Category: ANR

Obama Seeks Grand Bargain on Deficit [Bloomberg]
“Now is the time to deal with these issues,” Obama said at a White House news conference yesterday before resuming talks with congressional leaders on reducing deficits and raising the $14.3 trillion U.S. debt ceiling before the government exhausts its borrowing authority on Aug. 2. “If not now, when?”

Amazon Backs End to Online Sales Tax in California [NYT]
Amazon said Monday that it would back a California ballot initiative that would rolaw that forces more online retailers to collect sales tax. Amazon’s decision to support the proposed referendum pits the world’s biggest online retailer against the state government, which is looking for ways to raise additional revenue to cover budget shortfalls.

High-Speed Tax Rewrite Falters as Lawmakers Bicker Over Basics [Bloomberg]
Republican congressional leaders and President Barack Obama discussed a rewrite of the tax code over the past week and couldn’t resolve even the basic outline of what it should look like. They disagreed on revenue targets, the progressivity of the code, international taxation issues and the treatment of large businesses that aren’t currently taxed as corporations, according to two Republicans familiar with the talks.

Alleged Ponzi Scheme Accountant Settles SEC Complaint [Dow Jones]
In 2009, Philadelphia-area investment-fund manager Joseph S. Forte pleaded guilty to charges of wire fraud, mail fraud, bank fraud and money laundering, all linked to a Ponzi scheme he admitted to the year before. He is serving a 15-year prison sentence. Monday, the SEC said it has filed and settled a civil action against accountant John N. Irwin and his consulting firm, Jacklin Associates Inc. Both agreed to settle the Commission’s charges, without admitting or denying allegations. The complaint claimed Irwin and the firm participated in Forte’s scheme by recruiting investors for it.

Millennials frustrated with weak economy, scarcity of jobs [AW]
Dennis Nally can’t hire everyone now, can he?

KPMG Names Marc Moyers to Head U.S. Private Equity Group [KPMG]
Moyers takes over for Shawn Hessing.

PwC Sends Partners, Staff and Interns to Belize to Boost Financial Literacy Among Students and Teachers [PwC]
Don’t get jealous. It’s probably not too nice down there.

Cantor outlines $353B in Medicare, Medicaid savings [The Hill]
House Majority Leader Eric Cantor (R-Va.) on Monday proposed changes to Medicare and Medicaid he said would save $353 billion over the next decade. Cantor made the proposal in talks at the White House. His plan was immediately criticized by House Minority Leader Nancy Pelosi (D-Calif.), who said it would lead to benefit cuts.

Debt reduction talks in limbo as clock ticks toward Aug. 2 deadline [WaPo]
The White House meeting adjourned after roughly 75 minutes without agreement over how far the parties should go in cutting the deficit over the next decade or whether tax cuts and entitlement reductions should be a part of any deal. Congressional leaders will return to the White House on Monday to continue talks, administration officials announced, and Obama will hold a morning news conference before they do.

Bachmann’s Tax Attorney Job Was Collector for the IRS [WSJ]
Republican presidential hopeful Michele Bachmann touts one job as her primary professional experience before entering politics. On the campaign trail, she describes it as being a “federal tax litigation attorney.” Others might call it tax collector.

SEC IFRS Roundtable Debrief: March of the Zombies [Accounting Onion]
Tom Selling opines on the thoughts of the undead from last week’s roundtable.

Auditors and Audit Reports: Is The Firm’s “John Hancock” Enough? [Forbes]
What’s in a name? Maybe a lot.

Tax implications of Derek Jeter’s historic 3,000th MLB hit [DMWT]
Just when you thought taxes couldn’t invade a good show of sportsmanship.

Taxes Upon Taxes Upon . . . [WSJ]
So the fondest Washington hopes for a grand debt-limit deal have broken down over taxes. House Speaker John Boehner said late Saturday that he couldn’t move ahead with a $4 trillion deal because President Obama was insisting on a $1 trillion tax increase, and the White House quickly denounced House Republicans for scuttling debt reduction and preventing “the very wealthiest and special interests from paying their fair share.” How dare Republicans not agree to break their campaign promises and raise taxes when the jobless rate is 9.2% and President Obama’s economic recovery is in jeopardy?

KPMG Achieves 22 Percent Carbon Reduction Through “Living Green” Initiative [KPMG]
You miss the bottled water, don’t you?

Groupon Financial Assumptions Upended [CFOJ]
Customer acquisition and retention — already one of its highest costs, and arguably the most important – is becoming more expensive by the day and getting a lower return. According to its S-1 filing, Groupon spent some $179.9 million in the first quarter to acquire new customers, up from $3.9 million in the first quarter of 2010. Those costs were the main reason the company lost $117.1 million in the first three months of the year.

