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Accounting News Roundup: IRS Lost Some Pocket Change; Small Business Wants Tax Reform, Too, Ya Know; JP Morgan’s Big Fine | 09.26.13

Posted on by Caleb Newquist

Lost: $67 Million. If Found, Please Return To IRS [Forbes]
Tony Nitti: "That’s $67 million of taxpayer dollars that were spent on, well…nobody is quite sure what it was spent on, other than it appears to have used for employee workspaces and technology. In other words…Grand Theft Auto V for everyone!"

Messi in Court Shows Tax Collectors Set to Pursue Star Athletes [Bloomberg]
[Lionel] Messi, 26, the four-time global player of the year, and his father are due in a Barcelona court tomorrow to face a complaint that they evaded 4.2 million euros ($5.7 million) in taxes on payments from Adidas AG (ADS), PepsiCo Inc. (PEP), Procter & Gamble Co. and other companies. According to court documents, the Messis diverted 10 million euros to tax havens Belize and Uruguay from 2007 through 2009. The government is pursuing the case even after the Messis paid 5 million euros — the amount prosecutors say they evaded, plus interest — on Aug. 15. The hearing Friday is to determine whether to charge them with criminal tax evasion. If charged and convicted, they could be fined as much as 21 million euros and given a 1-year suspended prison sentence.

Feds: Kirkland accountant bilked his own brother while cheating the IRS [SPI]
Ahhh, family.

A list of all the reasons why JP Morgan may be facing the biggest bank fine ever [Quartz]
Author Tim Hernolz sums up in this tweet: "At what point do you consider JP Morgan a criminal enterprise?"

Don't Forget Small Business in Tax Reform [CFO]
Because jobs!

Marriage and Religious Freedom Act Promotes Neither [Tax Analysts]
David Brunori: "When politicians lose on an issue, they often turn to the tax code to address their grievances, and the anti-gay crowd has been losing in the courts and before the public on the issue of marriage equality. It turns out that people, especially young people, don't really care who consenting adults want to marry, so these members of Congress decided that organizations fighting for "tradition" need some help. The proposed law will allow section 501(c)(3) organizations to engage in political activity, as long as it's for championing heterosexual marriage, while 501(c)(3)s supporting marriage equality cannot engage in partisan political activity. No matter what you think of the issue, that is bad government and a misuse of the tax laws to further a political agenda. "

'F*** off back to your own country': What accountant 'told Asian man during Tube rant that was caught on camera and uploaded to YouTube' [DM]
Accountant Claire Moloney was filmed screaming at the unidentified man in a foul-mouthed video clip which was later uploaded to YouTube. Two and half years later, she was arrested on suspicion of racially aggravated assault, with prosecutors claiming that she had caused distress to the man and to onlookers. But she denies she was racist, saying she was upset at being told she had 'blood on my hands' and being criticised because she had been drinking alcohol. […] The video opens in the middle of an argument, with Moloney telling an Asian-looking man: ‘I f****** respect people in their countries, f*** you c***.’ She stood up in her seat, saying: ‘You come in this country, you wanna have f*****g everything on a plate. F*** off back to your own country if your country is so good.’

Posted in ANR

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IASB criticises Greek debt writedowns [FT]
In a letter sent to the European Securities and Markets Authority, the European Union’s market regulator, the International Accounting Standards Board criticised the inconsistent way in which banks and insurers have been writing down the value of their Greek sovereign debt. “This is a matter of great concern to us,” Hans Hoogervorst, IASB chairman, said in the letter, which was published on Tuesday after the IASB’s concerns were revealed by the Financial Times. People familiar with the IASB’s thinking said the intervention was unprecedented and reflected its belief that some European compaking enough provisions for Greek sovereign debt losses.

Dead Enron CEO Lay Beats IRS in Tax Court [Bloomberg]
Kenneth Lay, the deceased chief executive officer of Enron Corp., defeated the Internal Revenue Service in the agency’s bid to collect $3.9 million from his estate and his wife, the U.S. Tax Court ruled. The case decided yesterday involved transactions among Lay, his wife, Linda, and Enron that were executed on Sept. 21, 2001. The Lays sold $10 million in annuities to Enron as part of an agreement for him to retake the CEO position, under the stipulation that the annuities would be returned to Lay if he worked a 4.25-year term. The company didn’t survive that long, and it filed for bankruptcy protection in December 2001.

House Tax Chief Pitches No-New-Revenue Plan to Wary Voters [Bloomberg]
Representative Dave Camp’s summer- recess ritual of visits with constituents at a retirement home, the Rotary Club and an airport construction site was punctuated this past week by voters’ misgivings about the deficit fight in Washington in which Camp plays a central part. As he crisscrossed his hometown district of Midland, Michigan, on Aug. 25, the chairman of the House Ways and Means Committee repeated to residents — some of whom he has known since childhood — his promise not to raise taxes to cut the deficit. The 11-term Republican House member encountered voters who supported him while expressing doubt that Congress can tackle a $1.3 trillion budget deficit. “They need to grow up and get together,” John Church, a retired Midland retailer, said of Congress.

