Author: Caleb Newquist

Founding editor, Going Concern.

One Man’s Holiday Wish List Includes Tim Geithner and Charlie Rangel Sharing a Prison Cell with Wesley Snipes

Actually, if Wes Benedict, Executive Director of the Libertarian Party, had his way, Wes wouldn’t be doing time at all.

“The three-year federal prison sentence for Snipes’s failure to file tax returns is absurd. Snipes is not a threat to anyone, and the judge who sentenced him clearly just wanted to scare others who might think about resisting federal taxes.

“Maybe it’s worth reminding people that Wesley Snipes was acquitted of tax fraud and conspiracy charges in 2008. He was only found guilty on misdemeanor charges of ‘willful failure to file an income tax return.’


Right, so the ‘willful failure’ part is where we kind of have a problem. If you willfully fail to control your urge to get cop-slugging drunk and then actually slug a cop, you have committed a crime. Mr Benedict doesn’t buy it though:

“Why is a failure to file a tax return a criminal non-act? Should people ever be sent to prison for not doing something? If the IRS wants to come after Snipes and take his money, they have power to do that. Who does it help to send the man to prison?

“The tax code is incredibly vague and open to interpretation [Ed note: UNDERSTATEMENT OF THE CENTURY]. In fact, the ‘law’ is largely written by IRS bureaucrats. If they decide the law says one thing, you’re OK; if they decide it’s something else, then you’re headed for prison.

“The federal tax code also allows for ‘selective enforcement,’ to put it mildly. Why is it that Wesley Snipes gets a prison sentence, but known tax cheat Tim Geithner gets promoted to Secretary of the Treasury? Maybe Tim should be Wesley’s cellmate. Throw tax cheat politician Charlie Rangel in the slammer too for good measure.

Tim Geithner’s poor choice in self-prep tax software and an actor giving the 16th Amendment the middle finger for 10+ years aren’t quite the same thing. Maybe it’s just us.

[h/t Tracy Coenen]

A Future McGladrey Associate Is Having Second Thoughts About Their Decision

Welcome to the your-day-can’t-be-worse-than-Julian-Assange’s edition of Accounting Career Emergencies. In today’s edition, a college student who accepted a fulltime gig with McGladrey is spooked after reading some kvetching about the firm on this here site. Did he make a bad choice?

Caught in a jam at work? Thinking about blowing the whistle? Concerned that the washrooms at your office aren’t sanitary? Email us at advice@goingconcern.com for lawyer recommendations or hand-washing tips.

Back to the morose McG soon-to-be:

I am a college student in the Southeast region of the United States. I am a graduate student and have accepted an offer to work full time at McGladrey (audit) in this region.

I have seen so many negative remarks on your website from comments and articles about the company, that I am somewhat concerned with my choice of firm. I seemed to fit in really well with the people at the office, and I enjoyed the office visit. I received offers from the other middle market companies (GT, BDO), but I felt best at McGladrey.

Seeing comments that compare McGladrey to McDonald’s is a bit disconcerting considering the fact that I have spent so much time and effort in college trying to gain a good job with security.

My ultimate question is, did I make a bad decision? Is McGladrey really THAT bad, or is it comparable to the other mid-tiers? To me, it seemed to meet the standard of the mid-tiers.

Please help me figure out if I need to try and make a move before I start.

Dear Unhappy Meal,

In case you haven’t noticed, the peanut gallery here at Going Concern is a cheeky bunch (love!) and your concern about the comments that you’ve read on various posts is a little overblown, in our opinion.

For starters, trust your instincts. You made the best decision based on your experience with the three firms you mentioned. Now, all of a sudden, you’re spooked because you read a few comments comparing McGladrey to McDonald’s? Have you read the comments on the Grant Thornton threads? They are, at the very least, on par with the spouting on the Mickey G posts.

Secondly, our most recent post about McGladrey was news of extra paid time off, concierge services, bonuses and babysitters. Babysitters! Does that sound like such a bad place to work? Yes, it’s the McG brass giving you the “we appreciate your hard work and this is our show of thanks” line and that always invites skeptical reactions but you show us one firm that doesn’t experience some backlash and we’ll show you firm that doesn’t exist.

So to answer more directly – you didn’t make a bad decision because you went with your gut. You made the best choice for you and not based on what you heard some anonymous commenter say. Go forth with confidence, grasshopper.

One E&Y Office Is Under the Impression That KPMG Is Not Their Competitor

This marks the time of year that your firms ask you to give back to your community in various ways. The most common way that we’re aware of is to contribute to your firm’s respective United Way Campaign. This push usually involves numerous emails and maybe even a little dog and pony show where one partner essentially guilt-trips you into giving to the charity of the firm’s choosing rather than your own.

