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Accounting News Roundup: Tax Reform Bill Is All the Rage; Positive Thinking During Busy Season; Some Delayed Scott London Effect? | 02.27.14

Posted on by Caleb Newquist

A Republican’s Tax Overhaul Envisions Big Changes [NYT]
The best quote in this article indicates that Rep. Camp is on the right track with his bill: "To get those rate reductions, Mr. Camp would leave behind what Chris Krueger, a policy analyst at Guggenheim Partners, called a 'veritable killing field of sacred cows.' "

Tax Overhaul Plan Faces Key Hurdles [NYT]
Here's something of interest for lots of people in the audience: "Under the plan, the tax rate for about 99 percent of Americans would be, at most, 25 percent, but the remaining 1 percent, whose income is above $450,000 or so, would also be subject to a 10 percent tax surcharge on certain types of income, according to congressional aides. The surcharge would affect salaried professionals, like lawyers and accountants, while excluding those whose income comes from industries that produce goods, like manufacturing and farming." 

Lobbying Fury Begins Over Tax Revamp Unlikely to Advance [Bloomberg]
Winners: "Retailers, medical device makers and franchise businesses yesterday were supportive of the plan." Losers: "The oil, financial services, private equity and real estate industries were more critical."

Keep thinking positive!

Credit Suisse Said to Face SEC Probe of Accounting Moves [Bloomberg]
The best part about making your own rules is not following them when you don't want to: "Credit Suisse didn’t follow its own policies for determining the value of new assets, and shifted them between regions to hide a decline in the Switzerland-based unit, the subcommittee said. [CEO Brady] Dougan acknowledged in a December interview with the subcommittee that the Zurich-based bank may not have followed those policies in at least one instance, according to the Senate report."

Is this part of the Scott London effect? A-Mark is in Santa Monica and Spectrum is in Irvine and BDO did take Skechers after L'Affaire London. It's a theory!   

Suspect: I didn't know cocaine is illegal [KIN]
Today in Florida Man: "A Key West man was jailed Sunday for alleging trying to ditch a bag of cocaine in a planter at the Pier House Resort at 1 Duval St. in Key West. Guy Lanchester, 46, reportedly told Officer Darnell Sealy he didn't know why he was being arrested: 'I don't understand. I thought cocaine wasn't illegal in Florida.' "

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White House Taps Consumer Adviser [WSJ]
“President Barack Obama this week will appoint Elizabeth Warren to a lead role setting up the new Bureau of Consumer Financial Protection, two Democratic officials said, a move that will allow the White House to avoid a messy Senate fight over her role.

Ms. Warren, currently a professor at Harvard Law School, will be named an assistant to the president and special advisor to Treasury Secretary Timothy Geithner in charge of launching the new agency and setting its mission. She was a candidate to be the agency’s first director, a position that remains unfilled, but would likely have confirmation because of opposition in the Senate.”

What is Accounting? [White Collar Fraud]
It’s sort of like arithmetic but not really. Former Sam Antar nemesis, Howard Sirota, explains in a video over at WCF.

Chicago-Area Man Is Sentenced to 23 Years for Running 22-Year Ponzi Scheme [Bloomberg]
“Frank Castaldi, who ran a Chicago- area Ponzi scheme for 22 years that cost victims $31.6 million, was sentenced to 23 years in prison today in federal court.

For 22 years, Castaldi, 57, of suburban Prospect Heights preyed upon elderly Italian immigrants, U.S. District Judge John Darrah said today before handing down the sentence.

‘This is an offense of huge magnitude,’ the judge said after hearing from victims of the scheme in a packed courtroom. ‘It involved hundreds of victims. It involved millions of dollars.’

In an August 2009 plea agreement, Castaldi said he had raised more than $77 million from 473 groups and individuals. First charged in January of last year, he admitted to mail fraud and to trying to thwart a U.S. Internal Revenue Service probe.”

