Going Concern

News

Ohio Man Fighting the IRS May Not Be Done Bulldozing

Caleb Newquist
February 25, 2010

Great news everyone! There’s a chance that more bulldozer fun will be had in Ohio, courtesy of Terry “Dozer” Hoskins.

Having demolished his house in less than two hours and knowing that it was only a matter of time before the bank came after his business property, he’s giving serious thought to renting another dozer and finishing this thing once and for all. Small town bank and IRS be damned.

Hey, we’re all for it. If you can a dozer for $500 why not introduce a little more chaos in your life? And don’t worry, the man is a professional and is always mindful of safety, “‘You have to know what you’re doing before doing something like this’ to avoid being hurt, Hoskins said of destroying his house. ‘I’ve run heavy equipment for years.'”

Believe it or not, Dozer’s wife wasn’t thrilled with the whole razing of the house, “Also not happy about the destruction of their house was his wife, Hoskins said. They are now living in one of the buildings on the commercial property.” He must have concluded that since he had already declared bankruptcy and destroyed one piece of property, floating the idea of flattening the business property couldn’t piss off the Mrs. too much more.

Question Hoskins decision-making skills if you like but it’s good to see a man taking pride in his work, “I don’t regret one bit of it.”

Home razer might take business next [Cincinnati Enquirer via TaxProf]

SEC Votes to String this IFRS Thing Along

Caleb Newquist
February 25, 2010

AS PREDICTED. And It was unanimous. Sure, it wasn’t the boldest call we’ve ever made here at GC but we thought it was worth pointing out that the SEC really didn’t have much of a choice.

The good news is that the Commission doesn’t need to sweat this for now. They’re just letting everyone know that they’re tepidly re-re-committing to International Financial Reporting Standards but ONLY if the IASB and FASB can pull off meaningful convergence and the IASB stops being a bunch of lily-livered bean counters and tells the pols to BTFO.

Web CPA reports, “In the commission’s vote Wednesday, the SEC reiterated its cautious support for IFRS, contingent upon reaching a number of milestones, including convergence of U.S. GAAP with IFRS and improved governance of the International Accounting Standards Board.”

And even if that happens, the SEC staff has to check everything out so that everyone knows exactly what will result from the U.S. adopting IFRS (probably the rapture). Once that’s settled then we can talk about how this will get done.

Mary Schapiro’s words:

“In 2011, upon conclusion of the fact-gathering and analysis set forth in the work plan – and assuming completion of the convergence projects – the commission will then be in a position to determine whether to incorporate IFRS into the financial reporting system for U.S. public companies. Until that time, we will expect staff to provide periodic written public reports to the commission on the progress of its efforts.”

Back to work everybody. There are future meetings to be planned.

SEC Votes on Work Plan for Incorporating IFRS [Web CPA]
Earlier: SEC Meeting on Roadmap Will Likely Lead to More Meetings on Roadmap

Tax Deadbeat of the Day: Jose Canseco

Caleb Newquist
February 24, 2010

Try to make sense of this: J Can made $45 million playing baseball, “wrote” two books that essentially ruined the juicing party in MLB, has been on countless reality shows, tried his hand at mixed martial arts and he can’t scrape together $320,000 for the IRS and the state of California?

Okay, can’t undo what’s done and unfortunately, Canseco has limited options. He can’t really call McGwire, Bonds, A-Rod, Jason Giambi for a loan. That’s just awkward, plus he doesn’t strike us as the type of guy who would pay you back if he could.

If the MMA doesn’t work out, then we’re thinking he’s still got plenty of options:

• Working outside an Abercrombie & Fitch

• Bouncer on a porn movie set

• KPMG Chairman

• Jersey Shore cameos

Other possibilities? Sure they’d have to garnish his wages but dude needs to get the ball rolling.

Slugger Jose Canseco strikes out with tax agencies [Tax Watchdog]

Announcements

Thanks to This Week’s Advertisers

GoingConcern
February 24, 2010

A quick word of thanks to this week’s advertisers on Going Concern:

• Chase Sapphire

• The New York Times

If you’re interested in advertising on Going Concern, email us at advertising@breakingmedia.com.

Thanks!

News

Bad News: Forensic Accountants Are Crooks Too

Caleb Newquist
February 24, 2010

Allegedly of course! Despite our best wishes for a forensic accountants to be fraud-busting crusaders that pursue truth, justice and all that crap, this corner of the profession is not immune from shiesty characters.

