Source: IRS, www.irs.gov .
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Accounting
The AICPA staff issued two technical practice aids (TPAs) ( www.aicpa.org/members/div/acctstd/ ) on the applicability of FASB Interpretation no. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others” ( www.fasb.org/st/summary ). TPA 6400.45 addresses physician loans, and TPA 6400.46 discusses mortgage guarantees. Practitioners are
Let Uncle Sam Do Your Banking
Source: IRS, www.irs.gov .
Section 404 Compliance in the Annual Report
EXECUTIVE SUMMARY BEGINNING IN 2004, MANY PUBLICLY traded companies must comply with SEC rules by reporting on the effectiveness of their internal controls in the annual report. The content should contain A statement of management’s responsibilities for establishing and maintaining an adequate system. The identification of the framework used to
How to Apply Joint Estimated Tax Payments When Filing Separately
married couple who has filed jointly in the past—and made joint estimated income tax payments for the current tax year—may decide to file separately for that year. This could arise, for example, with a couple who was separated by the end of the tax year but had no legal separation
Deemed Substantiation of Business Travel Expenses
IRC section 162(a)(2) permits taxpayers a deduction for business travel expenses such as lodging, meals and other incidental costs while away from home. IRC section 274(n) limits the deduction for meal and beverage expenses to 50% of the amount incurred. And section 274(d) requires strict substantiation of all travel expenses.
Valid Transfers Excluded From Gross Estate
Under IRC section 2036(a) and Treasury regulations section 20.2036-1(a) there are two exceptions that prevent transfers from being included in a decedent’s gross estate. First, if a transfer is a bona fide sale for adequate and full consideration, it is not part of the gross estate. Second, the transfer also
What Constitutes a Responsible Person?
IRC section 6672 imposes a penalty equal to the total amount of any federal payroll (trust fund) tax any person willfully evades, fails to collect or does not account for and pays over. In view of the section’s scope, the courts broadly interpret “any person” to include officers, employees, partners
More Caught, But Fewer Punished
Source: IRS, www.irs.gov .
Collecting Attorney Fees From the IRS
Recently a district court in New Jersey reviewed the rules and requirements in the tax code under which taxpayers can collect a reasonable reimbursement for attorney fees they pay to litigate tax cases they win. Daniel Scheingold, John Orem and Edward Trueblood were officers of IE Inc. and Street Holding
Government Accounting
The Governmental Accounting Standards Board (GASB) issued Statement no. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions, which generally requires state and local governments to account for and report costs and obligations related to postemployment health care and other nonpension benefits, commonly referred to as
Substantial Compliance No Substitute for Filing Election
TAX BRIEF Substantial Compliance No Substitute for Filing Election A taxpayer’s sale or exchange of investment securities generally does not qualify for nonrecognition of gain as a like-kind exchange. However, when taxpayers (other than C corporations) sell securities that they have held for at least three years in a
Money Laundering
The federal financial institutions regulatory agencies—the Federal Reserve System, the Federal Deposit Insurance Corp., the National Credit Union Administration, the Office of the Comptroller of the Currency and the Office of Thrift Supervision—issued Bank Secrecy Act procedures that guide implementation of, and provide a consistent approach to examining, the customer
Tax Planning for Servants of God
EXECUTIVE SUMMARY FOR CLERICS, GROSS INCOME does not include housing allowances paid as part of compensation to the extent the allowance is used to rent or provide a home and does not exceed the fair rental value of the home plus the cost of utilities. However, housing allowances are included
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 Institute launched a Web-based survey to assess how well private company financial reports meet the needs of those who
Court Upholds IRS Lien Against Corporate “Alter Ego.”
Court Upholds IRS Lien Against Corporate “Alter Ego” T itle 26, section 6321, of the U.S. code provides: “If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount…shall be a lien in favor of the United States upon all property and
Financial Reporting Goes Global
EXECUTIVE SUMMARY THERE IS A CLEAR TREND toward adopting IFRS as the single body of internationally accepted financial reporting standards. In the next few years, thousands of companies will move to IFRS as a primary basis of financial reporting. THE IFRS MANDATE WILL AFFECT U.S. COMPANIES. Some may be required
Employer-Provided Education Benefits
EXECUTIVE SUMMARY MANY EMPLOYERS PROVIDE EMPLOYEES WITH TAX-FREE education benefits. The two most common are scholarships and grants under IRC section 117 and education-assistance programs under section 127. There is, however, a third alternative: CPAs can recommend using the working condition fringe benefit of IRC section 132(d). SCHOLARSHIPS UNDER SECTION
Fraud
The Association of Certified Fraud Examiners (ACFE) issued its 2004 Report to the Nation on Occupational Fraud and Abuse ( www.cfenet.com/report ). Based on a survey of certified fraud examiners from late 2003 through early 2004, the report analyzes more than 500 cases representing a loss of $761 million to
Government Accounting
The Governmental Accounting Standards Board (GASB) issued two exposure drafts (EDs). One, Net Assets Restricted by Enabling Legislation—an Amendment of GASB Statements no. 34 and 44, proposes standards intended to clarify for preparers of state and local government financial statements the requirements for reporting net assets contained in GASB Statement
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.
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Current developments in taxation of individuals: Part 2
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