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Accounting News Roundup: Hi, Sandy; Another Romney Tax Shelter; College Football-Ticket Tax Break | 10.29.12

To our readers on the East Coast – Be safe! Keep us updated with the communication from your firm and send us any pictures as Sandy starts to make herself at home. Email us at [email protected].

Storm Gains Strength as It Churns North [NYT (Paywall suspended)]
Hurricane Sandy grew stronger before dawn on Monday as it churned northward through the Atlantic Ocean en route to what forecasters agreed would be a devastating landfall, possibly within 100 miles of New York City. At 5 a.m., the huge storm was producing sustained winds of 85 miles an hour after turning due north, according to the National Hurricane Center. It was expected to veer again to the northwest later Monday morning and take dead aim at the coastline of New Jersey. With a wary eye on its expected path, residents and emergency management officials braced for the impact of the storm in more than half a dozen states, including Delaware, New York, Pennsylvania, Virginia, North Carolina and Connecticut. Far in advance of the hurricane’s expected landfall, residents were ordered to evacuate, with many seeking refuge in shelters. Mass transit systems ground to a halt and people stocked up on water and food supplies. Forecasters say the storm is on a scale that weather historians say has little precedent along the East Coast. Landfall is predicted on Monday night somewhere between central New Jersey and southern Delaware. But most of the eastern United States will feel Sandy’s effects, making the exact landfall spot less important than the overall trajectory. "One of the biggest storms of our lifetimes is unfolding right now," said the anchor Kelly Cass as The Weather Channel started its fourth day of nonstop coverage.

Markets Go Dark Ahead of Storm [WSJ (Paywall suspended)]
Stock and options exchanges and their regulators will close U.S. markets on Monday, the first unscheduled, market-wide shutdown since September 2001, as Wall Street braced for Hurricane Sandy's approach. The agreement, reached Sunday night, marked a reversal from an earlier call by the exchanges to remain open for business to electronic trading even as they shuttered their trading floors in advance of the storm. By late Sunday, exchange officials, traders and regulators were expecting that markets may stay closed on Tuesday, too. "In all my life I can't remember anything that is supposed to be as severe as this," said Stephen Ehrlich, chief executive of Lightspeed Financial Inc., an electronic brokerage and software firm based in New York. Mr. Ehrlich said in an email that Lightspeed's employees have been set up at home so that those who have power can assist the firm's clients, and its Chicago office will serve as Lightspeed's main call center. The initial plan to keep electronic trading open had drawn complaints from customers, who argued to the exchanges and the Securities and Exchange Commission that a partial close would be too complicated, according to people with knowledge of the matter.

Romney Avoids Taxes via Loophole Cutting Mormon Donations [Bloomberg]

In 1997, Congress cracked down on a popular tax shelter that allowed rich people to take advantage of the exempt status of charities without actually giving away much money. Individuals who had already set up these vehicles were allowed to keep them. That included Mitt Romney, then the chief executive officer of Bain Capital, who had just established such an arrangement in June 1996. The charitable remainder unitrust, as it is known, is one of several strategies Romney has adopted over his career to reduce his tax bill. While Romney’s tax avoidance is legal and common among high-net-worth individuals, it has become an issue in the campaign. President Barack Obama attacked him in their second debate for paying “lower tax rates than somebody who makes a lot less.” In this instance, Romney used the tax-exempt status of a charity — the Mormon Church, according to a 2007 filing — to defer taxes for more than 15 years. At the same time he is benefitting, the trust will probably leave the church with less than what current law requires, according to tax returns obtained by Bloomberg this month through a Freedom of Information Act request.

Football-Ticket Tax Break Helps Colleges Get Millions [Bloomberg]
Theodore L. Jones has held season tickets on the 43-yard line at Tiger Stadium, home of the perennial football powerhouse Louisiana State University, for almost 20 years. Because of the Baton Rouge lawyer’s lobbying in Congress in 1986, he and thousands of other fans get a tax break on donations they make as a condition for buying seats. The deduction Jones helped craft is now costing U.S. taxpayers more than $100 million a year in revenue that the Treasury can’t collect, based on data compiled by Bloomberg.

Who Really Benefits From Interest Deductions [NYT]
Real estate and building industry groups have loudly condemned proposals by both presidential campaigns to shrink the mortgage interest deduction. Central to their arguments is the long-hallowed deduction’s value to the middle class. But a closer look at who benefits suggests that this perception, though prevalent, is not accurate.

Deloitte Acquires Fast-Growing Health-Care Data Warehousing and Analytics Firm, Recombinant [Deloitte]
Recombinant is "a fast-growing provider of data warehousing and clinical intelligence solutions that enable advances in personalized medicine, translational research and health-care performance management." 

New leadership at Ernst & Young's Raleigh ops [TBJ]
Amy Baker takes over for Michael Constantino.

re: The Auditors Is Six Years Old [RTA]
Go say, "Happy Blogiversary!"

'Zombie Apocalypse' Training Drill Organized By Halo Corp. For Military, Police Set For Oct. 31 In San Diego [AP]
"This is a very real exercise, this is not some type of big costume party," said Brad Barker, president of Halo Corp, a security firm hosting the Oct. 31 training demonstration during the summit at a 44-acre Paradise Point Resort island on a San Diego bay. "Everything that will be simulated at this event has already happened, it just hasn't happened all at once on the same night. But the training is very real, it just happens to be the bad guys we're having a little fun with." Hundreds of military, law enforcement and medical personnel will observe the Hollywood-style production of a zombie attack as part of their emergency response training.

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