The Big 4 firms are quite competitive in their fund-raising efforts and a tipster had some thoughts on the tally in the Atlanta office of Ernst & Young (photo after the jump).

[A]pparently EY Atlanta doesn’t believe that KPMG exists (or is considered their competition)

Not to mention that these progress indicators are oddly phallic-looking…


It’s also worth calling attention to E&Y’s abysmal phallic filling performance compared to Deloitte and PwC. Our tipster’s points are duly noted and we’ve concluded that it’s either an obvious show of disrespect by E&Y Peachtown aimed right at KPMG OR the House of Klynveld happens to be blowing everyone out of the water and the Atlanta brass is saving everyone the embarrassment.

Knowing what we know about KPMG employees’ enthusiasm for the United Way Campaign, the latter scenario seems unlikely. Other theories and reactions are welcome at this time.

Accounting News Roundup: Rangel Censured, Feels Good; Tax Relief for Bailed Out Companies; “Little GAAP” Risks | 12.03.10

Rangel Censured for Ethics Violations [WSJ]
“I truly feel good,” said Mr. Rangel, 80 years old, who has represented Harlem for 40 years. “A lot of it has to do with the fact that I know in my heart that I am not going to be judged by this Congress, but I am going to be judged by my life.”

Baucus introduces tax, unemployment bill as accord appears possible [On the Money/The Hill]
There he goes again, attempting to don the bipartisan armor, “Senate Finance Chairman Max Baucus (D-Mont.) introduced legislation Thursday to permanently extend tax cuts for the middle class, patch the alternative minimum tax for two years and reinstate the estate tax.

Besides the tax provisions, the legislation calls for a yearlong extension of federal unemployment insurance through 2011. Baucus introduced a $56.4 billion bill earlier this week to federal extend benefits, which began lapsing on Wednesday.”

BofA Drags Balance Sheet Confidence Backward [Jonathan Weil/Bloomberg]
PwC may be in a bit of a pickle over Bank of America’s mortgage mess.

Is the IRS Racist? [Time]
Total headline bait trash from Time. Obviously the IRS isn’t racist. Their methods need some serious tweaking and they need help setting their priorities but they aren’t bloody racist.

What’s keeping CPAs up at night? [CPA Success]
Tom Hood tells us.

Tax Breaks for Bailout Recipients Stir Up Debate [WSJ]
A series of tax relief measures is saving companies bailed out by the government billions of dollars at a time when concern over tax revenues has risen.

Although the Treasury Department first provided the tax guidance in the fall of 2008, the magnitude of the tax savings has become clearer in the past year. The tax relief drew new scrutiny last month after Wall Street bankers touted it to investors in the initial public offering of General Motors Corp.

KPMG Announces 2010 Americas Partner Class [PR Newswire]
We tried telling them months ago.

The Fed’s Full Disclosure: Don’t Forget About Government GAAP [Forbes]
Francine may have lost it, “What do Ben Bernanke and Julian Assange have in common besides that sexy ‘come hither’ look?” Shudder.


The Big Risks of Little GAAP [CFO]
Careful what you wish for?

Clifton Gunderson relocating headquarters within Tosa’s Research Park [MJS]
CG is expanding into new digs of 28,000 square feet.

Compensation Watch ’10: Grant Thornton Kicks Off Hanukkah

From the mailbag:

I work at GT as an associate in [a Southwest] office. Partner called to tell me i got a 1k bump to salary. It appears that GT is giving out raises in December. They are calling them market adjustments…

There seems to be confusion as to whether this is a bonus, lump sum raise, or spread out over the year. My partner told me it’ll be spread out over the year and it was a permanent raise. Others have been told it is a lump sum bonus. The new A1’s found out yesterday their starting pay was increased. I’ve talked with seniors and none of them have heard anything I know about, and they seem pretty pissed at the whole situation.

Are SAs getting blanked? Is this happening anywhere else? Inform everyone below or email us if you know the scoop.

Some Clarification on the Bathroom Situation at E&Y Jericho

Yesterday, we shared a story with you that probably caused you to thank your lucky stars that you don’t work in Norway (especially if you’re a woman). In that post, we called back to our old report from January about the secure lavatories at Ernst & Young’s Long Island location in Jericho.

You may have been under the impression that someone within E&Y was responsible for the lockdown, however, thanks to an enterprising E&Y employee, we now know who the keymasters really are:

I don’t work in the Jericho office, but got shipped out there for random clients for most of this summer. The bathrooms are in the common areas shared by all tenants of the building, so the keyed entry to the bathrooms is mandated by the building management, not EY (not that I’d put it past the partners to come up with something like this, though).

