Tag: Taxes

Accounting News Roundup: Mazars Would Like to See More Competition in the Audit Market; Citi CFO Settles with SEC; Colbert on Tax Cuts | 07.30.10

Auditors don’t know the meaning of ‘competition’ [FT]
In a letter to the Financial Times, David Herbinet, the UK Head of Public Interest Markets for Mazars, takes issue with the notion (he says ‘puzzled’) that there is robust competition in the audit market, “Figures calculated from the most authoritative research available – the Oxera report that first spurred examination of the issue – show that a FTSE 100 auditor can on average expect to remain in place for an eye-watering 48 years and their FTSE 250 counterpart for 36 years. When the research was conducted more than 70 per cent of the FTSE 100 audits had not been subject to tender for at over, 97 per cent of current FTSE 350 audits are held by just four firms. If this represents fierce competition I would not like to see a stagnant market.”

Facebook Said to Put Off IPO Until 2012 to Buy Time for Growth [Bloomberg]
“Facebook Inc. will probably put off its initial public offering until 2012, giving Chief Executive Officer Mark Zuckerberg more time to gain users and boost sales, three people familiar with the matter said.

Facebook would benefit from another year of growth absent the added scrutiny that comes with a public listing, instead of holding an IPO in 2011 as investors speculated, said the people, who asked not to be identified because Facebook doesn’t discuss share-sale plans. Still, Zuckerberg, who holds board control, could push for a stock sale at any time, they said.”

U.S. Financial System Still at Risk, Says IMF [WSJ]
Get RIGHT out of town. “The International Monetary Fund says the U.S. financial system is “slowly recovering,” but remains vulnerable to crisis, in part because Congress and the administration have failed to streamline a regulatory system marked by turf battles and overlapping responsibilities.

‘We asked many times why bolder action could not be undertaken,’ said the IMF’s Christopher Towe, who oversaw the agency’s first broad review of the U.S. financial sector.”

SEC Charges Citigroup and Two Executives for Misleading Investors About Exposure to Subprime Mortgage Assets [SEC]
That includes former CFO Gary Crittenden who agreed to pay a $100,000 fine.


Colbert on the Expiration of the Bush Tax Cuts [TaxProf]

The Colbert Report Mon – Thurs 11:30pm / 10:30c
The Word – Ownership Society
www.colbertnation.com
Colbert Report Full Episodes 2010 Election Fox News

Chris Tucker Is Making a Run at Nicolas Cage-Level Tax Trouble

Maybe! CT owes the Treasury $11.5 million for back taxes, according to reports. This covers the 2001-2002, 2004-2006 tax years.

This sum nips on the heels of the $14 million that Nic Cage paid the Feds last year (and the $3.8 million he owes California for this year). In addition to the sum due to Shulman & Co., Tucker owed California $3.5 million last year, so, clearly, we’ve got ourselves a race here.

The difference is that NC has been working, which gives him a glimmer of hope of being in full compliance.


Tucker hasn’t been in a film since Rush Hour 3 in 2007 which, as some have pointed out, may be extremely good news for fans of that particular franchise.

Chris Tucker — 11 Million Tax Problems [TMZ]

John Kerry Saves $500k in Taxes By Dropping Anchor in Rhode Island

Don’t any of you get the idea that John Kerry is docking his new $7 million yacht in Rhode Island to navigate around Massachusetts’ sales tax and the annual excise tax. That would be, in a word, ludicrous.


“Kerry spokesman David Wade said Friday the boat is being kept at Newport Shipyard not to evade taxes, but ‘for long-term maintenance, upkeep and charter purposes.’ “

And Rhode Island is the Ocean State, so it makes perfect sense. “Isabel” is a 76′ beaut that has “two cabins, a pilot house fitted with a wet bar and cold wine storage.” A pretty swell ride.

It’s difficult to say why the Mass. Senator wouldn’t park the vessel near home base but we’d be willing to hear some theories.

Mass. Sen. Kerry docks yacht in RI, saving $500K [AP]
Sen. John Kerry skips town on sails tax [Boston Herald via TaxProf]

Accounting News Roundup: Rangel Found to Have Violated Ethics Rules; Friends of “Miami’s Go-to Forensic Accountant” Ask for Leniency; A “Refreshing” Settlement | 07.23.10

Rep. Charles Rangel broke ethics rules, House panel finds [WaPo]
“A House ethics subcommittee announced Thursday that it found that Rep. Charles B. Rangel violated congressional ethics rules and that it will prrobably beginning in September. The panel is expected to make the details of his alleged violations public next Thursday.

