Author: Adrienne Gonzalez

Adrienne is a 15-year veteran of the accounting industry, if by "veteran" you mean "vulture prowling the periphery of the profession waiting for something exciting to happen." She has been spewing vitriol on Going Concern since the site was founded in 2009. A former CPA review employee, she has sat through more FAR classes than any CPA exam candidate ever could -- even one who has failed FAR seven times -- and can still recall most of the mnemonics all these years later.

Is Benjamin Bankes an Independent Contractor?

We were wondering about Benjamin Bankes’ employment status with the AICPA, a non-profit professional trade organization, the trade being (loosely) the CPA. They fiercely defend the CPA designation’s legitimacy as a world-recognized credential and work for their members by offering themselves up as experts for legislators who have no idea what they are unleashing with a simple tax tweak. It’s a pretty good deal; we get reasonable security that our financial experts are at a minimum trained in the skills necessary to function at the entry level and the AICPA gets the notoriety that comes with being a 360,000 strong organization with a long history of protecting the integrity of its most precious asset.

So when we found Benjamin Bankes’ picture among AICPA headshots on Flickr, we wondered what kind of employment status he enjoys with the AICPA. Independent contractor? Full-time, taxable employee? Spokespig? I mean he’s right up there with Barry, so it’s got to be a pretty secure gig.

Just wondering. It’s a damn awesome picture.

IRS Issues an Apology to Same Sex Couples It Yelled at For Doing Their Taxes Wrong

Gay and lesbian couples in California got an “I’m sorry” from the IRS last week after robo-letters went out to same-sex couples who filed under new IRS rules which recognize their relationships for the first time in states with community property rules (California, Nevada and Washington). That means joint property is divided 50/50, regardless of who wears the pants (or the dress) in the couple.

Scott James has the scoop via the Bay Citizen:

The change to the tax code, put into effect for 2010, was supposed to be a step toward equal treatment by the I.R.S.

Instead, couples have faced a litany of conflicts. The latest involves at least 300 taxpayers who have had their returns rejected with terse letters signed by an enigmatic I.R.S. employee named J. Bell from Fresno.

“Your return includes income or tax liability for more than one taxpayer, other than husband and wife,” the letters read. Note: husband and wife. Not two husbands, or two wives.

Couples who received the letters had to produce additional paperwork and faced delays in receiving refunds; most were forced to hire tax professionals.

In a statement this week, the I.R.S. said that the letters had been “incorrectly sent” because of a processing error and that it “apologizes for this mistake and sincerely regrets any inconvenience to taxpayers.”

Santa Clara University law school professor Patricia Cain has an excellent blog on the subject of same sex taxes. Of the IRS apology, she said “Just to be clear, in my view, the battle is not between us and the IRS. The IRS wants to do the right thing. It wants to tax each citizen on the right amount of income under existing law. That is its job. However, the IRS is seriously hampered from promulgating rules that apply to same-sex couples by the the Defense of Marriage Act (DOMA). The IRS is to be commended for understanding that DOMA cannot usurp state property law. Thus I continue to applaud its decision about how to tax community income of same-sex couples. And now that the IRS understands how difficult it is to communicate these new rules, even to its own employees, I applaud them again — this time for their apology — which, by the way, I accept.”

Let me give the IRS a tip: you need money, right? Same sex couples have it. They do all the things other taxpayers do – buy stuff, work, pay their taxes. All they are asking for is equal treatment under tax laws. If straight couples can get trapped in loveless marriages and file jointly, why can’t gays have the same rights?

We all deserve to be miserable, overtaxed and sexless.

Here’s What Can Happen When You Get Bored After Passing the CPA Exam

ain't just crunching numbers

It’s awesome when those in the profession get excited about something other than the endless monotony of ticking and tying. For this Ohio auditor, bodybuilding was the answer when post-CPA exam boredom set in.

Via the Zanesville Times Recorder:

Philita Wheeler was a former track and cross country standout at John Glenn High School, where she reached the state meet in both sports.

Now 27, she’s encountered another athletic venture. In just five months she became a sponsored professional bodybuilder.

“After I passed my CPA exam I got bored,” said Wheeler, an auditor for Rea & Associates in Dublin. “I ran a lot, and it really wasn’t a challenge anymore. I just wanted something really challenging.”

The CPA exam wasn’t challenging enough, apparently, or perhaps just challenging enough to lead to disappointment when the whole process was over. In our humble opinion, this is far more useful than, say, picking up a drinking problem or dedicating one’s life to memorizing FASB regs.

How much do you want to bet the client gives up bank recs the second she asks for them?

