Footnotes: Once Upon a Time, Paul Ryan’s Ex-Girlfriend Stole From Ernst & Young and Other Strange Things | 09.04.12

~ We’re calling it a half day, team. Have a Happy Thanksgiving and travel safe. We’ll be back to a full slate on Monday. And remember, if you’re eating at a partner’s house, use a fork to eat any potatoes.

Madoff Trustee Reaches $326 Million Settlement With IRS [Bloomberg]
Trustee Irving Picard found that Madoff or his company made payments to the IRS under a section of U.S. tax code that requires that 30 percent of dividend payments to non-resident aliens and foreign corporations be withheld for taxes, according to a filing in U.S. Bankruptcy Court in Manhattan. A total of $330 million in payments were made on behalf of 145 foreign account holders and were reported to the IRS as federal income tax that was withheld from dividend payments. The agency erroneously paid refunds on claims related to the payment in the amount of $4.2 million, according to the filing.

Diamond Foods Says Director Death Unrelated to Payment Probe [Bloomberg]
Diamond Foods Inc. (DMND) said there’s no connection between the recent death of director Joseph Silveira and a board investigation of the company’s accounting. The San Francisco-based company’s shares tumbled 17 percent in late trading yesterday after CNBC reported that Silveira died from a self-inflicted gunshot wound. Diamond Foods, which makes Kettle potato chips and other snack foods, had posted a notice of his passing dated Nov. 17.

Tax refund loans land H&R Block in court again [KCS]
A lawsuit in U.S. District Court in Los Angeles accuses the Kansas City-based tax preparation firm and others of targeting “minorities and the working poor” with products that “provide little to no value” while charging “predatory interest rates and fees.” Attorneys seek court approval to treat the case as a class-action claim that would cover California residents who had gotten a refund anticipation loan after Nov. 17, 2007 that included a refund account fee. The lawsuit similarly targets refund anticipation checks, which it claims are refund anticipation loans under California law, for a class-action claim.

Will the super committee’s failure revive Simpson-Bowles tax reform proposals? [DMWT]
Will the plan co-chaired by cranky pants Alan Simpson make a comeback?

Boehner: GOP willing to work with Obama on payroll tax [The Hill]
House Speaker John Boehner stressed Tuesday that House Republicans were willing to consider an extension of the current payroll tax cut. The Ohio Republican’s statement, which came the same day President Obama lobbied for the payroll tax cut in a New Hampshire speech, also called on the Senate to approve what he called more than 20 House-passed bills that could help create jobs. “With one single statement, the president of the United States could dislodge these bipartisan jobs bills and ensure they are brought to a vote,” Boehner said. “I hope the president will put country before party and call on the Senate to bring these bipartisan jobs bills to a vote immediately after Thanksgiving.”

MF Global Customers Missing $1.2 Billion Denied Committee [Bloomberg]
MF Global Inc. brokerage customers, who may be missing more than $1.2 billion from their accounts, won’t be allowed to form a committee to represent their interests in bankruptcy court, a judge ruled. Customer accounts believed to hold $5.45 billion were frozen Oct. 31, the day after the New York-based company reported a shortfall in funds that are required to be segregated under rules of the U.S. Commodity Futures Trading Commission. A previous estimate of about $600 million in missing funds was raised to $1.2 billion yesterday by James Giddens, the trustee appointed to liquidate the company and distribute refunds to customers.

Companies May Face Rule to Shift Audit Firms [NYT]
Publicly traded companies may be forced to change their audit firms after several years, the chief regulator of the industry said Thursday. James R. Doty, who became chairman of the Public Company Accounting Oversight Board this year, said in a speech that he had been disturbed by evidence turned up by board inspectors that many auditors failed to show sufficient independence from their clients. “Considering the disturbing lack of skepticism we continue to see,” he told a conference at the University of Southern California, “the board is prepared to consider all possible methods of addressing the problem of audit quahether mandatory audit firm rotation would help address the inherent conflict created because the auditor is paid by the client.”

Deloitte attacked for appointing former RBS auditor as chairman [Telegraph]
A group of institutional investors has launched an extraordinary attack on Deloitte Touche Tohmatsu for appointing the former auditor of the Royal Bank of Scotland as its new global chairman. The investors are angry that Steve Almond, who was responsible for vetting the accounts of RBS between 2005 and 2009, has been promoted to the head of one of the “Big Four” audit firms.

Virgin America hiring new CFO from Pinnacle Air [AP]
Peter D. Hunt will become CFO and senior vice president effective July 11, replacing Holly Nelson, who is leaving “to pursue other opportunities,” Virgin America said. Hunt has spent six years at Pinnacle, which operates regional flights for Delta, Continental and US Airways through subsidiaries that include Colgan Air and Mesaba Aviation.

IRS Loosens Aug. 31 Deadline for Offshore Tax Disclosures [Bloomberg]
The Internal Revenue Service will let taxpayers with undeclared offshore accounts apply for a 90-day extension of the Aug. 31 deadline for coming forward. The change, announced on the IRS website today, would let taxpayers seek the extension in writing by showing that they have made a “good-faith attempt” to meet the deadline and explain what information they are missing. “This would be a welcome relief to many taxpayers,” said Barbara Kaplan, an attorney at Greenberg Traurig LLP in New York. “There is difficulty in getting the records together.”

Groupon’s Non-GAAP Measures Raise Questions [CFO Journal]
Beware non-GAAP accounting measures. In the case of Groupon’s IPO filing, at least, they seem to raise more questions than they answer about the company’s earnings prospects.

SEC Probes China Auditors [WSJ]
The SEC has publicly indicated it was examining accounting and disclosure issues regarding Chinese companies that engaged in “reverse mergers,” which allow companies to list on U.S. exchanges without as much regulatory scrutiny as an initial public offering. People familiar with the matter say the investigation also includes auditors, which hadn’t previously been known. As part of its inquiry, the SEC has suspended trading on some Chinese companies, questioning their truthfulness about their finances and operations.

Key Dem: Tax reform should not hurt working families [The Hill]
Rep. Sandy Levin, the top Democrat on the tax-writing House Ways and Means Committee is set to say Friday that, while there is a need for tax reform, an overhaul of the code should not punish working families. Officials on both sides of the aisle have called tax reform a priority, and Republicans are pushing a plan to reduce both the top corporate and individual rates to 25 percent, down from their current 35 percent.