Going Concern

News

Who Says Corporations Don’t Pay Their Share of Taxes?

Caleb Newquist
December 4, 2010

~ From the Joint Committee on Taxation via Felix Salmon

Ernst & Young Study: U.S. Is Great for Renewable Investment If You Don’t Count the Red States

Caleb Newquist
December 4, 2010

China has everyone beat, no shocker there, but if you don’t count Sarah Palin’s real America the ~~red~~, white & blue is #2!

Ernst and Young counts only perhaps half (or is it three quarters?) of the 300 million people in the US as “US”, by considering only those states that are doing anything about renewable energy, like California…The “US” excludes all the dirty states that lack renewable policy; states like Wyoming, Indiana, North Dakota, Kentucky, Oklahoma and so on.

Ernst & Young: U.S. Blue States Nearly as Attractive as China for World Renewable Investment [Reuters]

News

One Man’s Holiday Wish List Includes Tim Geithner and Charlie Rangel Sharing a Prison Cell with Wesley Snipes

Caleb Newquist
December 4, 2010

Actually, if Wes Benedict, Executive Director of the Libertarian Party, had his way, Wes wouldn’t be doing time at all.

“The three-year federal prison sentence for Snipes’s failure to file tax returns is absurd. Snipes is not a threat to anyone, and the judge who sentenced him clearly just wanted to scare others who might think about resisting federal taxes.

“Maybe it’s worth reminding people that Wesley Snipes was acquitted of tax fraud and conspiracy charges in 2008. He was only found guilty on misdemeanor charges of ‘willful failure to file an income tax return.’

Right, so the ‘willful failure’ part is where we kind of have a problem. If you willfully fail to control your urge to get cop-slugging drunk and then actually slug a cop, you have committed a crime. Mr Benedict doesn’t buy it though:

“Why is a failure to file a tax return a criminal non-act? Should people ever be sent to prison for not doing something? If the IRS wants to come after Snipes and take his money, they have power to do that. Who does it help to send the man to prison?

“The tax code is incredibly vague and open to interpretation [Ed note: UNDERSTATEMENT OF THE CENTURY]. In fact, the ‘law’ is largely written by IRS bureaucrats. If they decide the law says one thing, you’re OK; if they decide it’s something else, then you’re headed for prison.

“The federal tax code also allows for ‘selective enforcement,’ to put it mildly. Why is it that Wesley Snipes gets a prison sentence, but known tax cheat Tim Geithner gets promoted to Secretary of the Treasury? Maybe Tim should be Wesley’s cellmate. Throw tax cheat politician Charlie Rangel in the slammer too for good measure.

Tim Geithner’s poor choice in self-prep tax software and an actor giving the 16th Amendment the middle finger for 10+ years aren’t quite the same thing. Maybe it’s just us.

[h/t Tracy Coenen]

Career Center

A Future McGladrey Associate Is Having Second Thoughts About Their Decision

Caleb Newquist
December 3, 2010

Welcome to the your-day-can’t-be-worse-than-Julian-Assange’s edition of Accounting Career Emergencies. In today’s edition, a college student who accepted a fulltime gig with McGladrey is spooked after reading some kvetching about the firm on this here site. Did he make a bad choice?

Caught in a jam at work? Thinking about blowing the whistle? Concerned that the washrooms at your office aren’t sanitary? Email us at advice@goingconcern.com for lawyer recommendations or hand-washing tips.

Back to the morose McG soon-to-be:

I am a college student in the Southeast region of the United States. I am a graduate student and have accepted an offer to work full time at McGladrey (audit) in this region.

I have seen so many negative remarks on your website from comments and articles about the company, that I am somewhat concerned with my choice of firm. I seemed to fit in really well with the people at the office, and I enjoyed the office visit. I received offers from the other middle market companies (GT, BDO), but I felt best at McGladrey.

Seeing comments that compare McGladrey to McDonald’s is a bit disconcerting considering the fact that I have spent so much time and effort in college trying to gain a good job with security.