Sights Set on Grand Debt Deal [WSJ]
President Barack Obama and congressional leaders agreed Thursday to strive for a blockbuster deficit-reduction deal and will spend the weekend determining whether political support is possible for a sweeping plan to curb entitlements and make major tax-code changes. The package to reduce the federal deficit by $4 trillion or more over 10 years is much more ambitious than negotiators envisioned just two weeks ago, and represents the most far-reaching of three options Mr. Obama presented to lawmakers Thursday in a closed-door meeting in the White House Cabinet Room.

I.R.Slitical Donors [NYT]
The Internal Revenue Service on Thursday abandoned its effort to force five big-ticket donors to pay gift taxes on contributions they made to nonprofit advocacy groups that are playing an increasing role in American politics. “Until further notice, examination resources should not be expended on this issue,” Steven T. Miller, deputy commissioner for services and enforcement, wrote in a memo posted on the I.R.S. Web site. “This is a difficult area,” Mr. Miller wrote, “with significant legal, administrative and policy implications with respect to which we have little enforcement history.”

Accounting That Comes in Flavors [NYT]
[I]t appears increasingly likely that for a substantial period of time there will be two sets of accounting rules in the United States, with companies able to choose between American or global rules. And while most countries, including the United States, will say they embrace international accounting standards, there may be numerous flavors of them, with investors perhaps having trouble figuring out just how comparable financial statements really are.

Caterpillar Accused of Demoting Executive Discovering Tax Dodge [Bloomberg]
The company, the world’s largest construction-equipment maker, sold and shipped spare parts globally from an Illinois warehouse while improperly attributing at least $5.6 billion of profits from those sales to a unit in Geneva, according to the suit filed by Daniel J. Schlicksup. He was a global tax strategy manager for Caterpillar from 2005 to 2008. Schlicksup, 49, sued in U.S. District Court in Peoria, Illinois, in 2009, claiming he was moved to a job that limits his career opportunities because he complained to superiors that the “Swiss Structure” ran afoul of U.S. tax rules.

Being Goldman Sachs’s Brains May Make Viniar Irreplaceable CFO [Bloomberg]
David A. Viniar, the finance and risk-management overseer who some investors deem more essential to Goldman Sachs Group Inc. (GS) than Lloyd C. Blankfein, may not be replaceable. At least not by one person. The longest-serving chief financial officer of any major Wall Street firm may find his multiple roles distributed among two or even three deputies when he eventually steps down, according to two people with knowledge of the firm’s internal deliberations.

BofA’s Deal Has Other Player—IRS [WSJ]
Any deal has tax implications. That is especially the case for Bank of America’s proposed $8.5 billion settlement related to mortgage securities sold to investors. The Internal Revenue Service will play a particularly important role. BofA has said the settlement won’t be final until the IRS signs off on it.

SEC urged to go slow on global accounting move [Reuters]
The United States should move towards use of international accounting standards but must not rush the process, business representatives and accountants told the Securities and Exchange Commission on Thursday. If the United States does not shift to a global accounting regime, it will cut itself off from the rest of the world and lose influence over international standard-setting, participants at an SEC roundtable said. “I don’t think anybody disagrees with the ultimate goal” of a single set of high-quality global accounting standards, said Mark LaMonte, managing director at Moody’s Investors Service. In practice that may difficult to achieve, “but it doesn’t mean we should stop working toward this goal,” he said.

PwC Appoints Christina Dutch Managing Partner in Albany [PwC]
Christina Dutch succeeds Richard Grant.

U.S.-China audit talks seen making only modest progress [Reuters]
U.S. and Chinese securities regulators may soon strike a deal that would allow the Americans some access to Chinese auditors, but it is likely to be more superficial than Washington wants. A string of accounting scandals at U.S.-listed Chinese companies has increased pressure on regulators in both nations to toughen oversight of Chinese auditors. But a full-fledged agreement that allows the U.S. auditor watchdog, the Public Company Accounting Oversight Board (PCAOB), to review the work and papers of China-based auditors through formal inspections would be difficult to achiestrong>Obama to Push for Wider Deal With G.O.P. on Deficit Cuts [NYT]
Heading into a crucial negotiating session on a budget deal on Thursday, President Obama has raised his sights and wants to strike a far-reaching agreement on cutting the federal deficit as Speaker John A. Boehner has signaled new willingness to bargain on revenues.

New Accounting Rule Would Favor Hedgers [CFOJ]
The proposed rule, International Financial Reporting Standard 9, greatly expands the kinds of transactions that qualify for hedge accounting under the current rule, International Accounting Standard 39, and the SEC is debating when, and under what conditions, U.S. companies would have to report their results in IFRS instead of U.S. GAAP. Hedge accounting is one area where the two regimes currently stand far apart.

