Accounting News Roundup: Carried Interest Back in Tax Debate; E&Y Picks Up J&M in Germany; Building Your Own MLM | 02.06.13

Posted on by Caleb Newquist

As Unit Pleads Guilty, R.B.S. Pays $612 Million Over Rate Rigging [DealBook]
The Royal Bank of Scotland on Wednesday struck a combined $612 million settlement with American and British authorities over accusations that it manipulated interest rates, the latest case to emerge from a broad international investigation. In an embarrassing blow to the bank, its Japanese subsidiary also pleaded guilty to criminal wrongdoing in its settlement with the Justice Department. The R.B.S. subsidiary, a hub of rate-rigging activity, agreed to a single count of felony wire fraud to settle the case. The settlement reflects the Justice Department’s renewed vigor for punishing banks ensnared in the rate manipulation case. In December, a Japanese subsidiary of UBS pleaded guilty to felony wire fraud as part of a larger settlement, representing the first unit of a big bank to agree to criminal charges in more than a decade. As authorities built the R.B.S. case, they seized on a series of incriminating yet colorful e-mails that highlighted an effort to influence the rate-setting process, a plot that spanned multiple currencies and countries from 2006 to 2010. One senior trader expressed disbelief at reaping lucrative profits from the scheme, saying “it’s just amazing” how rate “fixing can make you that much money,” according to the government’s complaint. Another trader, after pressuring a colleague to submit a certain rate, offered a reward of sorts: “I would come over there and make love to you.”

Carried interest thrust again into tax debate [Reuters]

President Barack Obama said at a news conference on Tuesday that he will pursue a short list of tax loophole closures to try and avert looming budget cuts. Obma's press secretary singled out the tax break known as "carried interest." "That should be closed," White House spokesman Jay Carney told reporters after the president spoke. Obama on Sunday had mentioned carried interest in a CBS television interview in which he called for reducing the budget deficit by raising more tax revenue by closing tax breaks. Past attempts by some senior Democrats to roll back the provision have failed amid heavy lobbying by the private equity industry and other investment managers. The tax break has been defended by lawmakers from both parties, but this time advocates of repeal say they may have the upper hand.
 
Zoomlion Denies Allegations of False Sales and Accounting [Bloomberg]

Zoomlion Heavy Industry Science & Technology Co. (1157), China’s second-biggest construction-equipment maker, denied allegations in a press article published yesterday that it had reported fictitious sales and falsified accounts. All allegations in the report are “false, groundless and misleading,” the Changsha, China-based company said in a Hong Kong stock exchange filing yesterday, without identifying the publication it was refuting. “No accounting fraud has ever been committed,” the company said. The response is Zoomlion’s second in a month to published allegations that it had falsified sales. The most recent report may be based on documents sent anonymously to media organizations, including Bloomberg News, that purport to respond to Zoomlion’s initial denial last month by showing the company has made false statements about revenue. “Their revenue growth relative to all their peers and the economic activity in China doesn’t seem very credible,” Kevin Barnes, an analyst at Kerrisdale Capital Management LLC, a New York-based hedge fund with $150 million under management, said in an interview. “It’s also a difficult industry to audit, just because there’s so many pieces of machinery — unless you have an external auditor who’s willing to go out and count them individually.”

Ernst & Young takes over J & M Management Consulting [E&Y (Germany)]
J&M is a consulting firm in Germnay, Austria, and Switzerland that specializes in supply chain management that has 1,400 employees and €230 million in revenue.

Create Your Own MLM in Ten Easy Steps [Fraud Files]
Tracy Coenen explains: "It’s widely knows that those in MLMs make little money. In fact, almost everyone in the pyramid loses money. The real money makers in the scheme are those who own the MLM company. So in the spirit of giving, I’m offering you ten simple steps toward creating your very own MLM. Start yours now and cash in on all those people who are dying to hear about your 'opportunity'!"

Financially strapped Postal Service to cut Saturday mail, keep 6-day-a-week package delivery [AP]
The U.S. Postal Service will stop delivering mail on Saturdays but continue to deliver packages six days a week under a plan aimed at saving about $2 billion annually, the financially struggling agency says. In an announcement scheduled for later Wednesday, the service is expected to say the Saturday mail cutback would begin in August. The move accentuates one of the agency’s strong points — package delivery has increased by 14 percent since 2010, officials say, while the delivery of letters and other mail has declined with the increasing use of email and other Internet services. Under the new plan, mail would be delivered to homes and businesses only from Monday through Friday, but would still be delivered to post office boxes on Saturdays. Post offices now open on Saturdays would remain open on Saturdays.

Reproducing Value: How Tax Law Differentially Values Fertility, Sexuality & Marriage [SSRN via TaxProf]
From the abstract: "This paper focuses on the current discriminatory effects of § 213 doctrine as it is applied to the deductibility of fertility treatments for single persons and/or homosexual couples, as compared to heterosexual, married couples."
 
Monopoly: cat replaces iron as new token [Telegraph]

Toy maker Hasbro announced the changes on Wednesday morning, hours after voting on Facebook closed. Fans from 120 countries voted. The wheelbarrow, shoe and iron had been neck and neck for elimination through the Save Your Token Campaign. The new additions that people could vote for, as well as the cat, included a robot, a diamond ring, helicopter or guitar. "We put five new tokens out for our fans to vote on and there were a lot of fans of the many different tokens, but I think there were a lot of cat lovers in the world that reached out and voted for the cat to be the new token for Monopoly," said Jonathan Berkowitz, vice president for Hasbro gaming marketing. "Tokens are always a key part of the Monopoly game … and our fans are very passionate about their tokens, about which token they use while they play," he added.

