Tag: IRS

IRS Unit Fully Intends to Make Rich People’s Audit Experience as Unpleasant as Possible

As you my have heard, being mega-rich these days has its disadvantages, including but not limited to – 1) governments getting overly reliant on the wealthy pitching in with revenues; 2) people giving you a hard time when you buy new toys; 3) your own kind selling you out.

Because times are tough and elected officials are having difficulty convincing anyone that higher taxes for the middle class are a good idea, the affluent are having the unfortunate luck to experience the rigor of the Global High Wealth Industry Group – a new unit within the IRS designed to perform the financial equivalent of a full rectal exam:

The reviews performed so far have been particularly harsh, say attorneys. Investors are being asked to turn over numerous hard-to-get documents in short order. These are “the audits from hell that your grandfather warned you about,” says Charles P. Rettig, a partner at Hochman, Salkin, Rettig, Toscher & Perez in Beverly Hills, Calif.

And don’t think for a second that the Service is putting scrubs on these assignments. Extra-special auditees deserve extra-special auditors:

Miriam L. Fisher, a tax attorney and partner at law firm Morgan Lewis in Washington, says the audit teams comprise “A-list examiners” drawn from around the country who are knowledgeable and experienced with various financial products and industries. The audits are so intensive that each team is handling only a few right now and they aren’t far along in the process, she says.

IRS spokeswoman Michelle Eldridge says the group is looking at “individuals who have a complex set of situations, and looking at the complete financial set up.” She acknowledged that “these cases are full audits.”

Although you would never expect an IRS audit to be as delightful as, say, your average weekend in the Hamptons but haven’t rich people suffered enough? The least the IRS examiners could do is bring something from Maison du Chocolat to bring the tension down a notch.

[via TaxProf]

Do I Have Public Accounting Burnout?

Good morning and welcome back as we return with another accounting career quagmire. In today’s edition, an experienced associate at a California regional has a bad case of burnout and is weighing some options – including the IRS.

Caught in a dicey situation at work? Want to incorporate your love for your firm on your vanity plates but need some suggestions? Have some extra money to throw around and need help with ideas on how to best use it to your advantage? Email us at advice@goingconcl make sure you spend it wisely.

Back to the burnout at hand:

I am a second-year associate at a regional firm in California and I am considering getting out to go somewhere else, but I’m not sure where. I’ll start by saying that I have some big issues with the way the firm is run and I don’t trust anyone except for people in my office and maybe two people in the main office. Multiple people in my office have recently notified the firm that they will be leaving including multiple staff, a manager, senior manager, and a partner. Most of them are leaving due to the frustration related to the way things run around here. The partner and managers were basically rendered powerless by the CEO and main office for the entire time they were here and I think the growth of our office has suffered because of it.

I don’t have my CPA license and I’m not sure I care about it anymore, but then again, I’m not sure if working here has just beat me down to the point where I am pessimistic about the rest of my life spent in accounting. I do somewhat enjoy auditing, but I feel I would be better suited for forensics or consulting, a path that I inquired about at my current firm to which I received a reply similar to “not if you want to keep your job”. Could the grass be greener at another accounting firm? I had a good amount of personal interaction with the partner, but I am not sure it’s enough where I could ask him if he wants to bring me along when he jumps ship and swims to his new firm. Or should I be looking for a larger, more well-established firm with more interesting clients?

That being said, I’m pretty burnt-out and not even sure if I want to stay in public accounting. I don’t want to go private at this point, but might instead want to go work for the IRS. My brother is a revenue agent, enjoys it, and said he’d keep his ears open for job opportunities. It seems like it is less frustrating, fairly interesting work that fits into my more investigative mind-set. So could the better hours, more centrally located audit locations, great benefits, and lot’s o’ federal holidays be worth making the switch?

Thanks for your help,

Big-Time Burnout

Dear BTB,

Autocratic management? A quasi-exodus? Your professional interests are meaningless? How you’ve managed to last two years in this joint is nothing short of miraculous. How the firm convinced you to take the job in the first place is also a mystery but let’s focus on the future shall we?

From the sounds of it, you are suffering from a severe case of burnout but we’re not convinced that it’s because of public accounting. You ask, “Could the grass be greener at another accounting firm?” and considering the fact that grass you’re currently grazing is brown and the dog shit hasn’t been picked up for weeks, it wouldn’t be hard to find a better firm. The risk is that if you do have public accounting burnout then you’re doing yourself a disservice by making another run at it when your heart isn’t in it. Plus, your “meh” attitude about the CPA doesn’t do much for your prospects at another firm.

