• IRS audits fewer corporate taxpayers: critic [Reuters]
According to a Syracuse University research group, Transactional Records Access Clearinghouse (“TRAC”), the IRS is doing fewer audits of large corporations, using the Service’s own data to report its conclusions. TRAC looked at “number of hours spent on cases that had been closed in any given year,” saying the the IRS has cut the audit hours of companies with $250 million+ in assets by a third.
The Service, obviously, takes exception with this noting that they audit 100% of corporations with $20 billion+ in assets, nearly half of the companies with assets of $5 and $20 billion and 26% of companies with asset of at least $250 million. And because the average audit audit lasts two years, the notion that the Service is being less probe-y is ‘not indicative of the efforts in a given year.’
• A PCAOB “Reminder” on Significant Unusual Transactions: Is the World of Audit Guidance Now a Better Place? [Re: Balance]
The scariest thing that came out of the PCAOB’s reminder to auditors from last week, according to Jim Peterson, is it shows that the Board is virtually incapable of understanding the industry that it is assigned to regulate, “Behind the text of the alert – which offers not a single example or illustration to suggest that the PCAOB itself has a clue – is another ‘reminder,’ for anyone still thinking that government-provided audit guidance might supplant private assurance, in the event of Big Four disintegration and collapse: The PCAOB shows itself ill equipped to lead from Point A to Point B.”
Case in point, the Board doesn’t give any examples of what these bizarro transactions are, leaving that open to rampant speculation. Jim suggests that the Board may soon release even better ideas, “the next expected step in the dumbing-down of regulation will be “GAAS for Twitter” – auditing such tough subjects as related parties and special-purpose-entities and complex derivatives, 140 characters at a time,” which would, at the very least, keep audit workpapers to more desirable length.
• NY state sees “deep well” of UBS client tax cases [Reuters]
The New York State Tax Department is pretty stoked about the windfall that could result from UBS clients coming out with their hands up re: their offshore bank accounts and the related income.
The state’s deficit is nearly $9 billion, so the tax department will be taking money however it can get it, using duress or otherwise. In other NYS treasure-hunting news, the state is now “expanding on analytical programs developed with [IBM] to root out tax cheats,” to assist in the deficit reduction efforts. Prior to this development, the Tax Department’s 3,000 employees had been using their ‘best gut instinct’ to locate tax evaders, which may or may not have included throwing darts at a printout of New York State residents.