Author: Caleb Newquist

Founding editor, Going Concern.

Wife of Man Who Received Tax Refund Without Filing Tax Return Under the Impression the IRS Was Letting This One Go

Typically if you receive a $6,000 tax refund check in the mail, it’s something you’ve been expecting.

Such was not the case for James King who had a check cut to him back in February but unfortunately it’s due to case of identity theft. Right now the IRS can’t make heads or tails of the situation and despite the mix-up/criminal activity, Mr King’s wife figured that this was opportunity:

“She was ready to spend it,” King said of his wife with a laugh. “She was ready to go cash it and spend it. She had a to-do list right from the get-go.”

Man gets income tax refund without filing a return [TBO]

Accounting News Roundup: Tax-plagued McCaskill Will ‘Sell the damn plane’; Deloitte Sued Over China MediaExpress; KPMG Names New Head in Memphis | 03.22.11

U.S. Warplane Crashes in Libya; Pilots Safe [WSJ]
A U.S. warplane crashed in a field in northeast Libya Tuesday, but the two crew members ejected safely, U.S. military officials. The U.S. F-15 Eagle was the first to warplane to crash since the start of military operations on Saturday, and officials said they didn’t believe the crash was caused by enemy fire.

Claire McCaskill failed to pay taxes on aircraft [Politico]
he Missouri Democrat has tried to be proactive in dealing with the matter. When contacted initially about the propriety of taxsements for the 89 flights, McCaskill voluntarily issued a check to the Treasury Department to cover the cost of the trips. Yet there remained questions about whether McCaskill and her husband had fully paid property taxes on the plane. McCaskill called a Monday press conference after POLITICO had been pressing her for several days over that issue. “I have convinced my husband to sell the damn plane,” McCaskill said. “I will never set foot on the plane again.”

Greenberg’s Starr Investments sues China MediaExpress [Reuters]
Starr Investments, a firm run by former AIG chief Maurice Greenberg, has sued China MediaExpress Holdings , saying it was fraudulently induced to invest about $13.5 million in the firm, court documents show. Starr has also sued China MediaExpress auditor Deloitte Touche Tohmatsu. The investment firm said the auditor had resigned as “it was no longer able to rely on the representations of the management.”

Charlie Sheen, out of work, faces tax issues [AW]
Taxes never kept anyone from winning! DUH.

Regulating Audit Firms: News and a Short Wishlist [Fraudbytes]
Dr. Mark Zimbleman has some ideas on how to take the heat off auditors including an idea on the litigation front, “if auditors were simply penalized for missing a fraud and no litigation process took place, they would be more vigilant. In other words, audit penalties would not be based on whether or not you could show you followed the required process, but whether or not you had the right outcome.”

Will Auditors Be Held Accountable? The PCAOB Has A Plan [Re:The Auditors]
Francine McKenna goes through last week’s recommendations from the IAG.


Barnes named to lead KPMG in Memphis [MBJ]
Greg Barnes takes the big chair from Matt Lusco.

Barry Bonds Steroids Perjury Trial to Open Before Jury of 8 Women, 4 Men [Bloomberg]
Barry Bonds’s perjury trial, to be heard by an eight-woman, four-man jury that includes a data center engineer at Amazon.com Inc. (AMZN), two nurses and a business college student, is scheduled for opening statements today. Bonds, 46, who holds Major League Baseball records for career and single-season home runs, faces four counts of perjury and one count of obstruction of justice for telling a 2003 grand jury he didn’t knowingly take performance-enhancing drugs. The trial in federal court in San Francisco is expected to last as long as four weeks.

BREAKING: Accountants Work Long Hours, Get Stressed During Tax Season

Not only that but another shocking revelation is that they use caffeine to help them pull through this tough stretch.

They work 60-hour weeks this time of year, relying on pots of strong coffee and late-night dinners to help them calculate an endless swirl of numbers. Accountants are working feverishly to meet the deadline to file their clients’ tax returns this year even though they have extra time to do so.

Also, this just in – things get stressful because taxes are complicated:

The late nights can get intense, according to Carolyn Dolci, a tax partner in the Hackensack office of EisnerAmper. “It is busier than last year, partly because of the complexity of the tax code,” she said.