Glass Lewis Faults RIM Governance Stance [Bloomberg]
Research In Motion Ltd. (RIMM)’s decision to study the overhaul of its management structure to avoid a shareholder vote next week indicates it’s avoiding a commitment to appoint an independent chair, Glass Lewis & Co. said. “The appointment of independent board leadership does not require further study, but rather concrete action,” Dimitri Zagoroff and Marian Macindoe, analysts with the San Francisco- based proxy adviser firm, wrote in a report. Glass Lewis advises investors that manage more than $15 trillion on proxy voting.

In Minnesota shutdown, workers who calculate the cost are laid off [WaPo]
Now more than six days old, the shutdown has continued to shutter parks and toll booths and to leave thousands of government workers at home. The state’s Democratic governor and Republican lawmakers continued to wrangle, without resolution, over a $5 billion budget gap Wednesday. The talks were continuing without clarity on the shutdown’s cost. The staff members who would calculate those figures are “currently laid off,” said John Pollard, a spokesman for Minnesota Management and Budget.

Another Reason to Insist on the Ring [Tax Update]
Cohabitation has its tax consequences.

House, Senate Tax Panels to Hear Ideas for Tax Overhaul at Joint Session [WSJ]
House and Senate tax-writing committees will hold a rare joint hearing to examine potential ideas for a tax overhaul. It’s reportedly the first joint hearing by the two panels on a tax issue since 1940, according to a press release issued late Wednesday. The hearing next Wednesday in the Capitol Visitor Center could signal a greater degree of cooperation over tax changes in the future, as the panels gear up for what could be an intensive effort to overhaul the federal tax code.

IASB’s New Pension Accounting Will Mean Big Changes [Institutional Investor]
A bunch of foreign corporations likely are starting to reevaluate their pension plans’ asset allocations, thanks to the International Accounting Standards Board. In June the IASB, whose accounting rules are used by about 120 countries that include all European Union members, published its amendments to IAS 19 Employee Benefits, which cover how defined benefit plan sponsors handle pensions in their financial statements.

Madam admits tax fraud in Denver brothel case [9News]
The madam of a high-end prostitution business that allegedly catered to some of Denver’s most famous and successful residents admits she’s guilty of owing the IRS tens of thousands of dollars in unpaid taxes and of tax evasion. Brenda Stewart, owner of Denver Sugar/Players changed her plea in federal court Wednesday afternoon from not guilty to guilty to one count of tax evasion. The government moved to dismiss the other 69 counts against her.

New accounting rule would ease Greek pain: IASB [Reuters]
European Union banks would have more breathing space from losses on Greek bonds if the bloc adopted a new international accounting rule, a top standard setter said on Tuesday. The International Accounting Standards Board (IASB) agreed under intense pressure during the financial crisis to soften a rule that requires banks to price traded assets at fair value or the going market rate.

Obama Summons G.O.P. and Democratic Leaders for Deficit Reduction Talks [NYT]
Mr. Obama, who met secretly with Spr at the White House on Sunday to try to advance the talks, called House and Senate leaders from both parties to the White House for further negotiations on Thursday. And he rejected talk of an interim deal that would get the government past a looming deadline on raising the federal debt limit without settling some of the longer-term issues contributing to the government’s fiscal imbalances.

U.S. Will Probably Adopt IFRS Standards, IASB Chairman Says [Bloomberg]
The U.S. will probably adopt International Financial Reporting Standards, said Hans Hoogervorst, the new chairman of the London-based accounting organization IASB. The U.S. Financial Accounting Standards Board, which wanted to expand the use of fair-value accounting to all financial assets, has dropped that model and “that has made talking to each other a lot easier,” Hoogervorst told delegates at an IFRS conference in Zurich today.

Antitax Extremism in Minnesota [NYT]
More than 40 state agencies have closed, including the state parks over the July Fourth holiday. Courts and public safety agencies are operating, but essential services for the poor, like food pantries and child care subsidies, have evaporated. Many parents say they may have to quit their jobs if state-subsidized child care does not resume quickly. The shutdown will cost the state money, since many of the 22,000 laid-off workers will receive unemployment benefits and health insurance, while the treasury is unable to collect on tax audits, lottery tickets and park fees.

IFRS Is for Criminals [Grumpy Old Accountants]
Possible prerequisite for using principles-based accounting: walking on water.

Obama’s Twitter Town Hall: He’ll Take Questions in 140 Characters or Less [Bloomberg]
President Barack Obama will take questions today in what White House officials are calling his first Twitter town hall, complete with a “Tweetup.” Users of the social networking service can post questions for Obama before and during the event, which starts at 2 p.m. Washington time. Questions should fit Twitter’s 140-character limit and include the hashtag #askObama.

