Category: ANR

~ Morning, gang. We’ll be doing a half day today, so we suggest you do the same. Have a great three-day weekend and we’ll see you back here on Tuesday.

U.S. Is Set to Sue a Dozen Big Banks Over Mortgages [NYT]
The federal agency that oversees the mortgage giants Fannie Mae and Freddie Mac is set to file suits against more than a dozen big banks, accusing them of misrepresenting the quality of mortgage securities they assembled and sold at the height of the housing bubble, and seeking billions of dollars in compensation.

SABMiller Queries Foster’s Financial Statement [Bloomberg]
SABMiller Plc (SAB), which has made a hostile $10 billion bid for Foster’s Group Ltd. (FGL), questioned the Australian brewer’s statements on its financial performance and net debt in a submission to the country’s Takeover Panel. The Australian government agency received the application from SABMiller, according to a statement on the panel’s website. A panel hasn’t been appointed and no decision has been made to conduct proceedings, the government agency said. SABMiller argues there is “no reasonable basis for several forward-looking statements” in Foster’s fiscal 2011 results presentation, according to the statement. The world’s second- largest brewer by volume sought an order that Foster’s clarify “misleading and deceptive” remarks.

Investors to SEC: Please Don’t Switch to IFRS [CFOJ]
When SEC Chairman Mary Schapiro said in June that investors aren’t clamoring for International Financial Reporting Standards, she may have been understating things… a bit. Now, some of the biggest U.S. investor groups are letting the SEC know in no uncertain terms that it should postpone its decision on IFRS and even stop the convergence process between U.S. GAAP and IFRS.

Boeing’s Tax Assets Could Trump Liabilities for Years [CFOJ]
In total, the company has tax liabilities of roughly $10.7 billion. That’s compared to $14.4 billion in deferred tax benefits, which means it ultimately won’t pay anything to the IRS unless the value of those assets erode.

U.S. Showed No Job Growth in August; Rate Stays at 9.1% [NYT]
The net addition of no jobs in the month was down sharply from a revised 85,000 gain of jobs in July, the Labor Department said Friday, and was far below a consensus forecast by economists of 60,000. The unemployment rate stayed constant at 9.1 percent in August.

Undocumented workers got billions from IRS in tax credits, audit finds [WaPo]
The Internal Revenue Service allowed undocumented workers to collect $4.2 billion in refundable tax credits last year, a new audit says, almost quadruple the sum five years ago. Although undocumented workers are not eligible for federal benefits, the report released Thursday by the Treasury Inspector General for Tax Administration concludes that federal law is ambiguous on whether these workers qualify for a tax break based on earned income called the additional child tax credit.

D.C. Circuit: ‘The IRS is Not Special’ [TaxProf]
I won’t have it!

Salesforce Chief Calls Accounting Criticisms “Ludicrious” [SFC]
In fact, [Mark Benioff] says, Salesforce set the standard for other software-as-a-service companies that came after it.

KPMG Announces Nationwide Community Service Campaign at More Than 200 Non-Profits to Mark 9/11 Anniversary [KPMG]
As part of the “Service in Remembrance” campaign, taking place from September 6-11, thousands of KPMG partners and employees will volunteer at more than 200 non-profits across the country. “We look forward to being a part of something extraordinary, as the KPMG family proudly joins millions of Americans in support of the National Day of Service,” said KPMG LLP Chairman and CEO John Veihmeyer.

Obama Moves Jobs Speech After Skirmish With Boehner [NYT]
In a surreal volley of letters, each released to the news media as soon as it was sent, Mr. Boehner rejected a request from the president to address a joint session of Congress next Wednesday at 8 p.m. — the same night that a Republican presidential debate is scheduled. In an extraordinary turn, the House speaker fired back his own letter to the president saying, in a word, no. Might the president be able to reschedule for the following night, Sept. 8? For several hours, the day turned into a very public game of chicken. By late Wednesday night, though, the White House issued a statement say Obama “is focused on the urgent need to create jobs and grow our economy,” he “welcomes the opportunity to address a joint session of Congress on Thursday, Sept. 8.”

More Accounting Transparency May Distort Markets [Bloomberg]
In the post-crisis regulatory environment, companies are under pressure to disclose more. The Financial Accounting Standards Board and the International Accounting Standards Board have been trying to improve both U.S. Generally Accepted Accounting Principles and the International Financial Reporting Standards, and make the two sets of accounting rules fully compatible. The goal is to produce a single set of international conventions that achieve a high degree of reporting transparency. The benefits of more transparent reporting seem obvious: Companies with a high degree of disclosure would allow outsiders to exercise better market discipline, which, in turn, would improve resource allocation in the economy. However, the view that greater transparency enhances market discipline and therefore economic efficiency holds true only in a “Robinson Crusoe” economy, that is to say one in which a single decision maker is learning about a company whose decisions are taken as given and whose future cash flows or economic fundamentals are therefore fixed.

