Accounting News Roundup: IRS Probing HSBC Clients with Accounts in Asia; Saints Deny State Money Was Taxable; Pot Tax Helps Helps Another California Budget | 07.07.10
HSBC Clients With Asian Accounts Said to Face Probe [Bloomberg BusinessWeek]
“The Justice Department is conducting a criminal investigation of HSBC Holdings Plc clients who may have failed to disclose accounts in India or Singapore to the Internal Revenue Service, according to three people familiar with the matter.
‘This is a global initiative by IRS and the Department of Justice,’ said Robert McKenzie, an attorney at Arnstein & Lehr in Chicago who said he spoke to two people who got letters.
The probes show how the U.S. is expanding its crackdown on offshore tax evasion beyond Switzerland and UBS AG, the largest Swiss bank, s a tax lawyer at Greenberg Traurig LLP in New York. London-based HSBC is Europe’s biggest lender by market value.
‘It’s clear that the IRS and the Department of Justice are intending to pursue other depositors outside of Switzerland,’ Kaplan said. ‘They’ve announced it before, and they are moving forward in that regard.’ ”
A.T. Kearney, Booz Call Off Merger Talks [WSJ]
“A.T. Kearney Inc. and Booz & Co. called off discussions about a possible merger that would have given the two midsize firms greater scale in a highly competitive industry.
The two have flirted with each other multiple times over the years without completing a deal. The most recent talks occurred on and off over the past six months, says a person familiar with the matter.
The combined firm would still have been smaller than market leaders such as Deloitte LLP, McKinsey & Co. and Accenture Ltd in an industry where scale is increasingly important in wooing global business.”
Did Tax Ploy Help Saints Win Super Bowl? [Forbes]
If you feel so inclined, you could probably blame this on Reggie Bush but otherwise it’s probably due to some clever tax attorneys, “In a just-filed U.S. Tax Court lawsuit, the partnership owning the Saints acknowledges that it didn’t treat an $8.5 million annual payment from the state of Louisiana as income and therefore didn’t pay taxes on the sum. Rather, the team said the money was an addition to “working capital” and a nontaxable transaction.
The Internal Revenue Service insists the money should have been included in income by the franchise, owned for a quarter-century by auto dealer Thomas M. Benson Jr. The Tax Court case challenges that position.”
Pot Tax Helping Long Beach Plug Budget Deficit Faces Vote in California [Bloomberg]
“The city council of Long Beach, California, voted last night to pursue taxes on medical marijuana dispensaries, part of what may become a wave of communities turning to such proceeds to plug budget deficits.
The Los Angeles suburb with a population of almost 500,000 scheduled a public hearing on the drug levy for Aug. 3. If the council later approves the wording, a ballot initiative establishing a 5 percent tax on the city’s 35 dispensaries could go to voters in November, according to Lori Ann Farrell, Long Beach’s director of financial management.”
IRS Disbars CPA for Relying on Client’s Income and Expense Numbers [Tax Lawyer’s Blog]
How much due diligence should a tax preparer perform to be comfortable with their clients numbers?
Ex-Qwest Accountant Says SEC Should Be Sanctioned [CBS4]
“The SEC has said [James] Kozlowski hasn’t shown that it acted in bad faith. It has accused him of ‘theatrical conduct,’ including filing ‘numerous losing motions.’ Kozlowski’s attorneys dispute that.”