If you’re experiencing this phenomenon in your office, tell us your story in the comments below. Things will remain fluid for a few more weeks; we’ll keep you updated with any developments.

Accountants burning the candles at both ends [Star-Ledger]

Rich People in the U.S. Seem to Be Pulling Their Tax Weight Relative to Other Industrialized Countries

The United States relied more on tax revenue from wealthy individuals and families than other industrialized countries during the middle of the last decade, the Tax Foundation said Monday. Citing data released in 2008 from the Organization for Economic Cooperation and Development, the nonpartisan group said that the ratio of what higher-income households paid in taxes compared to their share of market income was bigger here than in certain other countries. The richest 10 percent of American households paid a 45 percent share of the nation’s taxes in the mid-2000s, the OECD found, while having a 33.5 percent share of market income. That 1.35 ratio was higher than countries including Australia (1.29), Canada (1.22), France (1.1) and Poland (0.84). [The Hill]

Regional CPA Firm Associate Concerned About Being Pigeonholed in Healthcare Industry

Welcome to the my-bracket-is-decimated edition of Accounting Career Emergencies. In today’s edition, an associate at a regional CPA firm enjoys her valuation work but is concerned about getting pigeonholed into the healthcare industry. Is it possible for her to wiggle her way into another industry? What kind of careers can she find if she can’t get out?

Need career advice? Feeling betrayed by someone on your team? Trying to get some credit for past work that was previously unrecognized? Email us atice@goingconcern.com”>advice@goingconcern.com and we’ll be sure you get everything you have coming to you.

Back to the problem du jour:

Dear GC,

I am a recent graduate working at a regional CPA firm doing business valuation / healthcare consulting. I really like my job so far but I have some questions about my future potential. The office that I work for is mainly, if not 100%, involved in healthcare, and as such, with the current trend in healthcare laws, we do mostly physician practice acquisitions and fmv comp agreements. I have sat and passed all four parts of the CPA exam (now I just have to wait for the 2 years experience) and will soon be training to get a CVA/AVA certification (AVA until I am a licensed CPA).

I guess my question is what kind of job will I be able to get after this? The problem I have is that I love the concept of what I’m doing but I’m not entirely in love with healthcare. Also, because I value mostly physician practices, the majority of my valuations are adjusted net book value (which is the easiest of all methods for valuing) which means I might not ever get valuation experience on a level that would make me attractive to other valuation companies. If I stay here am I doomed to either try and beome a hospital CFO or if I’m lucky, try and become a partner? This being such a niche specialty, I guess I’m wondering if I’m just pigeonholing myself.

Regards,

SA

Dear SA,

Before I address your question specifically, you are aware that the Baby Boomers will slowly be populating hospitals, retirement communities, rehab centers and the such in the coming years, thus making healthcare one of the most lucrative industries in our fair land, aren’t you? Landing a CFO/Director of Finance gig at a hospital or being a partner with expertise in healthcare wouldn’t be that bad. Of course you can always jump to a bigger/smaller competitor that has a healthcare valuations practice as well.

But you’re “not entirely in love with healthcare,” so I’ll address your pigeonhole problem. Many people find themselves in similar situations and it usually happens when you haven’t made the vision of your career path explicitly known to a superior, mentor or performance counselor. It sounds like you’re a still a fairly new associate so you might be a bit anxious but I’ll go with it. If you’ve been working for less than a year, then you simply make it known that you’re interested in jumping into similar work but on different clients (e.g. financial services). If you’re between the one and two-year mark, hope isn’t lost but by now your managers have come to trust your work and they probably have plans for you. If you’re at two years-plus, then you best speak up now (why haven’t you asked already?). Your firm should be receptive to your wishes and you’ll be able to get some experience with new valuation methods and clients.

If your firm isn’t crazy about your idea, then it may be time to explore your options. It’s important to get some exposure to various industries and technical issues but do keep in mind it’s in your best interest to choose an industry at some point in your career (and the earlier the better) and you could do a lot worse than healthcare. If you choose the jack-of-all-trades route, your peers with more expertise will be favored by managers and partners in specific areas as opposed to someone with little or no exposure to their industry. So speak up in order to find new opportunities but keep in mind that healthcare may harken you back (for one reason or another) but you’ll have plenty of career options in a field that will be blowing up for years to come.