My ultimate question is, did I make a bad decision? Is McGladrey really THAT bad, or is it comparable to the other mid-tiers? To me, it seemed to meet the standard of the mid-tiers.

Please help me figure out if I need to try and make a move before I start.

Dear Unhappy Meal,

In case you haven’t noticed, the peanut gallery here at Going Concern is a cheeky bunch (love!) and your concern about the comments that you’ve read on various posts is a little overblown, in our opinion.

For starters, trust your instincts. You made the best decision based on your experience with the three firms you mentioned. Now, all of a sudden, you’re spooked because you read a few comments comparing McGladrey to McDonald’s? Have you read the comments on the Grant Thornton threads? They are, at the very least, on par with the spouting on the Mickey G posts.

Secondly, our most recent post about McGladrey was news of extra paid time off, concierge services, bonuses and babysitters. Babysitters! Does that sound like such a bad place to work? Yes, it’s the McG brass giving you the “we appreciate your hard work and this is our show of thanks” line and that always invites skeptical reactions but you show us one firm that doesn’t experience some backlash and we’ll show you firm that doesn’t exist.

So to answer more directly – you didn’t make a bad decision because you went with your gut. You made the best choice for you and not based on what you heard some anonymous commenter say. Go forth with confidence, grasshopper.

Big 4

One E&Y Office Is Under the Impression That KPMG Is Not Their Competitor

Caleb Newquist
December 3, 2010

This marks the time of year that your firms ask you to give back to your community in various ways. The most common way that we’re aware of is to contribute to your firm’s respective United Way Campaign. This push usually involves numerous emails and maybe even a little dog and pony show where one partner essentially guilt-trips you into giving to the charity of the firm’s choosing rather than your own.

The Big 4 firms are quite competitive in their fund-raising efforts and a tipster had some thoughts on the tally in the Atlanta office of Ernst & Young (photo after the jump).

[A]pparently EY Atlanta doesn’t believe that KPMG exists (or is considered their competition)

Not to mention that these progress indicators are oddly phallic-looking…

It’s also worth calling attention to E&Y’s abysmal phallic filling performance compared to Deloitte and PwC. Our tipster’s points are duly noted and we’ve concluded that it’s either an obvious show of disrespect by E&Y Peachtown aimed right at KPMG OR the House of Klynveld happens to be blowing everyone out of the water and the Atlanta brass is saving everyone the embarrassment.

Knowing what we know about KPMG employees’ enthusiasm for the United Way Campaign, the latter scenario seems unlikely. Other theories and reactions are welcome at this time.

Should You Request a Rescore if a Simulation Snafu Cost You a Passing Grade on the CPA Exam?

Adrienne Gonzalez
December 3, 2010

For this, my first CPA exam advice column since 2010 testing finally closed, we have a pretty interesting question from a candidate in Georgia who wants to know if it her 74 is worth a rescore. Normally my advice is to forget about disputing your score as the AICPA has not actually changed a single failing score to passing in the last three years (remember, their formula is bulletproof and they are not about to admit their precious psychometric testing sucks) but this is a special case.

Hello, I have a question related to my score on Auditing and would appreciate any advice you could provide. I took the exam on 10/28/2010 and received my score of 74. I am wondering what my options are for appeal or review. The reason for this is because on the last simulation one of the tabs was not the same when I tried to review as when I first saw it. I am 100% sure that I had the choice of 6 options when taken the exam. But once I went back to review the test, there were only 4 choices available. I did report this to the coordinator that was present and she told me that she would write a report. I also reported in the section where they ask if there were any problems during testing.

Firstly, remember that Prometric test center staff are not hired by the AICPA to administer your test. They administer hundreds of different professional examinations, not just the CPA, so they don’t really get how important a single screwed up simulation can be to your overall score. Don’t be surprised if they merely wrote down your complaint and tossed it into the examination abyss.

That being said, the AICPA’s appeal process isn’t really going to help you. As I said above, the chances of a rescore turning out favorably for you are slim to none.