Casey Anthony, acquitted of murder in toddler’s death, faces IRS tax lien [DMWT]
I still don’t know who this woman is but she sure is popular on Twitter.

What does my boss want from me? [Accountant by Day]
Short answer: your soul. ABD has a slightly longer answer.

SEC Gauging U.S. Global Accounting Readiness [CFOJ]
The long road to determining whether U.S. companies will ever adopt international accounting rules will take another turn this week as U.S. securities regulators hold three roundtables to try to assess how ready the world’s largest economy would be if it goes forward with a plan to adopt IFRS. While the U.S. Securities and Exchange has spent most of the past two years slowing down an earlier plan that would have had U.S. companies using IFRS as soon as 2014, it aims to decide in the next year whether even a slower incorporation of IFRS is a feasible option.

Americans Rank Airlines Lower Than the IRS [ABC]
Overall, the U.S. airline industry scored a 65. That’s lower than the satisfaction score for Domino’s Pizza. Lower than the Post Office. Lower than the IRS. Well, lower for electronic tax filers, anyway, according to the most recent government rankings.

Profits Thrive in Weak Recovery [WSJ]
Two years after the official end of the recession, a range of indicators show that the economic recovery has been the worst, or one of the worst, since the government began tracking such data after World War II: Unemployment is too high, bank lending necessary to spur spending is too low, home prices are depressed while household expectations for financial well-being are near record low levels. Many economists predict the sluggish rebound may continue for years.

How Zynga Recognizes Revenue [Dow Jones]
Washington Mutual Inc. (WAMUQ) and other co-defendants agreed to settle a consolidated shareholder class-action lawsuit for $208.5 million, putting behind it one chunk of the failed bank’s litigation issues. The suit in federal court in Seattle was the consolidated version of several other class-action lawsuits filed by shareholders, in multiple courts, that all essentially alleged that Washington Mutual failed to stop them from investing when the now-failed thrift knew, or should have known, how much trouble it was in. Some of the lawsuits were actually filed long before the thrift’s collapse, though the plaintiffs regularly updated the consolidated case to include the latest reports on Washington Mutual.

2 Republicans Open Door to Increases in Revenue [NYT]
One of the senators, John Cornyn of Texas, said he would consider eliminating some tax breaks and corporate subsidies in the context of changes in the tax code, provided there was not an overall increase in taxes. “I think it’s clear that the Republicans are opposed to any tax hikes, particularly during a fragile economic recovery,” Mr. Cornyn said on “Fox News Sunday.” “Now, do we believe tax reform is necessary? I would say absolutely.”

Budget Needs Let Fireworks Fly Lawfully [NYT]
Desperate to find any source of untapped revenue, many cities, counties and states are scrapping decades-old restrictions on firework sales, trying to rescue budgets battered by several years of economic doldrums. A 65-year-old ban on fireworks in Hawkins County, Tenn., was lifted in May after a county commissioner persuaded colleagues that the sales could generate as much as $200,000 in annual permit fees and sales tax revenue. “Every penny helps,” said Shane Bailey, the county commissioner.

Minnesota Lawmakers, Governor to Discuss Ending Shutdown After Holiday [Bloomberg]
Minnesota Republican legislative leaders are returning to the capital in St. Paul today after a long holiday weekend ready to resume talks with Democratic Governor Mark Dayton on ending a government shutdown, said Senator Geoff Michel, the deputy majority leader. “It was probably healthy for the legislature and the governor to get out of St. Paul and get a little perspective,” Michel said in a telephone interview yesterday from Edina.

Unpaid taxes total $400B, but little political will to pursue it [Seattle Times]
In its most recent analysis, from 2001, the Internal Revenue Service estimated about 84 percent of federal taxes were voluntarily paid on time that year, leaving a gross tax gap of $345 billion, or roughly 16 percent, uncollected. Late payments and IRS collection efforts cut the net tax gap to $290 billion in 2001. But similar estimates point to a gross tax gap of $410 billion to $500 billion in 2010, said Benjamin Harris, a research economist at the center-left Brookings Institution. “You could go a long way toward solving our budget mess by closing the tax gap, but the problem is, it’s not easily closed,” Harris said.

Dominique Strauss-Kahn Accuser Said to Have Lied on Tax Return [AT]
Prosecutors found a number of inconsistencies in the accuser’s story about the incident as well as her finances, according to The New York Times. They found that she had lied on her application for asylum from Guinea about a gang rape, and misrepresented her income in order to qualify for public housing. She also claimed a friend’s child as her own on her tax return as a dependent, in addition to her own daughter.

