Author: Caleb Newquist

Founding editor, Going Concern.

Vastly Unpopular 1099 Requirement Survives Thanks to the Reliable Dysfunction of the U.S. Senate

Everyone’s favorite Two Minutes’ Hate from the healthcare reform legislation – the 1099 reporting requirement – managed to live to fight another day despite being as unpopular as the Democrats who originally got behind it (although don’t look at Nancy Pelosi).


As is the wont of Senate, this sliver of bipartisanship was foiled by…wait for it…politics:

The provision survived because of the complex politics of the Senate. Some lawmakers were reluctant to back repeal on Monday since the rule change would have been added to a popular food-safety law that is nearing approval, potentially jeopardizing its passage. In addition, dueling Democratic and Republican proposals allowed lawmakers to register their disapproval of the 1099 requirement whether the repeal passed or not.

In other words, everyone agrees that they hate this thing but they hate it in different ways. You see, it’s not enough to be against the 1099 requirement, it matters who gets the credit for being against so much that they actual introduced the proposal to do away with it.

Sigh. But it’s cool, the rule doesn’t actually go into effect until 2012, so blowing it off for another 12 months is totally an option. And a pretty realistic one, too.

Senators Cannot Agree on Fix to the Health Law [NYT via CPA Success]

Accounting News Roundup: “Showdown Votes” on Taxes This Week; Are Accountants Adaptable or Not?; Some Brutal Honesty About Your Career | 11.30.10

Disintegration of the Big Four Audit Firms? As They Tell the House of Lords, “We Don’t See That on the Horizon” [Re:Balance]
Round 2 (previous comments here) from Jim Peterson, “The epitaph for the private delivery of audit services to the world’s large global companies was written in London on November 23.”

Democrats to Test Republican Mettle With Tax-Cut Vote [Bloomberg BusinessWeek]
Dems are feeling out the GOP this week with some “showdown votes” that may set the stage for many late nights in December. Ah, politics.

An Interview With WikiLeaks’ Julian Assange [Forbes]
A “major American bank” is next on the leaking block. Not sure if Vegas has handicapped this but Team Jehovah seems like an early favorite.

Google Is Said to Be Poised to Buy Groupon [DealBook]
All your cheap sushi and massages could belong to GOOG.

Former Quest Energy Exec Sentenced To 16 Years For Fraud [Dow Jones]
Former CFO David Grose received his sentence for three counts of wire fraud. Ouch.

MarcumStonefield Enhances Tax, Assurance Services and Quality Control with Key Appointments [PR Newswire]
MS appoints three to in-charge positions, “Nanette Miller has been named Partner-in-Charge of Assurance Services, Alan Griffith has been named Partner-in-Charge of Tax Services, and Michael Feinstein has been appointed head of Quality Control for all of MarcumStonefield’s offices in California and Hong Kong.”

Smart Year-End Tax Moves for Investors [WSJ]
FYI – just in case you don’t have the utmost confidence in the lame-o Congress.


Accountants are more adaptable than you think [AWEB UK]
Point.

Accountants are less adaptable than you think [AccMan]
Counterpoint.

Top 20 Inconvenient Career Truths [Forbes]
A favorite: “If you hate your job, it probably won’t get better with time. Sticking around because you’re afraid will only dig you deeper into the rut.” Also, “If you find yourself job-hopping and nothing ever satisfies you for any period of time, it’s time to look at yourself. Most likely, you’re part of the problem.”

Should Derek Jeter Be Asking for a Stake in the Yankees?

Fay Vincent is making the suggestion that sports stars, like DJ, should be negotiating for shares of their respective teams.

My question is why sports figures are not taking steps to generate tax-favored income by bargaining to get ownership interests in their teams. Imagine how much better off old timers like Mickey Mantle and Roger Maris would have been if they had been able to obtain even tiny shares of the Yankees franchise in 1961. In today’s context, it is true enough that the tax rate on capital gains income may soon rise to 20%—but that’s still far below the rates levied on top income earners.

Since Vincent – a former entertainment lawyer – has been around the block with big-time earners, he might be on to something here, although maybe the Steinbrenners aren’t interested, being the shrewd business family that they are (George died in a year with no estate tax for crissakes). Since neither Jeets nor the Yanks are budging in the negotiations, this idea could work. It’ been floated in the Times so it’s not like this option is a huge secret. Make something happen, people.

By most accounts, Jeter wants to finish his career in New York and the man has been the franchise for over the last decade. Forget the cash, ask for shares and save on some taxes. It’s not complicated.

