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Accounting News Roundup: Individual Tax Evasion; Corporate Tax Avoidance; Bad Advice for Avoiding Identity Theft Tax Fraud | 01.31.13

Posted on by Caleb Newquist

U.S. Is Preparing More Tax-Evasion Cases [WSJ]
The U.S. is expanding its crackdown of offshore tax evasion, preparing numerous criminal cases against suspected offenders, defense lawyers involved in the cases say. Four years after an agreement between the U.S. and Switzerland pierced a veil of banking secrecy by requiring Swiss bank UBS AG to turn over names of account holders, defense lawyers estimate that federal prosecutors are conducting at least 100 criminal investigations against suspected tax evaders. The moves come as the U.S. is turning the screws on smaller banks that may have helped taxpayers stash money in secret overseas accounts. On Monday, a federal judge in New York approved an Internal Revenue Service summons demanding still more records from UBS. According to court filings, the government now is focusing on U.S. taxpayers with accounts at smaller Swiss banks that didn't have U.S. branches but served customers through a UBS account in Stamford, Conn.

Can publicity curb corporate tax avoidance? [FT]

Members of both political parties are keen to reduce the statutory corporate tax rate from 35 per cent, which is high by international standards, to perhaps 25 per cent. The problem is that if revenue-neutrality is demanded, no new revenue source such as a financial transactions tax is permitted, and the base-broadening is confined to the corporate side, then there is a problem. There are not enough corporate tax expenditures available to finance the rate reduction that everyone thinks is necessary. […] The one big tax preference theoretically available to finance a rate reduction is deferral on foreign source income. Presently, the US taxes the income of foreign subsidiaries of US-based multinational corporations, but only when repatriated to America. Income remaining offshore is untaxed by the US.
 
Companies Plan to Trim Cash Stockpiles [CFO]

For only the second  time in more than two years, the corporate-cash indicator from the Association for Financial Professionals shows more finance executives (28%) anticipate cutting their cash hoard in the first quarter than are planning to add to it (23%). It’s the first time finance professionals are forecasting lower cash reserves for a quarter since January 2011, when the AFP began conducting the study. If the forecast is correct, it would suggest companies are becoming less wary of parting with their cash.

BlackBerry 10’s Debut Fizzles as U.S. Buyers Left Waiting [Bloomberg]
The smartphone maker formerly known as Research In Motion stumbled in its introduction of the BlackBerry 10 lineup yesterday, disappointing shareholders with the lack of a firm U.S. release date and setting a price that may be too high to lure away customers from Apple Inc. (AAPL) and Google Inc.’s Android. The shares tumbled 12 percent after the event, which included an appearance by Keys, a Grammy-winning R&B singer who was given the title of BlackBerry’s global creative director. BlackBerry 10 phones won’t appear in the U.S. until March, raising concerns that the company will fall even further behind the iPhone and Android in its biggest market. The lag also means BlackBerry won’t get as much value out of its first-ever Super Bowl commercial, which airs on Feb. 3, weeks before Americans can even buy one of the new devices. “For the BlackBerry faithful, another month is a long time,” Shaw Wu, an analyst at Sterne Agee in San Francisco, said in an interview. “The execution could have been crisper.”

Waiting for Blackberry 10 – Launch Day [Greg Kyte/YouTube]
One disappointed consumer.
 
IRS Tips Won't Protect You From Identity Theft Tax Fraud [Forbes]
FYI.
 
Small Firms Say LinkedIn Works, Twitter Doesn't [WSJ]
Just 3% of 835 business owners surveyed earlier this month by The Wall Street Journal and Vistage International said Twitter had the most potential to help their companies.
 
Pot Consultant: Washington State Looks For Weed Scholars To Separate Seeds From Stems [AP]
Your next career move? "As Washington state tries to figure out how to regulate its newly legal marijuana, officials are hiring an adviser on all things weed: how it's best grown, dried, tested, labeled, packaged and cooked into brownies. Sporting a mix of flannel, ponytails and suits, dozens of those angling for the job turned out Wednesday for a forum in Tacoma, several of them from out of state. The Liquor Control Board, the agency charged with developing rules for the marijuana industry, reserved a convention center hall for a state bidding expert to take questions about the position and the hiring process. 'Since it's not unlikely with this audience, would a felony conviction preclude you from this contract?' asked Rose Habib, an analytical chemist from a marijuana testing lab in Missoula, Mont. The answer: It depends. A pot-related conviction is probably fine, but a "heinous felony," not so much, responded John Farley, a procurement coordinator with the Liquor Control Board."
Posted in ANR

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PwC To Provide Up To $12.5M To JPMorgan For FSA Fine [Dow Jones]
“J.P. Morgan Chase & Co. (JPM) disclosed in a regulatory filing Friday that PricewaterhouseCoopers LLP agreed to provide up to an aggregate of $12.5 million to the bank related to a fine J.P. Morgan had to pay to the U.K. Financial Services Authority.”

