 effective
PCAOB’s reporting model proposal poses risks, rewards for audit firms
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
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
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Five years ago, a grieving Angel Zhen started his own CPA firm with no clients and no revenue. Today, he has 300 clients, $600,000 in revenue and 12 weeks of annual vacation. In this JofA article, he shares how he set up his firm and how you could do the same.
From The Tax Adviser
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Current developments in taxation of individuals: Part 2
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