“Cannabusiness” is booming and obnoxious cutesy phrase aside, it’s a $25 billion-and-growing (heh) industry with more potential than a fresh cart of Blue Dream on a Saturday night. Clever CPAs who get in on the ground will not only open themselves up to nearly unlimited billing potential (yay), they’ll be helping cannabis businesses navigate the […]
For those of you hoping to retire one day, do you know how you’ll stay busy once you’re not working? Golf? Traveling? Yes, those sound nice and leisurely. Gardening is another nice hobby, however, be sure you stay current on the marijuana laws in your area, should you decide that’s the kind of greenhouse you […]
Last month we discussed timing as it relates to starting an accounting practice. And while the timing is important, arguably, the most important decision you will make with regards to starting an accounting firm is the positioning, or niche, of your firm. Niches can be structured in a number of ways but most commonly, […]
Thank goodness we have the SEC to protect us from ourselves. The SEC sent out a warning today cautioning investors to be on the lookout for shady "microcap companies that claim their operations relate to the marijuana industry after the agency suspended trading in the fifth such company within the past two months." The SEC […]
Remember awhile back when we looked at some unusual tax offices? Well even longer ago, we wrote about a Bronx joint called 420 Multi Services. I know what you’re thinking. What you’re thinking is not what anyone else was thinking because apparently 420 operated as a totally inconspicuous tax prep office for 10 years. I […]
Here's a discussion item that recently appeared in our inbox we're just going to throw out there: I haven't seen any articles on this site for accounting/tax prep for the marijuana industry? As a CPA I am always looking for clients but I don't want to have my license revoked or end up in prison […]
Sometimes I feel like I don’t know. Sometimes I feel like checkin’ out. I want to get it wrong. Can’t always be strong. And love it won’t be long… call us Ultraviolet, we’re here to light your way. If you have a career question, life question, ethics question and/or dumb question for us, go ahead […]
Right now, many accounting students are giving serious thought to their futures. Right this very minute, in fact, a few are gnawing their already bloody fingernails waiting for a Going Concern blogger to tell them what to do with their lives. They can't trust their parents and friends so it's only natural that they ask […]
It’s awesome when the Commissioner of the IRS calls the tax code “a monstrosity” like he did in a speech back in May but it’s even more awesome when the tax code messes with stoners worse than an assistant principal who still has something to prove to his dad. The Vapor Room Herbal Center […]
UPDATE: The Fairfield Citizen post now reports that the charges against Mr. Rosenberg have been dropped. The Fairfield Citizen reports that Stuart Rosenberg, 63, got a surprise package back in May: According to police, a package was sent by overnight priority mail to Rosenberg's office from Oregon. However, Rosenberg was away and instructed an employee […]
The Daily reports that the Hemp and Cannabis Foundation owes nearly $3 million in back income, foundation, and payroll taxes, citing "IRS documents." Foundation director Paul Stanford claims that things will be straightened out this year although the Foundation and Stanford have had their share of financial troubles. Regardless! Stanford argues that there were far […]
IASB proposals aim to demystify insurance accounting [Accountancy Age]
“The international accounting standard setter has released new proposals for insurance contracts which seek to demystify one of the most complex areas of company reporting.
The rules, announced yesterday, aim to transform current rules, said to be all but indecipherable for investors, to a model which helps to communicate the contract economics.”
‘Static Kill’ Appears to Be Working in Well, BP Says [NYT]
“BP said Wednesday it had brought pressure under control in its stricken well in the r pumping heavy drilling mud into it, calling the development a “significant milestone” in its efforts to permanently seal the well.
The company began the effort, known as a static kill, on Tuesday afternoon and stopped pumping the heavy mud after about eight hours, saying that the procedure appeared to have reached the “desired outcome” of controlling pressure in the well.”