China listings in U.S. could slow on accounting scandals -PwC partner [Reuters]
The negative sentiment towards some North America-listed Chinese companies triggered by recent accounting scandals will probably slow the momentum of Chinese firms’ IPOs in the United States, a partner at accounting firm PricewaterhouseCoopers China operations said on Monday. “The current negative public opinion on Chinese companies in overseas markets, especially in the United States, will definitely affect Chinese companies seeking a listing in those markets,” Jean Sun, assurance partner with PwC in Beijing, told reporters. “Investors are now less willing to dip into their pockets (for Chinese companies), so it’s understandable that the listing momentum will slow,” said Sun.

Strauss-Kahn Case Seen as Near Collapse [NYT]
The sexual assault case against Dominique Strauss-Kahn is on the verge of collapse as investigators have uncovered major holes in the credibility of the housekeeper who charged that he attacked her in his Manhattan hotel suite in May, according to two well-placed law enforcement officials. Although forensic tests found unambiguous evidence of a sexual encounter between Mr. Strauss-Kahn, a French politician, and the woman, prosecutors now do not believe much of what the accuser has told them about the circumstances or about herself. Since her initial allegation on May 14, the accuser has repeatedlaw enforcement officials said.

They’re Everywhere! Big Four Auditors Mixed Up In Mortgage Fraud [Forbes]
Francince McKenna sees “complicit auditors.”

Geithner Exit Would Force Obama to Rebuild [Bloomberg]
Treasury Secretary Timothy F. Geithner’s potential departure from the administration would force President Barack Obama to assemble a new economic team as he enters a re-election campaign that’s likely to be dominated by voter concern over jobs. Geithner has told Obama that he’s considering leaving the administration after the president reaches an agreement with Congress to raise the national debt limit, according to a person familiar with the matter.

Bill Clinton Backs Tax Holiday on Foreign Profits, With Caveats [Bloomberg]
Former U.S. President Bill Clinton endorsed a tax holiday on repatriating offshore profits with conditions, taking a position contrary to the Obama administration. “I favor it under certain circumstances,” Clinton said in an interview with Bloomberg Television’s Al Hunt yesterday in Chicago. He suggested an approach that would give companies a 20 percent tax rate on repatriated profits, which could be reduced to 10 percent if they “reinvest it in increasing employment in America.”

H-P Girds for iPad Battle [WSJ]
H-P’s device, the TouchPad, comes more than a year after Apple started selling its iPad. In that time, Apple has sold more than 25 million tablets and added nearly $100 billion in market capitalization. H-P, meanwhile, has lost $50 billion. H-P is planning a marketing blitz for the TouchPad. But it faces an uphill battle in the fast-growing tablet market, which is dominated by the iPad and crowded with devices from Samsung Electronics Co., Motorola Mobility Holdings Inc. to BlackBerry maker Research In Motion Ltd. “We know we’re the fifth man in a four-man race,” said Richard Kerris, the H-P executive in charge of developer relations.

Minnesota government shuts down [CNN]
A budget stalemate forced a virtual full shut down of the Minnesota government on Friday and left only a limited array of state services in operation over the busy holiday weekend. Visitors won’t be able to go to the state parks or the zoo, and travelers will find the highway rest stops shuttered. Road construction projects will cease, as will licensing for teachers and businesses.

Accounting woes threaten Chinese listings in Singapore [Reuters]
The string of blow-ups at overseas-listed Chinese companies could derail Singapore Exchange’s efforts to revive investor confidence and dent its status as a major trading hub for mainland issues. The bourse’s long-running charm offensive in China means Chinese stocks, known in the city-state as S-chips, now make up around 20 percent of its 779 listed companies, up sharply from April 2004 when there were just 41 mainland firms listed on the exchange. But a rash of accounting problems that broke this year, reminiscent of a previous wave in 2008 in Singapore, threatens to undermine SGX’s strategy as investor interest fades.

PricewaterhouseCoopers names new managing partner in Kansas City [KCBJ]
It’s New Year’s Day at PwC (E&Y too) and John Martin takes over in Kansas City from James Gegg. Well, sort of. The entire firm has the day off.

Pay Tally Up 19% for Finance Chiefs [WSJ]
Median pay for chief financial officers of S&P 500 companies surged 19% to $2.9 million last year, as profits and stock valuations rebounded and some finance chiefs assumed broader responsibilities, according to a Wall Street Journal survey. CFO pay varied widely, from less than $600,000 to more than $60 million. Five CFOs received more than $20 million in compensation. Growth in pay partly reflected the growing clout and multiple responsibilities of some finance chiefs, and moves by some companies to combine the function with others.

Fannie Mae Silence on Tay Fraud [Bloomberg]
The first sign of what would ultimately become a $3 billion fraud surfaced Jan. 11, 2000, when Fannie Mae executive Samuel Smith discovered Taylor, Bean & Whitaker Mortgage Corp. sold him a loan owned by someone else. Fannie Mae, the government-sponsored enterprise which issues almost half of all mortgage-backed securities, determined over the next two years that more than 200 loans acquired from Taylor Bean were bogus, non-performing or lacked critical components such as mortgage insurance.