Note: Private Lap Dances Are Not Tax Exempt in New York

This one is for you, ladies of the night.

A 2005 audit by the New York Division of Taxation found gentlemen’s club Nite Moves owed over $125,000 in sales tax on door admissions and private lap dance sales. The club argued that dances are a performance, not a taxable “service.” We’ll leave that one alone.

A New York State appellate court ruled last Thursday that private lap dances are not a dramatic or musical art performance, despite Nite Moves’ claims to the contrary. It is unclear whether any state taxation authorities partook in said private lap dances to make this determination.

In this case, the burden of proof rested on the club, who did not provide enough evidence to satisfy their claim, according to the five judge panel that made the ruling. “In short, petitioner was denied the requested relief due not to the nature of its business but, rather, because of the inadequacy of its proof,” they said.

The club’s lawyer, Andrew McCullough, plans to appeal the decision. “We brought in the foremost expert in the field,” he said. “She is the one in this country who has made a complete and detailed study of the art of exotic dance and if they are not going to believe her I don’t know who you believe.”

That expert had not actually seen Nite Moves’ dancers but other, similar exotic performances. As any connoisseur of naked gyrating women knows, not all naked gyrating is created equal.

Tax laws in New York State require sales taxes to be collected and paid on admission to or the use of any place of amusement except for dramatic or musical arts performances.

Maybe if the strippers wore historical costumes or mime makeup they’d have a case.

Hey, Nite Moves, you really should have called the Tax Domme, she knows all about this stuff.

New York court rules private lap dances not tax exempt [Reuters]

Is the CPA Exam Giving You Nightmares?

A fellow candidate puts this out to you to see if anyone else is psychologically affected by the process of studying for the CPA exam:

Ever since I started studying for the CPA exam, I’ve been consistently having these weird dreams where I am trying to memorize random nonsensical rules. Then I generally wake up feeling pretty stressed, having not been able to get them all down. Last night’s was something about boy scouts selling popcorn door-to-door being illegal in certain situations. I’m studying for FAR right now, but I just took REG last week.

Jesus, it sounds like you’re studying FAR. Present value tables can drive anyone a bit nuts after too long, so might I start by suggesting you avoid studying before bed? I had that problem once reading “In Fed We Trust” right up until I went to sleep and trust me, it was a nightmare that followed.

As for you? Boy Scouts actually carry some significance, according to the Dream Moods dream dictionary (take it or leave it, depending on what you believe):

Your own experience as a boy scout will definitely affect this dream symbol. If you were never a boy scout and dream that you are, then it signifies your commitment and discipline toward some task. The dream may emphasize a sense of community, belonging, and helpfulness.

To see a boy scout in your dream, denotes that you or someone else has displayed exemplary behavior. You will gain the ranks necessary to achieve your goals and success.

I don’t think the interpretation could be much clearer.

There’s also an entry for popcorn:

To eat or make popcorn in your dream, suggests positive growth. You are full of ideas. Some important fact or truth is being made aware to you through the dream. If the popcorn is unpopped, then it symbolizes potential.

Sounds to me like the best thing you can do is somehow convince yourself that you know what you are doing, have studied and don’t need to write down every single nonsensical rule, dreaming or not. Politely decline the popcorn from the dreamy Boy Scouts anyway just in case it is illegal and snooze for another 10 minutes.

Michigan CPAs, Welcome the Newest Member of the Club

Since we are totally above making disparaging remarks about strangers on the Internet, we present the following without comment from mlive.com:

Jessica A. Rolfe, of Yeo & Yeo P.C., 3023 Davenport in Saginaw, has received a Certified Public Accountant license and was promoted to senior accountant, providing auditing services in the firm’s Saginaw office.

Rolfe holds a bachelor’s degree from Saginaw Valley State University, and is a member of the Michigan Association of Certified Public Accountants and the American Institute of Certified Public Accountants.

Now the last time we shared one of these cheesy, free publicity “news” items, it also happened to be a Michigan CPA except that guy allegedly passed all four parts in one sitting, which the newspaper told us only happens with a lucky 4% of individuals. We’re not sure where they got that number (we suspect somewhere between their legs, towards the back end of things) but are glad to see no such claims made in this particular announcement.

We’ve said it before and we’ll say it again: if you have an announcement like this to make for the star intern in your life, please feel free to send it to us. We require at least 100 words, fact-checked claims and, of course, a Photoshopped headshot. Might I suggest Glamor Shots?

UK Whitepaper Seeks to Reconcile Mother Nature’s Books

When do you recognize maple syrup, when it is earned (sucked from the tree) or realized (when it goes down your big fat gap)? How much goodwill does a forest have?