But you may have another option, available through your state board, that would allow you to meet with one of their representatives and see the questions you did not answer correctly. Whether or not this actually ends up in your 74 turning into a 75 is up for debate and in my three years of working in CPA review, I never met anyone who did this, let alone did it successfully.

Contact your state board and ask about the score appeal option. If available, you will likely have to pay a fee and there are no guarantees that anything positive will come of it but if you sincerely believe that the simulation changed, that’s a glitch and throwing out that simulation could just bring you beyond a 75.

Good luck!

Tax
Video

Wealthy Canines Not Spared Democrat’s Ire During Tax Cut Debate

Caleb Newquist
December 3, 2010

Somewhere in the whole mishmash of yesterday’s events leading up to the House’s passage of chicken crap, Joseph Crowley took to the floor to remind us know that it’s just not wealthy humans that stand to benefit greatly from tax cuts.

[via Gothamist]

Accounting News Roundup: Rangel Censured, Feels Good; Tax Relief for Bailed Out Companies; “Little GAAP” Risks | 12.03.10

Caleb Newquist
December 3, 2010

Rangel Censured for Ethics Violations [WSJ]
“I truly feel good,” said Mr. Rangel, 80 years old, who has represented Harlem for 40 years. “A lot of it has to do with the fact that I know in my heart that I am not going to be judged by this Congress, but I am going to be judged by my life.”

Baucus introduces tax, unemployment bill as accord appears possible [On the Money/The Hill]
There he goes again, attempting to don the bipartisan armor, “Senate Finance Chairman Max Baucus (D-Mont.) introduced legislation Thursday to permanently extend tax cuts for the middle class, patch the alternative minimum tax for two years and reinstate the estate tax.

Besides the tax provisions, the legislation calls for a yearlong extension of federal unemployment insurance through 2011. Baucus introduced a $56.4 billion bill earlier this week to federal extend benefits, which began lapsing on Wednesday.”

BofA Drags Balance Sheet Confidence Backward [Jonathan Weil/Bloomberg]
PwC may be in a bit of a pickle over Bank of America’s mortgage mess.

Is the IRS Racist? [Time]
Total headline bait trash from Time. Obviously the IRS isn’t racist. Their methods need some serious tweaking and they need help setting their priorities but they aren’t bloody racist.

What’s keeping CPAs up at night? [CPA Success]
Tom Hood tells us.

Tax Breaks for Bailout Recipients Stir Up Debate [WSJ]
A series of tax relief measures is saving companies bailed out by the government billions of dollars at a time when concern over tax revenues has risen.

Although the Treasury Department first provided the tax guidance in the fall of 2008, the magnitude of the tax savings has become clearer in the past year. The tax relief drew new scrutiny last month after Wall Street bankers touted it to investors in the initial public offering of General Motors Corp.

KPMG Announces 2010 Americas Partner Class [PR Newswire]
We tried telling them months ago.

The Fed’s Full Disclosure: Don’t Forget About Government GAAP [Forbes]
Francine may have lost it, “What do Ben Bernanke and Julian Assange have in common besides that sexy ‘come hither’ look?” Shudder.

The Big Risks of Little GAAP [CFO]
Careful what you wish for?

Clifton Gunderson relocating headquarters within Tosa’s Research Park [MJS]
CG is expanding into new digs of 28,000 square feet.

Wanted: Big 4 Bean Spillers

Caleb Newquist
December 3, 2010

“Zero Hedge kindly requests any and all Big 4 (and all other) accounting firm whistleblowers to please stand up and let us know of any and every case of improper accounting they are aware of (preferably with supporting documentation).”

~ Tyler Durden

Grant Thornton

Compensation Watch ’10: Grant Thornton Kicks Off Hanukkah

Caleb Newquist
December 3, 2010

From the mailbag:

I work at GT as an associate in [a Southwest] office. Partner called to tell me i got a 1k bump to salary. It appears that GT is giving out raises in December. They are calling them market adjustments…

There seems to be confusion as to whether this is a bonus, lump sum raise, or spread out over the year. My partner told me it’ll be spread out over the year and it was a permanent raise. Others have been told it is a lump sum bonus. The new A1’s found out yesterday their starting pay was increased. I’ve talked with seniors and none of them have heard anything I know about, and they seem pretty pissed at the whole situation.

