The AICPA’s board of directors approved a document that replaces the initial Privacy Framework developed by the AICPA and the Canadian Institute of Chartered Accountants (CICA). The new guidance, “Generally Accepted Privacy Principles (GAPP),” is based on the premise that good privacy practices are essential to effective corporate governance and
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TOPICS
Tax
Technology
The AICPA issued its annual ranking of the 10 technologies most likely to significantly affect practitioners, their clients and their employers in the coming year ( http://infotech.aicpa.org/resources/top++10+technologies/ ). For the first time, the AICPA invited members of ISACA to join the AICPA Information Technology (IT) section members and Certified Information
AMT for Individuals
SOME PLANNING FOR INDIVIDUAL TAXPAYERS ince 1969 the Internal Revenue Code has included an alternative minimum tax (AMT), originally designed to prevent wealthy taxpayers from claiming so many deductions that they wound up paying little or no taxes. Under the AMT, taxpayers with large amounts of regular tax deductions and
…And Small Business Audits
Source: IRS, www.irs.gov .
Government Accounting
The Governmental Accounting Standards Board (GASB) issued Accounting and Financial Reporting for Pollution Remediation Obligations, an exposure draft (ED) that specifies five circumstances—any of which would require a government to estimate its obligations to address the current or potential detrimental effects of existing pollution ( www.gasb.org/exp/exdfpg.html ). The ED also
Can Estate Reduce IRAs’ Value for Tax Purposes?
gross estate includes the fair market value of all of the decedent’s property. IRAs are part of the gross estate, but beneficiaries of inherited IRAs do not report taxable income until after they receive distributions. The tax code classifies these items as “income in respect of a decedent” (IRD); both
More E-Filers Than Ever
Source: IRS, www.irs.gov .
Restrictions on the Right of Offset
ost businesses assume they can apply the right of offset to net a receivable and payable. Recently the Federal Circuit Court of Appeals limited the government’s right of offset. Although Pacific Gas and Electric (PG&E) filed its 1982 tax return on time, it subsequently filed an amended return requesting a
Too Much of a Good Thing
EXECUTIVE SUMMARY Companies that allow employees to invest their 401(k) accounts in company stock face a serious risk if the stock declines precipitously. Faced with large losses, employees can take legal action to recover their retirement savings. To head off trouble, companies should consider limiting how much 401(k) money employees
Dividends-Received Deduction From Portfolio Stock
ne of Congress’s goals is preventing taxpayers from taking undue advantage of the tax rules. To that end it passed IRC section 246A, which prevents corporations from claiming a dividends-received deduction against dividends from stock purchased using debt that generates an interest expense deduction. To make its insurance subsidiary a
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. The SEC approved on February 6, 2006, the Public Company Accounting Oversight Board’s (PCAOB) Auditing Standard no. 4 ( www.sec.gov/news/digest/dig020706.txt ;
Smart Stops on the Web
EMPLOYEE BENEFIT SITES Know the Law www.dol.gov/ebsa Firms shopping for health insurance will want to read up on the potential pitfalls at the Department of Labor’s Employee Benefits Security Administration Web site. Focus on Health Care Fraud has fact sheets on how to protect your employees when purchasing health insurance
Big Business Audits…
Source: IRS, www.irs.gov .
FYI
A semiannual AICPA survey of CPAs serving as senior corporate executives revealed they have a mostly favorable outlook for the U.S. economy in 2006 ( http://fmcenter.aicpa.org/NR/rdonlyres/ ). Sixty percent of respondents believed that the economy will continue to improve, and 74% of them had high hopes for their own organization’s
International
The International Accounting Standards Board (IASB) published an ED to amend International Financial Reporting Standard (IFRS) 2, Share-based Payment ( www.iasb.org ) by stipulating that the vesting conditions an individual or organization must satisfy to receive shares concern only specified periods of service or required performance targets. It also requires
Options and the Deferred Tax Bite
Just when you thought it couldn’t get any more complicated. EXECUTIVE SUMMARY Implementation of FASB Statement no. 123(R) goes beyond selecting a method to value employee stock options. CPAs also must help companies make the necessary tax accounting adjustments to properly track the tax benefits from stock-based compensation. Statement no.
Financial Reporting
FASB issued as final two staff positions—FSP SOP 94-6-1, Terms of Loan Products That May Give Rise to a Concentration of Credit Risk, and FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined-Contribution
Auditing
The ASB has approved for issuance eight statements on auditing standards (SASs) for audits of nonissuers related to risk assessment. These standards address the auditor’s assessment of the risk of material misstatements in financial statement audits and the design of audit procedures responsive to such risks ( www.aicpa.org/members/div/auditstd/2005_06_15_risk_assess.htm ). The
GAAP
FASB is codifying U.S. GAAP literature for nongovernment entities into a single authoritative reference that will supersede all existing standards and be available online. The board is seeking researchers’ feedback on the capabilities such a system should have ( www.fasb.org ).
FYI
Robert L. Bunting, AICPA immediate past chair, was appointed to the board of the International Federation of Accountants for a three-year term. In this post he will help determine how the international accountancy profession can best meet its public-interest responsibilities and contribute to worldwide economic growth and stability. Bunting is
Features
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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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