Okay, maybe it’s a little complicated.

PwC Survey: Working People to Death Might Cause Them to Quit Their Jobs

Shocking survey results out of PwC today as the firm announced that overworking staff increases turnover at law firms. If you can believe that.

There is a “strong correlation” between staff turnover and chargeable hours at law firms, according to PricewaterhouseCoopers.

Numbers released as part of their annual survey of the sector show that the top ten law firms have average turnover rates of 17-18%.
According to the accountancy firm, reducing turnover to less than 10% can reduce costs by £32,000 per equity partner.

In semi-ironic and related news, a bunch of bitter Big 4 employees finally decided over the Thanksgiving holiday that they would be leaving their respective firms because they are sick of the hours.

Big 4 Manager Needs Help Determining If He Is Underpaid

Welcome to the squelch-the-tryptophan-withdrawals-with-cyber-Monday edition of Accounting Career Conundrums. In today’s edition, a Big 4 manager is pret-tay sure he is underpaid. How can he broach the subject with a partner without causing major blowback?

Need career advice? Want gift ideas that will score some points with a boss in your life? Wondering where you can find an old PwC backpack? Email us at advice@goingconcern.com and we’ll sniff out a deal or a homeless person.

Back to our short-changed manager:

I was wondering if you could provide advice in how to determine if I am being underpaid and if I am how to go about asking for an increase? I am a 1st year Manager for a Big 4 firm in Kansas City. I have been with the same firm/office my entire career sans a 2 year secondment I completed in Dublin just in August. In addition, to having my CPA license I also hold the CFE certification and the CFA charter.

My feelings for asking for a raise are based on the additional certifications and knowing that my salary as a 1st year Manager is less than what 3rd year Sr. Associates were making in my office 2 plus years ago. I know the economy has changed during the subsequent 2 years but still feel like I am not fairly compensated. What advice do you propose? I am nervous about sharing my thoughts with my Partner as I am afraid of a potential backlash. Thanks in advance.

Dear Alphabet Soup,

Think you’re underpaid, huh? Seems to be theme around here. However, your situation is more unique than most so we’ll make a run at this.

First thing we noticed about your situation is that you’re a M1 which means you were recently promoted, which also mean you should have just received a better-than average raise. And we’re more than a little skeptical about your assertion that a SA3 is making more than you. That would have to mean that SAs are getting insanely good raises while you – the newly promoted manager – got an abysmal one; it seems unlikely. If this in fact the case, then you’ve had a serious string of bad luck.

As for determining whether or not you are underpaid, we suggest you speak to a professional recruiter in KC to find out whether or not your credentials and international experience or currently undervalued. If the recruiter takes a look at your résumé and starts drooling, you’ll know that he/she can earn a fat commission placing you somewhere else. If they shrug and say, “Look friend, you’re doing pretty well. But let me tell you about this great opportunity…” then your salary is probably fair.

When it comes to talking to a partner about this, be sure you’re speaking to someone you trust and just be honest. Make your case with facts. Don’t go speculating about what a SA3 is making because that turns the conversation to something that is out of your control. Highlight your credentials, international experience and why they bring value to the firm and your partner.

They’ve heard the “I’m underpaid” sob story a million times. You’ve got to prove to them that your case is an exception to the run-of-the-mill bellyaching.

KPMG Partner-cum-Poet Resists Urge to Create Verse on His Blackberry

Believe it or not, employees of Big 4 firms possess talents that have nothing to do with elaborate spreadsheets, coffee and bagel consumption or fantasy football.

A perfect example of this would be Arun Kumar, a “battle-tested” partner in KPMG’s Silicon Valley office. Mr Kumar is a poet, who recently published a collection of 39 poems entitled “Plain Truths.” And regardless of his almost certain reliance on his BlackBerry, he manages to set it aside for the sake of his art.

Kumar, a partner at accounting and consulting giant KPMG, knows another kind of poetry. A poetry of nature and relationships, of whimsy and wisdom, a poetry of words that can be written on planes or between planes or in the quiet of the evening, but never, ever, on a BlackBerry.

“A poem, for me, is visual,” Kumar says at his Mountain View office. “Seeing it is quite important, so I can’t imagine — on a BlackBerry it’s not the same.”

So not only is Kumar a man of professional integrity, he also is one of artistic integrity, resisting the eyestrain and temptation to double-thumb inspiring words on to a 2.5 inch screen that may or may not be lost after he drops it one too many times.