The UK Department for Environment, Food and Rural Affairs has published its first white paper on the natural environment in 20 years hoping to answer some of these questions. The natural choice: securing the value of nature suggests the UK should set up an independent Natural Capital Committee (sort of like FASB for forests) to advise the government on when, where and how natural assets are being used unsustainably.

This would create “green accounts” which give an idea how the country’s natural assets are being used.

The authors of the paper suggest that economic growth and the natural environment are mutually compatible, implying that “nature’s bank balance” should not be ignored when looking at the country’s overall economic growth.

“Past action has often taken place on too small a scale. We want to promote an ambitious, integrated approach, creating a resilient ecological network across England. We will move from net biodiversity loss to net gain, by supporting healthy, well-functioning ecosystems and coherent ecological networks. We will publish a new Biodiversity Strategy for England, responding to our international commitments and setting a new direction for policy over the next decade,” the paper says, proving that someone obviously read their accounting textbooks before they tried to write a framework for valuing nature’s assets.

[Insert bad money doesn’t grow on trees joke here]

Chase’s New Expense Tracking App Will Cater to the Most Anal-Retentive Bosses

If finicky expense-tracking is going to evolve with the times, there has to be a way to track every dime spent from anywhere and it appears Chase is making an effort toward that goal with its newest offering: Jot.

Hot off the wire:

Jot will provide Ink from Chase customers a variety of mobile benefits, including the ability to:

— Receive text alerts within seconds of making a purchase with their Ink card;

— Immediately tag these purchases to custom categories on a mobile device or online;

— Enable employees to tag their business expenses;

— Immediately view all transactions on their account, including those of their employees, through their mobile device or online;

— Adjust employees’ card spending limits in real-time via a mobile device; and

— Create and download reports into accounting software, including QuickBooks(R) and Excel(R).

“Small business owners are innovative, passionate and hardworking, and Chase’s dedication to partnering with these business owners comes from the belief that this group of entrepreneurs is an integral part of the American economy,” said Richard Quigley, president of Ink from Chase. “Jot was designed with small business owners’ immediate financial needs top of mind. Jot will enhance the finance-savvy business practices of small business owners, allowing for additional time and an improved focus on the passion and sense of accomplishment they have for their businesses.”

Financially-savvy Ink customers who have an iPhone or Android phone can download Jot by visiting the Ink website. Once you’ve got it downloaded you and your employees’ spending will be reined in and you’ll be back agonizing over more important things in no time.

Curious CPA Exam Candidate Wants the Scoop on Simulations

I’m digging deep in the mailbag for this one, only because you kids have been awfully quiet lately (a sure sign that we’re in a blackout month). If you have a CPA exam question, comment or complaint for us, please let it launch. Come on, you’re going to be sitting around for the next 2 – 3 weeks waiting for your scores, might as well.

Adrienne,

I was wondering if you could go over what the simulations entails in FAR. I understand that the multiple choice contains 30 questions, and that there are 3 testlets. However, does the break down for the 7 simulations include more than one part.

For example, I know you will have a problem say leases, maybe a research question…but is that 1 simulation or is that 2 of 7?

Thanks,

Recent Grad…miserable studying…

Let’s defer to the good ole AICPA on this one, you can never go wrong getting info straight from the source. From How the CPA Exam Is Scored:

In addition to multiple-choice questions, the AUD, FAR, and REG sections also contain task-based simulations. Task-based simulations are case studies that allow candidates to demonstrate their knowledge and skills by generating responses to questions rather than simply selecting the correct answer. Task-based simulations typically require candidates to use spreadsheets and/or research authoritative literature provided in the Exam.

Well that’s not very helpful, is it?

In FAR, you’ll encounter 7 task-based simulations, of which 6 will be graded. You don’t know which TBS is pre-test so you have to go into it as if they are all graded.

Assume that each of your simulations will be on a different topic and will only require you to complete one tab. You may see more than one research question so be sure to get in some practice in that area (and access your free 6-month subscription to the authoritative literature if you haven’t already – note that you must have a valid NTS to sign up for this).

In previous versions of the exam, one simulation consisted of several tabs. You’d have to get through two of them in 45 minutes a piece and hope you filled in enough tabs to pass. In the latest incarnation of the exam, however, you will receive more varied topics. This works in your benefit as you have a better chance of getting TBS problems on areas you feel comfortable in, whereas in the old exam you had to hope and pray you didn’t get a simulation on a topic you didn’t study well or suck hard in, as you were just about guaranteed to bomb it.

Then again, in the old exam you could blow the sims and still have a chance to pass. Nowadays, however, you don’t have that luxury as simulation problems carry a heavier weight point-wise.

