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 AICPA staff issued Technical Information Service (TIS) 9110.15, a practice aid on auditor “certification” of the cost reports that health
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TOPICS
Tax
E-Filing Gains Favor
Source: IRS, www.irs.gov .
Interest Paid as an Administrative Expense
A court held that interest an estate pays on a charitable bequest is deductible as an administrative expense for estate tax purposes. Betsy Carolyn Turner was executor of the estate of Sally C. Jackson, who died in 1997. Jackson’s will made a bequest of $10 million to Fowler Homes on
Court Review of IRS Abuse of Discretion
Various code sections give the IRS discretion to reduce or eliminate a tax liability for equity or hardship reasons. If the IRS fails to reduce a liability, the taxpayer can ask a court to mandate a reduction on the grounds the IRS abused its discretion. This type of judicial review
Uncle Sam Raises the Limit
Source: Social Security Administration, www.ssa.gov .
Risk Management
The Committee of Sponsoring Organizations of the Treadway Commission (COSO), of which the AICPA is a founding member, published Enterprise Risk Management—Integrated Framework ( www.coso.org/publications/ ), which describes risk management components, principles and concepts for organizations of all sizes. Built on the foundation of COSO’s Internal Control—Integrated Framework, which many
Opt to Adopt
Source: IRS, www.irs.gov .
Steer Clear of the Dirty Dozen
Source: IRS, www.irs.gov .
Deducting Retirement Community Fees
or clients living in health care retirement communities, the Tax Court’s decision in Delbert L. Baker, 122 TC 143 (2004), provides additional flexibility in determining the portion of fees deductible as IRC section 213 medical expenses. CPAs should take note of the ruling. BACKGROUND Delbert Baker and his wife had
Is “Equitable Remedy” Settlement Excludable From Gross Income?
Taxpayers are continually testing the legal definitions of “personal physical injuries” and “physical sickness.” The Tax Court recently decided an “equitable remedy” settlement did not meet the criteria for the tax treatment afforded these conditions. In 1985 William Kidd filed a lawsuit against the state of California, its personnel board
Deducting the Cost of Laser Eye Surgery
TAX BRIEF Many American taxpayers undergo clinical procedures to correct vision problems. The most common in today’s medical environment is laser eye surgery, commonly called Lasik. Taxpayers cannot deduct the cost of cosmetic surgery unless the procedure is necessary to correct a deformity from a congenital abnormality, personal injury
Auditing
The Institute reorganized and updated an AICPA audit and accounting guide, Government Auditing Standards and Circular A-133 Audits, for conforming changes as of May 1, 2004 ( www.aicpa.org/members/div/auditstd/ ). Its former title was Audits of States, Local Governments, and Not-for-Profit Organizations Receiving Federal Awards. Copies (product no. 012744JA) are available
Personal Financial Planning
The Financial Advisor agreed to publish a correction of erroneous information that appeared in its September issue about the AICPA’s personal financial planning division ( www.aicpa.org/download/pfp/ ). In addition the magazine’s editors agreed to print a letter from the AICPA and to highlight in an upcoming issue the activities of
FYI
A Department of Labor publication, Selecting an Auditor for Your Employee Benefit Plan ( www.dol.gov/ebsa/pdf/selectinganauditor.pdf ), identifies the AICPA Employee Benefit Plan Audit Quality Center ( www.aicpa.org/ebpaqc ) as a resource for companies whose plans have 100 or more participants. Under the Employee Retirement Security Income Act (ERISA), such plans
International
The International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) released two exposure drafts (EDs) and a discussion paper intended to improve the quality and consistency of audits. One ED, Clarifying Professional Requirements in International Standards Issued by the IAASB ( www.ifac.org/Guidance/EXD-Details.php?EDID=0033 ), addresses the
Accounting
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 AICPA Accounting and Review Services Committee issued a revised illustrative representation letter for review engagements ( www.aicpa.org/members/div/auditstd/revision_of_appendix_f.htm ). The revisions
Alimony Payments Must Terminate at Death
IRC section 215(a) says an individual who makes alimony payments may deduct them and the recipient must include them in his or her gross income. Under IRC section 71(b)(1), payments must meet four requirements to be considered alimony: They must be made pursuant to a divorce agreement. The agreement must
Privacy
The AICPA introduced educational resources designed to improve CPAs’ ability to help their clients and employers manage privacy-related risks. Understanding and Implementing Privacy Services: A CPA’s Resource (paperback with CD-ROM, product no. 056509JA) and “Privacy Issues for Business: Whose Information Is It Anyway?” (CD-ROM, no. 780005HSJA) are available at www.cpa2biz.com
Appeals Court Confirms Treatment of Assumed Liabilities
The Seventh Circuit Court of Appeals recently upheld a Tax Court ruling (see “ Acquiring Contingent Liabilities, ” JofA , June04, page 73) that a corporation must capitalize its payment of an assumed liability. The appeals court’s analysis offers a warning to other taxpayers that it’s unlikely this type of
Tax Deductions May Help Fight Obesity
A disease is defined as a sickness of the body or mind. Until recently, obesity was not considered a disease but a self-inflicted, controllable affliction caused by poor lifestyle choices, such as lack of exercise or improper eating habits. The statistics are staggering. The Centers for Disease Control and
Features
FROM THIS MONTH'S ISSUE
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
April 30, 2026
Current developments in taxation of individuals: Part 2
April 30, 2026