If you’re interested in forensics and consulting, the IRS may be a good route for you. Follow up on your lead and make it known that you are very interested in any opportunities. But since the IRS gig doesn’t sound like a guarantee, you should find a recruiter to help you get out of your current gig. Don’t make yourself look like you’re desperate but definitely communicate why you are looking. A good recruiter will help you find a cultural fit as well possibilities to satisfy your intellectual curiosities.

So while you’re showing severe symptoms of public accounting burnout, it’s not a clear-cut case. Your career aspirations would be best served if you could find another firm more willing to cater to your interests in forensics and consulting. If an opportunity at the IRS comes up and you’re still interested, go for it. In the meantime, take some vacation (if your firm will let you, yeesh).

Insight from the peanut gallery? Help the poor guy out.

Accounting News Roundup: Signs of Compromise on Tax Cuts; KPMG Caught in Between IRS, Wells Fargo; BDO Elects New Board Members | 11.05.10

White House signals compromise on tax cuts [Reuters]
A conciliatory White House said on Thursday it was willing to negotiate with Republicans on tax cut extensions, but Senate Republican leader Mitch McConnell took a hard line against compromises with President Barack Obama in a new Congress.

In the first possible policy shift since Democrats suffered heavy election losses two days ago, White House spokesman Robert Gibbs signaled Obama was open to talks on a temporary extension for the wealthy of Bush-era tax cuts that expire at the end of the year.

New York Court Sends “Amazon Tax” Case Back for More Information [Tax Foundation]
[T]he intermediate court of New York handed down its long-awaited “Amazon tax” opinion in Amazon.com, LLC v. New York State Department of Taxation and Finance. New York requires companies with no property or employees in New York to collect New York sales tax if the non-resident company receives revenue from in-state independent affiliates.

Qantas Blames Rolls-Royce for Engine Failure [WSJ]
Qantas Airways Ltd. Chief Executive Alan Joyce on Friday said the design of Rolls-Royce Group Plc engines could have caused a mid-air failure that forced one of its A380 super jumbos to make an emergency landing in Singapore.

“This is an engine issue and the engines were maintained by Rolls-Royce since they have been installed on the aircraft,” Mr. Joyce told reporters at the company’s headquarters in Sydney. “We believe this is most likely a material failure or some kind of design issue.”

BBC strike silences Today and hits TV news [FT]
BBC journalists ignored the pleas of their editor-in-chief on Friday, taking strike action over plans to cut their pension benefits and driving familiar morning news programmes off the air.

The Today programme on Radio 4 was replaced with pre-recorded material, including a documentary on bird life in the Humber estuary, while Radio 5 Live and the BBC’s morning television news were produced with skeleton staff and unfamiliar presenters.

IRS looks into Wells Fargo tax deductions [MST]
A dispute between the Internal Revenue Service and Wells Fargo & Co. that has been quietly taking shape in a Minneapolis federal court could cost the bank hundreds of millions of dollars.

The clash involves “sale-in, lease-out” (SILO) transactions in which a tax-exempt entity transfers tax benefits to a taxpayer like Wells Fargo, in exchange for a fee. The IRS says Wells Fargo has claimed nine-digit losses for tax purposes on such deals, but the government considers them an illegal tax dodge.


BDO USA, LLP Announces Results of Board Elections [BDO]
Brian Eccleston, Scott Hendon, Albert Lopez and Brad Schrupp have each been elected to the firm’s board of directors. These elections, which are for a three-year term, are effective immediately.

“The partnership has shown wise judgment in electing these very deserving individuals and I am confident that the firm will benefit from the insight they will bring to the process,” said Jack Weisbaum, CEO of BDO USA.

Actress’ name is mud in tax man’s eyes [Tax Watchdog/Detroit News]
Jaime Pressly is the actress and she owes $376k.

Young Buck Not Satisfied with Keeping Personal Possessions, Suing IRS

If you’re like us, you were crushed by the news of the IRS canceling the auction of Young Buck’s treasures. Whether it was the ‘marijuana leaf picture‘ or the Titans Fridge, the auction really had a lot to offer and it’s a shame – a damn shame – that Mr. Buck’s attorney put a stop to it.

