[K]ey Republicans have not responded positively to signals that President Obama will push for some tax increases in his deficit-reduction plan to be laid out this week. David Plouffe, a senior White House adviser, indicated Sunday that the president would reiterate his call to raise taxes on households making $250,000 and above and also signal a desire to look at other provisions in the tax code that wealthier taxpayers use to their advantage. In his fiscal 2012 budget, released in February, the president called for allowing the Bush tax cuts to expire for income above $200,000 for individuals and $250,000 for couples at the end of next year. That statement came roughly two months after a compromise with congressional Republicans had extended current tax rates for the richest taxpayers for two years. [The Hill]
- Monday Morning Accounting News Brief: How About That Entry Level Job Market!; The Failed Client That Could Cost PwC $8 Billion | 5.18.26
- Friday Footnotes: PCAOB Plans to Take It Easy; Just Ignore Those CP53E Notices, Probably | 5.15.26
- EY Gets Busted and Yeets Cybersecurity Report Littered With AI Hallucinations
A Prison Guard Is Now Equally as Effective at Busting Tax Cheats as the IRS
As we have learned, residents of our prison system have proven to be quite savvy at obtaining tax credits, including those intended for first-time homebuyers, alternative-fuel vehicles as well as filing bogus tax returns in order to receive refunds. These scams go along swimmingly until the IRS gets wind of it (anywhere from months to years later), at which time local (and sometimes national) media have some nice filler.
In the latest case of a prisoner tax schemed sniffed out, Troy Fears – who is enjoying a life’s stay in an Arizona prison for rape – spent 2005 to 2009 filing fake tax returns and obtained $119k in the process. He was using “fake W-2’s and apparently said he was filing other inmates’ taxes. He convinced other prisoners he was applying for grants on their behalf so he could get their Social Security numbers.” According to court papers, the IRS was missing this particular scam because “IRS routes [direct deposits] without making sure the name on the account matches the return.” The jig was up when a prison guard intercepted his mail, presumably figured out the tax returns were fakes, and called the authorities. Fears got four years tacked on to his sentence and the guard responsible for catching him can probably expect a “Deputy IRS Agent” certificate (signed by Doug Shulman, natch) in the mail any day now.
Jailed Rapist Gets $119K From Fake Tax Returns [KPHO via TaxProf]
Would Hannibal Lecter Eat His CPA?
Hard to say. But “Blockheads” would need to be careful.
It might have been funny if there had been glass in the window and our actor hit his head on it but otherwise we’re especially glad they didn’t involve any scenes with Miggs.
Sharon Allen Copes with Travel By Staying Hydrated, Listening to Kenny Chesney
Deloitte’s Sharon Allen recently had a little chat with our friends at FINS as part of their coverage of Women in the Workplace series over the next two weeks. Ms. Allen will be coasting into retirement as her second term as the firm’s Chairman (her preferred term) comes to end.
The Allen interview covers all kinds of fun stuff so let’s get to it, starting with those pesky regulators:
Some of us are still getting comfortable to having the PCAOB sticking their beak into audits:
The public accounting arena has indeed changed a lot. It’s now a regulated profession with oversight that’s provided through the Public Company Accounting Oversight Board. We are still, both the regulator and the profession, trying to work through that, with the common objective of improving audit quality. We’re learning how to work within a regulated environment that some years ago we just didn’t live with.
None of the firms chose to be the “Big 4” it just sorta worked out that way:
Just last week, we were talking at our global board meeting about how the profession got narrowed down to this number to begin with. The last reduction wasn’t the choice of the profession with [Arthur] Andersen out of business.
And speaking of four, she’s pretty comfortable with that number:
You have to have concentration of enough business to service the clients properly. If you spread that across eight firms, there just isn’t enough that supports that kind of that activity. In some of the major countries, the additional number of firms make sense, but when you look at it across the world, it doesn’t work. We’re not opposed to the competition; there are next-tier firms that are very good, and we encourage them to be in the mix in terms of proposal opportunities. It’s healthy. But the reality is the concentration will and probably should continue.