Lewis Freeman, “Miami’s go-to forensic accountant”, has been charged with embezzling $2.6 million from his clients. The Miami Herald is reporting that Lew has pleaded not guilty but is planning to change his plea to guilty “within a few weeks” while his attorneys try to negotiate a lighter sentence. The Herald also reports that two other employees of his firm, including the CFO, will be charged as co-conspirators in the case.

When you think about it, this really exposes Freeman as not being a very smart guy, just smarter than the people he was ripping off. As criminal mastermind Sam Antar told us in an email, “Lewis Freeman may have been considered ‘Miami’s go-to forensic accountant’ but he was not a very bright guy. He simply took old money from his client’s trust accounts and replenished it with new money. As a forensic accountant, he should have known that ultimately such Ponzi schemes end up collapsing over time.”

Despite this, Freeman was able to carry on the scheme for approximately a decade, swindling up to 250 victims.

Wondering what this latest development meant in terms of fraud involving forensic accountants, Sam told us, “Forensic accountants turned white collar criminals present a real challenge for law enforcement, since they (excluding Lewis Freeman) are far more sophisticated in their knowledge of anti-fraud measures and are more innovative in exploiting weaknesses in internal controls than the common white collar criminal.”

And don’t worry, they’re out there, “Freeman is probably not the only forensic accountant turned Ponzi schemer out there. The smarter and more sophisticated one’s have not been caught yet,” Sam said. Got it. Suspect everyone.

We first mentioned Lewis Freeman last fall when his firm was under investigation by the FBI and that his firm briefly served as the Chief Restructuring Officer for the Palm Beach Funds that were part of the Tom Petters orgy of fraud.

The bright side is we can’t foresee any scenario where the image of accountants gets worse.

Miami’s ‘go-to’ forensic accountant pleads not guilty to fraud [Miami Herald]

Priests Snitch on C Street Center to IRS for ‘Masquerading as a Church’

Adrienne Gonzalez
February 24, 2010

In case you’re not familiar, C Street is the destination spot for washed up, morally-tainted Republican All-Stars like South Carolina governor Mark Sanford post-Appalachain Trail (it’s called “decompression” and I suppose I’d do it too if I was hooked on an exotic South American beauty that wasn’t my wife) and Mississippi’s Chip Pickering who used the C Street facilities to entertain his mistress.

At least Sanford is classy enough to claim he was there for spiritual advice after his wife found out and started planning her book tour.

I guess we know what the C stands for (hint: it ends in “U Next Tuesday”) and there’s plenty of it running around the joint. Must be all that awesome Bible study.

WaPo:

The owners of a $1.8 million townhouse on Capitol Hill that has been home and refuge to conservative members of Congress are wrongly claiming a federal tax exemption reserved for religious establishments, 13 Ohio clergy members contend in a complaint to the Internal Revenue Service.

The clergy suspect that the C Street Center, which rents living space to lawmakers, is “an exclusive club for powerful officials . . . masquerading as a church,” according to a request for an investigation addressed to IRS Commissioner Douglas Shulman.

The questionable spirituality of C Street is nothing new but this is the first time real live priests have taken to snitching to front off the “organization”. Jim DeMint (another South Carolina Republican) defended the place (though mentioned nothing about whether or not he’d do Sanford’s mistress) saying, “We kind of make that commitment to each other to get together once a week. Sometimes it’s a Bible study; we always have a spiritual or scriptural thought. But sometimes we just talk about each others’ lives, try to get to know each other, remind each other that we are not important, that it’s just a title.”

How about lying, cheating, fake non-profit-status-having family values hypocrites? Is that just a title?

What’s up with C Street? Religious group for morally bankrupt politicians at the end of their rope seeking comfort and companionship or fundamentalist flophouse? I guess that’s for the Service to decide.

So far it doesn’t look good for our merry bunch of can’t-keep-it-in-their-pants GOPers, as DC already revoked 66% of C Street’s property tax exemption last year due to the fact that 66% of the facility was used as a residence and not a church.

Does getting on your knees count for that other 34%? Hallelujah and yay conservative family values!

Accounting News Roundup: Koss Sues AMEX for Sachdeva Spending Spree; IRS Worker’s Widow Sues Stack’s Widow; Twitter Feeds for Tax Pros | 02.24.10

Caleb Newquist
February 24, 2010

• Koss sues American Express over Sachdeva purchases [MJS]
Headphone factory Koss is suing American Express (the whistleblower!) for not reporting alleged embezzler extraordinaire Sue Sachdeva sooner.