Natural Disasters and Your Taxes [Smart Money]
Apparently there’s a bit of flooding going on.

AICPA Asks IRS to Extend Tax Deadline after Hurricane [AT]
“Many of our members are currently actively engaged in preparation of corporate, pass-through entity and trust tax returns with extended filing deadlines of September 15, 2011,” wrote AICPA Tax Executive Committee chair Patricia Thompson in a letter Tuesday to IRS Commissioner Doug Shulman. “The provision of these services has been drastically affected by the aftermath of Hurricane Irene. We are hearing reports of members who have limited Internet connectivity and power outages, both at their offices and at their personal residences. Our members have experienced massive transportation disruptions and flooding of their residences and offices. Also we have heard from members who are having difficulty communicating with their taxpayer clients who are located in the affected areas, including difficulty obtaining information necessary to prepare the return.”

U.S. Self-Employed Struggle to See Opportunities [Bloomberg]
More than 1 million self-employed Americans are no longer in business almost four years after the last recession began, as the economy constrains entrepreneurial activity and small-business job creation. The 18-month contraction that started in December 2007 initially resulted in more would-be business owners, as the number of people who work for themselves grew to 16.3 million in July 2008 from 15.7 million at the end of 2007, according to data from the Bureau of Labor Statistics. Since then, the total has fallen about 10 percent to 14.7 million in July, the data show.

Parmalat Judge in U.S. Reaffirms Ruling to Dismiss Grant Thornton Cases [Bloomberg]
A U.S. judge reaffirmed his ruling to take jurisdiction over two suits by Parmalat SpA (PLT) against accounting firm Grant Thornton LLP, which he later dismissed. U.S. District Judge Lewis Kaplan in Manhattan today ruled that he was correct in taking the two cases, which were originally filed by Parmalat and its Parmalat Capital Finance Ltd. unit in Illinois state court in 2004 and 2005. Kaplan dismissed the suits in 2009.

Some companies pay their CEOs more than Uncle Sam, study says [WaPo]
It has become a bipartisan article of faith in some quarters that the income tax on U.S. corporations must be lowered. But for many large U.S. companies, the burden of U.S. taxation pales in comparison with what they pay their chief executives, according to a study released Wednesday by the Institute of Policy Studies, a liberal think tank. Of last year’s 100 highest-paid corporate executives in the United States, 25 earned more in pay than their company recorded as a tax expense in 2010.

[Bloomberg]
Memo to Grover Norquist.

GOP Tax Expert to Lead Deficit-Committee Staff [WSJ]
The panel’s co-chairmen chose as their staff director Mark Prater, a senior aide and chief tax counsel to Republicans on the Senate Finance Committee. “Mark has a well-earned reputation for being a workhorse who members of both parties have relied on,” said the committee’s co-chairmen, Sen. Patty Murray (D., Wash) and Rep. Jeb Hensarling (R., Texas).

SEC Lawyer Blew Whistle Before [WSJ]
Darcy Flynn, who started in the SEC’s enforcement division in 1995, earned the large payout after reporting alleged Medicare fraud in 1993 as an insurance-claims auditor in Michigan, according to public records and people familiar with the case. Nearly two decades later, Mr. Flynn is again accusing his employer of misbehavior. This time, Mr. Flynn is targeting the Wall Street regulator, which hired him to ferret out wrongdoing. He was initially asked to probe accounting scams, insider trading and other financial frauds. Since early 2010, Mr. Flynn has been supervising record-keeping related to enforcement cases that have been closed.

Auditors under fire over Greek debt [FT]
Auditors and regulators have come under fire for allowing European financial institutions to take wildly divergent approaches to Greek government bond writedowns. The criticism comes amid claims that some banks and insurers should have reported bigger Greek losses than they had acknowledged in recent first-half results announcements. “Auditors have not enforced a consistent approach among their clients,” said analysts at JPMorgan Cazenove in a report drawing attention to the way that some significant financial institutions had written down Greek sovereign debt holdings by half, while others had cut their value by only a fifth.

SEC recovers bonus from ex-Beazer CFO [Reuters]
The former finance chief of Beazer Homes USA (BZH.N) has agreed to reimburse the company for over $1.4 million that he earned in bonus payments and stock sale profits when the Atlanta-based homebuilder was committing accounting fraud, the SEC announced on Tuesday. The Securities and Exchange Commission said James O’Leary had not been charged with misconduct, but was still required under the Sarbanes-Oxley Act to pay back the money he received while the fraud was going on.

