Category: ANR

Koss suit against former auditor to proceed [MJS]
Koss Corp.’s lawsuit against the company’s former auditor, Grant Thornton, will move forward in Cook County, Ill., according to a ruling from a judge in Chicago this week. Koss accuses Grant Thornton of gross negligence for not uncovering the $34 million embezzlement by its former vice president of finance. Sujata “Sue” Sachdeva is serving an 11-year sentence in federal prison for the crime, which came to light in December 2009 when American Express notified Koss of the fraud.

New York’s Schumer Gives ‘Newfound Life’ to Tax Holiday Sought by Apple [Bloomberg]
The lobbying campaign by Apple Inc. (AAPL), Pfizer Inc. (PFE) and Duke Energy Corp. (DUK) to allow companies to bring overseas profits to the U.S. at a low tax rate gained new traction after Senator Charles Schumer of New York signaled that Democrats might back the idea. The Senate’s No. 3 Democrat said yesterday that his caucus is exploring the potential of using the short-term revenue a repatriation holiday would generate to fund an infrastructure bank. The focus on infrastructure, he said, would “guarantee” job creation and address a key line of Democratic opposition.

Women CFOs: Still at 9% [CFO]
As of June 1, there were 45 female finance chiefs in the Fortune 500. That’s just one more than in 2010 and 2009, for a percentage of 9%.

Challenges in Chasing Fraud [WSJ]
Some legal experts said the SEC’s struggles reflect the difficulty of going after specific individuals and companies when so many more made decisions that backfired into catastrophic losses during the financial crisis. Corporate executives argue that the crisis was caused by good-faith moves that went sour rather than by the desire to short-change investors. Some lawyers say that the agency’s enforcement lawyers haven’t done enough to prove that high-ranking executives bore the ultimate responsibility for the most controversial mortgage-bond deals.

CFOs Say Corporate Cash Levels Are Appropriate [CFOJ]
“People have cash because there is a strategy,” said Suresh Senapaty, CFO at Wipro. He added that CFOs know cash has one of the lowest returns on investment for shareholders. “There are good reasons why they have it — otherwise they’re not doing their job as CFOs,” he said during a group discussion at The Wall Street Journal’s annual CFO forum held in Washington, D.C. Tuesday.

Senators call on IRS to clear up rules for same-sex couples [MSNBC]
This week, eight Democratic U.S. senators sent a letter to IRS Commissioner Douglas Shulman, calling on the IRS to clear up confusion for same-sex couples who encounter problems trying to file accurate tax returns. […] In the letter, the senators noted that some state tax laws recognize same-sex marriages or domestic partnerships, even though the federal government does not. That’s creating confusion for couples who want to file accurate returns but are classified differently by state and federal tax regulators, they said. They asked the IRS to offer guidance.

The IRS’s Charity Purge [WSJ]
The Internal Revenue Service announced this month that 275,000 nonprofit groups—around 18% of the country’s tax-exempt organizations—have lost their federal exemptions because they failed to file Form 990s. The announcement was a long time in the making, but it’ll take even longer for the IRS to dig itself out of the administrative and policy mess that it represents.

Hong Kong’s Li Says Exchange Will Avoid Worst of China Accounting Scandals [Bloomberg]
The MSCI China Index of 147 stocks available to foreign investors is down 10 percent since reaching a five-month high on April 21. That compares with a 28 percent plunge by Chinese companies that went public through U.S. reverse mergers, in which a closely held company buys a publicly traded shell and retains the U.S. listing. While bearish bets on the MSCI China have climbed to a record, Li says companies listed in Hong Kong are subject to too much scrutiny to deceive the market for long.

FedEx Joins Ford in House Tax Chief’s Portfolio, Panel Witness Chairs [Bloomberg]
Since becoming chairman of the House Ways and Means Committee in January, Representative Dave Camp has invited executives from 13 publicly traded companies to testify on tax and trade policy. The chairman owned shares in six of them. Camp, a 57-year-old Michigan Republican, owned stocks and bonds issued by dozens of individual companies, according to his annual personal financial disclosure form, which was filed June 15 and covers the year ending Dec. 31, 2010.