But having your home raided by IRS Agents wielding shotguns (our vision) is enough to get the most passive citizen upset. So if you’re Young Buck, simply getting to keep your material possessions won’t suffice:

Officials said Young Buck is suing the IRS over the raid, saying the government’s response to his tax problems has hurt his ability to make money and pay off his debts.

Got it? The IRS kicked down the doors, made off with all the man’s goods and now his records won’t sell. It has nothing to do with his music sucking.

What Does the IRS Have Against Boobs?

We’re asking this question in a collective sense. Call it a hunch but we’re pretty sure that Doug Shulman votes “T” on the T&A question.

To clarify, we’re talking about breast feeding. More specifically about breast pumps for nursing mothers.

You see, the IRS isn’t convinced that breast-feeding has enough health benefits to qualify as a form of medical care, thus, the pumps are not covered. From a tax/health policy standpoint, the Service is more concerned with teeth (false), skin (clear) and noses (not stuffy).

Denture wearers will get a tax break on the cost of adhesives to keep their false teeth in place. So will acne sufferers who buy pimple creams.

People whose children have severe allergies might even be allowed the break for replacing grass with artificial turf since it could be considered a medical expense.

But nursing mothers will not be allowed to use their tax-sheltered health care accounts to pay for breast pumps and other supplies.

That is because the Internal Revenue Service has ruled that breast-feeding does not have enough health benefits to quality as a form of medical care.

The Times explains that under the healthcare overhaul, “preventive procedures” were going to be encouraged to control costs. Despite the mounting evidence to the contrary, the IRS isn’t budging on the issue:

I.R.S. officials say they consider breast milk a food that can promote good health, the same way that eating citrus fruit can prevent scurvy. But because the I.R.S. code considers nutrition a necessity rather than a medical condition, the agency’s analysts view the cost of breast pumps, bottles and pads as no more deserving of a tax break than an orange juicer.

Because tools that will help a mother feed a new-born human being natural food is exactly the same thing as the Omega 4000. Got it.

Acne Cream? Tax-Sheltered. Breast Pump? No. [NYT]

Max Baucus Promises to Monitor the IRS Until the Tax Gap Is Closed ‘Once and For All’

As soon as you catch your breath from laughing hysterically, feel free to continue.

Max Baucus turns 59 69 on December 11th, so even if you assume that he will have the life expectancy of Robert Byrd that means he’s got 32 22 years of watching the IRS’s every move. Sure, we’re making the assumption that the IRS has a snowflake’s chance in Hell of closing the tax gap but that’s an assumption we’re comfortable making.

The General Accounting Office recently stated that the IRS was using “antiquated techniques” to fight tax evasion and Baucus feels compelled to be on top of the situation until the tax gap is a distant memory.

“This report makes clear the IRS needs to develop a comprehensive strategy to fight complex tax evasion schemes and that more work is needed to close the tax gap,” Baucus said in prepared remarks. “I intend to closely monitor the IRS’ progress to make sure they have an effective strategy to root out this tax evasions and close the tax gap once and for all.”

You may now resume laughing until you soil yourself.

Baucus urges new strategy for IRS to combat evasion [On the Money]

Accounting News Roundup: GOP Targeting IRS Funding to Stall Healthcare; Grant Thornton, BDO Merge in South Africa; What Your Recruiter Isn’t Telling You | 10.26.10

IRS Funding A Target In Health-Care Implementation Battle [Dow Jones]
Funding for the Internal Revenue Service could become a battleground in the next Congress as Republicans seek to halt implementation of the new health-care law.

GOP candidates are running on a pledge to repeal that law. But some repeal advocates say a strategy of choking off funding to the IRS and federal health agencies is more politically viable.

“Repeal is not within the set of possible outcomes while President Obama holds his veto pen. However, a defunding strategy could throw sand in the gear bring it to a near standstill,” said Michael Cannon, director of health policy studies at the libertarian Cato Institute.

Stephen Lukens Named Grant Thornton LLP Advisory Services Leader [Business Wire]
Another Stephen! Mr Lukens came on board from IBM Global Business Services and was with PwC Consulting prior to Big Blue’s purchase of the practice.