American Accounting Association and AICPA Create Pathways Commission to Study the Future of Accounting Higher Education [PR Newswire]
“The American Accounting Association and the American Institute of Certified Public Accountants together have formed the Pathways Commission to study possible future paths of higher education for those seeking entry into the accounting profession.
‘Interest in accounting as a career is the highest it’s ever been and underscores the need to make sure the educational infrastructure remains solid and able to meet the profession’s evolving requirements,’ said Barry Melancon, CPA, AICPA president and CEO, who served on the Human Capital Subcommittee of the U.S. Treasury Advisory Committee on the Audit Profession.”
Catch of the day: ESPN sells fishing organization [Bloomberg]
Apparently a former Deloitte CEO – Jim Copeland – is involved in a group buying the BASS fishing organization.
From Playboy to Biglaw: New Orrick CFO Has A Bitchin’ Resume [ATL]
A former Playboy CFO recently joined Biglaw firm Orrick, Herrington & Sutcliffe, presumably because access to a nice grotto is a must.
Getting Customers to ‘Check In’ With Foursquare [WSJ]
“Businesses of all sizes are trying the services out, looking to tap the networks’ ever-growing fan bases—Foursquare alone has 2.4 million users globally, and is growing 30% to 40% a month—and ability to harness enthusiasm for local establishments. For a small company with a limited marketing budget, the services are attractive because they’re free or cheap, require minimal time and effort, and appeal to loyal consumers who favor local businesses over big, cookie-cutter chains.”
Another Question about Timing of NBTY Insider Stock Purchases Prior to Announcement of Carlyle Acquisition [White Collar Fraud]
Sam Antar is still a little suspicious about the timing of the two NBTY directors that purchased stock right around the time that the Carlyle Group agreed to purchase NBTY stock. According to filings, NBTY executives met with Carlyle on May 11th and the two directors in question purchased their shares on May 13th and 18th. The next regularly scheduled board meeting was on May 21st.
Soooo, Sam wonders aloud, “At what point in time did Ashner and White know anything about the discussions with Carlyle and when did they find out about the confidentiality agreement? Often, such agreements are executed after the board has been notified. In this case, the confidentiality agreement was signed before Ashner and White purchased their NBTY shares.”
At Work, a Drug Dilemma [WSJ]
Even if you are legally able to purchase pot for medicinal purposes, your employer may still prefer you to pass on grass.
Legalization of gay marriage didn’t go over very well in the Golden State but come November, my fellow Californians and I will be deciding whether or not we’re up for taxing the hell out of the chronic to save our state’s sad fiscal sitch with an estimated $1.4 billion in revenue a year by making marijuana possession legal. According to the bill, an ounce would bring in $50 in revenue .
Now, we’re not promoting huge grow rooms in grandma’s Pomona basement but the law would allow an ounce for personal use (some of you might question that amount as a tad large) and for anyone over the age of 21 to have 25 square feet of plants growing in their residence.
As is, California is pretty loose with the definition of “medical use” and if you’ve ever been to Venice Beach, you already know that pot has been a big business round these parts since Proposition 215 made medicinal use legal. Everyone from depressed shlubs to Mr Magoo-sighted grandmas can head to the cannabis club for their medicine and some smart cities like Oakland already tax these sales.
Some of you may not realize this but pot is essentially legal in San Francisco anyway. I’ve never heard of cops asking for a prescription if you get busted toking on a blunt in the FiDi (hey, work is stressful) and the rumor is that the SFPD has actually made it an unofficial policy not to hassle pot smokers as long as that’s all they’re doing.
So if you’re smoking a joint on the street, you’re fine. If you’re smoking a joint AND killing someone or smoking a joint AND not wearing pants, you might have some trouble but for the most part, you can trot around town puffing away without having to worry about getting hassled. Of course, driving under the influence is still illegal so I would not recommend puffing away from behind the wheel, no matter how lax the locals are towards the green stuff.