Rep. Camp Wary of Repatriation Tax Holiday [CFOJ]
“We did repatriation a few years ago, and here we are with the same problem,” Camp said. He made similar complaints about other tax proposals, including an extension of the payroll tax holiday which is currently set to expire.

Geithner Says Corporate Tax Reform to Follow Deficit Talks [CFOJ]
“Our hope and our expectation is that after we get this deficit reduction done, we can move to corporate tax reform,” Secretary Geithner told the CFO Journal Conference in Washington D.C. Tuesday morning. He added that corporate tax reform would not be part of the deficit reduction negotiations, because dealing with the budget “requires all the oxygen there is in this town.”

Why Won’t the SEC Investigate Motorola … Again? [Accounting Onion]
Tom Selling digs in on the KPMG inspection report, “Why has the SEC apparently not followed up on the PCAOB’s findings? For one thing, the PCAOB inspection report provides highly credible evidence of very large accounting misstatement made by a high-profile registrant with the apparent complicity of its Big Four auditor. It doesn’t necessarily mean that the PCAOB is correct in its allegations as a matter of course, but someone should called to account by the SEC: if not Motorola and/or KPMG, then the PCAOB for a faulty inspection report.”

Say Anything: The Big 4 Defense Of Overtime Exemptions [Re:The Auditors]
Meanwhile Francine McKenna digs in more on Campbell v. PwC.

Fired Marc Jacobs Employee Demands Robert Duffy Personally Address Sexual-Misconduct Accusations [NYM]
Yes, the pole dancing. And the porn.

Former federal accountant sentenced for embezzling $1.4 million [LAT]
Kathy Stamps, 39, of Rancho Cucamonga, an accountant at the Angeles National Forest office in Arcadia, fabricated internal records to receive tax refunds, authorities say. From 2002 to 2004, Stamps received six checks from the U.S. Treasury totaling $1.4 million. She spent nearly $1.1 million on personal items ranging from cars and mortgage payments to jewelry and plastic surgery, authorities said.

Unhappy Workers Stay In Current Jobs, for Now [WSJ]
Only 1.4% of employees voluntarily left their jobs in April, the most recent month for which data are available, down from seasonally adjusted monthly rates of more than 2% before the recession started, according to the U.S. Department of Labor. Overall, voluntary turnover is still nearly at its lowest point since the Labor Department began to track it in 2000.

Merck Can’t Recoup $473 Million in U.S. Taxes, Court Rules [Bloomlough argued that funds it received as the result of two interest-rate swap transactions weren’t taxable as proceeds of loans from foreign subsidiaries and that the company was being treated unfairly by the IRS, which hadn’t demanded the same taxes from other companies that were in similar situations. U.S. District Judge Katharine Hayden ruled after a five- week non-jury trial in 2008 that Schering-Plough failed to prove it deserved a refund, and in April 2010 she denied the company’s request for a new trial. The U.S. Court of Appeals in Philadelphia upheld Hayden’s ruling today, saying the transactions were loans and that the IRS may treat taxpayers differently.

A Reboot for Internal Controls [CFO Journal]
A group of accountants and corporate executives met in New York on Monday to hash out some of the details of a proposed update to the nearly twenty-year-old internal control framework created by the Committee of Sponsoring Organizations (COSO). The reboot is expected to add in controls for information technology commonly used in business operations today, such as email and automated work processes, as well as address more theoretical issues, like how risk management and internal controls should work together. The update will also incorporate newer ideas about governance to better define the current role and responsibilities of audit and compensation committees.

Thomson Reuters Acquires CorpSmart From Deloitte [MW]
CorpSmart provides multinational corporations (MNCs) in South Africa with intelligent corporate tax compliance software. Using this web-based solution, MNCs are able to prepare monthly, quarterly and annual income tax computations as well as file South African IT14 tax returns.

Mandatory Auditor Rotation — Further Thoughts on PCAOB Chairman Doty’s Bad Idea [Re:Balance]
Jim Peterson continues to pick apart rotation.

Insurers fear volatility of IFRS ‘black hole’ [Accountancy Age]
Insurers have met to discuss fears surrounding the possible impact of phase II of International Financial Reporting Standards, saying the move “would introduce very significant but really meaningless volatility.”

