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December 4, 2022

Accounting News Roundup: The Year of Perpetual Crisis; HP’s Autonomy Issues Are the Gift That Keeps on Giving; Tax Planning by Death | 12.28.12

Obama, Lawmakers Set for Fiscal-Cliff Meeting [WSJ]
Congressional leaders and the White House prepared for a Friday afternoon meeting, a last-ditch negotiation that could signal whether Washington is able to avert the tax increases and spending cuts known as the fiscal cliff. "This afternoon's meeting, I think, is a first chance to put the four leaders in the room and see if there's any way to avoid this," Sen. Dick Durbin (D, Ill.), the No. 2 Senate Democrat, told The Wall Street Journal after speaking on the Senate floor. Sen. Chuck Schumer (D, N.Y.) said Friday on "The Today Show" that "I'm getting a little more optimistic today" because Senate Minority Leader Mitch McConnell (R, Ky.) "is actively engaged." He said "the odds are better than people think." And Sen. Pat Toomey (R., Pa.), speaking in a radio interview with WILK, said "it's not too late" to avoid the fiscal cliff. Mr. Toomey said that the Senate could take up House-passed legislation, amend it to extend tax rates for all but the top earners and then pass it with just 51 votes—"at which point I think it's very likely frankly that the House would take it up and pass it."

Snowe floats revising Senate tax bill to extend cuts on incomes under $400,000 [The Hill]
Sen. Olympia Snowe (R-Maine) suggested Friday that senators could compromise over raising tax rates only on those making more than $400,000 annually.  Snowe said "stubbornness" was preventing a deal on the "fiscal cliff" of tax hikes and spending cuts scheduled for January, but suggested a deal was possible. "It’s going to begin in the Senate, in my estimation, to address this and to modify maybe that legislation to go to the $400,000 the president suggested," Snowe said. 
 
2013 May Be the Year of Perpetual Fiscal Crisis [TaxVox]
Howard Gleckman's premonition: "After watching the still-unresolved partisan battle over the fiscal cliff, it is increasingly hard to imagine Congress and President Obama reaching anything like a big budget deal next year. Instead, it looks as if lawmakers will spend 2013 staggering from crisis to crisis, not unlike a bunch of nasty drunks weaving their way from barroom to barroom."
 
H-P Confirms Federal Probe of Autonomy Issues [WSJ]

Hewlett-Packard Co. confirmed that the U.S. Department of Justice is investigating its allegations that Autonomy Corp. engaged in accounting improprieties before it was acquired by H-P last year. The company's statements about Autonomy in a regulatory filing Thursday prompted a harsh response from Mike Lynch, the British software company's former chief executive. He said he hasn't been contacted by any regulatory authority. "We will cooperate with any investigation and look forward to the opportunity to explain our position," Mr. Lynch said in a statement.

HP Has Been Slammed With 10 Lawsuits Over The Autonomy Debacle [BI]
Since HP announced that it would take an $8.8 billion write-down on its $11.1 billion acquisition of Autonomy in November, at least 10 new lawsuits have been filed, HP reported in its 10-K document filed to the SEC yesterday.

Accountants Skirt Shareholder Lawsuits [DealBook]
According to NERA Economic Consulting, which tracks shareholder litigation and reported on the decline in accounting firm defendants in its midyear report in July, not one accounting firm has been named a defendant so far this year. One of the study’s co-authors, Ron I. Miller, confirmed that the trend has continued at least through November. […] “To the extent that firms have been burned for a lot of money, they have some pretty strong incentives to try to behave,” Mr. Miller said. “That’s the hopeful side of the legal system: You hope that if you put in penalties, that those penalties change people’s actions.” The less positive alternative, he added, is that public companies “have gotten better at hiding it.”

Will 'Fiscal Cliff' Accelerate Millionaire Deaths? [CNBC]
John Carney investigates: "Many families are faced with a stark proposition. If the life of an elderly wealthy family member extends into 2013, the tax bills will be substantially higher. An estate that could bequest $3 million this year will leave just $1.9 million after taxes next year. Shifting a death from January to December could produce $1.1 million in tax savings. […] There is good evidence that there is some "elasticity" in the timing of important decisions about life and death."
 
Jersey City accountant wins $10,000 for homemade shaving cream [JJ]
What have you been doing?

Katt Williams SUH-LAPPED With $4 Million Tax Lien [TMZ]
Seems to be the natural order of things when your life is spiraling.
 

White House to consider Death Star petition [Telegraph]
A petition to build a Death Star space station has received the 25,000 signatures needed for it to be considered by the White House. […] In February, students at Lehigh University in Pennsylvania calculated that the cost of steel alone for a real-life Death Star would be 13,000 times the world's gross domestic product (GDP), or £541,261 trillion.

 

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