Accountant describes ‘totally’ different transaction between GM and Delphi [Crain’s]
A forensic accountant testifying at former Delphi Corp. CEO J.T. Battenberg’s civil fraud trial in a federal courtroom in Detroit today said that the auto supplier recorded on its books a payment to its largest customer, General Motors, “totally differently from” the actual transaction conducted by the supplier and its former parent company.

Merger will create new accounting giant [Business Day]
THE merger between Grant Thornton and BDO Cape, which will become effective next Monday, will create the biggest accounting firm in SA’s mid-tier market , followed by Mazars.

The deal positions the merged firm to obtain more work, particularly from privately held businesses and listed companies. Previously the two firms obtained most of their work from privately held businesses.

The firm, which will be led by Grant Thornton national chairman Leonard Brehm, will have a staff compliment of 900 and 97 partners and directors, with combined revenue of R400m.

In Finance Team Building, Xerox Copied No One [CFO]
[M]ajor groundwork was laid through a finance reorganization and team-building effort that Lawrence Zimmerman began eight years ago after ending his retirement from IBM to become Xerox vice chairman and CFO.

“The big change Larry brought was to make the accounting unit independent of all other organizations,” says Gary Kabureck, who stayed on as chief accounting officer after Zimmerman joined Xerox. “That was a huge, very positive change.” The independent model, says Kabureck, replaced a Xerox structure that had tied accounting to business units. Now, accounting is used for “measuring operational results, which may which may [sic] not be what the local operation manager wants them to be, but it’s what the CFO wants them to be.”

Grassley: Three years before unemployment’s back to normal [The Hill]
2013 doesn’t sound that bad.


PayPal Names Patrick Dupuis as Chief Financial Officer [Business Wire]
Pat got his chops at the likes of Sitel, BJC Healthcare and GE Healthcare.

Should you upgrade QuickBooks? [AccMan]
SaaS/cloud upgrade issues are NOT the customer’s problem. They lie with the developers. Contrast this with the advice being given for a QuickBooks upgrade. There is plenty to think about. The same broad principles will apply to any on-premise solution. That’s a fundamental difference SaaS/cloud vendors should emphasize a lot more than they do. SaaS/cloud upgrades are usually seamless to the end customer while bug fixes are often more or less invisible to the user.

10 Things Employment Recruiters Won’t Say [SmartMoney]
You mean this person may not be completely honest with you? GET OUT.

Vast Improvement in Volunteer-prepared Tax Returns Proves That the TIGTA’s Nagging Pays Off

Last year the Treasury Inspector General for Tax Administration came down pretty hard on volunteer tax preparers, noting that 41% of the returns contained errors. As is the IG’s wont, they scolded the IRS to improve this shameless display by volunteers and made some suggestions to help them suck less.

And it worked! Ninety percent of the tax returns prepared by volunteers were accurate thus earning praise from the IG:

Ninety percent of the 39 tax returns volunteers prepared for TIGTA auditors were prepared correctly, a sharp increase from the 59 percent accuracy rate reported by TIGTA in its 2009 review. TIGTA attributed the improvement to an increase in volunteers’ use of the IRS’s Intake/Interview and Quality Review Sheet (Form 13614-C), improved training, and enhanced oversight. Only 5 percent of the 39 tax returns were prepared without use of the Form 13164-C, versus 33 percent in TIGTA’s 2008 Filing Season review, and 22 percent in its 2009 Filing Season review.

“This report is a positive indication of the good work that the IRS is doing for America’s taxpayers,” stated J. Russell George, the Treasury Inspector General for Tax Administration. “I commend the IRS on the progress it has made in helping volunteers accurately fulfill the very important task they assumed.”

This isn’t the first time that the TIGTA has managed to give the IRS credit for doing a decent job. Last month J. Russell George managed to give tepid kudos to the Service for providing satisfactory service at assistance centers but also reminded everyone that a mind-numbingly complex government bureaucracy can always get better. They’re blowing off the deaf and mute, after all.

Your Next Sunday Sermon: Tax Cuts with a Twist of Fire and Brimstone

Isn’t church boring and preachy enough?

Current law prohibits pastors from speaking on politics or endorsing a political candidate, but David Barton of WallBuilders says the IRS’s intimidation of removing a church’s tax exemption status is unconstitutional. Even though some pastors have intentionally crossed the line, Barton does not think the IRS wants to take them to court because it may lose.