Regulators to Target ‘Window Dressing’ [WSJ]
“Federal regulators are poised to propose new disclosure rules targeting “window dressing,” a practice undertaken by some large banks to temporarily lower their debt levels before reporting finances to the public.

The Securities and Exchange Commission is scheduled to take up the matter at a meeting Friday and is expected to issue proposals for public comment. The action follows a Wall Street Journal investigation into the practice, which isn’t illegal but masks banks’ true levels of borrowing and risk-taking.”


Banks take over record number of homes in August [Reuters]
“A record number of homeowners lost houses to their banks in August as lenders worked through the backlog of distressed mortgages, real estate data company RealtyTrac said on Thursday.

New default notices decreased at the same time, suggesting that lenders managed the flow of troubled loans and foreclosed properties hitting the market to limit price declines, the company said.

Root problems of high unemployment, wage cuts, negative home equity and restrictive lending practices persist, however, pointing to lingering housing market pain.”

Jon Stewart: Robert Gibbs and John Boehner on the Bush Tax Cuts [TaxProf Blog]

The Daily Show With Jon Stewart Mon – Thurs 11p / 10c
Faces of Debt
www.thedailyshow.com
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Accounting News Roundup: In Defense of Sherrod Brown; Former H&R Block CFO Gets the Parachute; Intuit Snatches Up Medfusion for $91 Mil | 05.11.10

Sen. Sherrod Brown Prods SEC/FASB to Fix Accounting Standards [The Summa]
This is Professor Albrecht’s take on Senator Brown’s amendment SA 3853 to the S. 3217: Restoring American Financial Stability Act of 2010. The Professor is less concerned about this particular attempt at financial accounting legislation, reasoning that the SEC and the FASB have had plenty of opportunities to fix these issues (e.g. repurchase accounting) and have passed them up.

Given the severity of the problems, and the inability of today’s standard setters to gird their loins and solve the problems, is it appropriate for Congress to pass a law directing the SEC and its standard setter to produce a desired outcome? Absolutely. Accounting standard setting is an inherently political process, as I explained in my popular essay, “Economic Consequences and the Political Nature of Accounting Standard Setting.” Because the SEC has passed on its legislative charge to establish accounting standards that adjudicate between competing economic interests, and because the private standard setters follow their own political agendas when preparing accounting standards, it behooves Congress to step in when things get too far out of whack with national priorities. Such is the case here.

In other words, s— or get off the pot, FASB and SEC. The argument is a fine one, however, if legislation of accounting has to force the FASB’s into action, where does it end? When FAS 157 was being decried as the cause of all our problems, Barney Frank called in Bob Herz, scared the living bejeesus out of him, and got the result he wanted. Is that preferable to this situation? That depends. At the very least, the Sherrod Brown method susceptible to the influences of others while the B. Frank method skips the voting and signing stuff altogether (which has proven tricky in the past).

Former H&R Block CFO gets $620,000 cash in severance [KCBJ]
Becky Shulman (no relation to the Commish, as far as we can tell) is getting $620k for walking away from H&RB along with automatic vesting of 148,725 outstanding stock options. There’s no indication that she is eligible for lifetime complimentary tax prep service.

Intuit to buy Medfusion in $91M deal [SV/SJ Business Journal]
Intuit, owner of QuickBooks, Mint.com, Quicken, etc. has now added Medfusion to its stable, expanding its SaaS holdings. The deal is scheduled to close this July, the 4th Quarter of the company’s fiscal year. CEO Brad Smith, from the press release:

“This transaction expands our software-as-a-service offerings with a solution currently used by more than 30,000 healthcare providers, the vast majority of whom are essentially small businesses. The combination of Medfusion’s industry-leading patient-provider communication solutions and Intuit’s expertise in creating innovative solutions that improve the financial lives of small businesses and consumers, will help us create new solutions that make the clinical, administrative and financial side of healthcare easier for everyone.”