The state seems divided equally on the issue, with the LA Times reporting that a recent poll left the state split 49/41, with 49% in favor of the legislation. Listen, if it’s between legal weed and paying $989 to register my car, I’ll take the weed tyvm.
So? Smoke ‘em if you got ‘em and if you don’t got ‘em, feel free to tax ‘em. Get used to the sin taxes, it might be the only way to bring my fine state (and others in equally dismal fiscal situations) back from the brink of financial Armageddon. And if that doesn’t work, at least we’ll be too high to notice.
AICPA Protests Disclosures of Uncertain Tax Positions [Web CPA]
The AICPA has come out against the IRS’ uncertain tax positions proposal, saying “it should withdraw its proposed rule that would require companies with more than $10 million in total assets to disclose uncertain tax positions on a new schedule.”
The AICPA is not so hot on the idea of the IRS wading into the financial reporting waters, “We understand that the UTP proposal does not change the underlying rules for financial reporting, but believe overlaying a tax disclosure construct on the financial reporting system introduces a dynamic which could work at cross purposes with the original and fundamental purpose of the financial reporting rules.”
Haitian recovery needs accountants [Accountancy Age]
Nearly five months after the Earthquake in Haiti things are recovering slowly. Financial records for the government and private business have had two considerably different experiences:
[T]he finance ministry’s financial controls and systems are now being restored after its headquarters were destroyed. The World Bank has helped this critical process, placing accounting experts with the ministry.
As for the private sector, Laforest said many companies’ financial systems had survived thanks to accounting software packages, whose data had been uploaded to cloud computing remote data sumps on the internet. But bills, receipts and other paper records vital for making tax returns had been lost where offices collapsed.
And creating proper controls around the donations process has been crucial for organizing those funds. According to one volunteer, “[W]ithout proper controls, the money that you and your friends and your government have given might as well be left in a big bucket in the middle of the market with a sign saying ‘biggest at the front, smallest at the back.’”
Pot could bring in $400K for D.C. [Post Now/WaPo]
The District’s Council is expected to vote on June 15th on a provision that would levy a 6% sales tax on ganj sold there. At an approximate price of $350 an ounce, each bag would yield $21 for DC and would be expected to raise $400k in the next 5 years.
Tweedie replacement must juggle dual roles [Accountancy Age]
The candidates for the IASB chair are dwindling but most people seem to agree that having the role split into “Chair” and “CEO” roles might benefit the Board. “Richard Sexton, head of audit at PwC, suggested the role should be split.” And BDO’s sometime blogger and International CEO Jeremy Newman chimes in, “It’s unrealistic to expect one person to cover both.”
Also, whoever fills the big chair can’t be a über double-entry geek or just a crafty political type to heavy one way or the other. Most think that it needs to be a balance of both, although the preference of which is more important is debatable, including one Deloitte partner’s point of view, “If you don’t understand the accounting, you won’t be able to do the diplomacy around the debate,” versus Grant Thornton, “At this stage in the IASB’s life, we would place political awareness ahead of technical [knowledge] for the chair, but of course the chair must be technically astute.”
Bank of America Names an Outsider as CFO [WSJ]
Charles Noski will be the new Bank of America CFO, effective May 11th. He most recently was the CFO at Northrup Grumman, which he left in 2005 and prior to that held the same position at AT&T. He has also served as a advisor to Blackstone Group and is currently a director at Morgan Stanley and Microsoft. It is reported that he will give up his director seat at competitor Morgan Stanley. Noski began his career at Haskins & Sells (now Deloitte) for seventeen years and was a partner.
This ends BofA’s quest to land a CFO after former finance bigwig Joe Price moved into a new role under new CEO Brain Moynihan back in January.
IASB says “no guarantee” of full US accounting convergence [Accountancy Age]
The FASB and IASB, try as they might, have announced that they simply cannot guarantee that they will pull off 100% unadulterated convergence. The two boards have struggled to get their cerebral minds together on a number of “important technical issues” and are holding out for the possibility that they may not resolve any of their remaining differences.