Ex-Rite Aid exec Franklin Brown freed after resentencing on accounting scandal charges [PN]
Brown, 83, of Susquehanna Twp., had served 71 months of a 7 1/2-year prison term that Rambo imposed last September, but that was overturned by a federal appeals court in May. In 2003, a federal jury convicted Brown of multiple conspiracy and other charges for an accounting fraud that prosecutors said cost East Pennsboro Township-based Rite Aid more than $18 million.

Bellevue accountant stole nearly $1 mil. from elderly couple, police claim [SPI]
A Bellevue accountant swindled an elderly couple – his clients of more than 15 years – out of nearly $1 million through a fake investment, King County prosecutors claim. Filing securities fraud and felony theft charges, prosecutors contend Shawn Eric Stoller bilked a 90-year-old man and an 88-year-old woman to pay off his own house and motor home.

IASB criticises Greek debt writedowns [FT]
In a letter sent to the European Securities and Markets Authority, the European Union’s market regulator, the International Accounting Standards Board criticised the inconsistent way in which banks and insurers have been writing down the value of their Greek sovereign debt. “This is a matter of great concern to us,” Hans Hoogervorst, IASB chairman, said in the letter, which was published on Tuesday after the IASB’s concerns were revealed by the Financial Times. People familiar with the IASB’s thinking said the intervention was unprecedented and reflected its belief that some European compaking enough provisions for Greek sovereign debt losses.

Dead Enron CEO Lay Beats IRS in Tax Court [Bloomberg]
Kenneth Lay, the deceased chief executive officer of Enron Corp., defeated the Internal Revenue Service in the agency’s bid to collect $3.9 million from his estate and his wife, the U.S. Tax Court ruled. The case decided yesterday involved transactions among Lay, his wife, Linda, and Enron that were executed on Sept. 21, 2001. The Lays sold $10 million in annuities to Enron as part of an agreement for him to retake the CEO position, under the stipulation that the annuities would be returned to Lay if he worked a 4.25-year term. The company didn’t survive that long, and it filed for bankruptcy protection in December 2001.

House Tax Chief Pitches No-New-Revenue Plan to Wary Voters [Bloomberg]
Representative Dave Camp’s summer- recess ritual of visits with constituents at a retirement home, the Rotary Club and an airport construction site was punctuated this past week by voters’ misgivings about the deficit fight in Washington in which Camp plays a central part. As he crisscrossed his hometown district of Midland, Michigan, on Aug. 25, the chairman of the House Ways and Means Committee repeated to residents — some of whom he has known since childhood — his promise not to raise taxes to cut the deficit. The 11-term Republican House member encountered voters who supported him while expressing doubt that Congress can tackle a $1.3 trillion budget deficit. “They need to grow up and get together,” John Church, a retired Midland retailer, said of Congress.

The Case Against a Payroll Tax Cut [Economix/NYT]
It’s rare for Republicans to find a tax cut they don’t support, but last week The New York Times reported on just such an exotic creature. Many leading Republicans, it seems, are extremely cool to the idea of extending the temporary cut in the Social Security tax that took effect on Jan. 1 and expires on Dec. 31. It has lowered employees’ share of the payroll tax to 4.2 percent, from 6.2 percent.

Auditor in China case makes case for Janus [Thomson Reuters]
In the latest twist in a four-year-old shareholder lawsuit alleging a $132 million accounting fraud at China Expert Company, PKF New York, one of the company’s former auditors, contends that a recent Supreme Court ruling should shield it from litigation. In a brief filed Friday in Manhattan federal court, PKF New York cites the Supreme Court’s June ruling in Janus Capital Group v. First Derivative Traders. Judge Alvin Hellerstein this month already granted PKF New York’s motion for a rehearing on a previous motion to dismiss (more on that later), citing the Janus ruling; on Friday PKF filed a detailed brief laying out just why it believes that Janus protects it from the shareholders’ accusations.

Fraud trial of Teaneck accountant ends in deadlock [NJ/The Record]
Andrew Muhlstock, 58, was spared a jury decision following a three-week trial in Trenton federal court, despite a guilty verdict returned against an owner of Total Time Solutions, which handled payroll and tax withholding for New Jersey companies.