In Deficit Plan, Taxes Must Rise, President Warns [NYT]
President Obama pressured Republicans on Wednesday to accept higher taxes as part of any plan to pare down the federal deficit, bluntly telling lawmakers that they “need to do their job” and strike a deal before the United States risks defaulting on its debt.

LivingSocial Said to Be in Talks With Banks for $1 Billion IPO [Bloomberg]
LivingSocial, the second-largest website devoted to daily coupons, is selecting investment banks for an initial public offering that may value the company at $10 billion to $15 billion, according to a person with direct knowledge of the talks. The Washington, D.C.-based company is seeking to raise about $1 billion in an IPO and has had conversations with Barclays Plc, JPMorgan Chase & Co. and Allen & Co. to lead the offering, said the person, who asked not to be named because the discussions are private. LivingSocial also has talked with additional banks for the IPO, which may happen by the end of the year, the person said.

No News from the SEC on its IFRS Roundtable is Bad News [Accounting Onion]
Tom Selling can’t get any details for the upcoming dog and pony show.

Spreadtrum Says Muddy Waters Questions Over Its Accounting Are Groundless [Bloomberg]
Spreadtrum Communications Inc. (SPRD), the Chinese chip designer whose accounting was questioned by Muddy Waters LLC, responded to the short seller’s report today by saying inventory surged last year because of new products. Muddy Waters, the investment firm run by Carson Block whose research has preceded almost $5 billion in share losses among Chinese companies trading in North America, cited a fivefold increase in inventory in a letter to Spreadtrum’s management. Block’s firm said the company’s deferred costs may have climbed too fast in explaining why it was betting the stock will fall.

Energy Cos Face Big Tax Hit If Congress Ends Accounting Method [Dow Jones]
As contentious negotiations over how to raise the federal government’s $14.29 trillion debt ceiling continue, Republicans lawmakers this week sharply criticized the White House for wanting to repeal the “last-in, first-out,” or LIFO, accounting method in order to raise revenue. The Joint Committee on Taxation, a nonpartisan Congressional research office, has estimated that repealing the method would generate new revenue of nearly $70 billion over 10 years, but the GOP charged that such a move could cripple struggling manufacturers.

PwC Appoints Nick Walker to Lead Kentucky Market [PwC]
Mr. Walker takes the helm in Louisville from Philip Gregory who is retiring after 33 years with P. Dubs.

Greece Secures Austerity Vote [WSJ]
Clashes have broken out between dozens of anarchists and police in front of Greece’s parliament Wednesday, just ahead of a vote on a five-year austerity plan the country needs to pass to avoid default. Eyewitnesses said demonstrators smashed marble paving stones in Athens’s central square and threw rocks at police, prompting them to respond by firing tear gas and clearing the area of people in front of Parliament.

Congress Finds Tax Code Complexity Contributes to Tax Gap [AT]
The complexity of the federal Tax Code can engender errors and underpaid taxes, according to a new government study. The study, by the Government Accountability Office, noted that the GAO has documented millions of taxpayer errors in following complex rules for determining taxpayers’ “basis”—generally the taxpayer’s investment in a property—in securities they sold or corporations they own.

Bank of America Agrees to $8.5 Billion Mortgage Settlement [WSJ]
Bank of America Corp. agreed Wednesday to pay $8.5 billion to settle claims by a group of high-profile investors who lost money on mortgage-backed securities purchased before the U.S. housing collapse. The payment will be the largest such settlement by a financial-services company to date, exceeding the total profits of the Charlotte, N.C., bank since the onset of the financial crisis in 2008.

Large Accounting Firms Bungled 17% of Australia Audits, Regulator Says [Bloomberg]
Four large accounting firms in Australia didn’t conduct proper audits in 17 percent of the cases reviewed by the country’s regulator, with smaller firms falling short almost a third of the time. The firms, which aren’t identified in the report, generally didn’t contain sufficient evidence to back the conclusions reached, according to the study, which was conducted between July 1, 2009 and Dec. 31 and was released today by the Australian Securities & Investment Commission.

The PCAOB’s Concept Release: What Might a Truly Useful Auditors’ Report Actually Say? [Re:Balance]
No, coverage of the Casey Anthony trial will not be a part of it.

A UBS Customer Pleads Guilty to Tax Evasion [Reuters]
An 81-year-old disbarred New York maritime lawyer admitted hiding more than $26.4 million at the Swiss bank UBS to avoid paying taxes, and agreed to pay a $9.8 million fine in pleading guilty on Monday. The former lawyer, Kenneth Heller, banked the money with UBS and then moved it to a smaller private Swiss bank, Wegelin, in June 2008 after reading that UBS might identify account holders, federal prosecutors said.

