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Accounting News Roundup: Treasure Hunt at MF Global; IRS Employees Going Rogue; Soda Tax By State| 11.01.11

MF Global Collapses as Books Questioned [WSJ]
MF Global Holdings Ltd. collapsed into bankruptcy Monday when a potential buyer bolted over a discrepancy of hundreds of millions of dollars in the beleaguered securities firm’s books, people familiar with the matter said. U.S. regulators are investigating the discrepancy, which relates to money from customers that couldn’t be accounted for as MF Global raced to sell itself, according to people with knowledge of the probe. The probe is at an early stage, and it isn’t clear if the money is missing or if the inconsistencies relate to sloppy bookkeeping. The last-minute dealbreaker came just hours after negotiations led by MF Global Chief Executive Jon S. Corzine had concluded with a tentative agreement on a rescue. ( Insolvency Looming? [WCF]
This isn’t looking good: “At the end of its third quarter, the had $18.4 million of net working capital (current assets minus current liabilities). However, the company would have reported a mere $1.4 million of net working capital had it not played a shell game and window dressed its balance sheet during the third quarter. Apparently, the company wanted to avoid reporting dangerously low net working capital going into the fourth quarter, while at the same time it is trying to renegotiate terms of its Master Lease Agreement (sale leaseback) with U.S. Bank.”

Tax Breaks for Students [WSJ]
News you can use.

Perry Flat Tax Is Fool’s Gold for Conservatives [Bloomberg]
Perry’s plan is, in short, a flat tax in name only. And notwithstanding his campaign’s absurdly optimistic projections, it seems likely that it would result in much lower revenues than the current system.

A Close Look at the Perry Tax Plan [Economix/NYT]
And for another perspective: “Mr. Perry’s plan cannot be taken seriously. I don’t think it’s meant to be, at least by those of us who don’t plan on voting in Republican primaries. It’s just a signaling device, telling the Republican faithful that they can trust Mr. Perry on the tax issue. Whether the plan makes any sense as a matter of policy is irrelevant to its purpose, which is to win him the Republican nomination.”

IRS Roguery is Not a New Development [Tax Lawyer’s Blog]
You. Tax preparer. Enemy.

Monday Map: Soda Taxes by State [Tax Foundation]
Places where buying the world a Coke™ will cost you a little extra.

PwC Names Dietmar Ostermann as Global Automotive Advisory Leader [PwC]
Dietmar comes by way of…A.T. Kearney.

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