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November 25, 2022

ANR: Volcker On Board at Rotation Station; IRS Commish Denies Targeting Nonprofits; Deloitte Quits Another Chinese Client | 03.22.12

Top 1% Would See $90,000 Tax Rise, Report Says [WSJ]
Americans whose income ranks them in the top 1% of earners would see their taxes rise by more than $90,000 on average next year under President Barack Obama's budget proposal, according to a nonpartisan research group's new estimate. "Almost all of the rich would end up paying a lot more," said Roberton Williams, a senior fellow at the nonpartisan Tax Policy Center, a joint venture of the Brookings Institution and the Urban Institute, which conducted the study. Mr. Williams questioned the wisdom of reducing federal deficits through tax increases only on those making more than $250,000, as Mr. Obama wants to do. "While they have a lot of money, they don't have enough money to solve our budget problems on their backs alone," Mr. Williams said.

Volcker Backs Auditor Rotation [CFOJ]
Former Federal Reserve Chairman Paul Volcker threw his support behind mandatory audit firm rotation on Wednesday, while other former regulators offered up alternative approaches to how companies should engage auditors. Speaking at the Public Company Accounting Oversight Board’s auditor rotation roundtables in Washington, D.C, Volcker told the U.S. accounting watchdog that a simple auditor rotation requirement for all public companies may not be efficient, but the idea could be refined. “It does seem to me that regular audits should not become sort of a long-term annuity for an accounting firm,” Volcker told the group.

P&G Explains Why It’s Had the Same Auditor for a Century [CFOJ]
122 years, to be precise.
 
Ryan budget passes committee by one vote [The Hill]

The House Budget Committee approved Chairman Paul Ryan's 2013 budget resolution on Wednesday night in a close 19-18 vote. Two conservative Republicans voted against the Ryan plan, which cuts spending by $5.3 trillion over ten years, because it did not cut the budget fast enough. Reps. Justin Amash (R-Mich.) and Tim Huelskamp (R-Kan.) voted no.
 
House Panel Subpoenas MF Global's Assistant Treasurer [WSJ]
An MF Global Holdings Ltd. employee who oversaw fund transfers in the final week before the firm sought bankruptcy protection has been subpoenaed by a U.S. House subcommittee to testify next week about the securities firm's collapse. The Oversight and Investigations subcommittee of the House's Financial Services Committee voted at about 2 p.m. Wednesday to subpoena Edith O'Brien, the company's assistant treasurer when it filed for Chapter 11 bankruptcy protection Oct. 31. "Ms. O'Brien has unique, personal knowledge regarding how and why customer funds went missing," said Rep. Randy Neugebauer, the chairman of the subcommittee. "We owe it to the thousands of customers of MF Global—the ranchers, farmers and investors who lost money—to get to the bottom of how this could have happened." Ms. O'Brien is expected to invoke her constitutional rights against self-incrimination and refuse to answer questions at the hearing next week, according to people familiar with the matter. Ms. O'Brien has so far declined to be interviewed by investigators and members of the committee.
 
IRS Eliminated 5,000 Jobs in Past Year Amid Budget Cuts [Bloomberg]
The Internal Revenue Service has 5,000 fewer employees this tax filing season compared with 2011. The IRS accelerated workers’ retirements through attrition and incentives, IRS Commissioner Douglas Shulman told a U.S. House committee today. About 3,000 of the employees worked in tax enforcement, he said. In fiscal year 2010, the agency’s workforce averaged 94,711 people.
 
IRS Chief Says Agency Isn’t Targeting Political Nonprofit Groups [Bloomberg]
The U.S. Internal Revenue Service hasn’t been “targeting” particular nonprofit groups engaged in political activity, Commissioner Douglas Shulman said today. Republicans have expressed concern that the IRS was singling out Tea Party-backed groups for extra scrutiny in deciding whether to grant them tax-exempt status. Shulman said today the groups applied for 501(c)(4) status, a nonprofit status for “social welfare” organizations whose primary activity isn’t political. “All of these organizations are not being examined,” he told a U.S. House Appropriations subcommittee. “They voluntarily came in and said: I’d like to apply for 501(c)(4) status.”
 
China dairy firm halts trading after auditors quit [Reuters]
Trading in shares of Chinese milk formula products producer Daqing Dairy Holdings Ltd was suspended on Thursday after the company's auditors resigned, the second accountant departure from a Hong Kong-listed Chinese company this month. Daqing, with a market value of about HK$1.7 billion ($218.95 million), did not identify the auditors and gave no details about the resignation. Company officials were not immediately available for comment. Deloitte Touche Tohmatsu was named as an auditor of Daqing in the company's latest interim report. The resignation came just days after Deloitte resigned as auditor of Boshiwa International Holdings, which holds the licence to make Harry Potter- and Bob the Builder-branded clothes, saying it was not satisfied with the company's response to questions about some of its transactions.
 
Rangel Introduces Mortgage Tax Relief Extender Bill [AT]
The Mortgage Cancellation Relief Act of 2012 would extend for two years a tax provision that prevents a federal income tax liability for struggling homeowners as a result of mortgage debt forgiveness from a financial institution. Rangel originally introduced the provision in 2007 when he chaired the tax-writing House Ways and Means Committee before stepping down in the midst of revelations of his own tax problems. “The sanctity of our homes is at the heart of the American Dream,” Rangel said in a statement. “The collapse of the American housing market that began in late 2006 has brought our economy to its knees and left Americans from all walks of life without a home or struggling to keep a roof over their head. While the law cannot repair the borrowers' credit or punish those who misled them into taking out inappropriate loans, it addresses a fundamental unfairness in the lives of those who find themselves in these dire circumstances."
 
Indianapolis attorney Stacy Sheedy pleads guilty in $596,000 fraud [IS]
An Indianapolis attorney and accountant pleaded guilty Wednesday to theft as part of an agreement with prosecutors. An investigation discovered late last year that $596,000 was missing from accounts managed for clients by attorney Stacy H. Sheedy. She was charged in January. Sheedy admitted to two counts of theft, according to a release from Marion County Prosecutor Terry Curry, and will receive a sentence of up to eight years. Sentencing is scheduled for April 26 in Marion Superior Court.

 

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