Businesses today expect professional service providers to offer a broad business perspective and deliver value-added solutions to an expanding array of opportunities. There is a clear market need for professionals who can manage a rapidly changing business environment and provide solutions that integrate broad strategic business issues. Many CPAs have
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TOPICS
Tax
Tax Rules for Day Traders Revisited
In January the JofA ran a second article by Marc I. Lebow, P. Michael McLain and Wayne Schell regarding the taxation of day traders (see “Day Trading and Self-Employment Taxes,” page 80 ). This was in response to a number of queries about two articles in the October 2000 issue
Professional Issues
New charter for Public Oversight Board increases its powers, staff and funding (not yet posted on POB Web site). Effective February 9.
Banking
Debt requirements set for banks with financial subsidiaries ( federalreserve.gov/boarddocs/press/boardacts/2001/20010119/default.htm ). OCC releases privacy obligations advisory for banks ( www.occ.treas.gov/ftp/advisory/2001-2.doc ). Survey shows that banks are raising their loan standards ( federalreserve.gov/boarddocs/snloansurvey/200102/fullreport.pdf ).
Lease Termination Costs
Taxpayers frequently enter into leases to guarantee access to a particular asset at a fixed price. Due to market changes, some leases can become financially burdensome. In such cases a taxpayer can either continue the lease or try to terminate it. If the lessor is paid a cancellation fee, the
Supreme Court Rules on COD Income and S Corporation Stock Basis
For a number of years, taxpayers, the IRS and the courts have disagreed about the proper treatment of S corporations that have cancellation-of-debt (COD) income and are insolvent. Recently the U.S. Supreme Court ruled in a taxpayer’s favor. David Gilitz and Philip Winn were equal shareholders in an S corporation.
Employee Benefits
Labor department rule bolsters security of small pension plans ( www.dol.gov/dol/pwba/public/media/press/pr101900.htm ). Effective April 17.
Tax Planning for Expatriates
he need for corporate tax planning, particularly for companies with international operations, is fairly obvious, and information on the various strategies is readily available. CPAs will find, however, that providing these corporate clients with individual tax planning and services for their U.S. employees assigned to foreign countries is less widely
Installment Method Again Available for Accrual-Basis Taxpayers
n December 1999, legislation repealed the availability of installment-method reporting for accrual-basis taxpayers. (See “Installment Sale Reporting for Accrual-Method Taxpayers—Gone But Not Forgotten?” JofA, Jun.00, page78.) Section 536(a) of the Ticket to Work and Work Incentives Improvement Act of 1999, which enacted IRC section 453(a)(2), repealed use of the method
Financial Reporting
FASB issues employee compensation guidance ( www.rutgers.edu/accounting/raw/fasb/eitf/eitfissu.html#00-23 ). FASB issues an exposure draft on accounting for goodwill ( www.rutgers.edu/accounting/raw/fasb/news/nr021301.html ). The comment period ended March 16. Accounting for financial asset transfers, servicing addressed in FASB report ( accounting.rutgers.edu/raw/fasb/project/125summary.html#Q&A ). SEC issues final rule that says mutual funds must disclose after-tax
Auditing
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. SBA earns high marks for internal control framework ( www.sba.gov/news/current01/01-08.txt ).
IRS Changes Home Page
The IRS has announced that over the next few months it will change its home page, the Digital Daily, at www.irs.gov to a more contemporary-looking portal page. The service expects the improvements will give visitors quicker and easier access to tax information. The revamped site will reflect the modernized IRS
Legal
SEC adjusts civil penalty amounts for inflation ( www.sec.gov/rules/final/33-7946.htm ). Effective February 2.
AGI on the Rise
Source: IRS, www.irs.gov .
Government Accounting And Auditing
GASB user guides explain government financial statements ( www.rutgers.edu/accounting/raw/gasb/pub/userguides.html ).
FYI
IIA sponsors report on audit committee best practices ( www.theiia.org/ecm/bookstore.cfm?doc_id=1257 ). GAO appoints new members to auditing advisory council (Not yet posted on GAO Web site). New members appointed to FASB ( www.rutgers.edu/Accounting/raw/fasb/news/nr_schipper.html ; www.rutgers.edu/Accounting/raw/fasb/news/nr_wulff.html ). Bush names SEC Commissioner Unger as acting chairman ( www.sec.gov/news/press/2001-20.txt ). Labor department sets
International
EU wants all listed companies to use international accounting standards by 2005 ( www.iasc.org.uk/news/cen8_193.htm ). G4+1 shuts down as IASB starts up ( www.rutgers.edu/accounting/raw/fasb/IASC/g4+1jan01.html ). IASC establishes international accounting standard-setting board ( www.iasc.org.uk/news/cen8_511.htm ). U.K.’s audit board seeks feedback on standards convergence handbook ( www.asb.org.uk/publications/publication320.html ). Comments are due by
Investments
SEC acts to improve mutual fund directors’ independence ( www.sec.gov/rules/final/34-43786.htm ). Effective February 15.
Line Items
When Compensation Limits Don’t Apply IRC section 162(m)(1) imposes a $1 million limit on the amount a publicly held corporation can deduct for remuneration paid to one of its “covered employees.” A “covered employee” is defined as the corporation’s chief executive officer or its four most highly compensated officers as
Mergers And Acquisitions
“Shadow panel” says more “financial modernization” legislation needed ( www.aei.org/shdw/shdw166.htm ).
Features
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