September 23, 2021

Accounting News Roundup: The Frenzy at MF Global; Transocean’s Tax bill; NYC’s Sketchy Tax Preparers | 03.01.12

Fast, Furious at MF Global [WSJ]
At 4:53 p.m. five days before MF Global Holdings Ltd. collapsed, an employee in its Chicago office asked a co-worker to move $165 million from one of the securities firm's bank accounts to another. "Approved," came the response one minute later, according to an email reviewed by The Wall Street Journal. Within about 15 minutes, the money moved to an MF Global account at J.P. Morgan Chase & Co., internal documents show. Within minutes, though, several MF Global employees realized there was a problem, according to people familiar with the matter. The cash actually had been transferred out of a customer-segregated account, not one of the company's own bank accounts, the documents show. The employees tried to reverse the $165 million transaction but failed.

Romney's new tax proposals add $3.4 trillion to deficit [The Hill]
Romney proposed slashing all individual tax rates by 20 percent and scrapping the alternative minimum tax last week, following charges from conservative commentators and his rivals for the GOP nomination that his original economic plan was milquetoast. The Urban-Brookings Tax Policy Center said Wednesday that those two changes would tack an extra $3.4 trillion on to budget deficits over the next 10 years, compared to a world where the Bush-era tax rates were extended. The tax cuts would add more to the deficit if those rates expired, as they are scheduled to do at year’s end. 

Transocean says may face $473 million U.S. tax bill [Reuters]
Transocean Ltd may face $473 million in U.S. back taxes, according to its annual filing, though it also said it was cleared in a similar dispute dating back eight years, which may give its lawyers a useful precedent. Transocean, owner of the world's largest offshore oil rig fleet, said the latest assessment received this month for 2008 and 2009 related to accounting between subsidiaries, for both engineering services performed between them and transfer pricing for rig charters. "If the authorities were to continue to pursue these positions with respect to subsequent years and were successful in such assertions, our effective tax rate on worldwide earnings with respect to years following 2009 could increase substantially," said Transocean, which booked an overall 2011 income tax expense of $395 million.

Sweep Nets Hundreds of NYC Tax Preparers Violating Laws [AT]
The New York City Department of Consumer Affairs conducted a two-week-long enforcement sweep of tax preparers across the city and issued violations to one out of every three preparers it inspected, mainly for violating laws governing refund anticipation loans and disclosure of their true qualifications and fees. The department conducted close to 850 inspections citywide and issued over 1,000 violations to tax preparers who misrepresented their qualifications, violated consumer rights, or illegally advertised refund anticipation loans as “instant” or “rapid” refunds. Total fines from the enforcement sweep could reach close to $1 million. The agency is encouraging taxpayers to instead take advantage of free or low-cost options for preparing their taxes and claiming the Earned Income Tax Credit.
 
CVS Caremark: Why Operating Leases Must Be Capitalized [GOA]
It's a Grumpy Thursday: "In his autobiography, Mark Twain discussed “lies, damned lies, and statistics,” attributing the phrase to Disraeli.  We think Twain was mistaken, because the coiner of that phrase must have been an accountant.  We surmise this because he was obviously talking about accounting for operating leases."
 
Grover Norquist's Taxpayer Protection Pledge [TDS]

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