Grant Thornton advertises its goal to run with the bulls [Crain’s]
The new work departs from earlier humorous campaigns to more aggressively support CEO Stephen Chipman’s charge to pursue “dynamic” companies that have ambitious growth plans, whether a Fortune 100 firm or a small company. The ad campaign asserts what wins, what doesn’t and that these firms know what wins, and that’s why they chose Grant Thornton. “It’s not about the size of the firm. It’s, do they have game on and are they really attacking the market?” said Tricia Conahan, chief marketing and sales officer of the city’s largest Chicago-based accounting firm.

BDO Canada acquires KPMG’s consumer insolvency wing [G&M]
BDO Canada Ltd. has acquired KPMG’s consumer insolvency practice for an undisclosed price, making it one of the country’s largest providers of such bankruptcy and credit counselling services. The integrated services — which offer trustees in consumer bankruptcy, proposal administrators and credit counsellors — began operating under the BDO Canada Ltd. name effective last Friday.

PwC Appoints Niloufar Molavi as U.S. Energy Leader [PwC]
The firm’s (now) former Chief Diversity Officer.

PwC US Appoints Tom Archer as U.S. Technology Sector Leader [PwC]
Succeeding Rob Gittings.

Commuters in Line for Long Rides [WSJ]
Some trains would run, officials said late Sunday. New York’s subways would be largely operating, with the exception of some express trains and lines in the Rockaways. Officials warned that trains would likely be less frequent and more crowded. But many trains from the suburbs won’t be running—stranding hundreds of commuters who use them to get to work. Metro-North Railroad and New Jersey Transit were going to remain almost completely shut down.

Irene Forecasters Missed Storm’s Intensity While Correctly Predicting Path [Bloomberg]
Forecasters overestimated the strength of Hurricane Irene even as they accurately predicted the direction and timing of the storm’s destructive path along the U.S. East Coast. “This was one of their better forecasts,” Hans Graber, a professor of marine physics at the University of Miami, said in a telephone interview. “Definitely, it helped to save lives.”

Hundreds of thousands still without power in D.C. region [WaPo]
Pleasant weather allowed utility companies to repair thousands of power outages Sunday, but hundreds of thousands of homes and businesses in the D.C. region were still in the dark by the evening, more than 24 hours after Hurricane Irene first brought heavy winds and rain to the area.

Irene Adds to a Bad Year for Insurance Industry [NYT]
The total damage inflicted by Hurricane Irene may reach $7 billion by the time the storm dissipates in the coming days, making one of the insurance industry’s worst years even tougher, according to an early estimate by the Kinetic Analysis Corporation in Silver Spring, Md. Most of the loss will very likely come from property in New York and New Jersey, according to industry experts. Although Irene had diminished to a tropical storm by the time it reached New York early Sunday, those two states have the most valuable coastal property on the Atlantic Coast.

Yes, the rich do pay higher taxes [Tax Update]
Confirmed.

Frequency of Accounting Reports [Grumpy Old Accountants]
From the Grumpies: “As is well known, we currently produce financial statements every three months and one of these reports is audited by an independent auditor. Some would like to pick up the pace and perhaps even supply data on a daily basis.”

Hurricane Irene Pushes IRS To Extend Tax Deadline [Dow Jones]
Hurricane Irene hammered the East Coast of the U.S., causing death and destruction, but at least one group of people is getting some relief thanks to the storm: Taxpayers who have money stashed in bank accounts overseas will get more time to apply to an IRS amnesty program. The IRS said Friday it would move the deadline for the program, known as the Offshore Voluntary Disclosure Initiative, or OVDI, to Sept. 9, “due to the potential impact of Hurricane Irene.” The deadline had been Aug. 31.

Tax Haven’s Tax Haven Pays a Price for Success [WSJ]
Zug’s history of rock-bottom tax rates, for individuals and corporations alike, has brought it an A-list of multinational businesses. Luxury shops abound, government coffers are flush, and there are so many jobs that employers sometimes have a hard time finding people to fill them.

~ Annnnnnnd we’re back! We’ve gotten the all clear from the Google gods so peruse as you normally would. Sorry about yesterday and we really appreciate your patience. There are various theories as to who the culprits are and we’re utilizing enhanced interrogation methods to find out. Now, then. Who’s ready for Irene?

Hurricane Irene Tracker [NYT]
The heavy stuff won’t be coming down for quite awhile.

Evacuations, Transit Shutdown Eyed in City [WSJ]
As Hurricane Irene barreled toward the East Coast, New York City officials prepared for the possibility of evacuating hundreds of thousands of residents in low-lying areas and a full shutdown of the city’s transit system. Mayor Michael Bloomberg, speaking at a news conference from City Hall Thursday evening, said he could make a decision by 8 a.m. Saturday about evacuating the public from parts of the nation’s most populous city.