Koss alleges that AMEX knew about Suze paying her credit card with Koss funds in February 2008 but then did nothing about it until August 2009; a month when SS spent $3.5 million on high end threads.

Sue Sach was finally exposed last December after allegedly making off with $31 million. So more or less, Koss is suing AMEX for $20 million because Koss’ management was far too busy to pay attention to their own company. The good news is that a whistleblower that happens to be corporation gets about as much gratitude as a human whistleblower. Consistency!

• IRS worker’s widow sues Texas suicide pilot’s wife [AP via NYDN]
The widow of IRS employee Vernon Hunter is suing Sheryl Stack, widow of Joseph Stack, in order to determine if JS had a life insurance policy or other assets. The suit alleges that Mrs. Stack should have “should have warned others about her husband,” apparently because someone bitching about the IRS regularly flies a plane into a building.

• Four Twitter Feeds for Tax Pros [FINS]
FINS put together their top four Twitter feeds for tax professionals yesterday and lo and behold, we ended up on the list! Thanks to FINS for including us but a special thanks goes to people like Terry “Dozer” and wives that shoot at their greedy husbands. They make our jobs easier.

Quote of the Day

Quote of the Day: Doug Shulman Speaks in Austin | 02.23.10

Caleb Newquist
February 24, 2010

“They do hard work on behalf of the American citizens, and an act like this won’t stop us from doing our jobs with dignity and respect for Americans.”

~ Doug Shulman, the Commish, on IRS employees.

The JDA

SHOCKER: Accountants Have a Conservative Outlook on the Economy

Adrienne Gonzalez
February 24, 2010

Surprise, surprise! CFOs, controllers, and CPAs are only slightly skeptical about the economic outlook these days. Surely it’s not because our industry has been pounded harder than others, in fact we’ve weathered the storm better than most.

The fourth quarter AICPA-UNC Business and Industry Economic Outlook Survey sheds some light on where CPAs’ heads were at in Q4 2009:

Expectations among Certified Public Accountant executives for the U.S. economy remained pessimistic in the first quarter as the recovery proved sluggish amid signs of potential growth in manufacturing and a slightly improving outlook for organizations, according to a new nationwide survey conducted by the American Institute of Certified Public Accountants and the University of North Carolina’s Kenan-Flagler Business School.

“It is good to see signs of optimism, especially from the manufacturing sector,” said Carol Scott, CPA, AICPA vice president for business, industry and government. “Unfortunately 40 percent of our CPA members in business and industry — chief financial officers, controllers and CPA financial professionals – are now telling us that they do not expect their business to return to pre-recession levels until 2012 and beyond.”

Such a conservative bunch, those little accountants.

Interestingly enough, the latest survey shows a shift in the collective thinking of CPAs, who had shown uncharacteristic optimism in previous 2009 survey responses. What gives, guys? Know something we don’t that you’d like to share with the class? Perhaps reality has finally bit down and left a mark on a traditionally recession-proof industry.

In a recent “unscientific” straw poll of AICPA Insider readers, CPA Trendlines’ Rick Telberg shares CPAs’ top 10 concerns, not surprisingly dominated by the number one concern for accounting professionals, the economic outlook. Firms are cutting costs and slicing away the “flash”, meaning no stupid tchotchkes for you!

Will this back-to-basics approach change CPAs’ outlook for the quarters ahead or simply keep everyone afloat until things do genuinely begin to look up? If nothing else it means better service for clients and maybe a little less fear for accounting practitioners who are ultimately the ones who have to deal with any shift in the industry outlook. Clients will always be around, it’s the qualified professionals I’m a tad worried about.

We’ll let you know what happens with the next survey but are not afraid to wildly speculate that respondents will continue to pull back the optimism and stick to conservatism as usual.

PwC Wants You to Know Your Elevator Speech

Daniel Braddock
February 24, 2010

By now busy season is causing many of you to burn the candle from both ends and I have little doubt that you’d have a few choice words if you found yourself sharing the morning elevator ride with your firm’s CEO.

No fake smiles or warm-felt appreciation for your job. But as much as you’d like to punch The Big Boss in the spleen and kindly ask for your personal life back, you’d find yourself grinning and bearing it, and maybe even thanking them for the excellent work / life balance initiatives.

Ha. Balance.