But even more surprising (and disappointing) than his commitment to his craft, is Kumar’s ability to avoid penning poems related to his job. “Most [poems] are far removed from his work,” the article states, despite the undeniable muse that is life inside the House of Klynveld.

Arun Kumar, of Silicon Valley s KPMG office, finds poetry on the human side of the ledger [Mercury News]

Accounting News Roundup: Deloitte Still Wants Roland Berger; Big 4 Knew UK Banks Were Getting a Bailout; The Tax Angle on Oprah’s Giveaway | 11.29.10

Democrats Gird for Tax-Relief Battle [WSJ]
Only 32 days remain! “Congressional Democrats, under pressure from their liberal wing, are preparing to put up a fight over tax relief for wealthier Americans before they agree to any compromise with Republicans that could extend the Bush-era breaks.

With the lame-duck Congress reconvening Monday, House Speaker Nancy Pelosi (D., Calif.) may hold a vote mid-week on legislation that would extend the 2001 and 2003 tax cuts only for families with income less than $250,000, while allowing the upper brackets to expire.”

Deloitte hopes to resurrect Roland Berger deal [ft.com/cms/s/0/2e44af2a-f8bb-11df-b550-00144feab49a.html#axzz16gAzoSvU”>FT]
Deloitte does not take “no” for an answer.

PCAOB Signals More Enforcement, Fee Increase in 2011 [Accounting & Auditing Update/CW]
The Public Company Accounting Oversight Board has signaled through its 2011 budget that it is beefing up its enforcement staff to handle an increasing caseload. The board also signaled that public companies can expect a 5.4-percent increase in the support fee they will pay in 2011 to help fund the operations of the PCAOB.

Another Guilty Plea in Iowa Film Fiasco [Tax Update Blog]
Despite this round of justice, Joe Kristan reminds everyone, “Whatever the merits of the case against Ms. Runge, if any, it’s hard to believe that she is the only person out there who should be worried. The State Auditor reported that fully 80% of the tax credits issued under the program were issued improperly, with millions of dollars milked from the state for imaginary or grossly-inflated expenses and through the use of strawmen LLCs to funnel cash improperly out-of-state.”

Turkey, Gravy, Networking: How Savvy Job-Hunters Spend the Holiday [FINS]
Though hiring probably won’t pick up until the new year, savvy candidates are cramming their calendars with informational interviews, meetings with recruiters and as many holiday happy hours as they can handle.

“The general rule is that it’s a really good time to network, because people are in a mindset of charity, goodwill and warmth,” said J. Patrick Gorman, principal at iFind Group, a New York based recruiter of accountants.

The Answer Is No [JDA]
But what’s the question you ask? Go find out.

Big 4 Bombshell: “We Didn’t Fail Banks Because They Were Getting A Bailout” [RTA]
Prior notice is always helpful, “The leadership of the Big 4 audit firms in the UK has admitted that they did not issue ‘going concern’ opinions because they were told by government officials, confidentially, that the banks would be bailed out.”

The House of Lords Looks at the Role of Auditors: And Then Everyone Went for Tea [Re:Balance]
Jim Peterson was pleasantly surprised by the testimony of the Big 4 in the UK, although he had low expectations.


Tax Consequences of Oprah’s Latest Car Giveaway [TaxProf Blog]
From the Prof, “Oprah was back at it last week, giving away to her studio audience a 2012 VW Beetle, a $1,000 Nordstrom gift card, an iPad, and a limited edition Oprah 25th anniversary watch from Phillip Stein encrusted with 58 hand-set diamonds, among other things.”

We should also mention that the audience’s screaming is unbearable.

Destiny’s Child star Kelly Rowland ducks ‘Bills, Bills, Bills’ [Detroit News/Tax Watchdog]
We’re not sure where she left it with Beyoncé but maybe she’ll call Jay-Z to help out?

Twenty Lies You’ll Hear on a Job Interview [Bloomberg BuisnessWeek]
Including a couple of our favorites: “We’re all about work-life balance” and “We don’t have office politics here.”

An Accountant’s Thanksgiving Leftovers | 11.24.10

~ That’s it for us team. Have a great Thanksgiving! We’ll be back on Monday. That is, unless we get the locale for the PwC NYC feast tomorrow (pictures too).

Man Up When Called for Your Junk Pat-Down [Bloomberg]
You want your genitals left untouched or terrorists on your plane? You can’t have both.

