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TOPICS

Tax

The Risks of Being Global

EXECUTIVE SUMMARY Increased international trade regulations have led to greater risks for companies that do business abroad. How CPAs help companies manage these risks will vary based on the countries and products involved, the size of the company, the potential penalties and the company’s import/export structure. In going global, companies

When Payments to an S Corporation Don’t Create Basis

TAX CASE o payments, either direct or indirect, to a subchapter S corporation always create an increase in the taxpayer’s basis? The Tax Court recently decided that they do not. Sid and Al Ruckriegel were 50% shareholders in Sidal Inc., a subchapter S corporation, set up in Indiana. They were

New Pension Act Affects Charitable Giving

espite its name, the recently enacted Pension Protection Act of 2006 also addressed a number of other areas of taxation. A segment of this law created some new rules for individuals who donate cash and certain other types of property to charities. MORE DOCUMENTATION For many years, the government has

Like-Kind Exchanges of Real Property

TAX CASE RC section 1031 permits the tax-free exchange of like-kind property. If the transferor receives “boot” (such as cash) in addition to the like-kind property, the boot is currently taxable. The application of these rules to the exchange of real property that was burdened by a supply contract was

Government Accounting

The Financial Accounting Foundation, the parent body of the Governmental Accounting Standards Board (GASB), commissioned the first in a series of periodic surveys asking its stakeholders to share their views on how effectively GASB fulfills its mission. Overall, the 1,200 respondents said GASB has been carrying out its standard-setting charge

Professional Issues

The AICPA, under the leadership of immediate past Chair Leslie Murphy, launched the Young CPA Network, to address the needs of professionals early in their careers. The network offers a monthly electronic newsletter, The Edge, and a dedicated Web site ( www.aicpa.org/YoungCPANetwork ) that provide tools and resources to help

Banking

The Federal Reserve Board, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Office of Thrift Supervision jointly proposed rules that would implement new risk-based capital requirements in the United States for large, internationally active banking organizations ( www.fdic.gov/news/news/press/2006/pr06082.html ). In addition the agencies

Interest on Overpayments by S Corporations

TAX CASE arwood Irrigation Co., a Texas company, acquired very valuable water rights in 1900. Garwood had operated for a time as a C corporation, then elected S status before selling its rights in January 1999. The sale triggered recognition of a built-in gains tax, which the company reported and

Financial Reporting

The SEC issued Staff Accounting Bulletin (SAB) no. 108, which provides guidance on quantifying financial statement misstatements, including the consideration of the effects of the carryover and reversal of prior-year misstatements ( www.sec.gov/interps/account/sab108.pdf ). Typically, entities have quantified such errors in one of two ways—as the amount by which the

Hired Help: Finding the Right Consultant

  EXECUTIVE SUMMARY CPAs can help companies hire consultants to deal with a wide variety of employee benefits challenges including managing the rising cost of health insurance, maintaining competitive benefits offerings and dealing with the complexity of pension and other retirement plans. Before hiring a benefits consultant, companies should check

Auditing

For news from the AICPA and state societies, visit www.cpa2biz.com , which also offers online CPE, AICPA professional literature, practice management aids and links to state society Web sites.

FYI

The AICPA’s annual National Healthcare Industry Conference will take place November 2–3 in New Orleans. “This is another important part of our ongoing commitment, which includes organizing a Disaster Recovery Resource Center and an AICPA volunteer center to provide pro bono tax assistance to Katrina’s victims,” said AICPA President and

International

The International Federation of Accountants (IFAC) issued an exposure draft and several information papers on education in ethics, corporate sustainability and internal control. IFAC’s International Accounting Education Standards Board released an exposure draft of an International Education Practice Statement, Approaches to Developing and Maintaining Professional Values, Ethics and Attitudes (

Tax Software 2007

Data from more than 2,000 AICPA Tax Section members responding to the JofA annual tax software survey help you decide which product is best for you.

Understanding Closing Agreements

TAX CASE hen an IRS audit identifies deficiencies in a tax return, the taxpayer may be asked to sign a closing agreement. There are two types of closing agreements. The first—contained on Form 866, Agreement as to Final Determination of Tax Liability —establishes the final tax liability. The other, contained

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