Tax Tips for Harvey Golub (and Other Millionaires) [WSJ]
Step 1: Fire your accountant.

Ex-Lehman Officers Seek $90 Million to End Lawsuit [WSJ]
Former Lehman Brothers Holdings Inc. Chief Executive Richard Fuld and other directors and officers are seeking the release of $90 million in insurance funds to settle a potential multibillion-dollar lawsuit brought by shareholders of the failed investment bank. The pending settlement, filed Wednesday with the U.S. Bankruptcy Court in Manhattan, would end a class-action suit that began in June 2008—about three months before Lehman filed for Chapter 11 protection.

Groupon Has ‘Never Been Stronger,’ Mason Says [Bloomberg]
“When I read some of the press this weekend, I realized a rational person could read this stuff and wrongly conclude that we’re in trouble,” Mason wrote in a memo sent to employees yesterday and obtained by Bloomberg News. “The irony is hopefully clear: We’ve never been stronger.”

For Some in G.O.P., a Tax Cut Not Worth Embracing [NYT]
In a turning of the tax policy tables, Democrats are increasingly hammering on Republicans who oppose the president’s proposal to extend for a year a payroll tax cut passed last year with bipartisan support. That tax cut — which reduces workers’ contributions to Social Security this year to 4.2 percent of wages, from 6.2 percent — expires in December. The White House would like to extend it for another year. But Republicans in Congress are balking, arguing that such a cut adds needlessly to the nation’s budget deficit, and should be replaced with an overhaul of tax policy instead.

Jobs Quits as Apple CEO [WSJ]
Apple said Mr. Jobs submitted his resignation to the board of directors on Wednesday and “strongly recommended” that the board name Mr. Cook as his successor. Mr. Job been elected chairman of the board and Mr. Cook will join the board, effective immediately, the company said. “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know,” Mr. Jobs said in his resignation letter. “Unfortunately, that day has come.”

Management Faces Task of Keeping Momentum [WSJ]
The executives who will now run Apple without Mr. Jobs will face big tests of whether they can still excel in highly competitive businesses that often have small profit margins. “Can they hit the next home run?” asks Charles O’Reilly, a professor at Stanford University’s Graduate School of Business. “Because if they don’t, they’re in a bunch of bad businesses.”

Grant Thornton CEO on Mandatory Audit Rotation [CFOJ]
Nusbaum: “There’s a natural inclination among accounting firms for anything like mandatory firm rotation to raise the hair on the back of our necks and make us very nervous, because we don’t want to give up clients. We have a lot of clients and of course we always think we’re doing a great job with them. But I think we as a profession have to be open minded and look at all the ways we can improve audit quality. But it’s a difficult decision. The PCAOB is in the unique position to see how all the firms operate, to see how we do audits, what we do well and what we do poorly and how we can improve.”

Trust No One, Particularly Not Groupon’s Accountants [Grumpy Old Accountants]
The grumpies start really digging into Groupon.

Warning to budget mavens: ‘Tax expenditures’ may yield less than expected [WaPo]
Don’t forget, there are 180 tax expenditures in this tax code, which are really tax earmarks, which are really spending by any other name, and you get rid of those and start picking them off, and you can save billions and billions of bucks.

Buffett’s $7 Million Sacrifice Is Only a Start [Jonathan Weil/Bloomberg]
Whenever the leadership class feels nervous, you can count on some of them to offer the less-moneyed masses a bone to demonstrate they care. Warren Buffett says his idea of “shared sacrifice” is higher taxes on the super-rich. Only for him, this wouldn’t cost much.

Americans renounce citizenship over taxes [WFP]
Ohio-born Julie Veilleux spent the first eight years of her life in the United States but has lived in Canada for nearly 40 years. She became a Canadian citizen in 1995 and was told by the citizenship judge she was no longer an American. But Veilleux is among thousands of Canadians who could get caught up in a U.S. tax dragnet called the Offshore Voluntary Disclosure Initiative, or OVDI. It’s an amnesty program that promises reduced fines and penalties for Americans living abroad who catch up on unfiled tax returns. But it still threatens penalties of $10,000 or more for every bank account, RRSP or other savings account not declared from 2003 to 2010.

A Value-Added Tax Fuels Big Government [WSJ]
President Obama is now talking about a “balanced approach” to deficit reduction that includes a “revenue component” achieved by “tax reform.” Among the tax reforms getting attention is a value-added tax, or VAT. Similar to a sales tax […], the value-added tax has become a significant part of the revenue systems of Europe and also has been adopted by over 100 other nations. The VAT is believed to be a magical device that can stuff government coffers with money without untoward economic political consequences. It is no such thing.

