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November 26, 2022

Accounting News Roundup: Tax Planning for Secretary of State Nominees and FASB Stuff | 01.11.17

Tax planning (for Secretary of State nominees)

Richard Rubin of the Wall Street Journal reports that secretary of state nominee Rex Tillerson would like to defer the taxes on the $170 million retirement he received from his former employer, ExxonMobil.

Normally, the creation of such a trust for Mr. Tillerson’s benefit outside Exxon would create immediate taxable income on the full $170 million.

But, the trust for Mr. Tillerson is designed to match the economic and tax treatment he would have gotten had he retired from Exxon as scheduled in March, with payments and taxes spread over a decade, according to Exxon and a person familiar with Mr. Tillerson’s thinking.

The plan could save Tillerson $10 million if tax cuts are passed by Congress in the new administration. Robert Jackson of Columbia University says this is "one of the most aggressive and least successful tax positions executives have taken" while another expert calls it "aggressive but not frivolous."

One thing is for certain, it follows the standard logic of tax planning that I described yesterday: keep deferring the income in the hope that some crazy exemption comes along. Still, Jackson told the New York Times that he doesn't think someone "who has the ambition of being secretary of state should be taking aggressive tax positions moments before their Senate confirmation hearing." That could also be pretty standard tax planning logic, even if it's rarely given.

Big 4 Executives: Where are they now?

Here's a Fortune article about Joel Hyatt — best known for co-founding Current TV with former Veep Al Gore — and his latest venture: Globality, a startup that "matches multinational companies with prequalified specialists in countries where they have a limited on-staff presence." The article quotes former PwC Global Chairman Dennis Nally who sits on Globality's board and probably knows a thing or two about finding consultants in obscure places. Interestingly enough, Mark Vorsatz, Andersen Tax's CEO, is also on the board.  

FASB stuff

I'm sure some of you have been just dying to know when the FASB would get around to updating its guidance on classifying debt and inventory disclosures. Good news! They got around to it.

Previously, on Going Concern…

I wrote about the PCAOB and how the Big 4 are probably looking forward to a friendlier version of it.

Joey Havens of Horne, LLP, an Accountingfly Firm Partner, wrote about two words helping breed complacency in accounting: trusted advisor.

In Open Items, someone wants good questions to ask recruits during a career fair.

In other news:

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