Fraud at senior management level is highlighted in KPMG report [Guardian]
When it comes to “white collar” crime, finance directors, chief executives and other senior management are far more likely to be involved in fraud – such as the mis-statement of financial results, theft and expense abuse – than junior staff. The economic downturn has also made it a lot easier to commit fraud, according to research by KPMG, which warned that scams go undetected for longer.

Japanese manufacturers ‘need more time’ for IFRS switch [Accountancy Age]
The Japanese Financial Services Agency and Financial Accounting Standards Federation initially proposed a three-year switch over period, after which use of IFRS would become mandatory for listed companies. They argued holding off on IFRS adoption would make Japanese companies look guilty of failure to disclose adequate information at a time when many other countries were switching. However, last month 22 companies and organisations – including heavyweights Mitsubishi, Nippon and Toyota – wrote to the head of the FSA asking for more time, and describing the change over as “a significant burden.”

Lawyers and Accountants Once Put Integrity First [NYT]
It will take decades to fully untangle the causes of the 2008 financial crisis, but as our economy fitfully heals, it would be prudent to ask whether lawyers and accountants offer the same protection against corporate misconduct that they once did.

Dems are lukewarm on Obama’s push for a payroll tax holiday [The Hill]
“The extended tax credits will help stimulate the economy, and giving tax credits to businesses will in fact help with the unemmes Clyburn of South Carolina, the House’s No. 3 Democrat, said on MSNBC on Wednesday. But other Democrats and liberals say the current payroll tax break for employees, which passed Congress in December, has not given the economy much of a spark. They also expressed concerned about what augmenting the holiday would do to both the revenue stream and Social Security, which is funded by the payroll tax.

Companies Push for Tax Break on Foreign Cash [NYT]
“For every billion dollars that we invest, that creates 15,000 to 20,000 jobs either directly or indirectly,” Jim Rogers, the chief of Duke Energy, said at the conference. Duke has $1.3 billion in profits overseas. But that’s not how it worked last time. Congress and the Bush administration offered companies a similar tax incentive, in 2005, in hopes of spurring domestic hiring and investment, and 800 took advantage. Though the tax break lured them into bringing $312 billion back to the United States, 92 percent of that money was returned to shareholders in the form of dividends and stock buybacks, according to a study by the nonpartisan National Bureau of Economic Research. This money comes from overseas operations and in some cases accounting maneuvers that shift domestic profits to low-tax countries. The study concluded that the program “did not increase domestic investment, employment or research and development.”

Happy Father’s Day to 1.8 million single dads & their head of household tax status [DMWT]
Ties not mandatory.

D.A.: Man stole $110,000 tax refund deposited in error [OCR]
A Laguna Beach man who received someone else’s $110,000 federal tax refund in error spent the money on foreclosure debt and student and car loans, prosecutors said.

Chinese Firms Need to Open Up Books [WSJ]
The Securities and Exchange Commission is investigating accounting and disclosure issues at a number of U.S.-listed Chinese companies that acquired backdoor listings through so-called reverse mergers, and even top-name Chinese companies are inviting new scrutiny. Renren Inc., a social-networking site that launched its shares to much fanfare in early May, now trades at about half its IPO price. Renren itself stirred controversy when it lowered the growth rate of its user base without explanation in its IPO prospectus and the head of its audit committee resigned just before the listing. Shares of Toronto-listed Sino-Forest Corp. have plunged 80% since late May after a short seller alleged problems in the forestry company’s accounting, which the company denies. Hong Kong-listed Chinese companies, too, are drawing new scrutiny over their accounting. Not all Chinese companies are shady. But investors are right to ask: How do you know which aren’t?

An Actor, Inventor, Accountant, and Now, a 9/11 Victim [NYT]
Mr. Borg died last Dec. 15 of complications of pulmonary sarcoidosis, an inflammatory disease of the lungs. The New York City medical examiner ruled that he had died from inhaling toxic substances in the dust cloud thrown up by the collapsing twin towers, and on Friday, Mr. Borg, who was 63, became the 2,753rd official victim of the Sept. 11 attack on the trade center.

