September 24, 2022

Accounting News Roundup: Presidential Candidate Tax Returns and PwC’s Matt Damon | 02.29.16

POTUS candidate tax returns
Presidential candidates have been releasing their tax returns for decades so people have come to expect it. There can be some interesting info learned from time to time, however it's never too significant.

However, people want them to be significant, so Marco Rubio and Ted Cruz released pages 1 and 2 of their 1040s on Saturday supposedly to put pressure on you-know-who: 

“It is time to stop the excuses,” Mr. Cruz said in a statement. “Donald Trump owes it to the American people to be fully vetted, and that includes releasing his tax returns so the voters can see the full financial picture.”

This is quite a strange statement from Cruz since tax returns decidedly don't give the full financial picture of anyone's wealth. Cruz even speculated that Trump's not releasing them because it could show his ties to the mafia, which, as we all know, is something that people regularly disclose in their tax returns. Not to mention that pages 1 and 2 are pretty useless for knowing anything particularly useful:

“By only releasing pages 1 and 2, Cruz and Rubio have given Trump an out if and when he should decide to publish his returns,” said Anthony Nitti, an accountant at Withum, Smith & Brown in Aspen, Colo. “He could release the same pages, which would certainly give us insight into his adjusted gross income, but would offer no detail about the items people are most curious about with regard to Trump: his charitable contributions and the extent and success of his various business dealings.”

Why Cruz and Rubio only released pages 1 and 2 is a mystery to me. Maybe they don't want people to see that they don't pay state income taxes. Maybe they're cheapskates when it comes to donating to charity. For now, we won't know but what we do know is that Donald Trump won't be releasing his tax returns regardless of what Rubio and Cruz do.

In other Trump tax return news, David Cay Johnston has 9 Key Points About Trump’s Income Taxes.

New CPA Exam vs. Old CPA Exam
Ugh:

I don’t want to sound like an old man yelling at kids to “get off my lawn,” but some of us who had to take the pre-computerized exam have claimed (rightly or wrongly) that “kids taking the exam today have it WAY easier than we did.”

For those of you who are too young to remember (or who just want to forget), the CPA exam used to be a 2 day ordeal where one had to take all four parts during those two days. In other words, we didn’t have the luxury of studying really hard for the FARE section and only focusing on that. Rather, one had to study for all parts of the exam simultaneously and then hope to pass at least 2 parts (without getting below 70% on the parts one failed). If you didn’t get at least “conditional” passing (75% + on two parts, and 70% – 74% on the parts you failed), you had to take all four parts of the exam over again. It was brutal.

This is all in the context of this article about "Removing Barriers to the CPA License." CPAs don't work in pencil and paper any more, so a computerized test makes sense. And offering a two-day exam only twice a year seems silly, so the current format is an improvement. The exam covers more than it ever has, candidates have to cram more knowledge in their brains, making it, arguably, more difficult. By getting rid of twice-a-year-all-sections-at-once exam, the conditional passing isn't necessary (FWIW, I remember 50% being the floor).

The point is, the exam is hard now, it was hard then. Full disclosure: I took the last written CPA exam. I passed all four sections in one sitting. I don't think this makes me better than people who didn't take a written exam. I have no idea if the exam is harder then than it is now, but the exam has been computerized for over 10 years and I find the debate pretty pointless.

PwC's Matt Damon
I guess we're doing this again:

Apparently, I'm alone in thinking that they don't look that much alike.

In other news:

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