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November 28, 2022

Accounting News Roundup: Is Auditor Rotation Nigh in the UK?; KPMG India’s Notable Ship Jumpers; Defining ‘Middle Class’ | 02.18.13

Florida hit by "tsunami" of tax identity fraud [Reuters]
"We are on the top of a national trend that is causing a hemorrhage of tax dollars," said Wifredo Ferrer, United States Attorney for south Florida. "It's a tsunami of fraud." While the IRS says it has detected cases in every state except North Dakota and West Virginia, the fraud's epicenter is Florida, and it is mostly concentrated in Miami and Tampa. Miami has 46 times the per-capita rate of false tax refund claims than the rest of the country, and 70 times the national average in dollar terms, Ferrer told Reuters. "For whatever reason, we always tend to lead the nation when it comes to fraud," he said, noting that his office has been battling massive Medicare fraud in recent years that has since spread to other parts of the country.

Big Four audit dominance has "adverse" effect, CC to find [Accountancy Age]
The Big Four's dominance of the listed audit market has an "adverse" effect on competition, an investigation into the firms' concentration of the market is expected to find this week. It is believed that the Competition Commission will propose some form of mandatory rotation, which will force companies to change their auditors, when it delivers the provisional findings of its investigation into the Big Four's grip on the market.
 
The Myth of the Rich Who Flee From Taxes [NYT via TaxProf]
Apparently, Phil Mickelson is an exception rather than a rule: "The notion of tax flight 'is almost entirely bogus — it’s a myth,' said Jon Shure, director of state fiscal studies at the Center on Budget and Policy Priorities, a nonprofit research group in Washington. 'The anecdotal coverage makes it seem like people are leaving in droves because of high taxes. They’re not. There are a lot of low-tax states, and you don’t see millionaires flocking there.' "
 
Top KPMG honchos in exit rush, Russell Parera latest to leave in a series of high-profile resignations [TOI]
KPMG's Indian operation is in the grips of a major churn in its top deck that has resulted in a bunch of senior-level exits in recent months, exposing rare tumult in the top echelons of one of the so-called Big Four accounting and consulting groups. The latest to leave is Russell Parera, KPMG's long-serving chief executive, who lost the title last October to current incumbent Richard Rekhy after an unprecedented vote of the firm's 150 or so partners. Parera, who had held the CEO job for the preceding six years and resigned last Friday, lost to Rekhy in that vote and was since excluded from the firm's leadership team in India. […] His exit was the latest in a series of other high-profile resignations, notably Vikram Utamsingh, a KPMG veteran who headed its transactions & restructuring and private equity practice, Sunny Banerjea, the head of its management consulting, and Sangeeta Singh, head of human resources. All three have been replaced. New CEO Rekhy confirmed Parera's exit, noting that some departures were inevitable in the event of a leadership change. "When the CEO leaves (his post), it is difficult for him to carry on, especially in the Indian scenario unlike in the West," he said, adding that Parera's departure was amicable. The former India boss is said to be joining another of the firm's Big Four rivals as an audit partner, according to a senior management employee at KPMG.
 
Who Is Middle Class, Anyway? [WW/WSJ]
If you're measuring by median income, then that kinda depends: "Nationally, the figure is about $51,027, but even at the state level there are huge differences. Mississippi has a median household income of just $39,078. In Maryland, the number is $67,469."

Former San Diego Mayor Gambles Away $1 Billion; What Are The Tax Implications? [Forbes]
Tony Nitti clears up some confusion from a CNN article and then laments, "it’s almost as if they’re not even bothering to teach Section 165(d) to journalism students anymore." 

State and Local Sales Tax Rates in 2013 [TF]
News SALT pros can use.

Accountants’ caucus back in business in Congress [JofA]
Here's the roster: Reps. Patrick Murphy, D-FL; Tom Rice, R-SC; John Campbell, R-CA.; K. Michael Conaway, R-TX; Bill Flores, R-TX; Lynn Jenkins, R-KS; Steven Palazzo, R-MS; Collin Peterson, D-MN; Jim Renacci, R-OH; Brad Sherman, D-CA; Sens. Mike Enzi, R-WY, and Ron Johnson, R-WI.

Carnival rescue bus breaks down while bringing passengers home [CBS]
Thousands of passengers erupted into cheers Thursday night as the crippled Triumph finally pulled up to the dock. As they stepped onto dry land, and into the arms of their loved ones some couldn't contain their excitement. Carnival then chartered a caravan of buses to transport folks out of Mobile, Ala. To add insult to injury, at least one of those buses became stranded on the way to New Orleans, reports CBS News correspondent Anna Werner.

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