The GOP will raise taxes — on the middle class and working poor [WaPo]
America’s presumably anti-tax party wants to raise your taxes. Come January, the Republicans plan to raise the taxes of anyone who earns $50,000 a year by $1,000, and anyone who makes $100,000 by $2,000. Their tax hike doesn’t apply to income from investments. It doesn’t apply to any wage income in excess of $106,800 a year. It’s the payroll tax that they want to raise — to 6.2 percent from 4.2 percent of your paycheck, a level established for one year in December’s budget deal at Democrats’ insistence. Unlike the capital gains tax, or the low tax rates for the rich included in the Bush tax cuts, or the carried interest tax for hedge fund operators (which is just 15 percent), the payroll tax chiefly hits the middle class and the working poor.

Biden Says He Didn’t Go to China ‘to Explain a Damn Thing’ About Economy [Bloomberg]
Some media had suggested the purpose of his trip to China was to “explain our economic situation,” Biden told U.S. troops at Yokota airbase in Japan today. “I didn’t come to explain a damn thing.”

Amtrak taps KPMG for fast-rail plan [BG]
Amtrak, the taxpayer-supported passenger railroad, has hired KPMG LLP to assist in developing a business and financial plan to have 220-miles-per-hour service between Washington and Boston by 2040. KPMG will lead a team of consultants that will help identify funding sources and maximize private investment, Amtrak said.

Iowa Priorities [Tax Update]
JK: “When Iowa really cares, it can move quickly.”

PwC US Appoints Dean Simone U.S. Risk Assurance Practice Leader [PwC]
Dean-o had been running both the Industrial Products and Risk Assurance prior to announcement.

America is GE’s tax haven [Reuters]
GE’s disclosures show that over the last decade it paid much lower tax rates in America than offshore, just the opposite of the Washington political mantra. Even more puzzling, the U.S. corporate giant chooses to take more of its profits in other lands despite the higher tax rates there. Given that GE […] has a roughly 1,000-person tax department dedicated to paying as little as possible in taxes, what the disclosures show is that something other than tax policy is driving GE’s business decisions.

H&R Block selling RSM for $610 million [MW]
H&R Block Inc. said on Tuesday that it is selling its RSM McGladrey unit to McGladrey & Pullen, LLP for $610 million. The firm said the deal will result in a $53 million, or 17 cents a share, after tax charge to s expected to close by the end of the year.

Tax Break for Clergy Questioned [WSJ]
As Congress scrutinizes every nook and cranny of the budget for possible revenue, a surprising court decision is allowing clergy members to buy or live in multiple homes tax-free. The U.S. Tax Court ruled that Phil Driscoll, an ordained minister and Grammy Award-winning trumpeter who went to prison for tax evasion, didn’t owe federal income taxes on $408,638 provided to him by his ministry to buy a second home on a lake near Cleveland, Tenn. Under a provision of the tax code known as the parsonage allowance, first passed in 1921, an ordained clergy member may live tax-free in a home owned by his or her religious organization or receive a tax-free annual payment to buy or rent a home if the congregation approves.

Obama Talks to Buffett About Economy [Bloomberg]
“The president and Mr. Buffett discussed the overall outlook on the economy and the reaction to the headwinds we’ve experienced over the last couple of months,” said Josh Earnest, an administration spokesman. “They talked a little bit about some possible measures that would spur investment and increase economic growth and they also talked about some measures that could address the long-term fiscal situation in this country.”

Mandatory Auditor Rotation: If PCAOB Sanctions Were “Case-By-Case” [Re:Balance]
JP: ” [I]f the PCAOB can sustain its proof that long audit tenure was causally related to its definition of “audit failure,” it could include rotation in its toolkit of post-inspection sanctions.”

Hate Your Job? It May Run In the Family [WSJ]
Sayeth a new study.

Sharma to step down as S&P president [FT]
Deven Sharma is stepping down as president of Standard & Poor’s only weeks after the rating agency issued an unprecedented downgrade of the credit of the US, the company said. Mr Sharma will remain as an adviser to S&P’s owner, McGraw-Hill, for four months and leave the company at the end of the year. He will be replaced as S&P president by Douglas Peterson, chief operating officer of Citibank, the banking unit of Citigroup.

Satyam Gets $463.3 Million Tax Notice [WSJ]
India’s Satyam Computer Services Ltd. Monday said it has received a preliminary draft notice from local authorities for a tax claim of 21.13 billion rupees ($463.3 million) disallowing the exemptions claimed by the company and dealing a setback to its attempt to recover from a fraud in 2009.