China Regulator ‘Aware’ of Concerns on Chinese Firms’ Accounting [Bloomberg]
“We have been in touch with other foreign regulators regularly as usual,” Yao Feng, deputy director general of the CSRC’s department of accounting, said today while attending a conference held by the Hong Kong Institute of Certified Public Accountants. “We are aware of the concerns.”

PricewaterhouseCoopers Will Go To Trial In California Overtime Case [Forbes]
Francine’s take on this week’s decision in the 9th Circuit.

Ramseyer & Rasmusen: IRS Had No Authority to Waive NOL Rules for GM [TaxProf]
GM did not make many cars anyone wanted to buy, but it did have $45 billion in NOLs. Unfortunately for the firm, if the Treasury now sold the stock it acquired in bankruptcy it would trigger those § 382 NOL limitations. Suppose the newly reorganized GM did start making cars that consumers wanted. It would be able to use only a modest portion of its old NOL’s — if any.

House Panel Endorses Budget Cuts at IRS, Consumer Bureau [Bloomberg]
A U.S. House Appropriations subcommittee approved a spending bill that would cut funding for the Internal Revenue Service, limit the budget of the Consumer Financial Protection Bureau and deny a spending increase sought by the Securities and Exchange Commission. The $19.9 billion bill was approved today in Washington on a voice vote by the subcommittee on financial services and general government, and heads to the full committee. It includes funding for the Treasury Department, the White House, the District of Columbia, the federal courts, the Consumer Product Safety Commission and the General Services Administration.

No Parties After IFRS Adoption in Canada [CFO Journal]
If U.S. regulators want to get a sense of what the transition to International Financial Reporting Standards might be like, they may only have to look to their neighbors to the north where companies were required to switch from Canadian GAAP this year. But they should be prepared for some rather negative reviews.

IFRS doubters stung by government audit report verdict [Accountancy Age]
Haters gonna hate. Or something.

Europe Faces ‘Lehman Moment’ as Greece Unravels [Bloomberg]
The European Union’s failure to contain the Greek debt crisis is sending fresh shockwaves through currencies, money markets, equities and derivatives. The euro lost more than 2 percent against the dollar in the past two days and the cost of protecting corporate bonds soared to the highest level since January, with credit-default swaps anticipating about a 78 percent chance that Greece won’t pay its debts. Equities declined around the world, while a measure of fear in fixed-income markets jumped the most since November.

What Should Be Int? Would Users Know When They Saw It? [Re:Balance]
Red flags aren’t very useful if everyone is color blind.

Audit Firm Term Limits: Nothing Else Left to Try [Accounting Onion]
Speaking of things that aren’t proven useful.

Still Writing, Regulators Delay Rules [NYT]
Regulators overseeing financial reform are delaying many of the planned changes in the $600 trillion market for complex securities known as derivatives because they are running drastically behind schedule in writing their new rules. The Securities and Exchange Commission said on Wednesday that market participants would not have to comply with many aspects of derivatives reform scheduled to take effect in mid-July. It declined to specify how long the delay would be in the equity derivatives it oversees.

Rangel Sold Condo, Report Shows [WSJ]
Mr. Rangel, the New York Democrat, sold his condo at the Punta Cana beach villa for somewhere between $250,000 and $500,000 last year. He was censured by the House last year for, among other things, failing to pay taxes on rental income from the resort property over a 17-year period. Mr. Rangel was required to repay those taxes and forced to relinquish his chairmanship of the Ways and Means Committee.

Golfer Goosen’s Tax Court Case Tests Principle That Image Is Everything [Bloomberg]
The international golfers at this week’s U.S. Open in Bethesda, Maryland, will be watching for two-time champion Retief Goosen on the leaderboard. Their lawyers will be studying Goosen’s U.S. Tax Court decision. The South African native challenged the Internal Revenue Service’s analysis of the endorsement income he earned from such companies as Electronic Arts Inc. (ERTS), Adidas AG (ADS) and Rolex Group. The case will affect golfers, tennis players and pop stars from around the world who tour in the U.S., license their images for advertising and hawk perfumes, cars, and jewelry.

