Let’s See What Some Folks Are Saying About the Proposal to Fold the PCAOB Into the SEC
Since we posted our take last week about the Trump administration’s fiscal year 2021 budget proposal to eliminate the PCAOB and fold its duties into the SEC by 2022, we’ve gotten some emails from accountants about what they think of the PCAOB. Most of them have been negative, like this one: Reducing or better yet, […]
Could We Soon Be Living In a PCAOB-less World?
I cut out of the office early yesterday afternoon to watch my oldest daughter’s junior high basketball game, thinking: “It’s a slow news day, I’m not missing out on anything.” It wasn’t until I had my first cup of coffee this morning that I saw a couple of articles posted yesterday afternoon, including one from […]
Some Cryptocurrency Traders Opting for ‘Screw It’ Tax Compliance Approach
Here’s an amusing New York Times column by Kevin Roose that features a rafter of cryptocurrency traders distressed about their tax situations. As we noted earlier this year, some crypto traders got mad/sad upon learning that taxes were a thing they had to deal with. And according to Laura Walter, aka Crypto Tax Girl, some […]
#TBT: That Time PwC Consulting Named Themselves After Everyone’s Least Favorite Day
From The Wall Street Journal June 9, 2002: PwC Consulting became the latest consultancy to flee headlong from the tarnish on the once-sterling accounting profession, announcing it will change its name to Monday when it completes its separation from accounting company PricewaterhouseCoopers LLP. PwC Consulting, a management-consulting and technology-services business, announced in March that it […]
Let’s Imaginate What a ‘Big 4 City’ Would Look Like
It appears its massive, child-like compound isn’t enough as Facebook has announced plans to build a “company town” near its Menlo Park HQ: The social network said this week it is working with a local developer to build a $120 million, 394-unit housing community within walking distance of its offices. Called Anton Menlo, the 630,000 […]
Acting IRS Commissioner Admits That Planting a Question About Reviewing 501(c)(4) Orgs at a Sleepy Tax Conference Wasn’t Such a Great Idea After All
Under less-than friendly questioning from members of the Senate Finance Committee Steven Miller was all, "Yeah, that was my bad." “I will take responsibility for that,” Miller said, expanding on last week’s admission that he knew mid-level manager Lois Lerner had answered a question planted by a member of an IRS advisory council. “Now that we had […]
Why Yes, Tax Reform Can Get More Complicated
Juggling all the aspects of income tax reform is quite a task. Here's a mind dump of a few of the elements involved: Credits Deductions Tax-exempt income The treatment of pass-throughs How much marginal rates should be cut If more revenue should be raised How carried interest is treated The capital gains rate Transfer pricing […]
Dumb: Iowa Once Tried to Implement a Pumpkin Tax
We've noted in the past that states try to levy taxes on many silly things. Literally. Maine taxes jugglers, comedians, and clowns for crying out loud. States also try to tax other things that simply don't make a lot of sense. It seems that legislators, rather than improve tax systems with reform, like complicate things […]
Big 4 Tax Associates Prepared for Sept. 15th Eve All-Nighter with “5-hour Bombs”
It’s come to this.
Our immediate concern was that the imbiber would be suffering from a disturbing reaction but he informed us that he has “just about” quit shaking. Good to know, good to know. If you have your own deadline cocktail that may or may not have caused an unexpected visit to the emergency room, we’d invite you to share it with the group at this time. Happy September 15th!
Would You Show Your Loyalty to KPMG with a Tramp Stamp?
Or the new PwC logo on the back of your neck? How about Deloitte green dots incorporated into some barbed wire? Sure most people are looking for new jobs but for those of you looking to show some loyalty to your firm, you should know that some company ink may go a long way:
Employees of Anytime Fitness, a workout chain based in Hastings, Minn., can get the company’s purple running man logo permanently inked on their bodies by a tattoo artist who shows up at monthly training sessions. More than 350 employees have gotten permanent tattoos including CEO Chuck Runyon.
Runyon says the tattoo represents a significant commitment to the brand. Employees receive standard benefits like retirement plans and health insurance, but they also have flexible hours and an office culture that includes contests and giveaways among staff, a combination of perks that Runyon believes encourages employee loyalty.
“We spend a third of our lives at work,” he says. “If you don’t love what you do, that’s a miserable existence.”
Senators Introduce Bill That Would Require IRS to Produce 310 Million (or so) Receipts
Plenty of horrendous ideas get introduced inside the hallowed walls of Congress but the latest submission from Bill Nelson (D-FL) and Scott Brown (R-MA) ranks right up there:
Sens. Bill Nelson (D-Fla.), chairman of the Senate Finance subcommittee on Fiscal Responsibility and Economic Growth, and Scott Brown (R-Mass.) introduced the measure Wednesday that would require the IRS to provide each taxpayer with an itemized list, similar to a grocery store receipt, that shows where their payroll and income taxes are spent. “Taxpayers have a right to know where their money goes, how much Uncle Sam is borrowing on their behalf, and what they get in return for it,” Nelson said.