“The IRS doesn’t have any interest in doing this because if they do, I believe they know they are going to lose. And if they lose, you have 370,000 pastors in America who suddenly find out that there’s no restriction on them,” Barton suggests.

But this isn’t about politics, this is about TRUTH!

“You cannot lose your tax exemption as a church because as a church, you have a constitutional standing for tax exemption,” he points out. “So with that basis, losing your letter means absolutely nothing — and that’s something pastors are now figuring out.”

Barton argues that the pulpit was and should continue to be the news perspective for America, so he encourages all pastors to speak out and stand for truth.

Barton: No need for pastors to fear IRS [One News Now]

Accounting News Roundup: Hans Has His Work Cut Out; Paladino Trickster Owes Back Taxes; Rand Paul Wants IRS Abolished | 10.13.10

EC proposes mandatory rotation of auditors [Accountancy Age]
“The European Commission is proposing a radical restructure of the audit industry including a multinational regulator, mandatory rotation and caps on advisory fees.

Some proposals, audit to draw up living wills or a detailed “long form report” for regulators or hive off their audit arms, under the measures raised in a new green paper”

18,000 Tagging Errors in XBRL Filings So Far [CFO]
“Companies that have filed data-tagged quarterly and annual reports appear to be handling the task fairly well, even as the overall number of errors continues to pile up.

About 500 of the largest companies were required to use XBRL, or eXtensible Business Reporting Language, to tag data in their financial statements for periods ending on or after June 15, 2009. As of June 15 of this year, approximately 900 more companies had to do so, and the first group of filers additionally had to tag all amounts and tables in their financial-statement footnotes.”

IASB a tightrope walk for Hans Hoogervorst [FT]
“The appointment of Hans Hoogervorst, 54, as chairman of the International Accounting Standards Board raises two big questions

First, does it matter that he is not an accountant? Second, will his elevation lessen the likelihood that the US will adopt the IASB’s IFRS accounting rules in place of its own?

The lack of professional qualifications were not a concern for Michael Izza, chief executive of the Institute of Chartered Accountants in England and Wales.

‘I don’t think that it is an issue,’ he said on Tuesday, citing the simultaneous appointment of Ian Mackintosh – a veteran accounting standards-setter with enviable professional credentials – in a supporting role as IASB vice-chairman.”

Some IRS servers down during crucial filing week [AP]
Move along, nothing to see here.

Team Paladino’s Roger a ‘dodger’ [NYP]
“Roger Stone, a key adviser to Republican gubernatorial candidate Carl Paladino, owes Uncle Sam more than $400,000 in unpaid taxes, The Post has found.

The Internal Revenue Service filed a $405,035 lien for unpaid income taxes against the consultant — one of politics’ most notorious dirty tricksters — and his wife, Nydia, last fall in Dade County Circuit Court in Florida, records show.

The debt makes Stone the second high-profile Paladino adviser to run afoul of the taxman. Paladino’s campaign manager, Stone protégé Michael Caputo, recently admitted to a federal tax debt topping $52,000, although he says he’s paid back all but $9,302.”


Rand Paul supports replacing income tax with higher sales tax, eliminating IRS [LCJ]
“Republican U.S. Senate candidate Rand Paul said Tuesday the federal tax code is a ‘disaster,’ and he wants to replace the income tax with a 23 percent sales tax on goods and services.

Paul said he supports changing the federal tax code to get rid of the Internal Revenue Service and would vote to repeal the 16th Amendment that created the federal income tax.

‘The federal tax code is a disaster no one would come up with if we were starting from scratch,’ Paul said in a written statement distributed by an anti-tax group and verified by Paul’s campaign. ‘I support making taxes flatter and simpler. I would vote for the FairTax to get rid of the 16th Amendment, the IRS and a lot of the control the federal government exerts over us.’

Paul refused to answer questions on the issue during a campaign stop in Louisville Tuesday afternoon. At a previous stop in La Grange, he told reporters he’d also like to see the U.S. Department of Education eliminated.”

The Year of Magical Thinking [TaxVox]
“California is just always in a budget mess. Indeed, the state has faced operating shortfalls – or gaps between inflows and outflows – in every year since 2002.

But this year, it would seem that state lawmakers and outgoing Governor Arnold Schwarzenegger have really outdone themselves. They busted through last year’s tardiness record by enacting a budget 100 days into the new fiscal year. Like last year, they balanced the books – but with a combination of spit and polish and pixie dust. “