‘Convergence’ Hits a Bump [WSJ]
The Financial Accounting Standards Board and International Accounting Standards Board said they will issue a revised proposal to overhaul the rules on revenue recognition, updating a proposal they first made last year. The revised proposal is planned for the third quarter, and companies, investors and other observers will have 120 days to comment on it after it is issued.

Adelphia’s Rigases, Jailed for Fraud, Lose Bid to Block Criminal Tax Case [Bloomberg]
Adelphia Communications Corp. founder John Rigas and his son Timothy, who are in prison for securities fraud, failed to persuade a U.S. judge to dismiss a pending criminal tax case against them. John Rigas, 86, is serving 12 years and Timothy Rigas, 55, 17 years for looting the cable company and lying about its finances. After a federal jury in New York convicted them in 2004, U.S. prosecutors in Pennsylvania charged the two with conspiring to dodge taxes on $1.9 billion they stole from Adelphia, a cable-television company that collapsed in 2002.

Accountant accused of embezzling $392,000 [ArgusLeader]
A Sioux Falls man who recently served as a watchdog for city finances is accused of embezzling almost $400,000 while working as an executive at SDN Communications.

Florham Park accountant indicted in trying to meet two underage girls in Atlantic County [NJSL]
A 56-year-old Florham Park accountant was indicted yesterday in connection with trying to meet with two underage girls earlier this year in an Atlantic County hotel, officials said. Stephen Bubniak, was indicted on 23 counts, including attempted luring, attempted sexual assault and attempted criminal sexual contact, said Atlantic County Prosecutor Ted Housel yesterday. Bubniak had arranged to meet the two girls, ages 13 and 14, on Feb. 3 and 4, after a series of online chats, Housel said.

Bob Lutz: I’m Not an Anti-Finance Guy [CFO Journal]
The former General Motors vice chairman has got a knack for numbers, and claims he even put a brake on unnecessary costs occasionally. But he’s got a beef with executives who focus solely on budgets and spreadsheets, instead of focusing on the product and on consumers. And he thinks that’s the biggest cause of Detroit’s downfall – and that Detroit is now back on the right track.

Pandora Prices Its I.P.O. at $16 a Share [DealBook]
Pandora Media on Tuesday priced its initial public offering at $16 a share, above its recently raised target range. The company, whose shares will start trading on the New York Stock Exchange on Wednesday under the ticker “P,” has raised $234.9 million, valuing the business at $2.6 billion.

Firms Squeezed on Tax Bills [WSJ]
During the financial crisis, hosts of small companies fell behind on their taxes for the first time, accountants and lawyers say. Their timing couldn’t have been worse.

Detroit bomb squad detonates suspicious package left outside IRS building [NYP]
Bomb squad officers in Detroit blew up a suspicious package early Wednesday outside a building that houses the Internal Revenue Service, the FBI and other federal offices. A black backpack that was found on the steps of the building around 4:30 am was blown up by bomb squad agents outside the building at around 6:45am after an X-ray unit showed it contained a power source.

What Happened to Barry Minkow? [Grumpy Old Accountants]
Zebra. Stripes. Or is it a tiger?

Happy Flag Day! 14 States Exempt Flags from Their Sales Taxes [Tax Foundation]
FYI for next year.

Crooked accountant rips off £450,000 from Coatbridge firm in just four months [Daily Record]
Sue Sachdeva is not impressed.

S.E.C. Seeks to Halt Sales of Stocks of 2 Chinese Companies [NYT]
Investigators say that China Intelligent Lighting and Electronics and China Century Dragon Media failed to disclose that their independent auditors had quit after questioning the accuracy of financial statements, according to separate orders released Monday. The S.E.C. is seeking a so-called stop order to keep the firms and shareholders from selling stock under the faulty statements, the agency said in a statement.