Late Ponzi schemer’s accountant surrenders license [Nashville Business Journal]
This accountant managed to surrender his CPA in just under four months for his role in a Ponzi scheme. Dave Friehling had to be stripped of his license nearly 9 months after pleading guilty. NY DoE should get with Tennessee and see how they do things.

IRS to stay at new Austin site after plane crash [AP]
“An Internal Revenue Service office will not return to the Texas building where a tax protester killed himself by crashing his plane into the structure.

IRS spokeswoman Lea Crusberg said Thursday that the agency has signed a two-year lease on another office space in Austin. She declined to identify the location.”


Senate Democrats Propose Scaling Back IRS Reporting Law [WSJ]
“The Nelson proposal would exempt from the reporting rules firms with fewer than 25 employees. For larger businesses, it would require information returns only in cases where payments to a single vendor exceeded $5,000 in a given year—down from $600 in the health-care law.”

Richtermeyer to Chair Management Accountants [Web CPA]
“The Institute of Management Accountants has named accounting professor Sandra Richtermeyer as the chair of its board of directors for the 2010-2011 fiscal year.

Richtermeyer, who also chairs the Department of Accountancy in the Williams College of Business at Xavier University in Cincinnati, is only the fourth woman ever to hold the position of IMA chair since the organization’s inception in 1919.”

BKD looks to grow health care practice with purchase of Grant Thornton team [Wichita Business Journal (partial subscription required)]
According to the message sent from Stephen Chipman, that we reported on at the end of July, this is the final transition that Grant Thornton will be making. What happens from here is anyone’s guess.

Accounting News Roundup: Changes Coming at Yahoo, BofA; The Same Ol’ Tax Relief; Begging Saves Ex-Duane Reade CFO | 09.07.11

Yahoo Ousts Bartz as CEO [WSJ]
Independent directors did a study of Yahoo’s assets and performance in the past two weeks and concluded the company wasn’t performing as well as it could, said a person familiar with the matter. The review came after nearly a year of board discussions about Yahoo’s flagging performance, and the independent directors ultimately decided a change at the top was the only way to turn things around, according to two people familiar with the matter. One of these people said Yahoo is open to selling itself to the right bidder. The board named Chief Financial Officer Tim Morsehile it searches for a replacement for Ms. Bartz.

BofA Shakes Up Senior Ranks [WSJ]
The bank installed David Darnell and Thomas Montag as co-chief operating officers. It also ousted wealth-management head Sallie Krawcheck and consumer banking head Joe Price, and removed Barbara Desoer, who has been running the bank’s mortgage business, from Mr. Moynihan’s list of direct reports.

Carlyle files for $100m initial public offering [FT]
Carlyle Group has formally fired the starting gun on its plans to go public, with the private equity group filing registration documents for an initial public offering as early as the first half of 2012. The move follows the listing of competitor Apollo Global on the New York Stock Exchange in March, and will test the willingness of investors to back a sector that has a poor stock market record.

Tax Code Has Upside-Down Rewards for Good Behavior [Bloomberg]
If the committee wants to bring about constructive tax reform that is a bit less ambitious, however, here’s an idea: Change the tax breaks that are meant to encourage people to do good things — such as save for retirement, buy real estate, get health insurance or give to charity — into flat-rate credits that aren’t affected by the taxpayer’s income. After all, it makes no sense, in terms of economic efficiency or simple fairness, to have the size of such incentives depend on earnings.

Old Tax Relief Seen as Anchor in Obama Plan [NYT]
The centerpiece of the job creation package that President Obama plans to announce on Thursday — payroll tax relief for workers and perhaps their employers — is neither his first policy choice nor that of many economists. But it is the one that they figure has the best chance of getting Republicans’ support. Mr. Obama has signaled that he will propose to extend for another year a reduction of two percentage points in the 6.2 percent Social Security payroll tax that employees pay, which means about $1,000 more for the average household. And he is considering a proposal to expand the tax relief to employers’ share.

A Banker Explains Why Some Small Businesses Have Trouble Getting Credit [You’re the Boss/NYT]
In case you’ve been wondering.

Ex-Duane Reade CFO Tennant Sentenced to Probation in Securities-Fraud Case [Bloomberg]
“Please don’t send me to jail,” Tennant said today to U.S. District Judge Deborah Batts, who granted his request at a hearing in federal court in Manhattan. Tennant told Batts he had cooperated in the investigation and suffered from the “long, painful, humbling experience” of the prosecution.

Deloitte Names Elizabeth Krentzman Asset Management Services U.S. Mutual Fund Leader [Deloitte]
This newly-created position is another strategic step in the three-year expansion of Deloitte’s asset management services practice led by asset management services leader Cary Stier.