Term limits have somewhat led to SA’s retirement but there’s at least one person who’s especially happy about her quitting early:
I’m approaching the end of my second four-year term as chairman. We have a limit of two terms. While I’m not at mandatory retirement age yet, I concluded that it’s a really good time to make this move. I’ve had a fabulous 38-year career. But I’m also very comfortable with the transition leadership and the state of the firm. It’s a good time for me to leave at the top of my game. My husband is looking forward to spending more time with me.
FINS went ahead and asked Allen about the leadership election process, even though they already knew how the process went down.
We have a nomination process that we undertake. We interview through a nominating committee chosen by the board. They interview about 1,300 partners for their input on the type of attributes they’d like to see in the chairman and CEO positions. Then the committee interviews some individuals who match up with those qualities and ultimately proposed the nominated person.
One of the biggest challenges Allen has faced as Chairman was dealing with this clusterfuck of an economy. Luckily for the Green Dots out there, Deloitte management saw this coming and was able to save a bunch of you:
We were a little ahead of the game in anticipating the downturn that allowed us to prepare well for the difficult times to come. We had some reductions in our workforce, but they were not as substantial as they might have been had we not appropriately planned for the downturn.
And as a high-flying executive, there has to be coping mechanisms:
[Julie Steinberg of FINS]: How do you handle all the travel you do?
[Sharon Allen]: I drink a whole lot of water. I’m also fortunate to be able to adjust to time zone changes relatively easily. I work on domestic flights, and I do take my iPod and my computer.
JS: What are you listening to these days on your iPod?
SA: I’m a country music fan.
Chesney just came to mind for some reason (FYI Sharon: I can get you into the sold-out Red Rocks show, so reach out if you’re interested). But maybe she’s more of Toby Keith person, I can’t possibly know not having had the pleasure of seeing what ended up on the cutting-room floor. You’re invited to speculate as to artists (I’m pulling for Willie Nelson myself) and react to anything else you see above.
Deloitte’s Sharon Allen on Big Four Domination, Self-Promotion and the Corporate Lattice [FINS]
Earlier: Deloitte’s Sharon Allen Never Misses Date Night, Discovered Early on That She Wasn’t Meant to be a Car Hop
Donald Trump Once Proposed a One-Time 14.25% Net Worth Tax
Back in 1999, when the The Donald was also faux-considering a Presidential run, he proposed a one-time 14.25% net worth tax on anyone with a net worth of $10 million that would solve all our national debt problems in a blink of an eye.
According to an article published by CNN in November of ’99, DT crunched the numbers himself and “his proposed 14.25 percent levy on such net worth would raise 5.7 trillion and wipe out the debt in one full swoop.” Of course this was all before the SCOTUS determined the outcome of an election, 9/11, Afghanistan, Iraq, George W. Bush somehow winning re-election, Barack Obama being elected President, The Tea Party, Libya and several seasons of The Apprentice. And seeing how Mr. Trump’s politics change like his hair caught in a a gusty wind, it’d be surprising if he still felt strongly about this particular policy. [CNN via TaxProf]
Book Review: As One, Co-authored by Deloitte’s Jim Quigley
Let’s be completely honest here, when I heard James Quigley had worked on a book subtitled “Individual Action/Collective Power,” I half-expected this to be a handbook on how to get miserable shlubs to do your evil bidding for you while you abuse and humiliate them. After all, the man oversees an entire army of miserable green dot shlubs, surely he knows a thing or two about getting people to do things for you.
Lucky for Quigs and the inds behind As One, however, this book was nothing of the sort. More like Choose Your Own Adventure for leaders, which allows the reader to first determine which archetype of leaders and followers his or her group falls under. Featuring case studies (“inspirational” stories) with such big names as Apple, GE and Pixar, As One looks the why of these organizations’ collaborative efforts before taking on the how.