High Court Denies Suit Against E&Y Over Time-AOL Deal [Law360]
The U.S. Supreme Court on Monday declined to hear an appeal brought by an AOL Inc. investor alleging that Ernst & Young LLP approved tainted financial statements related to Time Warner Inc.’s merger with AOL. In rejecting the petition for certiorari, the high court dashed AOL investor Dominic Amorosa and co-petitioner attorney Christopher Gray’s claims that the Second Circuit failed to properly apply the Securities Litigation Uniform Standards Act of 1998 when it dismissed the fraud suit in February. The decision brings an end to 2003 suit claiming that Ernst & Young, the independent auditor for AOL, Time Warner and the merged company, engaged in fraud and abetted the companies’ fraud when it issued audited financial statements approving the companies’ allegedly faulty accounting.

The Importance of Being Audited [NYT]
When a company’s auditors resign and disclose that prior financial statements “should no longer be relied upon,” investors should head for the hills because there is a very good chance fraud has been discovered. Unfortunately if that company is a Chinese operation that obtained an American listing through a so-called reverse merger, then it is probably too late to salvage much if anything from the investment.

Candidate Johnson: I’d abolish the IRS [DMR]
“I think the biggest issue facing this country right now is that we are bankrupt and on the verge of a financial collapse,” Johnson told about 75 people at an Iowa Tea Party event at the Elks Lodge here. Johnson, who announced in April that he would seek the Republican nomination, predicted the nation’s financial troubles will be manifested in a bond market collapse. He vowed to fight for a balanced federal budget to avert such a calamity, adding he would replace federal personal and corporate income taxes with the so-called Fair Tax, in essence a national sales tax.

Iowa Senator Chuck Grassley “Clings Tightly” to His State’s Ethanol Subsidies [JDA]
As Adrienne might say, “WTFC?”

Is Green Mountain Coffee Roasters Fudging Its Reserve Numbers? [WCF]
Maybe! Or it’s simply that math isn’t someone’s strong suit.

LarsonAllen buys Seattle accounting firm [MBJ]
Lockitch Clements & Rice PS joins Club LA.

Richest Americans Get $1.4 Million Tax Cut in Pawlenty Plan [Bloomberg]
The top 0.1 percent of U.S. taxpayers would save an average of $1.4 million in taxes under the economic plan of Republican presidential candidate Tim Pawlenty, according to an independent analysis. Pawlenty’s $11.6 trillion tax-cut plan, which reduces rates on income, capital gains, interest, estates and dividends, is almost three times larger than the proposals endorsed by House Republicans.

Chinese investors shrug off U.S. accounting scandal fallout [ two dozen Chinese retail investors gathered at the dimly lit public hall of a brokerage firm in Shanghai, the accounting scandals involving U.S.-listed Chinese companies are far from the hot topic of the day’s trading as they swap strategies over tea and cigarettes. Many of the investors, mostly retirees, have not even heard about the saga over fake numbers among some Chinese firms that has shaken U.S. investors and stunned regulators there.

Stray Cat Strut: Woman Beats IRS [WSJ]
When Jan Van Dusen appeared before a U.S. Tax Court judge and a team of Internal Revenue Service lawyers more than a year ago, there was more at stake than her tax deduction for taking care of 70 stray cats. Hanging in the balance were millions of dollars in annual tax deductions by animal-rescue volunteers across the nation—and some needed clarity on the treatment of volunteers’ unreimbursed expenses for 1.55 million other IRS-recognized charities. Early this month, Ms. Van Dusen learned she had won her case. “I was stunned,” she said. “It feels great to have established this precedent.”

Fuzzy Accounting Enriches Groupon [NYT]
Groupon, the Internet coupon company, had an operating loss of $420 million last year. But it thinks investors in its initial public offering should instead look at “adjusted consolidated segment operating income,” or adjusted C.S.O.I. It is easy to see why Groupon wants prospective shareholders to view its accounts this way. Strip out marketing expenses, acquisition-related costs, stock compensation, interest expense and payments to the tax man and, presto, the start-up earned $60.6 million.

VF to Buy Timberland for $2 Billion in Cash [WSJ]
Branded-apparel company VF Corp. agreed to buy Timberland Co. for about $2 billion, taking advantage of the footwear company’s beaten-down stock price to boost its outdoor and action-sports businesses. VF’s offer of $43 a share represents a premium of 43% to Friday’s close. Shares of Timberland, which specializes in boots and outdoor apparel, traded above $45 as recently as late April, but a first-quarter report that fell well short of estimates sent the stock tumbling. Its earnings in the period fell 30% as it spent more on planned initiatives and saw higher product costs.