Is Madoff’s Auditor Spilling His Guts?

Maybe! David Friehling was supposed to be sentenced last week but apparently it got pushed back again.

On November 3, 2009 Friehling pleaded guilty to various charges ranging from securities fraud to filing false reports to the SEC. He was to be sentenced for these crimes in February 2010 but because of his cooperation with the government, that was postponed until September 2010….that was then postponed until March 15, 2011….now that has been postponed until September 16, 2011. […] So what does a guy know who claims he did not know a lot? Is Friehling working with the Feds and Irving Picard (Madoff Trustee) on strong-arming Mets’ owners Saul Katz and Fred Wilpon? I doubt it. Can Friehling put a finger on one of the Bernard Madoff family members, who have yet to be charged criminally? Maybe.

Of course this could mean that Friehling also knows the location Jimmy Hoffa, the true identities of the participants in the Kenneday assassination and the Coke formula. Oh wait, everyone knows that one now. ANYWAY, the investigators may just be enjoying the anecdotes and would hate to see the poor guy shipped upstate. But most likely, he’s trying to save his ass from a sentence in FPMITAP like his #1 client received.

Giving Friehling the benefit of the doubt, he is cooperating to do the right thing now but he is also trying to get his sentence reduced in the process. With a fraud so large, I do not see how the Federal Sentencing Guidelines keep this guy in prison for less than 20 years.

Madoff Accountant — Now Auditing To Save His A#$ [Forbes/Walter Pavlo]

Ernst & Young, Guy Who Plays Boy Wizard to be Recognized by Trevor Project

Having seen the rabid crowds outside FAO Schwarz to see this guy first hand, it’s hard telling what kind of internal battle there is at E&Y to rub elbows with Harry Potter (even if he’s likely to be sans spectacles).

Daniel Radcliffe will be honored by The Trevor Project with the Trevor Hero Award during “Trevor LIVE” at Capitale (130 Bowery, NY, NY). The annual show benefits the life-saving work of The Trevor Project and will also honor Ernst & Young LLP with the Trevor 2020 Award.

If you’re not familiar with the Trevor Project, they do great work, focusing on “suicide prevention efforts among lesbian, gay, bisexual, transgender and questioning (LGBTQ) youth.” Kudos to E&Y for the recognition.

Accounting News Roundup: AT&T Deal Will Bring Scrutiny; Death by PowerPoint; Michigan Gov’s Tax Overhaul Plan | 03.21.11

AT&T Faces Year-Long Scrutiny for ‘Unthinkable’ T-Mobile Bid [Bloomberg]
AT&T Inc. (T)’s $39 billion purchase of T-Mobile USA, the biggest acquisition worldwide in almost a year, may take a year to gain regulators’ approval even if the carrier pledges to sell assets and expand rural coverage. The acquisition would push AT&T past its largest rival, Verizon Wireless, to become the biggest U.S. mobile-phone carrier. AT&T and T-Mobile combined have 39 percent of the market, according to research firm EMarketer Inc.

Allies Press Libya Attacks [WSJ]
The U.S. and its allies intensified air attacks against forces loyal to Col. Moammar Gadhafi on Sunday, keeping anti-Gadhafi rebels from being immediately overrun and bringing a reprieve to the increasingly desperate pro-democracy uprising. Allied jets and missiles pounded Libyan military targets over the weekend, including one of Col. Gadhafi’s armored columns seen charred on the road to Benghazi, the rebels’ de facto capital. Rebels emboldened by the international support renewed fighting in Ajdabiya, a strategic city they had lost last week, witnesses said.

It Turns Out That Lower Taxes Could Kill You After All [JDA]
Some states (namely those with mottos like “Live Free or Die”) aren’t going to buckle to the pressure of tax lovers like the American Lung Association.

Is There Death in the Accounting Classroom? [The Summa]
Speaking of death.

Promise on Taxes Sparks GOP Rift [WSJ]
A few prominent GOP lawmakers believe they will have to raise some tax revenue if they are to bring Democrats along on a bipartisan compromise to address the U.S.’s long-term fiscal problems. Many Democrats want higher taxes to cover at least part of future budget gaps. That has led to clashes between Republican lawmakers and a Washington advocacy group, Americans for Tax Reform, the self-appointed keeper of the party’s anti-tax flame.