Yeah, no problem. New responsibilities under healthcare reform, chasing offshore accounts, not to mention your everyday tax compliance and enforcement. This will be a piece of cake since the the Service’s budget is getting slashed.
Senators introduce bill that would provide detailed tax receipt [The Hill]
Just So You’re Aware: An Ex-IRS Agent Has a Reality TV Show
A taste of the June 6th premiere of The IRS (+) Hitman:
And if you think that’s interesting, there’s more:
Is there a complete sentence in there somewhere? Try the next one.
You hear that? How can you live with yourselves IRS? Stealing money from this Jonas Brothers wannabe family that won’t be able to stand around the kitchen eating cheese whiz out of the jar with their hands! No mercy indeed. If you have an IRS injustice story, you better get in touch with this Hitman character.
Wanted by America, the IRS (+) Hitman Reality TV Show is Here [PR]
Elvis Fails to Make Ernst & Young Singalong Less Awkward
Any thoughts on this? The swaying needs work, that’s for sure.
States Are Coming Up with Some Really Bad Ideas for Taxing Services
Yesterday we explained why sin taxes can work, despite the feelings of those that just want to tell the religious types to GTFO of the legislative process. While we agree that religious based legislation is a bad — nay — a horrendous idea, since more states refuse to legalize and tax certain things like marijuana, gambling, prostitution, among others, our elected officials have started coming up with even far worse ideas that the Texas pole tax.
The Times ran a story over the weekend that examined various states and what types of services they are taxing to close their budget gaps. While many states are considering taxes on professionals like lawyers and accountants, legislators in other states have gotten so desperate it appears they’re just pulling ideas straight out of their asses:
In Nebraska, a lawmaker has introduced a bill to tax armored car services, farm equipment repairs, shoe shines, taxidermy, reflexology and scooter repairs. In Kentucky, Jim Wayne, a state representative, and some fellow Democrats are proposing taxing high-end services: golf greens fees, limousine and hot-air-balloon rides, and private landscaping.
In June, voters in Maine will decide whether to accept a state overhaul of its tax system that would newly tax services like tailor alterations, blimp rides, and entertainment provided by clowns, comedians and jugglers.
We get it. States are desperate for revenues but these are the ideas? A juggler tax? Taxing your shoe shines? How’s this idea for taxing a service? Prostitutes! A service is being provided, yes? Make it a 50% tax, whatever the hell you want. Plus, more people getting laid might actually cut down on the crazies taking matters into their own hands.
We decided to get a service provider’s (not a prostie) thoughts on the matter, so we asked resident GC tax expert Joe Kristan for his thoughts:
Being a service provider myself, I can’t say I’m excited about the idea. Still, standard tax theory would say that services should be covered to make the tax as broad as possible, allowing (in theory) a lower rate. Iowa taxes a bunch of services, including foot reflexologists (you’d thank that would take care of the budget right there), but CPAs and lawyers are exempt. I’d say it’s because we’re special, but mostly it’s because we have special lobbyists.
All right, so maybe there’s a “theory” to it but something tells us it has nothing to do with taxing clowns.
States Seeking Cash Hope to Expand Taxes to Services [NYT via Web CPA D&C]
What Are Your Taxes Buying Hollywood?
The former head of the Iowa Film Office was charged this week with “unfelonious misconduct in office” for his role in a scandal in which filmmakers bought themselves everything from featherbeds to Benzes with money advanced by the taxpayers of Iowa.
The Hawkeye State fell big time for the film credit fad that swept the country in recent years. Iowa had two 25% tax credits, one for filmmakers and one for investors. As interpreted by Mr. Wheeler (but not the Attorney General), the credits together could add up to 50% of film costs incurred in state, making it perhaps the most generous such giveaway in the country.
Better yet, the credits are transferable, so filmmakers can sell them at a discount to raise money. The program had no caps, meaning that Iowa could give away money as fast as Hollywood could spend it.
The entire program was managed by Mr. Wheeler, almost by himself. And did he ever manage it. According to the Iowa Attorney General:
Defendant Wheeler permitted filmmakers… to utilize “payments in kind” including “services in kind” in support of claimed expenditures for tax credits. Under defendant Wheeler’s direction, Iowa’s film program became one of the few, if not the only, state film incentive program in the nation to allow credit for “services in kind.”…Examples included “sponsorship agreements” in which intangible assets (such as reciprocal web links, product placement and marketing agreements) were traded with no money changing hands. These non-cash “expenditures” sometimes constituted the majority of the filmmakers entire alleged budget.