$90 million accounting mistake costs county official his job [WBEZ]
The former worker, Faisal Abbasi, 36, of Prospect Heights, accidentally made double entries for county cigarette and sales tax revenue from 2009, said Cook County Chief Financial Officer Tariq Malhance. “It was really a human error that one person booked it, and then, not realizing that it had been booked before … he [duplicated it], and booked again,” Malhance said. But Abbasi, who was laid off from his county job when the Preckwinkle administration took office in February, said he is simply a scapegoat for the mistake. The idea that he alone could have caused such an error is “a bunch of hogwash and smoke and mirrors,” Abbasi said. “You can’t just put in a $20 million or $30 million dollar entry without the external auditors looking at it.,” he told WBEZ on Friday.

Vote to end ethanol subsidies revives Coburn-Norquist tax revenue battle [The Hill]
Coburn successfully pushed for a Tuesday vote on a measure to cut subsidies for ethanol, a proposal that the Oklahoma Republican and Norquist, the anti-tax crusader, feuded over earlier this year. Both Coburn and Norquist have said they opposed a tax credit that gives refiners and gasoline blenders 45 cents for every gallon of ethanol bought and combined with gasoline – a policy the Government Accountability Office says cost about $5.4 billion in 2010.

Troubled Audit Opinions [NYT]
On one side is an assessment of a company with a clean audit opinion from the Toronto office of Ernst & Young, and with bonds rated just below investment grade by Standard & Poor’s and Moody’s. It has raised billions in capital markets. On the other is an investment research firm using the name Muddy Waters Research. It says the company, the Sino-Forest Corporation, is a fraud, and that its shares are worthless. As this is written, there is no definitive answer as to who is right. But the initial reaction of the markets seemed to be that they had more trust in the short-seller — a company whose Web site gives no the auditor’s opinion.

Auditors face suits over Chinese blowups in U.S. [Reuters]
Investors who have suffered a drubbing from accounting scandals at U.S.-listed Chinese companies are starting to sue the auditors who blessed their financial statements, but it will be tough for them to win in American courts. Shareholders already have sued a string of China-based, U.S.-listed companies for fraud, saying they lost money when stocks tanked after financial scandals emerged. They contend companies invented sham businesses, inflated revenue or gave vastly different information to U.S. and Chinese regulators.

$100 Million Claim Against Deloitte & Touche [CNS]
SBP Capital, formerly known as Ameriquest Capital, claims Deloitte & Touche cost it $100 million by giving it bum advice on “tax issues related to Ameriquest’s securitizations” of mortgage lending and “related activities.”

Is Groupon’s Business Model Sustainable? [DealBook]
In its less than three years of existence, Groupon has established itself as the king of social buying sites. As feverish speculation mounted about its impending initial public offering, analysts and investors could only await further details of how much money it was minting. But with its I.P.O. filing now public, Groupon faces significant questions about the sustainability of its business model. A look at the company’s overall financials shows a steep decline in how much money it is wringing from its fast-growing subscriber base.

Bill Aims at Tax-Strategy Patent [WSJ]
U.S. patent No. 7,698,194 isn’t an ingenious new machine or a break-through medical treatment. It is a method of analyzing taxes related to college-savings plans. It also is one of 144 patented tax strategies and 162 pending applications, as of late May, that tax preparers say have burdened their job and made it harder for citizens to pay their taxes. Consumer and tax groups have pushed since 2007 to get such patents banned. When it returns from recess this week, the U.S. House is expected to vote on an overhaul of the patent system that would effectively prohibit patenting tax strategies.

Leona Helmsley’s rich dog is dead [DMWT]
No more Trouble.

Retief Goosen Birdies at FedEx St. Jude Classic, Bogeys in Tax Court [TaxProf]
Swapping a caddy for a CPA could be an option.

