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What Happens When Congress Says, “We’ve Got Time. We’ll Get to It”

“Ever since the tax cuts were enacted in 2001 and 2003, policy makers have known the law would expire at the end of 2010. That ‘drop dead’ date offered an auspicious way to galvanize a systematic effort to reform a tax system that is badly in need of repair. Instead, policy makers pretty much ignored the issue until just before the 2010 Congressional recess, when politically tinged efforts to extend some or all of the tax cuts finally began — a ‘debate’ that was too little, too narrow, and too late.”

~ William G. Gale, Miller Chair at the Brookings Institution and co-director of the Urban-Brookings Tax Policy Center

Angelo Mozilo Wishes He Had John Elway’s Problems

Neither man is having a very good week but Moz got especially bad news today that might cause him to cut back on luxury items including 86ing the private jets with tanning beds and the two-tone shirt collection:

The Securities and Exchange Commission today announced that former Countrywide Financial CEO Angelo Mozilo will pay a record $22.5 million penalty to settle SEC charges that he and two other former Countrywide executives misled investors as the subprime mortgage crisis emerged. The settlement also permanently bars Mozilo from ever again serving as an officer or director of a publicly traded company.

Mozilo’s financial penalty is the largest ever paid by a public company’s senior executive in an SEC settlement. Mozilo also agreed to $45 million in disgorgement of ill-gotten gains to settle the SEC’s disclosure violation and insider trading charges against him, for a total financial settlement of $67.5 million that will be returned to harmed investors.

Former Countrywide CEO Angelo Mozilo to Pay SEC’s Largest-Ever Financial Penalty Against a Public Company’s Senior Executive [SEC]

More Stuff on the Young Buck Auction Block: Titans Fridge, Louis Vuitton Gun Holster, Ms. Pac Man

Yesterday we listed out some of the fine items up for bid at the IRS’s Young Buck auction. The auction is slated to go down on October 28th at 10 am Tennessee time.

The complete inventory (after the jump) runs four pagesve more interesting items for your consideration:

• Titans Refrigerated soda machine – Chris Johnson finally turned it on last week, didn’t he?

• Tattoo Kit – whenever the moment strikes you.

• Louis Vuitton gun holster – Pictured.


• Craps gaming table – Because reenacting the scene from A Bronx Tale is just embarassing.

• Ms. Pac Man video game – History lesson for the kids

If you’re looking to bid and aren’t in the Antioch, TN area here’s the mail-in form but no plastic, you’ve got to come with cash, certified or cashier’s check, etc. Good luck and good bidding.

Young Buck Inventory

And just in case you need some visuals, a few items from the Treasury’s website follow.


Keeps perfect time!


Who’s got a birthday on June 15th?


For those looking to spruce things up around the house.

Accountant Mugshot of the Day

An accountant for a Jersey City church was arrested today on charges he swindled the house of worship out of more than $40,000 by pocketing tax payments and spending some of the money in casinos and restaurants, officials said.

“A bond of trust has allegedly been broken with these parishioners,” said Hudson County Prosecutor Edward DeFazio of the charges against Hector L. Sanchez, 59, of Jersey City.

The accountant for the Fountain of Salvation Christian Church on Communipaw Avenue was arrested in South Orange this morning and charged with theft by failure to make required disposition, DeFazio said.

Wouldn’t think it to look at the guy.

Jersey City man accused of stealing $40K from church funds [NJ.com]

Big 4 Manager Would Like Staff to Get Some Perspective Re: Raises

Now that compensation season has passed for the major firms and most of the belly aching has died down, we’ll present some thoughts from a friend of GC and a Big 4 senior manager who shared the following with us earlier in the summer.

Hey Caleb,

A few of us were talking today at lunch about compensation and how we like reading how much everyone bitches about what % raise they got and what they feel they should have been entitled too. An A1 thinks they deserve a $10,000 raise, and that would make them happy, c’mon give us a break?

It is easy to understand this is a prime area to feel you have been cheated in, however, we thought it might be interesting for some net dollar coeffect, for those complainers who feel they were cheated with their raise %.


Interesting idea, we thought. Our muse suggested the following assumptions: 1) 40% tax rate – federal and state combined 2) 24 annual paychecks.

Our friend/source continues:

Would be interesting to see and shed a different light on a cash pay basis what the real difference is in pay for those who think they got cheated from a 8% raise and only got 6% or something, does the $35 per paycheck really require a personal vendetta or hours of frustrated Facebook status updates? Probably not.

My guess is that on an after-tax, per paycheck basis, some of these raises are equivalent to cutting out the morning Starbucks run, or latest iTunes download.

So we decided to dust off the Excel skills and crunch a few numbers to see if our Senior Manager friend was onto something.