Web Surfing Helps at Work, Study Says [WSJ]
Don’t feel guilty about browsing the Internet at work—turns out it may actually improve your performance. According to a new study, Web browsing can actually refresh tired workers and enhance their productivity, compared to other activities such as making personal calls, texts or emails, let alone working straight through with no rest at all. The study, “Impact of Cyberloafing on Psychological Engagement,” by Don J.Q. Chen and Vivien K.G Lim of the National University of Singapore, was presented last week in San Antonio, Texas, at the annual meeting of the Academy of Manage of management scholars.

Corporations pushing for job-creation tax breaks shield U.S.-vs.-abroad hiring data [WaPo]
Some of the country’s best-known multi­national corporations closely guard a number they don’t want anyone to know: the breakdown between their jobs here and abroad. So secretive are these companies that they hand the figure over to government statisticians on the condition that officials will release only an aggregate number. The latest data show that multinationals cut 2.9 million jobs in the United States and added 2.4 million overseas between 2000 and 2009.

My Response To Buffett And Obama [WSJ]
Harvey Golub: “Over the years, I have paid a significant portion of my income to the various federal, state and local jurisdictions in which I have lived, and I deeply resent that President Obama has decided that I don’t need all the money I’ve not paid in taxes over the years, or that I should leave less for my children and grandchildren and give more to him to spend as he thinks fit. I also resent that Warren Buffett and others who have created massive wealth for themselves think I’m “coddled” because they believe they should pay more in taxes. I certainly don’t feel “coddled” because these various governments have not imposed a higher income tax. After all, I did earn it.”

Romney plans to quadruple size of Calif. home [WaPo]
A Romney campaign official confirmed the report, saying the Romneys want to “enlarge their two-bedroom home because with five married sons and 16 grandchildren it is inadequate for their needs. Construction will not begin until the permits have been obtained and the campaign is finished.”

File Under Regulatory Capture: Deloitte’s “Fireside Chats” [Forbes]
Apparently the SEC has a historical society.

Accounting Reform, Sans the Reform [The Street]
Sweeping reforms of the accounting industry are being discussed, but whether they will survive industry lobbying efforts remains to be seen. Ask the Financial Accounting Standards Board (FASB), which helps define the rules about what companies report, or the Public Company Accounting Oversight Board (PCAOB), which keeps an eye on the auditors, about any particular trouble area and they’ll point to a new rule or a speech as evidence they are on the case. Given recent history, however, it is hard to take them seriously.

Michele Bachmann’s ‘war’ on the IRS [WaPo]
Rep. Michele Bachmann (R-Minn.) used to work as a lawyer for the Internal Revenue Service. Now she’s running for president and discovering, apparently, that not everyone loves the IRS. So this week she came up with a novel explanation for the principal job she’s held outside of elected office. “I went to work in that system because the first rule of war is ‘know your enemy,’ ” Ms. Bachmann told a crowd in South Carolina [last] Thursday.

Silicon Valley Seeks CFOs to Hop on IPO Train [CFOJ]
The IPO boom in Silicon Valley is creating another mini-boom in demand for experienced financial executives. While demand for new chief financial officers has been somewhat slow at Fortune 500 companies and private-equity backed firms this year, executive recruiters say the market is on fire in Silicon Valley.

No Easy Answer on Tax Issue [WSJ]
After two decades of bipartisan tax policy, nearly half of all American households don’t pay federal incolican presidential candidates are making a politically challenging case to change that fact. Most working Americans do pay Social Security and Medicare payroll taxes. But because of tax breaks for seniors and inducements for work and raising children, among other accumulated changes to the tax code, many manage to avoid income taxes altogether. The nonpartisan Tax Policy Center in July pegged that number at 46% of U.S. households for this year.

Democrats’ road tour strikes back at GOP’s stand against raising taxes [WaPo]
On Wednesday morning, as his tinted black bus pulled into Randy Hultgren’s congressional district, President Obama told residents that Republicans like Hultgren must be willing to raise taxes to reduce the deficit. A few hours and 90 miles away, Hultgren’s own constituents had picked up the message, repeatedly hectoring the freshman congressman at a town hall meeting to raise taxes on the wealthy and corporations.[…] “I just have one question for you tonight,” said another [man]. “Did you sign Grover Norquist’s pledge to never raise taxes?” — referring to the promise that has been signed by most congressional Republicans, including Hultgren. “Don’t you have the confidence in your own ability in Congress to make up your own mind? You need Grover Norquist to tell you?” the man continued.

