his is a tale of two relationships. Ezzon Corp. employs Jay and Pat. Jay has been married to Lisa for two years; Pat has lived with Chris for six years. CPAs who think they are familiar with the rules applicable to unmarried couples living together may be surprised to
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TOPICS
Tax
Banking
The federal reserve board of governors adopts a rule that revises official staff commentary on regulation E, which implements the Electronic Funds Transfer Act. The new rule provides compliance guidance on electronic check conversion transactions, computer-initiated bill payments and electronic authorizations of recurring debits from a consumer’s bank account (
E-Commerce
To combat online fraud and improve the public’s confidence in doing cross-border business on the Internet, the United States joins 12 other nations in launching econsumer.gov, a multilingual Web site where consumers can obtain information about relevant laws and agencies and submit e-commerce-related complaints online ( www.ftc.gov/opa/2001/04/econsumer.htm ).
Unclaimed Property Laws
ll 50 states (as well as the District of Columbia, Puerto Rico and Guam) have laws that apply to unclaimed property. Unclaimed property typically is intangible property—held, issued and owed to another in the ordinary course of the holder’s business—that the owner has not used or made an ownership claim
Employee Benefits
A new survey examines retirement plan sponsorship by businesses with fewer than 100 employees. Among reasons business owners cite for not offering a plan are their uncertainty about future revenue and workers’ preference for higher wages or other benefits ( www.ebri.org/sers/2001/index.htm ).
IRS Can’t Invalidate Return After Accepting It.
In 1996 after 15 years of marriage and of filing joint federal income tax returns, a husband and wife divorced. Shortly thereafter, a professional tax preparer filed a joint 1995 return on their behalf, without either the husband’s or wife’s signature. The IRS accepted and processed the return, and the
Financial Reporting
Corporations whose press releases provide pro forma earnings should also include a reconciliation to GAAP results, according to best practices guidelines jointly issued by the Financial Executives Institute and the National Investor Relations Institute ( www.niri.org/publications/alerts/ea042601.cfm ).
Personal Financial Planning
Fewer than three of four workers saved for retirement in 2000, says a new survey. According to researchers, while health care expenses worry workers who have tried to estimate their retirement needs, those who have not fret less about their retirement income ( www.ebri.org/rcs/2001/index.htm ).
Insurance
The National Association of Insurance Commissioners says its plan to improve the uniformity, efficiency and effectiveness of state insurance regulation will serve consumers better than the American Council of Life Insurers’ call for an optional federal charter for life insurance companies. Meanwhile, the Shadow Financial Regulatory Committee—an independent research group—evaluates
FYI
Gary S. Schieneman, CPA, begins a two-year term with FASB on July 1, replacing Anthony T. Cope, who has joined the International Accounting Standards Board ( http://accounting.rutgers.edu/raw/fasb/news/nr051401.html ). The United Kingdom’s accounting standards board appoints Douglas Flint to a three-year term ( www.frc.org.uk/publications/publication335.html ).
International
A new IFAC discussion paper examines the methods different countries’ accounting organizations advocate for defining and achieving competence in professional accountancy. Comments are due by October 31 ( www.ifac.org/News/LastestReleases.tmpl?NID=99010990012150 ). The Organisation for Economic Co-operation and Development’s initiative on harmful tax practices draws the opposition of the U.S. Treasury secretary,
Accounting
For news from the AICPA and state societies, visit www.cpaweb.org , which also offers online CPE, AICPA professional literature, practice management aids and links to state society Web sites. FASB reaffirms its restrictions on how banks can qualify for sale accounting treatment and issues a series of related questions and
Home Sale Exclusion Limited
More and more individuals are using living trusts to avoid probate court and transfer their property to named beneficiaries upon their death. A new letter ruling exposes a potential problem if a married couple’s revocable trust becomes irrevocable after the first spouse dies and the trust then sells the surviving
Line Items
OK to Donate Stock With No Voting Rights Revenue ruling 81-282 states that, if a taxpayer contributes voting stock to a qualified charitable recipient but retains the right to vote, IRC section 170 (f)(3), which disallows charitable deductions for partial interests in property, will deny a charitable contribution deduction if
Use the $10,000 Annual Gift Tax Exclusion
hile many taxpayers know about the $10,000 annual gift tax exclusion, they do not realize it can be one of the most effective techniques available for providing substantial long-term tax savings. In addition to lowering current taxes, it can be used to move assets out of a taxable estate on
Fraud
Belgian software maker Lernout & Hauspie says its Korean division faked $100 million in revenue and assigned staff to pose as customers, deceiving its auditors (ftp://ftp.lhsl.com/b ports/KoreaReport.pdf).
Professional Issues
The AICPA develops a practice guide to assist members in observing FTC and SEC privacy and disclosure requirements established by the Graham-Leach-Bliley Act ( http://ftp.aicpa.org/public/download/news/ftc.doc ). The SBA presents outstanding entrepreneurship awards to two CPAs—David A. Cottrell of Anchorage, Alaska, and Margaret A. Johnsson of Chicago—recognized for their personal achievements
Banking
The FDIC chairman says a forthcoming reform proposal will address the allocation of deposit insurance costs among covered institutions, the timing of premium collections and inflation’s effect on insurance benefits ( www.fdic.gov/news/news/speeches/chairman/sp07mar01.html ).
Innocent Spouse Provisions
One of the most important changes Congress introduced recently to make the tax laws more equitable was a revision of the innocent spouse rules. Since their enactment, the courts have been busy determining which taxpayers qualify for relief. Ellen Hinckley was married for more than 30 years and, for most
Employee Benefits
Researchers warn that a potential Social Security shortfall and a shift from defined-benefit to defined-contribution retirement plans will put the onus on workers to ration benefits effectively throughout their retirement years ( www.ebri.org/ibex/ib232.htm ).
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