Are SAs getting blanked? Is this happening anywhere else? Inform everyone below or email us if you know the scoop.

News

The House Decides Tax Cut Extension Is Not Chicken Crap After All

Adrienne Gonzalez
December 3, 2010

Our favorite minority attention whore, House Republican leader and next Speaker of the House John Boehner, seems to feel as though all this nonsense over extending the Bush tax cuts is chicken crap, whatever that is supposed to be. Did he mean bullshit? Just tell us what’s on your mind, Mr Boehner, we won’t hold it against you if you say bullshit on C-SPAN. “I’m trying to catch my breath so I don’t refer to this maneuver going on today as chicken crap, all right?” he said. “But this is nonsense, all right? The election was one month ago. We are 23 months from the next election, and the political games have already started trying to set up the next election.” No no, homie, this has nothing to do with the next election, this has to do with y’all just getting around to this now when no one’s cared since 2002.

If there are any doubts as to the stimulative or depressive effect of a tax rate change in terms of tax receipts received by the Treasury, check out this WSJ op-ed by W. Kurt Hauser which tells us that historically, tax revenues as a share of GDP have averaged just under 19%, whether tax rates are cut or raised.

Anyway, regardless of our feelings on the matter (many of which include expletive-filled rants like “WTF, why are you guys just now trying to figure this out?!”, “please! Can’t you work well with others for just once in your life” and/or “Gee, maybe if we addressed the problem of an overly complicated tax system this wouldn’t be such an epic pain in the assets”), the House has finally made a decision. Frankly we couldn’t be happier to see the light at the end of the W-2 on this at last.

A mere 29 days before the scheduled December 31st Tax Cut Armageddon, the ~~threats~~ votes have been counted and it appears as though the yeas have it. With 6 minutes to go on the vote and with little help from House Republicans, Democrats rallied together to get the 218 votes they needed to extend tax cuts to those earning up to $250,000 and then some.

It doesn’t really matter because there’s no way the Senate is going to let this fly so you may go back to whatever you were doing and start socking away a few bucks for your 2011 tax bills.

Ahhh political process. It’s like watching a car crash in slow motion from the driver’s side.

Some Clarification on the Bathroom Situation at E&Y Jericho

Caleb Newquist
December 3, 2010

Yesterday, we shared a story with you that probably caused you to thank your lucky stars that you don’t work in Norway (especially if you’re a woman). In that post, we called back to our old report from January about the secure lavatories at Ernst & Young’s Long Island location in Jericho.

You may have been under the impression that someone within E&Y was responsible for the lockdown, however, thanks to an enterprising E&Y employee, we now know who the keymasters really are:

I don’t work in the Jericho office, but got shipped out there for random clients for most of this summer. The bathrooms are in the common areas shared by all tenants of the building, so the keyed entry to the bathrooms is mandated by the building management, not EY (not that I’d put it past the partners to come up with something like this, though).

Also, while there are keys for each bathroom, there are also entry codes you can use instead. So you can grab one of the communal keys (kinda gross), or remember the terribly difficult four digit code (0001 if I remember correctly).

As a side note, I remember the admin mentioning that the original set of five keys for the men’s room was down to two. I’m wondering why someone would make off with these nasty over-sized germ farms.

Okay, so the missing keys aren’t news but what’s it going to take to get some extras made? And, again, who’s making off with the keys in the first place?

And while it’s good to know that the E&Y brass in Jericho aren’t actually the ones putting the clamp on the johns, would it kill them to spring for some private restrooms that non-E&Yers don’t have access to? It’s one thing to have to schlep to the front desk to get a key every time; it’s entirely another to be sharing a bathroom with the entire building. What is this, Penn Station?

Seriously, how much time and cost would it take to throw in some pots, sinks, urinals and XLERATORs®? It’s a health issue for crissakes.

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