We took a humdrum salary of $70k and applied the 8%, 6% comparison and tabled it:

Salary $70,000 $70,000
% Raise 8% 6%
$ Raise (Annual) $5,600 $4,200
Taxes withheld 40% 40%
Net Raise $3,360 $2,520
Bi-monthly # of paychecks 24 24
Net $/paycheck $140 $105

BFD you say? You got a 6% raise while some clown who couldn’t audit their way out of a paper bag got 14%? Fine, we’ll take a look at that too:

Salary $70,000 $70,000
% Raise 14% 6%
$ Raise (Annual) $9,800 $4,200
Taxes withheld 40% 40%
Net Raise $5,880 $2,520
Bi-monthly # of paychecks 24 24
Net $/paycheck $245 $105

So let’s say you’re the average shmo with the 6% raise and your friend/sworn enemy is getting the 14%. Are you really spitfire pissed that you’re missing out on $280 a month? We’re not talking life-changing sums here. If you’re consistently average over your career, maybe this will add up but hopefully your better sense will grab ahold and you’ll either A) step up your game B) move on with your life C) eliminate the competition (not condoning violence here, just pointing out that it’s a variable in the equation and maybe that it’s an option).

Rebuttal? Agree? Let it rip.

Deadline Watch ’10: Happy October 15th!

Along with AG’s friendly reminder about the drop-dead deadline for nonprofits today, we’d be remiss if we didn’t call attention to the significance of October 15th deadline.

Maybe you finished things up earlier in the week and today is simply a formality but for many, today is a frantic mishmash of signatures, phone slamming, desperate, last minute emails and – for the holdouts on electronic filing – trips to the post office.


Sure you’re not getting the attention bestowed on April 15th or Chilean miners but – hey! – we remembered you and that should count for something.

So whether you’re finishing up a 1040, a benefit plan’s Form 5500 or converting some poor sap’s IRA, finish up ASAP and go blow off some steam. Another year down.

Earlier:
Deadline Watch ‘10: Happy September 15th!
See also:
Don’t miss these Oct. 15 tax deadlines! [DMWT]
Extended 1040s and Individual NOL Carryback Elections Are Due Today! [Tax Update Blog]

Dear Nonprofits, Today Is Really Your Final 990 Deadline (No Seriously, Final)

Just in case you have been hiding under a rock for most of 2010, the big deal for nonprofits has been this whole 990 requirement and, more specifically, the fact that many still haven’t filed information returns despite every trick in the book by our friends at the IRS to get them to comply.

First they asked nicely. Then they sent out reminders. And then they went so far as to give procrastinating charities an extension on the May 15th deadline so they could get their butts in gear and start filing away. Apparently this wasn’t enough for some offenders so the Service stepped it up a notch by calling everyone out in the hopes that being publicly humiliated might do the trick. We can only hope.


We found it especially interesting to see the Cal State Sacramento Accounting Society on the list of California 990 slackers but unfortunately didn’t have the time nor energy to comb through all 1,162 pages to see who else we know on the list. 1,162! In California alone!

We did manage to skim it, finding Oakland’s “Get Legit” and “Get It Together Inc” charities hilariously ironic considering the Service is just trying to get these lazy procrastinators to get it together. Perhaps those guys need to focus efforts on their own affairs and stay out of the community until they can figure this simple little task out. Get it together!

Listen people, this is serious. Sure the IRS said it was serious months ago but we’re serious it’s serious, one need look no further than the IRS document calling these guys out to know just how serious. “Exempt Organizations At-Risk of Revocation” makes it pretty clear at this point. Now we’re not saying today’s deadline is absolutely 100% but we’re pretty sure the Service is done playing around while nonprofits figure this out.

Want another good laugh? The American Tax Reform Committee, American Tax Reform Foundation and the American Taxpayers Alliance (all DC-based) must have been so busy trying to hook us up on some tax reform that they forgot to do some important interacting with their favorite agency. Whoopsie.

Even funnier, apparently the DC Internal Revenue Agents Association and Internal Revenue Service Employees Beneficial Association must have missed out on the memo as they are on the 990 slacker list too. Shock that.

P.S. – Internal Revenue Service Bowling League of Dallas, you guys are on the list too. Put down the ball and get on it instead, you of all people should have been the first ones with your 990s ready to go! Let’s not forget the IRS Employees Association of the District Direct in NY, Internal Revenue Service Employees Fund of Des Moines and Internal Revenue Service Employees Association of Wilmington, you guys have some ‘splainin to do.

Accounting News Roundup: PwC Rakes in Fees on Lehman; Grant Thornton: Opening the Audit Market Wouldn’t Hurt Big 4; One in Three IRS Employees Are Eligible for Retirement | 10.15.10

Bernanke Signals Intent to Further Spur Economy [NYT]
“The Federal Reserve chairman, Ben S. Bernanke, indicated on Friday that the central bank was poised to take additional steps to try to fight persistently low inflation and high unemployment.

‘Given the committee’s objectives, there would appear — all else being equal — to be a case for further action,’ he said in a detailed speech at a gathering of top economists [in Boston].

Mr. Bernanke noted that ‘unconventional policies have costs and limitations that must be taken into account in judging whether and how aggressively they should be used.” But he suggested that the Fed was prepared to manage the riske most powerful tool remaining in the Fed’s arsenal of weapons to stimulate the economy: vast new purchases of government debt to lower long-term interest rates.’ “

Lehman Brothers’s U.K. Administrators Billed $420 Million Since Collapse [Bloomberg]
“Lehman Brothers Holdings Inc.’s European administrators have billed 262 million pounds ($420 million) for work since the bank sought bankruptcy protection in September 2008.

