Source: IRS Oversight Board FY2004 Budget/Special Report, www.irsoversightboard.treas.gov , 2004.
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Tax
Extraordinary Personal Services Exception
IRC section 469 generally disallows a deduction in the current year for the amount by which taxpayers’ losses from passive activities exceed their passive income; instead, such losses can be carried forward and offset against passive income in future years. Passive activities include trade or business interests in which taxpayers
Personal Financial Planning
The Institute, the AICPA Foundation, the National Endowment for Financial Education and the American Red Cross jointly published Disasters and Financial Planning: A Guide for Disaster Preparedness, which CPAs can use to help consumers obtain insurance and take other loss-mitigation steps before a catastrophe occurs. “Protecting the public interest is
FYI
Cheryl Linthicum, Mark Taylor and Teri Yohn will begin one-year terms in August as academic accounting fellows in the SEC’s Office of the Chief Accountant. Linthicum is associate professor at the University of Texas at San Antonio; Taylor holds the John P. Begley Chair in Accounting at Creighton University in
“Outsourcing, Offshoring, Nearshoring: What to Do?”
EXECUTIVE SUMMARY FANS OF OFFSHORE OUTSOURCING SAY it lowers labor costs; it’s efficient; and it lets firms accept new work during periods of peak demand. SOME LONG-TERM CONCERNS CPAs VOICE ARE: How will outsourcing affect the traditional CPA career path? How will it affect U.S. employees’ training? How will accountants
International
The International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) proposed four international auditing standards (ISAs) ( www.ifac.org/guidance/exd-outstanding.php ): ISA 600 (revised), The Audit of Group Financial Statements; ISA 260 (revised), The Auditor’s Communication with Those Charged with Governance; ISA 705, Modifications to the Opinion
“Tax Relief, Chapter 2004”
EXECUTIVE SUMMARY THE WORKING FAMILIES TAX RELIEF ACT OF 2004 extends the alternative minimum tax exemption of $58,000 (married filing jointly) and $40,250 (single) through 2005. THE WFTRA PROVIDES A UNIFORM DEFINITION OF “qualified child” that applies for purposes of head-of-household filing status, the child care credit, the dependency exemption
Credit Creeps Higher
Source: IRS, www.irs.gov .
Exiting a Partnership
Limited partners generally are not responsible for partnership debts; nonetheless, creditors often demand they guarantee them. When a limited partner who has guaranteed a debt wants to leave the partnership, he must satisfy the guarantee or have it cancelled. How this is accomplished can greatly affect the partnership’s taxation. MAS
Retirement
The Institute released Understanding Social Security Reform: The Issues and Alternatives, a comprehensive analysis by AICPA tax, accounting and economic specialists of the benefits and drawbacks of many current reform proposals. The report assesses the program’s financial condition; its importance to the elderly living in poverty; how reform could affect
Substantiating Travel and Entertainment Costs
n Townsend Industries, Inc., 342 F3d 890 (2003), the Eighth Circuit ruled that the cost of a company’s annual fishing trip was a working-condition fringe benefit and a deductible business expense. CPAs should study Townsend to help business clients substantiate (and deduct) employee entertainment costs. BACKGROUND Townsend Industries produced printing
“The Tax Is Assessed, Not the Taxpayer”
No tax can be collected without first being properly assessed. Under IRC section 6501, the IRS has three years from the filing of a return to assess any additional tax liability, and the method of assessment is dictated by IRC section 6203. Once a proper assessment is made, the IRS
Day Camp Counts
Source: IRS, www.irs.gov .
Banking
The SEC issued an order extending until September 30, 2005, the date by which banks must comply with certain broker registration requirements of the Gramm-Leach-Bliley Act, which repealed a provision of the Securities Exchange Act of 1934 that had allowed such institutions to engage in securities activities without registering as
Contingent Attorney Fees
Taxpayers often hire an attorney on a contingent fee basis. If the recovery is taxable, the attorney fee is deductible. Because of the interaction between regular tax and alternative minimum tax rules, however, these taxpayers can owe significant amounts—sometimes exceeding their entire receipt. In such situations they have argued that
FICA Taxes For Medical Residents
Payments to students for services they provide to a school, college or university are exempt from FICA taxes under IRC section 3121(b)(10) if the students are enrolled and regularly attend classes. Mount Sinai Medical Center of Florida Inc., Miami Beach, is a teaching hospital. Between 1996 and 1999 the hospital
Financial Reporting
The SEC again extended the dates by which nonaccelerated filers and foreign private issuers must comply with amendments—adopted in keeping with the internal control and financial reporting provisions of section 404 of the Sarbanes-Oxley Act—to its rules under the Securities Act of 1934 ( www.sec.gov/rules/final/33-8545.htm ). Such entities must begin
Get Whats Coming To You
Source: IRS, www.irs.gov .
Auditing
The AICPA Auditing Standards Board issued an exposure draft of proposed Statement on Auditing Standards (SAS), Defining Professional Requirements in Statements on Auditing Standards, and proposed Statement on Standards for Attestation Engagements (SSAE), Defining Professional Requirements in Statements on Standards for Attestation Engagements (www.aicpa.org/members/div/auditstd/2005_02_28_prof_req.asp). The suggested guidance defines terminology describing
Information Technology
The AICPA unveiled a Web site for CPAs interested in information technology ( www.aicpa.org/infotech ). It offers resources on system security and reliability; tools and checklists to help CPAs assess organizational practices pertaining to information privacy, e-commerce and similar subjects; and guidance on standards and regulations. In addition to the
Features
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4 ways solo practitioners can stand out
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
April 30, 2026
