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Accounting News Roundup: Are You Ready for Taxmaggedon?; Accounting Beats Psych; Brown Readies California’s Belt | 05.15.12

John Snow: 'Taxmaggedon' Is a Real Threat [WSJ]
[W]e face that real prospect, as prominent proposals by the administration would triple the top dividend tax rate to nearly 45%, while doubling the top rate on capital gains to 30%. If one intended to cripple job creation, depress stock prices, and lower the value of retirement savings for working Americans, these proposals would be just what we should choose.

HP loses $190 million tax case against IRS [Reuters]
Hewlett-Packard Co. on Monday lost a battle with the U.S. Internal Revenue Service for more than $190 million in tax refunds tied to a Dutch tax shelter designed by the derivatives arm of American International Group. The ruling turns a spotlight on an aggressive tax-cutting strategy created last decade by AIG Financial Products and bankrolled by several European banks. The strategy involved trading derivatives with the aim of generating capital losses and foreign tax credits for large corporations, like HP, which then used them to try to lower their U.S. tax bills.

Job Seekers Find Accounting Beats Psychology [BBW]
Accounting student Anne Rose will already have a job waiting when she receives her degree next week. Psychology major Echo Presgraves, another member of the Class of 2012, won’t be so fortunate. Rose, 22, credits her choice of major as paving her way. She signed a contract with PricewaterhouseCoopers LLP before she even began her senior year at Villanova University’s School of Business in Pennsylvania, after completing an internship last summer with the audit and consulting firm. “The major obviously has a huge role in it, compared to some of my friends that are marketing majors who still are struggling to find full-time employment right now,” said Rose, who is from Dallas, Texas, in a phone interview between final exams.

Is the IFRS Rhetoric Machine Running Out of Gas? [The Accounting Onion]
Tom Selling: "Everyone knows that GAAP/IFRS convergence has been a spectacular failure; yet the Big Four, the AICPA, maybe a few mega corporations, too-big-to-fail banks and the EU (albeit ambivalently) are continuing to prod the "politicians and regulators" to the point where many are wishing this whole IFRS thing would go away on its own."
Groupon shares jump on upbeat Q1 results [Reuters]

Groupon Inc (GRPN.O) shares jumped 22 percent in premarket trade on Tuesday after the daily deals company posted its first quarterly profit as it signed up more customers and merchants. "While billings, revenue, margins, and guidance all met or exceeded, signs of accelerated North American revenue shows that the company's technology efforts around personalization and, to a lesser extent, mobile and rewards, are paying off," Evercore Partners analyst Ken Sena wrote in a note.

PwC diversity chief on advancing diverse talent [HBJ]
“They really tackle the things they will confront working for the firm,” [Chief Diversity Officer Maria] Moats said. “It may be the first time they work in corporate America … so it really helps them understand what to expect from corporate culture.” When Moats — a first generation college grad and an Hispanic in corporate America — began her career, she wore a purple suit during her first week, and later discovered it wasn’t the best choice for banking in 1990. Those are the things PwC’s programs try to teach new employees who have never worked in a big corporation, and the firm tracks their advancement within the company, she said.

Brown Warns Californians: Taxes or Cuts [WSJ]
California Gov. Jerry Brown laid out a revised budget plan that relies on deeper spending cuts and higher taxes to bridge a projected state deficit that has widened to $15.7 billion from $9.2 billion since January. The Democratic governor said Monday he had no choice but to cut even deeper into social services to help close a budget gap that has shot up due to lower-than-expected tax revenue and delays and court-ordered impediments to spending cuts. Mr. Brown proposes to nearly double spending cuts to $8.3 billion for fiscal year 2012-13 from a January estimate that $4.2 billion of reductions were needed. Mr. Brown warned that if voters in November don't pass his proposal to temporarily increase income taxes on California's wealthiest residents and the state sales tax, already-strapped elementary and high schools would sustain billions of dollars of additional cuts. Mr. Brown hopes to raise about $6 billion of new revenue through his tax-increase measure. "Schools will suffer," Mr. Brown said at a news conference in Sacramento. "It won't be pretty."
Chairman of Best Buy Resigns After an Internal Audit [NYT]
The founder of Best Buy, Richard M. Schulze, has resigned as chairman after an internal investigation released on Monday said that he knew about a former chief executive’s improper relationship with an employee but did not report it to the board. he former chief executive, Brian J. Dunn, who abruptly resigned in April, “violated company policy by engaging in an extremely close personal relationship with a female employee that negatively impacted the work environment,” the report by the company’s audit committee said. Mr. Dunn, 51, is married with children, and the employee in question was a 29-year-old female subordinate who still works at Best Buy. Mr. Schulze, 71, the chairman, learned about the affair in December 2011, the report said, when an executive gave him a written statement from another employee with specific allegations about Mr. Dunn’s behavior. Mr. Schulze then confronted Mr. Dunn, who denied any inappropriate contact. “Following this conversation, the chairman did not share information about the conversation, the C.E.O.’s denial, or any of the related allegations with the audit committee, the general counsel, the head of human resources, the chief ethics officer or any other board member,” the report said.
Craig Dershowitz Of NYC Spends $60,000 In Custody Battle Over Dog Knuckles [CBS]

Craig Dershowitz has spent more than $60,000 in lawyers’ fees trying to win custody of his dog Knuckles after his ex-girlfriend took the pooch to California. Dershowitz, 34, said he considers Knuckles to be his son, and that although he’s gone through his life savings, he said it’s worth it. In papers filed earlier this year in Manhattan state Supreme Court, Dershowitz said ex-girlfriend Sarah Brega “kidnapped” Knuckles after they broke up. Brega said Dershowitz gave her the puggle pup — half pug, half beagle. Dershowitz started the website Rescue Knux to raise money for the custody fight. For $250, contributors can play fetch with Knuckles. For $10,000, Legends of Graffiti will do a giant, personalized mural.


Posted in ANR