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November 30, 2022

Accounting News Roundup: EY’s Hiring Outlook in UK; Judge Notes ‘Reprehensible’ Conduct by KPMG in BB&T Tax Case; Factors in Accounting Firm Sales | 09.23.13

Big Four firm signals return to risk with expansion drive [The Times (Paywall)]
EY is hiring 3,700 in the UK by next June.

Corporate Tax Reserves on the Rise [AT]
An annual study of SEC disclosures showed that the Fortune 500 collectively believe that they have underpaid their corporate income tax by $191.7 billion, an increase of 2.2 percent from the group’s collective tax reserves last year. […] “If uncertain tax position reserves are trending up at the same time profits are going down, you have to ask if there is a movement to build up reserves for tax underpayments,” said Scott Knott, a tax partner at the Ferraro Law Firm, which conducted the study. The firm, which specializes in tax whistle blower awards, compiles the annual Ferraro 500 list by the size of the Fortune 500 companies’ unrecognized tax benefit reserve for uncertain tax positions. The tax reserves of the top five companies on this year’s list are Exxon Mobil, which set aside $7.633 billion to cover potential taxes; Microsoft, $7.202 billion; J.P. Morgan Chase & Co., $7.158 billion; general Electric, $6.579 billion; and Pfizer, with $6.315 billion.

With a Tweet, Twitter Starts a Debate [NYT]
As of April, on the law’s first anniversary, 63 percent of all companies filling I.P.O.’s during the [JOBS Act's] life used the confidentiality provision, according to a survey by Ernst & Young. Nearly all companies that have had I.P.O.’s in the last 30 years would have been able to use the provision, had it been in place. From 1980 to 2012, 94 percent of American companies that have gone public had revenue of under $1 billion when they filed for I.P.O.’s, according to data compiled by Jay Ritter, a University of Florida professor who is a leading expert on initial offerings. “Under that criterion, most I.P.O. companies would be classified as ‘emerging growth companies’ worthy of special help,” said Professor Ritter, who opposed the enactment of the JOBS Act.

The state that taxes the poor the most is… a blue one [WaPo]
Poor families in Washington state pay 16.9 percent of their total income inA  state and local taxes, more than any other state in the nation, according to a new report from the nonprofit Institute on Taxation and Economic Policy, which advocates for progressive tax policies. Washington takes the top spot by a sizable lead. For the poor in Illinois, 13.8 percent of their income goes to paying state and local taxes. In Florida, those taxes eat up 13.3 percent of the income of the poor. The share in Hawaii is 13 percent, followed by Arizona at 12.9 percent.

Ohio attorney faces discipline in billing probe; allegedly billed state for 29-hour workday [AP]
Appears reasonable.

BB&T loses claims court suit to recoup $688 million in taxes [Bloomberg]
BB&T Corp. lost a bid to recover $688 million in taxes and penalties as a federal judge ruled a series of transactions with Barclays Plc, aimed at generating tax credits, lacked economic substance. U.S. Court of Federal Claims Judge Thomas Wheeler in Washington criticized BB&T, Barclays and other participants in the transactions, including the KPMG consultancy and the Sidley Austin LLP law firm, for conduct that was “nothing short of reprehensible.” Those firms should have known better than to follow a path “rife with its conflicts of interest, questionable pro forma legal and accounting opinions, and a taxpayer with a seemingly insatiable appetite for tax avoidance,” Wheeler wrote.

Accounting firm sales: The five factors [JofA]
Joel Sinkin, president of Transition Advisors, has your hit list.

One Mortgage, No Home Equity Loan: How Much Interest Can You Deduct? [Tony Nitti/Forbes]
Tony Nitti takes you code diving.

Indianapolis man arrested after impersonating officer to get free Applebee's meal [IS]
Philip D. Smith, 46, was charged with one count of theft and one count of impersonating a police officer, both Class D felonies. According to a police report, Smith finished dining at Applebee’s on Richmond’s east side when he told his server that he did not have money to pay his bill. He then allegedly displayed a badge, said he was a police officer and asked to go to an ATM to get money. Authorities said employees at Applebee’s called police to report the incident after Smith failed to return to pay his bill.

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