That said, you’ll want to do the tutorial on the AICPA’s website. While review course materials can come close to simulating the actual exam environment, the CPA exam remains the intellectual property of the AICPA, therefore no review course can copy simulation problems exactly. But since the AICPA provides that tutorial, it has the exact look and feel of the questions you will see on the exam.

So You Think Your CPA Can Dance?

One thing I’ve always loved about the Maryland Association of CPAs is that they aren’t afraid to shake things up, do what everyone else isn’t doing and, uh, break out into a dance routine in the middle of a dinner reception.

Remember the “big surprise” they were planning for the 2011 CPA Summit? Here it is, enjoy:

Post-Nasal Drip Ruins One CPA Exam Candidate’s Experience

Perhaps Caleb can confirm for us whether or not the exotic Colorado climate is snot-inducing, inquiring minds are dying to know.

We love tales from the CPA exam (if you have one, please let us know), especially ones that make us wonder if Prometric staff are human beings or robots. Once again, we totally get the high security environment but have to question the logic that dictates a drippy nose should be left to annoy the rest of the room instead of providing a candidate with a damn tissue (or a barf bucket). Absent a pen (unless they’ve keistered one, obviously), what exactly could the candidate do with the tissue to compromise the security of the CPA exam? Copy MCQ by swirling around the snot?

Seriously.

I got kicked out of the CPA exam (but let back in) because of the sniffles. I had just moved to Colorado and was having a hard time adjusting to the climate so I had a constantly running nose. When I got to the exam I asked if I could take some Kleenex in with me and they told me no. It was my first part of the exam so I was still feeling out how it all works, etc. I was in my second testlet and occasionally had a sniffle here and there (not hocking a loogie or anything, just a small sniffle). I feel a tap on my shoulder which scares the pants off me since I’m in the zone. I turn around and pull off my headphones and the moderator tells me she’s going to have to ask me to leave the exam (which is all she says). I stare at her dumbfounded and my heart starts racing “but why?? what did I do wrong??!” trying to think if I had taken off my hoodie during the exam (which is a no-no) or something else to get me kicked out of my first exam. She says “I’m going to have to ask you to come blow your nose, we’ve had some complaints”. So I stare at her more. “But I’m in the middle of a testlet, should I wait and come out after the testlet is closed?”… she responds “No, please come with me.” So she escorts me out of the testing room, points at a box of kleenex and demands I blow my nose in front of her and throw it in the trash can. I had flooding memories back to kindergarten….. So I return to my testing room, relieved I was allowed back in, only to wonder to myself “Who the hell would have complained about my sniffles? Were they not wearing their headphones or something?”. So when I got to the typing portion of my test I made sure to bang my keys as loud as I possibly could.

Colorado CPA in Australia.

Fine, it’s a Pandora’s Box… first Prometric starts providing tissues and next thing you know candidates are demanding emergency tampons for unplanned monthly accidents, insulin, and porn to accommodate their masturbation disability. We get it, it’s a slippery slope of accommodation and Prometric shouldn’t be expected to have a solution for every possible scenario but let’s be reasonable here, it’s just a little snot.

Really, Prometric?

CPAs Aren’t As Optimistic As They Used to Be on the Economy

Straight from the horse’s mouth, or, in this case, the CPAs:

According to the latest AICPA Economic Outlook Survey, chief financial officers, controllers and CPAs in executive and senior management accounting roles are far less optimistic now about the direction of the U.S. economy than they were in the first quarter of 2011.

The CPA Outlook Index, a broad-based composite index that captures the expectations of CPA financial executives and management accountants, declined three points to 66 this quarter, from 69 in the prior period.

“The flush of optimism we experienced earlier this year has given way to more moderate expectations for the U.S. economy,” said Carol Scott, AICPA vice president for business, industry and government. “While the CPA Outlook Index is still positive relative to the dark days of the recession, our members are concerned about rising energy costs and inflation, health care costs and continuing weakness in demand.”

The pullback in optimism follows an upbeat assessment in the prior quarter and signals the two-year-old U.S. economic recovery has lost momentum, Scott said. The survey shows that expectations for corporate expansion and hiring have moderated and the outlook for revenues and profits declined. Concerns about inflation continued to rise, driven by higher energy costs. The outlook for capital spending remained largely flat with information technology the only sector enjoying improvement.

It’s worth noting that while optimism for the US economy declined sharply this quarter, it is still higher than it was for the 4th quarter of 2010. Slightly more than one quarter of respondents (27%) expressed a pessimistic outlook for the US economy, driven by concerns about unemployment, government debt and rising prices.

Check out the full survey here, Valium not included.