DOMA's Elimination Could Benefit Ernst & Young, Google, Facebook By Ending 'Grossing Up' [HP]
After her partner gave birth to triplets in 1998, Chris Crespo began paying closer attention to the employee benefits offered by her company, major accounting firm Ernst & Young. "I wanted to make sure that there was coverage for my children," said Crespo, an accountant who lives in Western Pennsylvania with her partner of nearly 30 years. "And I began looking more at the long-term questions of how I could support the family." In 2002, Crespo and others in the company's LGBT community succeeded in persuading the firm to offer benefits to employees in long-term domestic partnerships. But those benefits came with a cost. Whereas married employees don't pay taxes on their benefits, unmarried domestic partners do, sometimes to the tune of several thousand dollars a year. And because the federal government and states like Pennsylvania don't recognize the legitimacy of same-sex marriages, Crespo and many others were essentially penalized for being gay. Now, as lawyers present their arguments in the second of two historic cases on gay marriage before the Supreme Court, Ernst & Young finds itself among a wide range of private companies with a financial stake in the verdict, partly because of its recent decision to reimburse employees who are forced to shoulder that added tax burden.
Matthew Francis is a manager in KPMG’s insurance practice and a committee member of Breathe, the firm’s network for LGBT employees: "Breathe was established at KPMG 10 years ago by a group of gay accountants who wanted to build their own social and support network. This was around the same time legislation came into force banning employers from discrimination and harassment in the workplace on the grounds of sexual orientation. Since then, the network’s membership has grown significantly to around 140 with representation across the firm’s UK offices. While I’d never seen the need to get involved in an LGBT society when I was at university, I felt that by joining Breathe I’d be expanding my support group at work as well as gaining confidence and tips on how to come out to my immediate team."
IRS Loses Appeal of Injunction on Tax Preparer Licensing [WSJ]
The District of Columbia Circuit Court of Appeals denied a renewed request by the Internal Revenue Service to suspend a January 18 injunction against the agency’s effort to license tax preparers. A three-judge panel upheld U.S. District Court Judge James E. Boasberg’s refusal to lift his injunction against the IRS’s licensing program. The IRS’s program is an effort to regulate independent tax preparers that it fears are not properly trained. It would require them to pass a competency test, receive continuing education, and pay annual fees, among other things. Attorneys, certified public accountants, IRS enrolled agents and “supervised” preparers would be exempt from the requirements.
Audit Standards Might Get a Makeover [CFO]
Four-digit numbers would replace the current hybrid method of labeling PCAOB audit standards, which are either listed with an “AS” tag for standards labeled AS No. 1 to AS No. 16, or with an “AU” tag for interim standards. The proposal would thus eliminate the classification of interim standards, though the PCAOB would continue to update or improve those it is currently working on. It would not, however, change the existing requirements for performing and reporting on audits. “It should come as no surprise to any professional person that auditing literature is extensive. As printed, these standards run to over 2,000 pages,” said PCAOB chairman James Doty at a board meeting yesterday. Navigating the audit standards in their current form, he noted, “can prove daunting.”
Baucus to IRS: How did the 'Star Trek' video happen? Who's responsible? [The Hill]
“We all have the duty to make sure that taxpayers’ hard-earned money is spent wisely,” Baucus said in a letter to Treasury Secretary Jack Lew and Steven Miller, the acting IRS commissioner. “I am not sure that any Montanan would think that the IRS’s Star Trek video meets that standard. Rather, as far as I can tell, they see the video as an example of government waste.”
Tax and Accounting Firms' Net Profit Margins Expand to 21.2% [CPAT]
Second to only oil and gas.
Travelers Say Eating Healthy and Exercising On the Road Are More Stressful Than Airport Security [HI]
When asked how stressful certain travel-related activities are, 67 percent of frequent travelers said exercising was either somewhat or very stressful; while 66 percent said eating healthy was stressful.