The Case Against a Payroll Tax Cut [Economix/NYT]
It’s rare for Republicans to find a tax cut they don’t support, but last week The New York Times reported on just such an exotic creature. Many leading Republicans, it seems, are extremely cool to the idea of extending the temporary cut in the Social Security tax that took effect on Jan. 1 and expires on Dec. 31. It has lowered employees’ share of the payroll tax to 4.2 percent, from 6.2 percent.

Auditor in China case makes case for Janus [Thomson Reuters]
In the latest twist in a four-year-old shareholder lawsuit alleging a $132 million accounting fraud at China Expert Company, PKF New York, one of the company’s former auditors, contends that a recent Supreme Court ruling should shield it from litigation. In a brief filed Friday in Manhattan federal court, PKF New York cites the Supreme Court’s June ruling in Janus Capital Group v. First Derivative Traders. Judge Alvin Hellerstein this month already granted PKF New York’s motion for a rehearing on a previous motion to dismiss (more on that later), citing the Janus ruling; on Friday PKF filed a detailed brief laying out just why it believes that Janus protects it from the shareholders’ accusations.

Fraud trial of Teaneck accountant ends in deadlock [NJ/The Record]
Andrew Muhlstock, 58, was spared a jury decision following a three-week trial in Trenton federal court, despite a guilty verdict returned against an owner of Total Time Solutions, which handled payroll and tax withholding for New Jersey companies.

Grant Thornton advertises its goal to run with the bulls [Crain’s]
The new work departs from earlier humorous campaigns to more aggressively support CEO Stephen Chipman’s charge to pursue “dynamic” companies that have ambitious growth plans, whether a Fortune 100 firm or a small company. The ad campaign asserts what wins, what doesn’t and that these firms know what wins, and that’s why they chose Grant Thornton. “It’s not about the size of the firm. It’s, do they have game on and are they really attacking the market?” said Tricia Conahan, chief marketing and sales officer of the city’s largest Chicago-based accounting firm.

BDO Canada acquires KPMG’s consumer insolvency wing [G&M]
BDO Canada Ltd. has acquired KPMG’s consumer insolvency practice for an undisclosed price, making it one of the country’s largest providers of such bankruptcy and credit counselling services. The integrated services — which offer trustees in consumer bankruptcy, proposal administrators and credit counsellors — began operating under the BDO Canada Ltd. name effective last Friday.

PwC Appoints Niloufar Molavi as U.S. Energy Leader [PwC]
The firm’s (now) former Chief Diversity Officer.

PwC US Appoints Tom Archer as U.S. Technology Sector Leader [PwC]
Succeeding Rob Gittings.

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Accounting News Roundup: Charlie Rangel Has a Primary Challenger; Does Your Salary Define You?; PCAOB Wants Auditors to Consider Big Weird Transactions | 04.08.10

• Rangel Challenged by a Historic Foe [WSJ]
Someone finally realized that Charlie Rangel’s constituents in New York’s 15th District have maybe had enough of Chuck and his “pay taxes as I wrote them, not as I pay them” ways. Rangs will be challenged in the primary by New York State Assemblyman Adam Clayton Powell IV, according to the Journal. Not only does Mr Powell have an upper hand in the ad campaign department but there’s a bit of history here.


Powell Number III, sire of IV, was defeated by ChaRang back in 1970 amid his own ethical trubs. ACP 4th Edition insisted to that this had nothing to do with sweet, sweet revenge, “It has nothing to do with revenge or anything like that. Anyone with that record in public service would be interested in higher office.”

It won’t be easy for ACP4 however. He was flicked away by Rangs in a primary challenge back in 1994 and was recently convicted of “driving while impaired,” which actually seems worse than hogging rent-controlled apartments, since that could result in, you know, someone getting killed.

• My Paycheck, My Self? [FINS]
Does your salary define you as a human being? Or, at the very least, does it feel that way? Master pay czar Ken Feinberg had to snoop around some people that pull down some hefty scratch and he found out that the human psyche can easily be affected by their pay stub.

• PCAOB Issues Staff Audit Practice Alert on Auditor Considerations of Significant Unusual Transactions [PCAOB]
Don’t worry about the plain old vanilla transactions auditors, the PCAOB needs you to be on the lookout for significant unusual transactions. What that entails, we don’t really know but we’ll assume that means any transaction, and the PCAOB means any transaction, that looks remotely out of the ordinary, has a funny name (that may or may not include a “105”), requires smokey-filled room approval etc., definitely give it a second look. Or a third.