For a brief glitzy moment, Iowa was overrun with film crews and starlets helping themselves to a bountiful harvest.
The party ended last fall with revelations that Iowans helped buy a Mercedes and a Land Rover for a producer via film credits. Mr. Wheeler lost his job, and now he stands charged with a “serious misdemeanor.” Two filmmakers are charged with felony theft for inflating their expenses while claiming credits.
But if Mr. Wheeler is criminally inept, what about the bosses that left him alone and unsupervised to give away over $30 million so far? And what about the 147 legislators — out of 150 — who thought it would be a good idea to give Hollywood a blank check? And you thought “Music Man” was fiction.
But lest you think too badly about the rubes in Iowa, forty-four states are giving taxpayer money to Hollywood. Chances are that your legislator is taking money from you and giving it to those nice Hollywood people. Remember that next time your legislator says you aren’t paying enough taxes.
‘Subversive’ Organizations Must Register in South Carolina; Terrorist Tax to Follow?
Do you have a client thinking of starting a subversive organization in South Carolina? Are they looking to expand their network of businesses to include one with the expressed mission of overthrowing the U.S. government? Thought so!
Just so you know, they are required by law to register with Secretary of State and declare their intentions or they will be subject to a $25,000 fine and 10 years in prison. Let’s keep the ship tight people.
The Subversive Activities Registration Act was passed last year by the Palmetto State legislature and is now officially on the books. Oh! And there is a $5 filing fee (we attached for the form below for your convenience).
If you’re not sure if the new entity will qualify, the law defines subversive organization:
(1) “Subversive organization” means every corporation, society, association, camp, group, bund, political party, assembly, body or organization, composed of two or more persons, which directly or indirectly advocates, advises, teaches or practices the duty, necessity or propriety of controlling, conducting, seizing or overthrowing the government of the United States, of this State or of any political subdivision thereof by force or violence or other unlawful means
South Carolina, clearly not satisfied with the job being done at DHS, obviously enacted this little gem of legislation to exploit these organizations’ propensity for full disclosure. What’s the point of organizing a business with such an important purpose if everything isn’t going to be on the up and up?
The Raw Story reports that enacting redundant legislation is the norm for the Palmetto State as “[it] is among those states which require drug dealers to declare their illegal income, or face additional criminal penalties on top of the already established penalties for buying, possessing and selling drugs.”
We can only assume that the SC pols will now get to work on a new “Terrorist Tax” that will be known as the Super-Anti-American Business Sucks Act. It seems like a natural progression of the legislation there.
No joke: South Carolina now requires ’subversives’ to register [The Raw Story]
Terrorists Must Register With SC Secretary Of State [Fits News]
[h/t Joe Kristan and Russ Fox of Taxable Talk]
Florida CFO: Office Supply Czar will Oversee Paper Clip Exchange
Of course! It didn’t even occur to us that Florida CFO Alex Sink would be far too busy running for Governor to oversee the new CFO Depot. Accordingly, as is the rage in politics these days, there will be a Office Supply Czar to overlook this little treasure of savings.
Not only does the video below inform us of this new critical position in the Florida government, the exact number of paper clips that were counted is made known: 402,419.
When you think about it, the appointment of a czar is a natural progression in the bureaucracy. If there is a specific problem (e.g. an overabundance of paper clips) appointing one individua to get on the problem like stink on a monkey is the best way to address said problem. The creation of a committee, while tempting, has run its course. Why appoint a team of 10 – 12 individuals to talk about a problem when you can get one person (with the appropriate qualifications) to make the solving of the problem their sole purpose for being on Earth?
Florida CFO to Solve Budget Crisis with Paper Clip Exchange
CFOs have a tough job. Oh sure maybe a select few get to globe-trot with the Fab Four to the likes of Davos but the lion-share of them have to deal with less sexy tasks like, say, saving money.
Or solve a state fiscal crisis! Enter Florida’s CFO, Alex Sink. Ms. Sink is taking cost saving initiatives to levels that the Big 4 either considered and found ridiculous (even for them) or will be implementing them in the near future.
Last year Ms. Sink had her staff count paper clips in order to reduce costs. No, seriously. “Her staff spent untold hours determining the Department of Financial Services has 537 pounds of paper clips, 37,601 binder clips and 17,425 pens.”
The staff that were found to hogging more than a reasonable amount of suppliers were fired on the spot. Okay, not really but yeah, staff were counting counting paper clips. Makes you glad to be working at public accounting, no?