Well, PricewaterhouseCoopers still believes in the elevator speech, or at least their recruiting team does. Personal Brand Week kicked off on P. Dubs’ Facebook and recruitment pages yesterday with the first lesson. The week’s schedule is as follows:

• Monday – your elevator speech
• Tuesday – your passion
• Wednesdsay – your network
• Thursday – your online brand
• Friday – open to change (career momentum)

As soft as these topics may seem, the worksheets provided on the site can be a starting point for those of you already in the midst of your careers. Forget the elevator and the high-up partners. This should go for everyone above you that you’ve worked for, no matter how briefly that experience might have been or where you happen to bump into them.

Take the elevator speech idea: knowing how to succinctly articulate your position and experience within the firm is important. It might sound trivial, but remembering the name of your first manager-who-recently-made-partner and name-dropping this individual can be beneficial. Same goes for what clients you’ve worked on. Mentioning how you worked on XYZ bank and that you found the work engaging and something you want to experience more of could spark the interest of the your target.

Like I mentioned, this conversation can take place anywhere. In line at the cafeteria. Your building’s shoe-shine or newspaper stand. Even the end-of-busy-season party is an opportunity.

There is a fine line between sounding sincere and sounding manufactured (ask Tiger Woods). The last thing you want to come off is an overzealous associate who stalked down the leading tax partner only to say how much you appreciated the opportunity to work 14-hour days. Be genuine but avoid sounding rehearsed.

Why Snoop Dogg’s Latest Tax Problem Isn’t a Surprise

Caleb Newquist
February 24, 2010

Seriously. Does anyone think that Snoop Dogg forgetting about his taxes is that much of a stretch? He’s got to have the money; the Starsky & Hutch royalties alone should be able to settle the $598-odd thousand lien that the IRS slapped on him.

So the only plausible explanation is that he forget to pay the taxes. He’s got the regular day-to-day celebrity issue that Nicolas Cage or Eve may have but come on people. His daily ritual consists of choosing between White Widow, Hollands Hope or Northern Lights (or whatever strain he wants, really); has it occurred to anyone that it may have slipped his mind?

D-O-Double G got hit with a lien last year too so isn’t this the kind of tax compliance we’ve come to expect anyway? It’s basically like you scrounging around for your keys every morning. It’s the routine.

Yes, we suppose that he could hire a CPA to take care of his business affairs but we’re guessing that may have escaped the mental to-do list too. NBD, really. See you next year Snoop.

Audit

Audit Room Etiquette: Three Faux Pas That Make Your Co-workers Hate You

Caleb Newquist
February 24, 2010

Since we marked the countdown to the first SEC deadline of busy season yesterday, let’s tackle an important issue.

Sitting in close proximity of the same people day after day, night after night tends to wear on a person (and if you happen to be sleeping with them, it’s worse).

You start noticing the most mundane, yet painfully annoying habits of your fellow auditors and they can drive you up the boringly-beige wall. Pretty soon, assault and battery seems like your only course of action. We ask that you refrain from beat downs (it’s just not considered good professional to batter your co-workers these days), but it is, of course, your God-given right to gripe about it and share your gripes behind the offending co-workers’ back.

But before you get too high and mighty, are you absolutely sure you’re not one of the annoying ones? We consulted another former audit room survivor, DWB, and no one is immune. In order to make you more aware of your personal, er, shortcomings, we’ve assembled this handly list of the most common bad habits that occur in the audit room:

• Eating – You either eat food that makes the entire room reek or you happen to simultaneously masticate and opine on recent accounting developments. Trying to burp quietly is an act in futility and don’t react to your food like it’s sexually stimulating (even if it is). All of these make you terrible to be around.

• Personal phone calls – You know that guy that takes three phone calls from his girlfriend every single day at the exact same time? Or you happen to call your mother every day to shoot the breeze for 45 minutes. Oh, that’s you? Well, not only are you shamefully whipped and/or dependent you’re annoying the hell out of everyone else within earshot.

• Humming, whistling and/or singing – For the love of God, why on Earth is necessary to audibly hum a tune that you’re making up in your head? Furthermore, why would you put words to it? You’re an auditor, not Andrew Lloyd Webber. (And no, it’s not OK if the tune is actually one of Mr Lloyd Webber’s compositions – actually that might be worse.)

Now for those of you that simply think that a set of headphones will solve all these problems, we regret to inform you you’re gravely mistaken. Once these habits have saturated a person’s psyche, any movement, otherwise normal, will amplify the inner wrath to deistic proportions.

The above list is by no means all-inclusive and we’ll admit that our tolerance for bad human behavior is lower than most but the issue is important enough to warrant discussion and possible solutions.

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