Deloitte spent two years studying effective collaborations and in the process defined eight archetypes of leaders and followers: Landlords & Tenants, Community Organizer & Volunteers, Conductor & Orchestra, Producer & Creative Team, General & Soldiers, Architect & Builders, Captain & Sports Team and Senator & Citizens. The main archetypes are strategically located across a circular axis, with Landlord & Tenants and Community Organizer & Volunteer anchoring the upper and lower poles. Conductor & Orchestra and Producer & Creative Team sit at the extremities of the horizontal “nature of the task” dimension on the west and east ends of the axis. The other four archetypes are hybrids, occupying the spaces between the main archetypes and combining some characteristics of each.
So this got me thinking, where would Caleb and I be on the axis?
As much as I would like to paint your dear Going Concern editor in a sycophantic, borderline psychotic light, “Dictator & Huddled Masses” wasn’t included in As One, so instead I used the easy chart in the book’s intro to answer a few simple questions about how our organization works. I have the creative freedom to carry out tasks the way I choose (as long as I don’t talk too much about the Federal Reserve), and we have a fairly small hierarchy given the size of our website and TPTB that rule over us. Instead of choosing the archetype I assumed we’d be (Producer & Creative Team), I went by the chart to determine we were most like Community Organizer & Volunteers.
From key characteristics:
Volunteers cannot be told what to do; they must be given the choice to join on their own terms. The persuasive message of the community organizer motivates them to join in the cause; and it’s that common purpose that inspires volunteers to make a difference.
[Volunteers] independently choose to follow the path of altruism or enlightened self-interest. Community organizers and volunteers may be passionate, selfless and dedicated, but, above all else, they are independent thinkers who, of their own volition, decide whether to get involved in a cause and for how long.
“A community organizer is someone who uncovers [volunteers’] self-interest,” says Jana Adams, the National Training Coordinator at the Direct Action Training Research Center. “They give [volunteers] an opportunity to work in their own self-interest and address problems in the community that they could not address by themselves.”
All of those key characteristics rang true with me, though I wouldn’t necessarily call making misogynist jokes about work/life balance altruistic. And I definitely cannot be told what to do, so another point to the book for that one.
As One allows the reader the opportunity to brand his or her own strategy, whether or not the current structure allows for such freedom. Unlike much of what one might encounter in public accounting or any other similarly-structured business, the free flow and adaptability of As One gives leadership the chance to form itself, mostly through analysis of what makes an archetype tick. Even miserable shlubs have a drive (be it money, stability, masochism or the perpetual carrot of becoming partner one day being dangled in front of one’s face), it’s how they are driven that makes all the difference. Point being that leadership isn’t about who can bark orders the loudest, despite how life in public accounting might make it appear.
Are we all so easily prodded into distinctive roles? Not really, and As One doesn’t attempt to do so. Its authors argue that life itself is a collaborative journey, and it may just be easier on all of us to accept that. Organizational structure doesn’t necessarily have to create a disenchanted workforce just in it for the paycheck, and recognizing the strengths and weaknesses of each collaborative group can actually help infuse a little pride in the job, or at least more willing participation.
As One isn’t a book about how to get people who hate you to do things for you, it’s about recognizing the individual power in each of us to accomplish collective goals, be that running a business or changing the world as we know it. It presents some awfully lofty goals but asks one very important question: what could we accomplish if we could unlock the power of As One on a global scale?
Find the book on Amazon here, and download free As One iPhone or iPad apps here. You can find out more about As One through the Deloitte Center for Collective Leadership.
Accounting News Roundup: Google CFO Gets a Second Helping; Osbournes on a Crazy Tax Train; Is Distraction at Work Good for You? | 04.11.11
Level 3 Agrees to Purchase Global Crossing in $1.9 Billion All-Stock Deal [Bloomberg]
Level 3 Communications Inc. (LVLT), the Colorado-based provider of broadband services, agreed to buy Global Crossing Ltd. (GLBC) in a deal valued at about $1.9 billion. Level 3, based in Broomfield, will acquire Global Crossing in an all-stock transaction worth $23.04 a share, based on Level 3’s closing stock price on April 8, the companies said in a statement today. The value of the purchase is $3 billion, including the assumption of $1.1 billion in debt, they said.