Also, while there are keys for each bathroom, there are also entry codes you can use instead. So you can grab one of the communal keys (kinda gross), or remember the terribly difficult four digit code (0001 if I remember correctly).

As a side note, I remember the admin mentioning that the original set of five keys for the men’s room was down to two. I’m wondering why someone would make off with these nasty over-sized germ farms.

Okay, so the missing keys aren’t news but what’s it going to take to get some extras made? And, again, who’s making off with the keys in the first place?

And while it’s good to know that the E&Y brass in Jericho aren’t actually the ones putting the clamp on the johns, would it kill them to spring for some private restrooms that non-E&Yers don’t have access to? It’s one thing to have to schlep to the front desk to get a key every time; it’s entirely another to be sharing a bathroom with the entire building. What is this, Penn Station?

Seriously, how much time and cost would it take to throw in some pots, sinks, urinals and XLERATORs®? It’s a health issue for crissakes.

IRS Says Area Man Owes Taxes from His Prepubescent Years

He’s thinking it’s a mix-up and rather than doing something insane (like you might expect), he simply reported it to the local authorities.

A man told Elmhurst police that he owes the Internal Revenue Service $7,000 in back taxes from 1999 to 2000. He suspects identity theft because he was 10 years old and unemployed at the time.

The incident was reported at 11:57 a.m. Nov. 29 at Elmhurst Police Station, police said.

According to the report, the victim received the IRS letter notifying him of back taxes after he filed for 2009. The victim suspects someone used his Social Security number to claim wages in 1999 to 2000, police said.

We didn’t say his reaction wasn’t boring.

Some Ernst & Young Employees Got Paid to Look at a Plethora of Porn

Really not sure why or how E&Y landed this gig but work is work.

Police may be called on to investigate reports [New South Wales] [Members of Parliament] or their staff accessed websites containing sexually explicit images of young people.

The findings were contained in an independent report by Ernst & Young, commissioned in September after an unauthorised audit of computer use in the NSW parliament showed “adult” websites had been visited from the offices of some MPs.

The report, tabled in parliament yesterday, says that of the 72 most-used websites on parliamentary computers over a 10-month period, 35 “appear to be adult-related sites”.

Nine contained sexually explicit images of young people, some of whom may be under 16.

Nearly 50% of the most-used sites over a 10 month period? And some that could involve minors (in NSW)! That’s impressive even by SEC standards.

Accounting News Roundup: McConnell Promises to Block House Bill on Tax Cuts; Morrison & Co. Merges with WithumSmith+Brown; Section 409A Relief | 12.02.10

U.S. Bill to Extend Middle-Class Tax Cuts Likely to Stall After House Vote [Bloomberg]
At least six House Democrats said yesterday that they would vote against the measure or were considering doing so because they either agreed with Republicans or were concerned about the $3 trillion measure’s effect on the growing federal budget deficit. The House has 255 Democrats and 179 Republicans.

Even if the measure passes the House, Senate Minority Leader Mitch McConnell of Kentucky said Republicans would block its passage in his chamber because it would amount to a tax increase for high earners.

World Cup Bids Go Down to the Wire [WSJ]
As you may recall, PwC had a big hand in England’s push to land the 2018 Cup. The announcement comes today circa 9 am, although the Journal states, “keeping with the opaque nature of international football politics, no one knows exactly when or how the result will be announced.”

Morrison & Company merges with WithumSmith+Brown [AW]
Forensic accounting firm Morrison & Company, P.A., has merged with New Jersey-based CPA firm WithumSmith+Brown, P.C. (WS+B). Effective this week, the union adds 14 professionals to the WS+B roster.

The Morrison & Company staff currently based in the Paramus office will remain at that location, under the WS+B name.

Green Mountain Coffee Roasters, Time to Spill the Beans? [White Collar Fraud]
Sam Antar wants some hippies in Vermont to share all the details about their accounting errors.

Senate votes to exempt CPAs from ‘red flags rule’ [CPA Success]
The AICPA reports that the Senate has passed the “Red Flag Program Clarification Act of 2010,” a measure that narrows the definition of “creditor” in the Fair Credit Reporting Act and thus likely excludes CPAs and CPA firms from having to comply with the Federal Trade Commission’s “red flags rule,” which requires certain business entities to “develop and implement written identity theft prevention programs” that could detect the red flags that signal identity theft.


IRS Provides Additional Relief Under Section 409A Document Failure Correction Program [JofA]
Aka: “Relief for the Worst Tax Enactment of the Last Decade.”

The Obama Deficit Panel’s Tax Reform Version 2.0 [TaxVox]
The wonks at the Tax Policy Center feel that 2.0 is “specific and more realistic than their initial plan.”