 

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Accounting News Roundup: McConnell’s “Small Business” Definition Includes Obama; Oprah Picking Up Taxes on Aussie Trip Giveaway; Deloitte’s Holiday Outlook | 09.20.10

Obama Among `Small Businesses’ Bearing Share of Tax on Wealthy [Bloomberg]
“Senate Republican leader Mitch McConnell says President Barack Obama wants to subject half of all small-business income to a tax increase, a move that he says would strike a blow at the U.S. job-creation engine.

McConnell’s numbers only add up if you consider people like billionaire investor George Soros, most movie stars and Obama himself small-business owners, tax experts say.

That’s because the lawmaker is basing his figure on a broad definition of the term that experts say includes authors, actors and athletes who employ few if any workers. It also encompasses businesses that many people wouldn’t consider small, such as Soros’s hedge-fund firm and major law partnerships.”

What Should We Do With the Estate Tax? [WSJ]
“any believe Congress will tackle the estate-tax question in the weeks before it adjourns, along with a slew of other tax matters. What’s likely to happen? Many think lawmakers will return the estate tax to its 2009 level—a $3.5 million exemption per individual and a top rate of 45%—and possibly raise the exemption. Heirs of those who die in 2010 may also get the choice of using 2009 rules. If lawmakers don’t step in, the tax will return in 2011 with a $1 million exemption per individual and top rate of 55%.”

Oprah — I’ll Pay the Taxes for My Aussie Giveaway [TMZ]
Locking up sainthood: “TMZ spoke with Larry Edema from Michigan — who was selected to be in the audience on Monday for Oprah’s big giveaway — and dude tells us Winfrey had a certified public accountant on hand to address the tax issue right after the taping.

Edema says the CPA informed the group that all taxes associated with the trip would be “handled by the Oprah show,” so the trip would truly be 100% free.”

BP oil spill well effectively dead, says US [FT]
“The US authorities pronounced BP’s blown-out Macondo well in the Gulf of Mexico ‘effectively dead’ on Sunday, 152 days after the explosion on the Deepwater Horizon drilling rig that caused the world’s largest accidental offshore oil spill.

The announcement ends the 5m barrel leak, which sparked fury among the US public and politicians, but may eventually be seen to have had only a marginal effect on the global energy industry.”


Your Coming Tax Cut (or Not) [NYT]
The Times breaks things down, in gray lady fashion, if all of the tax cuts are extended.

Deloitte Forecasts a 2 Percent Increase in Holiday Sales [PR Newswire]
Deloitte Downer.

Feds charge man shot by IRS agent in San Francisco [AP]
“Investigators say the IRS agent, 36-year-old Dena Crowe, was putting things into her car outside her home in the Bayview-Hunters Point neighborhood when she was confronted by a teen demanding money and Higginbotham pointing a shotgun at her.

Authorities say Crowe identified herself as an agent and fired her .40-caliber semiautomatic handgun at the suspects, who then fled on foot.”

Accounting News Roundup: Geithner Supports Obama Tax Policy; Reznick Group Announces Principal Promotions; What’s It Cost to Be the Boss? | 08.03.10

Geithner defends Obama policy on tax cut extension [AP]
“Treasury Secretary Timothy Geithner said Tuesday it would be ‘deeply irresponsible’ for the Obama administration to support a wholesale extension of Bush era tax cuts, including breaks for the wealthy.

Geithner said in a nationally broadcast interview that President Barack Obama strongly believes those reductions should be retained for the ’95 percent’ of taxpayers with individual incomes under $200,000 a year and families below $250,000.”

Bank of America, KPMG Settlement With Countrywide Investors Wins Approval [Bloomberg]
“Bank of America Corp. and KPMG LLP’s $624 million settlement with investors in Countrywide Financial Corp. led by New York pension funds won initial court approval.

U.S. District Judge Mariana Pfaelzer in Los Angeles ruled today on the accord. A fairness hearing will be held on final approval for the settlement, first announced in May.”

Snooki Tanning-Bed Protest Splits Sin From Taxes [Bloomberg]
“[P]eople don’t like government moralizing. If there’s one thing people dislike even more than taxes, it’s being told what to do.”

So does that mean that Alabama is imploring reverse psychology?


Reznick Group Promotes Four New Principals [Business Wire]
Reznick Group promoted Dan Fox and Renee Matthews in Bethesda, MD, Eric Jones in Sacramento and Daniel Worrall in Atlanta are the big winners.

Accounting & Consulting Group acquires Roswell’s Miller & Associates [New Mexico Business Weekly]
“With 95 employees overall, Accounting & Consulting Group is now the third-largest accounting firm in the state. Headquartered in Albuquerque, it has offices in Alamogordo, Carlsbad, Clovis, Hobbs and Roswell, and has a member firm office in Lubbock, Texas. The firm specializes in audit and financial reporting, tax compliance, business consulting and trust and estate planning.”

Becoming the Boss Can Cost Plenty [WSJ]
“When starting a business on a tight budget, a single spending gaffe can spell disaster. For this reason, experts in entrepreneurship recommend taking precautions, such as doing research to identify potential hidden fees, focusing only on necessities and setting aside emergency funds.”

SAP Business ByDesign 2.5: time to invest? [AccMan]
Dennis Howlett gives the lowdown on the “general availability of SAP Business ByDesign 2.5,” which means that it is available for any to purchase. Dennis reports that starter packs for as few as ten users are available for CRM, ERP and PSP.