The latest idea from the CFO of the FLA that is the creation of the “CFO Depot”. This will allow employees to swap supplies as needed, as opposed to rummaging through every drawer at the their desk. Presumably this will cut down on violence in the workplace and will save the state money. Ms. Sink is encouraging other state agencies to set up similar systems, as this may save the state $14 million.
Here’s the pitch:
The FDIC’s New “Risk-Based” Fee Policy. Or, Alternatively, “F&%k You, Pay Me; Banker Edition”
Editor’s Note: Want more JDA? You can see all of her posts for GC here, her blog here and stalk her on Twitter.
Listen, we know the FDIC is broke, there’s no use pretending they aren’t. But apparently we’re going to keep doing it so let’s stop for a moment and analyze the FDIC’s latest crackpot scheme to keep bad banks afloat and their balance in the black, shall we?
The summation up to now — for those of you with short attention spans — is that the FDIC is looking to tax banks’ asses based on the risks they take. On the surface that doesn’t sound like a bad idea until you consider the fact that the FDIC, by its very nature as a “safety net”, encourages the exact behavior they’re looking to “penalize”. Keeping in mind also that the Obama administration is coming down on banks from the other end with some tax scheme, it makes you wonder why the hell we bailed them out in the first place.
Blame the academics and these brainiacs in Washington who believe there’s nothing wrong with the fundamental framework of American banking, least of all that any of it could possibly be attributed to the attitude that Uncle Sam will always come to banks’ rescue. Here’s hoping the bankers paid attention in Econ 101 when they went over that whole “no such thing as a free lunch” part.
FDIC Chairman Sheila Bair said there was “a broad consensus of academic studies,” that concluded “poorly designed compensation structures can misalign incentives and induce risk taking.”
Bair said called a study of “compensation structure, rather than levels of compensation,” a fair approach.
Maybe I just don’t have the auditor mind needed to wrap around a concept like this but WTF is that supposed to mean?! The FDIC epitomizes moral hazard so how in the hell is it that the FDIC is the one coming in to tap banks to cover said risks? I’m not rationalizing banks’ behavior (I remind dear reader here that the top 5 banks in America hold $275 trillion in notional derivative exposure) but, uh, just because Sheila needs to cover the next round of failed banks doesn’t make it appropriate to start regulating now.
Has she ever heard of too little too late? How about too much too late?
As I have already pointed out, we all know who is going to ultimately pay for this and it sure as hell isn’t the banks. Bend over, the next round is about to hit and it’ll hurt less if you’re prepared.
Alleged Gunman Hates Taxes, Loves Pizza Hut
We thought that Glenn Beck had flipped his lid again but unfortch, it’s just some other person complaining about taxes:
A daylong hostage standoff ended late Wednesday when an armed, disabled man wheeled himself out of a post office in Wytheville, Virginia, and was taken into custody, police said.
The alleged gunman, identified by police as Warren “Gator” Taylor, 53, of Sullivan County, Tennessee, surrendered in a wheelchair, said Wythe County Sherrif’s Office Chief Deputy Keith Dunagan. All three hostages walked out without injury.
He asked for a pizza but made no other demands, [the police] said. He seemed neither angry nor disgruntled but did utter complaints about government and taxes…When the supreme pizza that police ordered was more than half an hour late, Taylor joked that Pizza Hut promises delivery in less than half an hour or the food is free.
Gunman surrenders in hostage ordeal at Virginia post office [CNN]
The American People Have Spoken on Tax Reform
After asking pretty much everyone for their suggestions on tax reform, the President’s Tax Reform Panel has released 384 submitted suggestions and the American People did not disappoint.
The FairTax.org crowd turned out en masse and plenty of practitioners and academics also provided their $0.02.
We didn’t really read those but we’re sure they’re great. We were more interested in those people that were more or less thinking out loud.
Suggestion #239 Mike Finch:
I support yearly audits of all government big wigs and prison terms for any that are found to have made more than $100 mistake on their taxes.
Suggestion #249 from “Froggy” whose organization is “peace man”:
Tax the rich! tax the rich! tax the rich!. oh please please please tax the rich. I want the economy to sink further!
Suggestion #278 from Alex Clay:
Make it explicit that cheating on your taxes makes you ineligible for presidentially appointed positions or committee chairmanships in the congress
Suggestion #346 from Ed:
0% tax rate. Reduce the tax law to 2 pages.
David Laing’s suggestion (#359) must have gotten lost on its way to the health care debate:
No option is NO OPTION! No bill that does not contain a public option is not worth your signature.
Since most of you have checked out for the week, consider spending some digging through these for more gems (we haven’t been able to find an intern that’s up to the job) or suggest your own ideas in the comments.