My Auditor, My Whistle-blower [CFO]
The Securities and Exchange Commission’s new whistle-blower rules, issued late last month, received much attention for providing cash rewards to securities-fraud informants. CFOs should be aware of a potential outcome of the rules that was not well publicized: auditors can blow the whistle on their own audit clients and receive a substantial bonus for doing so.

~ Good morning capital market servants. I’ll be traveling this morning to an undisclosed location, so posting my be on the lighter side until later this afternoon. That should give you plenty of time to either A) determine my whereabouts or B) dig up some dirt and send it to us. If you manage to sniff out my trail correctly, your reward will be a hot date with either Adrienne or DWB, depending on your preference.

Former Citigroup Accountant Accused of Embezzling $19.2 Million [NYT]
Gary Foster toiled away as a midlevel accountant in Citigroup’s Long Island City back office, collect0 paycheck last year. But federal prosecutors claim Mr. Foster gave himself a bonus fit for a star investment banker by embezzling more than $19.2 million from Citi before its auditors picked up on the scheme.

Siemens CFO Says Tailwind From Recovery Is Likely Over [WSJ]
“The tailwind from the economic recovery is likely over. Now, increased efforts are required for continued growth,” Siemens Chief Financial Officer Joe Kaeser told analysts at an event in Shanghai. Kaeser has already said several times that growth will slow in the second half of the current fiscal year 2011, which ends in September, as the comparison base gets tougher.

Lululemon eyes $1 billion in revenue [Reuters]
While Lululemon’s sales have soared along with its share price, investors have been concerned that competition might start to slow its ascent. “We’re not feeling it or seeing it on a global basis or even store by store,” Chief Financial Officer John Currie told the Reuters Global Consumer and Retail Summit on Monday, when the stock hit an all-time high. “But you know, it’s a competitive marketplace. So, the next competitor … we have to worry about them just like we do about Nike and Adidas.”

Fed policymaker: Mortgage-interest deduction can be bad incentive [The Hill]
Narayana Kocherlakota, the president of the Federal Reserve Bank of Minneapolis, said in a speech in Big Sky, Mont., that the tax code now provides both taxpayers and financial institutions incentives to carry at times excessive debt. Kocherlakota, currently a member of the policy-making Federal Open Market Committee, specifically singled out the mortgage-interest deduction and a policy that allows banks to deduct interest payments on debt.

Los Angeles Dodgers File For Chapter 11 Bankruptcy, Seek Television Deal [Bloomberg]
The Los Angeles Dodgers filed for bankruptcy protection after Major League Baseball rejected a television deal with News Corp. (NWS)’s Fox Sports, leaving team owner Frank McCourt unable to make payroll this week. Major League Baseball Commissioner Bud Selig last week said the 17-year TV-rights deal, which McCourt valued at about $3 billion, would harm the franchise in the long term. Baseball took over the Dodgers’ business operations about two months ago.

Negotiators Wrangle on Taxes [WSJ]
With time running short to reach a deal to avoid a government default, President Barack Obama met privately Monday with Senate leaders in hopes of resolving an impasse over whether to include tax increases in a deficit-reduction agreement. The White House argued that the deficit can’t be significantly cut without eliminating tax breaks for certain wealthy individuals and companies, while Republicans said doing so would cripple the economy.

Audit Comittees Dig Into Compensation [CFOJ]
A new rule requiring companies to disclose whether their compensation structures could lead to excessive risk-taking has so far failed to result in significant new disclosures. However, the rule has forced audit committee board members to work more closely with their compensation committee counterparts and may result in more members serving on both in the future.

Companies Are Erecting In-House Social Networks [NYT]
As social networks increasingly dominate communications in private lives, businesses of all sizes — from tiny start-ups to midsize companies like Nikon to behemoths like Dell — are adopting them for the workplace. Although it is difficult to quantify how many companies use internal social networks, a number of corporate software companies have sensed the opportunity and offer various systems, some free to existing customers, others that charge a fee per user.

Pelosi Says U.S. Debt-Ceiling Deal Must Reduce Tax Subsidies for Companies [Bloomberg]
Democratic President Barack Obama and Republican House Speaker John Boehner will need the support of Democrats to get an agreement through the House, Pelosi said yesterday in an interview on CNN’s “State of the Union.” Such an agreement would have to include both spending cuts and an end to tax breaks for some industries such as oil, she said. “You can’t cut your way out of the deficit,” California Democrat Pelosi said. “You have to have revenue on the table.”