BofA’s Moynihan Says to Expect 3,500 Job Cuts [Bloomberg]
Bank of America Corp. (BAC) Chief Executive Officer Brian T. Moynihan told his managers at the biggest U.S. lender to expect 3,500 job cuts this quarter. Some employees have already been informed of the firings, which are in addition to 2,500 reductions made this year, Moynihan said in a memo to staff yesterday. The cuts aren’t part of the Charlotte, North Carolina-based firm’s expense-trimming effort called Project New BAC, according to the document.

Let the “Condorsement” Games Begin [TAO]
Tom Selling: “The SEC has finally conceded that its efforts to adopt IFRS have failed. Damage control has begun in earnest, but the ship is still taking on water.”

Institutes attack US mandatory rotation plan [Accountancy Age]
UK institutes have questioned whether forced firm rotation will have the desired impact, saying it could be detrimental to quality and increase audit errors. ICAEW executive director Robert Hodgkinson said mandatory firm rotation has been debated for decades, concluding: “The evidence to date has not been supportive and has pointed towards a potential loss of audit quality”.

Top Stock Picker Jain Won’t Touch Chinese Banks on Bad Debt [Bloomberg]
“We have not owned a Chinese bank, and I don’t see owning one any time soon,” said Jain, who oversees about $15 billion, including three funds that beat 99 percent of peers this year, data compiled by Bloomberg show. “If you look at the accounting, I don’t see how anyone could put a penny there.”

Analysis: Critics say new law makes them tax agents [Reuters]
A U.S. law meant to snuff out billions of dollars in offshore tax evasion has drawn the criticism of the world’s banks and business people, who dismiss it as imperialist and “the neutron bomb of the global financial system.” The unusually broad regulation, known as FATCA, or the Foreign Account Tax Compliance Act, makes the world’s financial institutions something of an extension of the tax-collecting Internal Revenue Service — something no other country does for its tax regime.

Ernst & Young Announces Leadership Additions in the Carolinas [E&Y]
Charlotte OMP Curt Fochtmann will now run the entire Carolinas region.

SEC Accused of Destroying Files [WSJ]
An employee at the Securities and Exchange Commission has accused the regulatory agency of destroying at least 9,000 documents relating to inquiries of Wall Street banks and hedge funds. Documents that were destroyed related to corporate giants including Goldman Sachs Group, Deutsche Bank, Lehman Brothers, Citigroup, Morgan Stanley, Wells Fargo, Bank of America, convicted fraud operator Bernard Madoff and hedge fund SAC Capital Advisors, according to a letter from the employee’s attorney released Wednesday by Sen. Charles E. Grassley (R., Iowa).

Obama to issue neweation, debt reduction [WaPo]
President Obama has decided to press Congress for a new round of stimulus spending and tax cuts as he seeks to address the great domestic policy quandary of his tenure: how to spur job growth in an age of austerity. Obama will lay out a series of ideas in a major address right after Labor Day, when he and a largely antagonistic Congress will return from vacation, the White House said Wednesday.

Accounting Chinese Audit Regulators Plan Washington Visit [WSJ]
A delegation of Chinese regulators will visit Washington in October as the U.S. and China continue talks on allowing American inspectors to scrutinize Chinese audit firms, the U.S.’s top auditing regulator said Wednesday.

Mandatory Auditor Rotation — The PCAOB Sails Off the Charts [Re:Balance]
In case you thought Jim Peterson was too heady for your liking, he opens this post with an exchange between Otter and Bluto.

Tax Court: Accountant Cannot Deduct Bathroom as Home Office [TaxProf]
What?!? Lots of business gets done in there!

Tracking time [ABD]
Again, we’ll refer you here if you have further questions.

Canadian Accountants Call for Simplification of Canada’s Tax Code [Tax Foundation]
Is there a trend yet?

PCAOB: Chinese regulators can no longer shut the door [Accountancy Age]
Chairman James R Doty […] said an arbitrary position of refusing cross-border collaboration “will no longer fly”, claiming market pressures make capitulation inevitable.

US appeals court backs government in tax shelter case [Reuters]
A federal appeals court has upheld a ruling against a former senior tax lawyer at Grant Thornton LLP and Coopers & Lybrand that banned him from selling bogus tax shelters costing the United States government up to $800 million in unpaid taxes. A three-judge panel for the 8th U.S. Circuit Court of Appeals on Tuesday rejected an appeal filed by A. Blair Stover Jr., who had sought to overturn a Missouri federal court decision in August 2010 barring him from promoting three tax schemes deemed abusive by the Internal Revenue Service.