The two boards issued a statement which warned, “Although our recent experiences with joint meetings show that we have been able to resolve differences on several projects, there is no guarantee we will be able to resolve all, or any, of our differences on this project.” The two cite “different imperatives that pushed our development timetables out of alignment,” in the struggle for converging the two sets of rules. While the FASB and IASB are warning that accounting rule convergence may be impossible, the statement indicates that the two still aim to finalize their work by the mid-2011 deadline.
Medical pot users to pay sales tax [Bangor Daily News via Tax Policy Blog]
The Pine Tree State will taxing its medical green that is sold at state-sanctioned dispensaries. The Maine Revenue Service had argued that since marijuana is currently issued for medicinal purposes, that the it should be treated as a prescription drug and thus, not taxed. However, since a prescription isn’t necessary to obtain medical marijuana, Maine lawmakers disagreed and ultimately decided to administer a levy on the sale of state-issued grass.
Elie Mystal, the Editor of our sister site Above the Law, did a fair amount of kvetching over the Texas “pole tax” on Friday. He focuses primarily on his distaste for sin taxes, “I can’t avoid sin taxes — and thus I can’t stand them. First of all, they are regressive. Secondly, they’re anti-business. So we literally have a tax regime that freedom-loving progressi conservatives should hate, and yet sin taxes continue to be an acceptable way for the government to shove its morality down our throats.”
We’ll address that statement in a minute but first, we’ll examine the pole tax which supporters have stated, “is an appropriate exercise in state power — promoting public safety by discouraging the ‘combustible combination’ of drinking and live nudity.”
Nude women + alcohol = rape? What kind of sex crazed sociologist came up with that equation? Just because boobs and beer make your sick ass go out and terrorize females doesn’t mean that other males are incapable of telling the difference between fantasy and cold, lonely reality.
And if this is a serious problem — what the f*** is $5 going to do about it? Texas legislators want us to believe that there is an epidemic of sexual assaults occurring because of the “combustible combination” of alcohol and live nude girls, but they also want us to believe that a $5 surcharge is going to make a difference.
We agree with Elie that Texas has come up with a bad — nay — horrendous idea. An extra $5 at the door isn’t going to accomplish a damn thing. Strip clubs are highly “combustible” environments regardless; taxing patrons to get them to think twice before entering doesn’t make a lot of sense.
Where Elie is dead wrong is his notion that “Either [the behavior subject to tax] is a serious societal problem that the government needs to step up and make [it] illegal — or it isn’t. If it’s not that big a deal, then what is a sin tax other than the government trying to get a taste of a lucrative American business?“
We have a problem with the “step up and make it illegal” part. The decriminalization and taxation of certain “sins” is a perfectly good way for states to raise money since taxes on income and property are far more political and thus, not effective.
Alcohol and tobacco both cause a myriad of health problems in humans that can result in high medical treatment costs. Taxes on these items are appropriate in order to supplement the burden that they place on society as a whole. Drugs and prostitution are, for the most part, criminalized. Thousands of people are arrested and jailed yearly for engaging in these behaviors, imposing millions of dollars in costs to taxpayers. Here’s a newsflash: human beings are not — ARE NOT — going to stop engaging in these behaviors. So why not take the “criminal” element out of the equation?
If they were to be made legal, highly regulated and taxed, states could enjoy new revenue streams and citizens can engage in behavior that they choose. That’s something many “freedom loving progressives” can certainly get behind. Plus, if drugs and prostitution are legal, won’t this encourage entrepreneurship and a more competitive marketplace? That sounds like something “money-loving conservatives” would approve of.
So while we’re with Elie railing against Texas’ impotent legislation, sin taxes are useful when implemented intelligently. California is putting legalized marijuana to a vote and DC may not be far behind so maybe we’re beginning to see some common sense for a change.