As we noted on Friday, KPMG announced last week that it would continue its relationship with the incredibly bad insider trader/gambler, Phil Mickelson. At least one person thinks that's worth rethinking:
[G]iven that it is tasked with auditing and signing off on company’s financial statements, and that it is a regulated entity, it probably faces the most reputational risk.
It's not an illegitimate point. Despite his reputation as a guy who would bet on anything, Mickelson is also well-liked by almost everyone. By sponsoring him, KPMG got the advantage of showing him around at events and things to either help the firm win business or raise money. Now, with this golf-buddy-insider-trading comedy, Phil looks kinda reckless and dumb. Do professional services firms — ones who tout integrity — want to sponsor a person like that? I guess so. For now?
Elsewhere in Phil's insider trading drama: The Newman ruling from a couple years ago probably saved Mickelson from criminal charges. And: "Dean Foods Co's former chairman Thomas Davis said he threw his cellphone into a Dallas creek to hide his role in an insider-trading scheme after FBI agents visited his home, according to a transcript of his guilty plea."
State and local tax issues are some of the most fascinating and complex not only because there are so many jurisdictions, and therefore, so many more rules, but also because states are getting increasingly aggressive about finding taxpayers where there were no taxpayers before. Here's an example from Bloomberg BNA's Melissa Fernley:
“This year we asked the states whether employees flying into the state on a commercial airline for business purposes one to four times per year would create nexus in the state. Twenty states (two out of five) said that it would create income tax nexus. This at first seems surprising, but it indicates how states are looking to increase their revenue in any way possible, and are becoming more and more aggressive with their nexus policies.”
I'm only an appreciator of SALT issues, but I'd say this seems unusually aggressive. Here's a more cogent take from a SALT partner Peter Stathopoulos from Bennett Thrasher:
“It’s always easier to raise taxes on nonresidents because they are not voters and they won’t make things difficult, so many states want to shift as much as possible of their tax base to nonresidents. You do that by having a very low nexus standard. They’re always pushing the boundaries of minimum nexus to subject nonresidents to nexus — that’s the trend.”
Considering how some individuals and businesses feel about paying taxes, I wonder if lawsuits will soon become a trend. Maybe the SALT nerds out there can enlighten us?
Elsewhere in SALT: "Voluntary" Sales Tax Collection From Remote Sellers.
Previously, on Going Concern…
In other news:
- Bayer Offers to Buy Monsanto for $62 Billion
- Like It or Not, “Smart Drugs” Are Coming to the Office
- SEC Considering Tighter Regulation of ETFs
- "When the rich kid receives a bequest from their parents, it's like getting private welfare."
- Lego 'arms race': Bricks growing more violent, study says
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