Obama to Call for Broad Plan to Reduce Debt [NYT]
President Obama will call this week for Republicans to join him in writing a broad plan to raise revenues and reduce the growth of popular entitlement programs, as the battle over the nation’s financial troubles moves past Friday’s short-term budget deal and into a wider and more consequential debate over the nation’s long-term fiscal health.
More GoogQuake Aftershocks: CFO Patrick Pichette Adds BizOps and HR to His Duties [AllThingsD]
Pichette gets rewarded with more responsibility (and presumably, work) in Google’s managements shakeup.
Tax Indictment for Tax Activist [NYT]
Taxpayers have rights. It says so in the Colorado Constitution in an amendment known as Tabor, which passed in a voter referendum drive in the early 1990s that was led by a man named Douglas E. Bruce. Criminal defendants? Yes, they have rights, too, as Mr. Bruce learned the hard way last week after he was arrested for what prosecutors said was a failure to pay his taxes.
Corporate Governance At Berkshire Hathaway: Maybe It’s Not All That [Forbes]
Francine McKenna pokes around Berkshire’s sterling reputation.
Ozzy and Sharon Osbourne’s Massive IRS Tax Lien [TMZ]
The amount of cursing will be relatively unchanged.
In Praise of Distraction [TNY]
In other words, Going Concern March Madness made you better at your jobs.
Encore Energy Partners Dismisses Ernst & Young [CityBizList]
BDO will take it from here.
Toddler Mistakenly Served Alcohol at Applebee’s [WJBK]
The blood alcohol level in the 15-month old was .10, which is over the legal driving limit.
Did Ohio State Dump Deloitte for PwC Over Colors?
Sounds like CFO Geoff Chatas and state auditor Dave Yost wanted to figure a way around a 15-year limit but it was to no avail, “Ohio State CFO Geoff Chatas said Yost discussed with him the possibility of letting Ohio State be the first to stick with the same audit firm, but the school opted to put the contract out for bid.”
A likely story. If you ask me, this has everything to do with the fact that Deloitte’s main color is blue while PwC has opted for slightly more appropriate hues.
Cleveland IRS Office Is Getting a Jumpstart on the Shutdown
Feels a little bit like a false start but apparently an IRS office in Cleveland has already said “fuck it” and sent employees home this morning.
WKYC reports, “They told us there was a government shutdown and there was nothing they could do and we should take our taxes to someplace where you pay,” said taxpayer Samantha Beynum. [WKYC]
A Government Shutdown Near the End of Tax Season Could Prove to Be Very Inconvenient
Since the IRS made it clear earlier this week that blowing off your 1040 is not an option, you best be on top of this if you want to file pre-April 18th. However, you might run into a wee bit of a problem if you go to the IRS for help.
In all, 92,000 [Treasury] department employees would be furloughed, with IRS staffers working during the height of tax season representing roughly two-thirds of the 35,000 who would still be on the job.
Still, around four out of every five IRS employees would be furloughed. Dan Tangherlini, an assistant Treasury secretary, reiterated in a blog post that taxpayers should file electronically to avoid potential delays in receiving a refund, and laid out other areas where IRS operations would be affected.
Taxpayers with audit appointments should assume their meeting is canceled, Tangherlini wrote, while walk-in IRS assistance centers would be shuttered and customer service phone lines would not be as easy to reach.
Treasury would furlough over 70 percent of employees in shutdown [The Hill]
Big 4 Employee with an Itch to Jump Ship Wants to Know What His Options Are
Welcome to the the-shutdown-will-probably-last-45-minutes edition of Accounting Career Emergencies. In today’s edition, a Big 4 senior associate has a hanker to jump ship. Problem is, corporate accounting and internal auditing don’t sound like appealing life-preservers. Are there other options or is our hero doomed for permanent Big 4 burnout?
Nervous about a promotion? Back on the hunt for a co-worker to canoodle with after an unfortunate experience? Concerned about where your