US banks face fresh scrutiny on lending [FT]
US banks could be forced to disclose when they give clients below-market rates on loans as a part of their efforts to secure further business, under rules being considered by accounting regulators. The proposed change could lay bare cases in which larger lenders use their balance sheet to secure lucrative investment banking business.

Companies: Gov. Rick Snyder’s business tax plan simple, appealing [DFP]
CPA turned Michigan Governor Rick Snyder wants to Michigan’s 6% corporate tax in a overhaul for the state.

Taxing Gestational Surrogacy [TaxProf Blog]
For those interested.

Presenting Going Concern March Madness: The Coolest Accounting Firm

Now that the Sweet Sixteen is set, the general consensus here at Going Concern is to take advantage of the combination of March Madness and the plight of busy season. Accordingly, we bring you the first ever edition of GC March Madness: Coolest Accounting Firm. Inspired by our sister from another mister, ATL, we’ve decided that we’re looking to the GC readers to determining which accounting firm is the coolest of the cool by way of a democratic process but utilizing the seasonally appropriate method of a bracket. We opted with the prestige rankings determined by Vault to determine the seeds because…well, Vault has a prestige ranking and if we tried to come with a similar list ourselves, there would be rampant speculation of bias that we’re not prepared to address (plus we’re pulling this together on fairly short notice). If you don’t like your firm’s seed – or your firm is shut out of the tournament altogether – we suggest you speak up in next year’s Vault rankings.

Now, then. On with the bracket.


Obviously there are many compelling narratives here. Will the Big 4 be the Final 4? Will Rothstein Kass surprise everyone like they did in the premiere Vault Ranking? If McGladrey is victorious will they celebrate with punch and cake? So get your vote on and leave your thoughts on the match-ups or each firm’s chances (please consult your local bookie for actually odds) in the comments. And naturally, we’re rooting for underdogs in every single match-up (we’re looking straight at you, Reznick and BKD people)

The vote launched at 6 am this morning and it will close promptly at 11:59 pm ET on Tuesday. We’ll then update you with the winners at some point on Wednesday and then launch voting for the next round and so on and so forth. Voting for each match-up appears on the following pages. And don’t even think of skipping the match-ups that don’t involve your firm; A) that makes you a loser and B) you’re clearly working too hard.

Let’s get to the voting, shall we?

Starting with PwC vs. Reznick Group.

Next up is unfounded rumored GT merger partner Moss Adams and perpetual Fortune lister, Plante & Moran.

Moving on to aforementioned GT vs. CG.

Klynveld v. Crowe

The most interesting accounting firm in the world vs. the firm now known as EisnerAmper.

#1 in size taking on the up-and-comer.

Mickey G’s up against Julius H. Cohn

Finally we’ve got Lehman Brothers’s auditor vs. BKD.

Pipedream Legislation Would Tax Billionaires at 49%

Congresswoman Jan Schakowsky (D-IL) has introduced the cleverly-named “Fairness in Taxation Act” that would tax millionaires and billionaires at rates that will cause John Boehner to hack up both his lungs.

Despite the futility of the FiTA, these are some tax rates that Tom Bloch can get behind!

The bill would create the following new tax brackets for millionaires and billionaires:

• $1-10 million: 45%
• $10-20 million: 46%
• $20-100 million: 47%
• $100 million to $1 billion: 48%
• $1 billion and over: 49%

And Schakowsky obviously has a thing for the Steve Cohens and John Paulsons of the world:

The current top tax bracket begins at $373,000 in income and fails to distinguish between the “well off” and billionaires, such as the top 20 hedge fund managers whose average income last year was over $1 billion, Schakowsky pointed out.

Congresswoman Introduces Bill to Tax Millionaires and Billionaires [AT]

This Wouldn’t Do Much for the Popularity of IRS Agents

Under a GOP-backed bill expected to sail through the House of Representatives, the Internal Revenue Service would be forced to police how Americans have paid for their abortions. To ensure that taxpayers complied with the law, IRS agents would have to investigate whether certain terminated pregnancies were the result of rape or incest. And one tax expert says that the measure could even lead to questions on tax forms: Have you had an abortion? Did you keep your receipt? [MoJo]