Accounting News Roundup: TurboTax’s Fight Against Simple Filing; SCOTUS Tax Cases; The PCAOB’s ‘Terminal Inconsequence’ | 03.27.13

How maker of TurboTax fought free, simple tax filing [ProPublica via TaxProf]
Imagine filing your income taxes in five minutes — and for free. You'd open up a pre-filled return, see what the government thinks you owe, make any needed changes and be done. The miserable annual IRS shuffle, gone. It's already a reality in Denmark, Sweden and Spain. The government-prepared return would estimate your taxes using information your employer and bank already send it. Advocates say tens of millions of taxpayers could use such a system each year, saving them a collective $2 billion and 225 million hours in prep costs and time, according to one estimate. The idea, known as "return-free filing," would be a voluntary alternative to hiring a tax preparer or using commercial tax software. The concept has been around for decades and has been endorsed by both President Ronald Reagan and a campaigning President Obama. "This is not some pie-in-the-sky that's never been done before," said William Gale, co-director of the Urban-Brookings Tax Policy Center. "It's doable, feasible, implementable, and at a relatively low cost." So why hasn't it become a reality? Well, for one thing, it doesn't help that it's been opposed for years by the company behind the most popular consumer tax software — Intuit, maker of TurboTax. Conservative tax activist Grover Norquist and an influential computer industry group also have fought return-free filing.

Supreme Court to Hear Arguments in DOMA Tax Case [Tax Trials]
Edie Windsor and Thea Spyer were New York residents and a couple for over 40 years. In 2007, they were married in Canada where same-sex marriage was legal. Upon Thea’s death, Edie filed a federal estate tax return, Form 706. Thea’s estate paid $363,053 in federal estate taxes because she was not eligible for the unlimited marital deduction under IRC §2056(a) – a benefit routinely applied to married couples of different sexes. Edie filed a claim for refund of the estate taxes paid. When that claim for refund was denied she filed suit in federal district court.

Hong Kong raises stakes in U.S.-China audit battle [NST via Paul Gillis]
Hong Kong has raised the stakes in a global accounting spat. Its regulator is suing Ernst & Young for failing to hand over documents relating to a suspect client. The audit firm says Chinese secrecy rules  prevent it from complying. The case mirrors a broader U.S. complaint about Chinese accounting frauds. But Hong Kong has  more at stake. The trial, which started on March 27, centres on E&Y’s work  for a Chinese company called Standard Water. E&Y resigned as  auditor in 2009, forcing the company to abandon its plans for a  Hong Kong listing. The local Securities and Futures Commission  launched an investigation and repeatedly asked E&Y for its  records. The accounting firm refused, arguing that its Chinese  affiliate – which did most of the work – is bound by rules  preventing mainland auditors from handing over documents to  other regulators. The SFC also appealed to Chinese authorities,  apparently without success.

Supreme Court to weigh IRS penalties on alleged tax dodges [Reuters]

Though it rarely hears tax matters, the court has decided to weigh in on a case involving Texas billionaire Billy Joe "Red" McCombs, a former owner of professional sports teams. The court's decision, not expected until June 2014, will likely have implications beyond McCombs' case, tax lawyers said. […] The case being taken up by the court involves a 1999 transaction undertaken by McCombs and his business partner, Gary Woods. The government contends it had no purpose other than tax avoidance. The transaction was known as "current options bring reward alternatives," or COBRA. According to the government, Woods and McCombs bought and sold options on foreign currencies to generate paper losses used to offset gains chiefly related to McCombs's sports ventures.

Male/female accountant pay gap narrows [Accountancy Age]
The pay gap between young male and female chartered accountants is narrowing, according to ICAEW research. The average basic salary for female chartered accountants under 30 is now 97% of their male counterparts, compared to 92% last year. Sharron Gunn, director of the ICAEW's commercial department, said: "The closure of the gender pay gap is a positive step." 

Re:Balance Takes a Spring Time-Out — Will the Silliness Please Take a Break Too! [Re:Balance]
Our friend Jim Peterson is taking a break from his blog but not before taking a shot at the PCAOB: "The PCAOB announced consideration of a proposal for the reorganization of its auditing standards – something on absolutely nobody’s list of priorities — while the agency has failed to get off the snide on either auditor rotation or the content of the auditor’s report – reinforcing the unavoidable conclusion that this body has lapsed into terminal inconsequence."

Eight Reasons Business Travelers Shouldn't Work on Planes [BBW]
Among other things: "You feel like you might puke."

“Sovereign citizens” promoter faces up to 164 years in prison [JofA]
Followers of the sovereign citizens movement maintain that individuals can decide which laws to obey. One tactic they practice involves engaging in protracted legal battles in which the individual files numerous court filings espousing various legal theories couched in a coded “truth language” that requires a lexicon to decipher. The defendant, James Timothy Turner, is president of what is reportedly the largest sovereign citizens group, the Republic for the United States. In September 2012, he was indicted by a federal grand jury on 10 counts, including a charge of conspiracy to defraud the United States.

Why the Tea Party Should Support Soda Taxes [Tax Analysts/Joe Thorndike]
[A]s a general rule of good government, you shouldn’t let regulatory taxation get too far ahead of public opinion. When it does, regulatory taxation can undermine faith in the tax system as a whole, making it seem heavy-handed and paternalistic. Is that what progressives really want? To make Americans even more suspicious of the tax system than they already are? On the other hand, that’s probably exactly what anti-tax activists would like to see. Under the theory that “it has to get worse before it gets any better,” a soda tax could be just the ticket for anyone eager to fan the flames of tax rebellion.

My Gucci Addiction [GQ]
Well, this is unexpected: "My name is Buzz Bissinger. I am 58 years old, the best-selling author of 'Friday Night Lights,' father of three, husband. And I am a shopaholic."

 

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