Payroll-Tax Break Said to Be Discussed by Obama Aides Amid Slowing Economy [Bloomberg]
President Barack Obama’s advisers have discussed seeking a temporary cut in the payroll taxes businesses pay on wages as they debate ways to spur hiring amid signs that the recovery is slowing, according to people familiar with the matter. The idea, which is in preliminary stages of discussion, is among several being talked about at the White House as the economy holds center stage for the administration and Congress, the people said on condition of anonymity to discuss internal deliberations.

What Divorce Means For Your Taxes [SmartMoney]
Divorce has no season.

Corporate Audit Fees Barely Budged Last Year [CFO Journal]
Public companies paid $3.3 million on average for their audit in 2010, up just 2% from 2009, according to an annual survey from Financial Executives Research Foundation on Thursday. Private companies paid their auditors an average of $222,300, which was in line with 2009 figures. Public company audit fees had actually fallen about 2.4% in 2009, according to FERF’s survey last year, so this puts them back near their 2008 levels.

I.R.S. Ends Exemptions For 275,000 Nonprofits [NYT]
The I.R.S. announced on Wednesday that it had revoked the tax exemptions of 275,000 nonprofit organizations after they did not meet legal requirements to file annual tax forms. The action shrinks the nation’s growing nonprofit sector by roughly 17 percent, to about 1.3 million charities, trade associations, membership groups and labor unions.

Dallas’s Secret Weapon: High Fives [WSJ]
Yeah, that’s what it is.

California Voters Balk at Tax Plan [WSJ]
A deadline next week is raising the pressure on talks between Gov. Jerry Brown and lawmakers over his plan to close the state’s $9.6 billion budget gap, but the proposal isn’t gaining traction with voters. The Democratic governor pushed lawmakers for months to approve his plan to ask voters to extend some tax increases in a June special election, in line with his campaign promise to seek voter approval of any tax measure. But they didn’t strike a deal in time, so he now wants them to approve the taxes and later ask voters to ratify them.

That Look, That Weiner-Spitzer-Clinton Look [City Room/NYT]
If caught in a sex scandal, this is the face you’ll make.

Audit: IRS Erroneously Gave Out $151 Million In Auto Tax Breaks [Dow Jones]
The IRS missed 4,257 individuals who claimed more than $151 million in undeserved tax deductions as part of the 2009 stimulus package program designed to boost automobile sales, according to an audit released Wednesday from the Treasury inspector general for tax administration. In 473 cases, the tax agency erroneously allowed 439 prisoners who were in jail the entire year, 16 dead people and 18 children under the age of 15 to claim just over $1 million in deductions.

GM’s Akerson pushing for higher gas taxes [Detroit News]
General Motors Co. CEO Dan Akerson wants the federal gas tax boosted as much as $1 a gallon to nudge consumers toward more fuel-efficient cars, and he’s confident the government will soon shed its remaining 26 percent stake in the once-bankrupt automaker. “I actually think the government will be out this year — within the next 12 months, hopefully within the next six months,” Akerson said in a two-hour interview with The Detroit News last week. He is grateful for the government’s rescue of GM — “I have nothing but good things to say about them” — but Akerson said the time for that relationship to end is coming because it’s wearing on GM.

A Twitter Group Warned About Weiner [NYT]
Calling themselves the #bornfreecrew on Twitter, members of the group closely monitored those whom Mr. Weiner was following, taking it upon themselves to contact young women they believed to be “schoolgirls,” and urging them publicly to stay away from him, according to an analysis of posts on Twitter’s public stream.

IMF urges Japan to triple sales tax to steady finances [Reuters]
The acting head of the IMF urged Japan to reduce its massive debt load to boost public confidence in the sustainability of the economy, which the global lender said could be achieved by tripling the 5 percent sales tax. Japan’s economy should bounce back from a slump after the March earthquake and tsunami, the International Monetary Fund said on Wednesday, while urging lawmakers to adopt another emergency budget and start raising the sales tax from next year as the center piece of long-run fiscal consolidation.

Facebook vs LinkedIn vs Twitter vs Blogging [AW]
Place your bets.

Hatch, liberal group respond to Pawlenty tax plan [The Hill]
Oddly, they have different opinions.

Rx for a Double-dip Recession: Cut Government Spending by 15 Percent [TaxVox]
And call me in the next decade.