The administrators have recovered 11.9 billion pounds in cash in the 24 months since the bank’s collapse and more than 350 trading counterparties have settled what they owed according to a report today on the PricewaterhouseCoopers LLP website.

‘We have achieved exceptional progress in the administration, dealing with some 29 billion pounds of securities and cash, having now returned almost 12 billion pounds of this to clients,’ Tony Lomas, the PwC partner on the Lehman administration, said in a statement. ‘Whilst there are still numerous major challenges to address, our actions to date have generated significant realizations for creditors which will be paid to them in due course.’ “

Y U Luv Texts, H8 Calls [WSJ]
“For anyone who doubts that the texting revolution is upon us, consider this: The average 13- to 17-year-old sends and receives 3,339 texts a month—more than 100 per day, according to the Nielsen Co., the media research firm. Adults are catching up. People from ages 45 to 54 sent and received 323 texts a month in the second quarter of 2010, up 75% from a year ago, Nielsen says.”

Big Four can take losing a chunk of the audit market [Accountancy Age]
“Opening up a fifth of the FTSE-250 audit market would only hit the revenues of the Big Four by an average of £6m, according to Grant Thornton.

Welcoming the EC’s green paper on audit reform, which has made a raft of radical measures including mandatory rotation of audits, the firm said opening up the audit market would not hurt the Big Four.”

Mozilo and SEC in Deal Discussions [WSJ]
“Confidential talks begun in recent weeks appear to be moving toward a settlement in the Securities and Exchange Commission’s high-profile civil fraud case against former Countrywide Financial Corp. Chief Executive Angelo Mozilo and two other former executives, people familiar with the matter said.

Late Thursday, a status conference on the case was ordered for Friday, a move that could signal a new development in the suit. If no agreement is reached, a jury trial is scheduled to begin Tuesday in federal court here before Judge John Walter.

It is also possible, people familiar with the matter said, that only one or two of the defendants would reach a settlement before the trial. Attorneys for both sides are preparing for trial in the event it goes forward, said people familiar with the matter.”


33% of IRS’s 106,000 Employees Are Eligible for Retirement [TaxProf Blog]
Do they simply love their jobs that much?

A little perspective on those 18,000 XBRL errors [CPA Success]
“It’s not that bad.”

Items Up for Bid at the IRS’s Young Buck Auction: ‘Marijuana Leaf Picture,’ Royal Copenhagen White Bear Figures, Three-foot Santa Claus

[caption id="attachment_19427" align="alignright" width="150" caption="Could be yours"][/caption]

Plus the Scarface poster, natch. The good news is that lots of this stuff is probably affordable. Not like some auctions.

From the Tennessean:

• Several gold and platinum records for his own work and collaborations with 50 Cent – Yawn.

• Several pieces of fine art – Fine art according to whom? The IRS or the reporter? OR Young Buck?


• Multiple LCD and plasma televisions – Shock.

• Designer watches and an assortment of faux-fur coats – Again, floored.

• Pictures of Al Pacino and rapper Tupac – Lover of legends, obviously

• A “marijuana leaf picture” – Bid increments are 25¢.

• Three Royal Copenhagen white bear figurines – These? Really, Young Buck?

• A 3-foot white and silver Santa Claus decoration – Never too early to start the Christmas shopping!

IRS to auction off rapper Young Buck’s property on Oct. 28 [Tennessean]

Layoff Watch ’10: KB Home Offers Denver Accounting Department a Free Trip

To Phoenix. If you’re not interested, well that’s probably TFB.

In a cost-cutting move, builder KB Home (KBH) said Thursday it is consolidating its two accounting and administrative services centers into one Phoenix office.

The Los-Angeles based builder said it will move the Denver operation to Arizona during the next few months. The Phoenix office will manage accounting-related operations for its 30 markets nationwide.

The builder, one of the nation’s largest, did not say how much money will be saved.

Some of the 66 affected Denver-based employees will be offered positions in Phoenix.

KB Home Consolidates Accounting Centers [Dow Jones]

Your Next Sunday Sermon: Tax Cuts with a Twist of Fire and Brimstone

Isn’t church boring and preachy enough?

Current law prohibits pastors from speaking on politics or endorsing a political candidate, but David Barton of WallBuilders says the IRS’s intimidation of removing a church’s tax exemption status is unconstitutional. Even though some pastors have intentionally crossed the line, Barton does not think the IRS wants to take them to court because it may lose.

“The IRS doesn’t have any interest in doing this because if they do, I believe they know they are going to lose. And if they lose, you have 370,000 pastors in America who suddenly find out that there’s no restriction on them,” Barton suggests.

But this isn’t about politics, this is about TRUTH!

“You cannot lose your tax exemption as a church because as a church, you have a constitutional standing for tax exemption,” he points out. “So with that basis, losing your letter means absolutely nothing — and that’s something pastors are now figuring out.”

Barton argues that the pulpit was and should continue to be the news perspective for America, so he encourages all pastors to speak out and stand for truth.

Barton: No need for pastors to fear IRS [One News Now]