Ireland Ushers In four Years Of Brutal Cuts, Tax Hikes [Dow Jones]
Will Irish eyes ever smile again?

UBS, Others Sued for $2 Billion Over Madoff Fraud [ABC News]
Irving Picard still has the most thankless job in the world.

States Slashing Film Tax Subsidies [Tax Foundation]
Somewhere, Joe Kristan is doing a happy dance.

CFOs Cool Their Heels [CFO]
Turnover is down for the second straight year.


Compliance costs rise for small business [CFOZone]
Sayeth the SBA.

Convicted felon hired to teach accounting at university in Missouri [AccountingWEB]

Lawmakers want IRS to make breastfeeding a medical expense [Healthwatch/The Hill]
Doug Shulman is being asked to reconsider the IRS’s anti-boobs stance.

Al-Qaeda Marching Band To Join Macy’s Parade After Incredible Audition [TO]
FYI – for those attending.

Forward One Email and Your Career at PwC Is Over

Do you see what happens?

Of course we kid (some of you have no sense of humor). We actually haven’t heard what is happening to the Irish lads as the investigation is rumored to be still on-going. But this could explain what PwC did with a large portion of their swag when the new logo rolled out.

If you happen across this guy, get him a seat at the New York Thanksgiving soirée (location still unknown), wouldja?

Decision Time: A Promotion with Deloitte or a New Opportunity with Ernst & Young?

Welcome to the why-do-we-bother-on-days-like-today edition of Accounting Career Conundrums. In today’s edition, a young consultant has a pretty sweet gig with Deloitte in DC but has a very interesting offer with E&Y in NYC. What’s a boy to do?

Does your career need a change? Need cheering up? Looking for some last minute advice on the dysfunctional hell that you’re about to walk into tomorrow? Email us at advice@goingconcern.com and we’ll make it all better.

Returning to the Decider:

Hi,

I am currently a second year consultant in the federal practice in Deloitte in Washington DC. I recently interviewed with EY and got an offer for staff advisor role in New York City. Though my pay raise is not significant (in fact the same, since cost of living is higher in NYC), the position is something that really interests me as it deals in financial consulting and is not audit oriented.

The flip side is that i have been a strong performer at D and am most likely to get promoted at year end. Do you think it makes sense to leave D at this juncture and jump to EY even though I am not being offered a senior position, I am not getting a significant pay raise but the job description is something I have always wanted to do.

Please help me out as I need to make a decision by week-end.

Confused,

Dear Confused,

You simply couldn’t let us cruise into a four day food and drink bender, could you? Very well, then. We are here to help after all.

This is a clear-cut situation of figuring out what your priorities are. You make a decent case for each position, so it’s time to line up what’s most important and make a decision based on that.

It really boils down to this: love or money? Your gig at Deloitte sounds pretty good. You’re in an high-profile group at the firm, looking at promotion, probably more money and – as far as we can tell – you don’t hate the work. All good things.

But the opportunity with E&Y has obviously piqued your interest. Different city. Different firm. Different opportunity. Sure the money won’t go as far and you’ll probably live in a broom closet but there may be more than a sliver of a chance that you will love it.

Some people will say, “You’re doing a disservice to yourself and your career,” if you were to take the E&Y gig. “You’re giving up a promotion and the years of experience earned at Deloitte for a longshot,” they might also say.

Personally, we like longshots. All kinds of people in Big 4 and top ten firms continue to choose to stay on the path they’re on because it’s easy and things like higher salaries and more prestigious titles are hard to turn down.

If you’re genuinely interested in the work that comes with the E&Y position, we say go for it. You’ll never look back and wonder what would have happened if you didn’t take that risk and this may be the rare opportunity that you’ve been waiting for.

Chew on that (along with your poultry of choice tomorrow) and then go make it happen.

Bonus Watch: Pre-Turkey Spot Bonuses at PwC?

This just in:

Was communicated a spot bonus yesterday, PwC Tax. $4k as a senior. I have never received a spot bonus anywhere near this size. I think instead of mid-year salary adjustments, they are giving enhanced spot bonuses to the higher performers. This is in addition to the “ipad or cash” extravaganza from earlier this month.

PwC is really buttering some people up, aren’t they? Either it’s going to be a rough 2011 or the good times are really back. If you’ve received similar news this week, do share or get in touch and we’ll keep things rolling here.

Earlier:
Bonus Watch ‘10: PwC Announces Across the Board Mid-year Bonuses