What the CFOs Want [WSJ]
CFOs at big companies are no longer content to manage just finances or operations. They want, and say they need, a prime seat at the table when setting strategy. So said the roughly 60 big-company finance chiefs at The Wall Street Journal’s inaugural CFO Network annual meeting last week. Many of these CFOs already count strategic planning among their responsibilities, a shift from the past, and one that primes them to possibly take the chief executive spot some day.

Chipotle Will Raise its Prices Regionally [WSJ]
We need a Poncho No. 8 over here.

Did Green Mountain Coffee Roasters Violate Its Code of Ethics, too? [White Collar Fraud]
This is starting to get awkward.

Must the Amish e-File? [TaxProf]
The horror!

Senate’s Snowe offers bill to repeal tanning tax [The Hill]
A bill, sponsored by Sen. Olympia Snowe (R-Maine) and co-sponsored by Sens. John Barrasso (R-Wyo.), Roy Blunt (R-Mo.), John Boozman (R-Ark.), John Cornyn (R-Texas) and Pat Roberts (R-Kansas) was introduced on Thursday in the Senate, mirroring an effort in the House to eliminate the 10 percent tax on certain tanning services. Support for the House measure has grown since June 2 when Rep. Michael Grimm (N.Y.) introduced the bill. His legislation now has 29 Republican co-sponsors backing the effort.

Tax activists want U2’s Bono to ‘pay up’ [DMWT]
Reports of actual mud-slinging have not been confirmed.

‘Angry Birds’ Staying Power Tested With CEO Hatching Movie [Bloomberg]
And now, some important news.

China tells firms to favour govt-designated accounting firms [Reuters]
China has told companies to favour government-designated accounting firms as their auditors for sake of “fair and orderly competition” in the sector, according to a notice published by the Ministry of Finance on Friday. The notice came as a string of accounting problems and stock plunges has hit publicly traded Chinese firms in overseas markets and sparked deep concerns across auditing quality in China. According to Ministry of Finance notice, large and medium-sized companies should prefer accounting firms that are allowed to provide auditing for H-share listed companiesricans See Debt Threat, Reject Tax ‘Scare’ [Bloomberg]
Americans say that the $14.3 trillion U.S. debt threatens the economy and that entitlement programs may go broke even as they dismiss as “scare tactics” the arguments offered by Republicans and Democrats who are debating a solution. Their sentiments in a Bloomberg National Poll suggest that the public is open to the recommendations of the majority of President Barack Obama’s debt commission. Members of the group, which included current and former members of Congress and White House officials, called for revenue increases and spending cuts that would have shaved deficits by $3.8 trillion over the next decade.

Tax Dispute Stalls Debt Talks [WSJ]
House Majority Leader Eric Cantor (R., Va.) said he was backing out of the talks for now because the group had reached an impasse over the question of whether tax increases should be included in the deal. The only other Republican in the group, Sen. Jon Kyl (R., Ariz.), soon followed suit, agreeing that only the highest levels of leadership could break the logjam between Democrats’ demand that the budget deal include tax increases and Republicans’ adamant opposition to that demand.

Tax Break for Mortgage Debt Is Ready for the Wrecking Ball [Bloomberg]
Forty-nine percent of respondents in a Bloomberg National Poll said they were willing to abandon the mortgage tax break if it meant lower overall tax rates. Only 45 percent opposed the switch. That’s a sharp contrast with polling patterns of prior years, when the public showed 2-to-1 support for keeping the mortgage deduction. The Bloomberg poll of 1,000 adults conducted June 17-20 has a margin of error of plus or minus 3.1 percentage points.

Let’s Make a Deal, Amazon Tells Texas [NYT]
In the middle of a fight with Texas tax collectors over book sales in the state, Amazon offered Thursday to invest $300 million in five or six warehouse and distribution centers in the state, employing 6,000 people, if lawmakers would let the company operate for four-and-a-half years without collecting sales taxes.

The NBA Salary Cap Gives No-Tax Dallas and Miami an Unfair Advantage [TaxProf]
Relatively decent teams.

IRS Increases Mileage Rate to 55.5 Cents per Mile [AW]
Up from 51¢.

Factbox: Big Four audit firms on approach to risk in China [Reuters]
The string of accounting scandals in China is prompting the “Big Four” audit firms to be on alert, fearing a blow up at a Chinese company could cause big reputational risk. Reuters asked all four firms about their approach to working in China and whether the recent scandals have prompted them to review their procedures when taking on work for Chinese companies looking to list on exchanges.

PwC to Acquire PRTM [PwC]
“The PRTM team will provide our firm with significant capabilities in the areas of operational strategy, execution and business model innovation,” said Dana Mcilwain, PwC Vice Chairman and U.S. Advisory Leader. “We are especially pleased that the PRTM team of highly talented, globally-oriented professionals have chosen to continue their careers at PwC.”