Rangel (D-N.Y.) has been under the House ethics committee’s microscope since early 2008 after it was reported that he may have used his House position to benefit his financial interests. Two of the most serious inquiries have focused on Rangel’s failure to declare $239,000 to $831,000 in assets on his disclosure forms, and on his effort to raise money for a private center named after him at City College of New York using his congressional letterhead.”

Geithner: Taxes on Wealthiest to Rise [WSJ]
“The Obama administration will allow tax cuts for the wealthiest Americans to expire on schedule, Treasury Secretary Timothy Geithner said Thursday, setting up a clash with Republicans and a small but vocal group of Democrats who want to delay the looming tax increases.

Mr. Geithner said the White House would allow taxes on top earners to increase in 2011 as part of an effort to bring down the U.S. budget deficit. He said the White House plans to extend expiring tax cuts for middle- and lower-income Americans, and expects to undertake a broader revision of the tax code next year.

‘We believe it is appropriate to let those tax cuts that go to the most fortunate expire,’ Mr. Geithner said at a breakfast with reporters.”

FASB Requires More Disclosures Around Credit Risk [Compliance Week]
“Accounting Standards Update No. 2010-20, Receivables (Topic 310) calls for more credit risk disclosures to give investors a better view of the credit risk in a company’s portfolio of receivables as well as the adequacy of its allowance for credit losses. Under the update, companies will be required to say more about aging receivables and credit quality indicators in particular.

The new disclosure requirements affect financing receivables and trade accounts receivable, including loans, trade accounts receivable that are greater than a year old, notes receivable, credit cards and receivables for certain leases. The new disclosure requirement does not affect short-term trade accounts receivable, receivables that are measured at fair value or the lower of cost or fair value, and debt securities.”


Convicted accountant Lewis Freeman’s friends urge leniency [Miami Herald]
“Miami’s go-to forensic accountant” Lewis Freeman is to be sentenced today for stealing nearly $3 million from victims of fraud who he was appointed to protect. He faces a dozen to fifteen years in prison but his friends and supporters have turned on the pity party, sending nearly 300 letters to Judge Paul Huck, asking for leniency.

“[E]very one of those letter writers also asks the judge to show mercy, emphasizing that the affable New York native should not have to languish in prison because he has done so much for institutions like his alma mater, the University of Miami, Miami Children’s Hospital and the Miami Children’s Museum, among others.”

No need for non-audit ban, regulator claims [Accountancy Age]
“Accountants will not have to give up their non-audit work for audit clients, under proposed guidelines released today, which have not recommended an outright ban, suggested by politicians in the wake of the financial crisis.

The Auditing Practices Board, of the Financial Reporting Council, which publishes guidance for auditors, does not believe an outright ban on non-audit services should be enacted and has instead proposed to tinker with present disclosure requirements.”

Could This Be a Real Deterrent? [Floyd Norris/NYT]
Despite the usual fare in the SEC’s settlement yesterday, Floyd Norris writes that the $4 million fine for Michael Dell and other executives is “refreshing.”

Being a Former 007 Does Not Entitle Sean Connery to a ‘License to Not Pay Taxes’

Meant to get this out there on Friday but you know how it is. Anyhoo, everyone’s favorite Bond-turned-Darrell Hammond impersonated celebrity, Sir Sean Connery is having a bit of tax trouble in the country now known as the World Cup champions:

Legendary James Bond actor Sean Connery is being investigated for alleged tax fraud involving the sale of two large tracts of land in Spain.

Investigators say a property firm linked to the 79-year-old actor failed to pay taxes after he and his second wife sold land they owned on the outskirts of Malaga, Spain

The fact that the Connerys haven’t been arrested and are merely celebrities being investigated because some real estate companies involved in some shady dealings should be enough evidence to indicate that celebrity news is waning in the dog days of summer. Dr. Henry Jones wasn’t quote in the Daily Mail’s story but we’re hopeful that, if asked, it would go more or less go like this:

Man Attempts to Pay $6,400 Tax with Kiddie Pool Full of Pennies

God bless our friends to the North. If you can’t have a sense of humor about this stuff, you’re likely to do something stupid like, say, join the Tea Party:

A Quebec man, fed up with his skyrocketing property taxes, carted more than 200,000 pennies down to City Hall to pay his bill. But he was denied, and asked to simply cut a cheque.

Normand Czepial of Ripon, Que. — less than an hour’s drive northeast of Gatineau — arrived at City Hall on Wednesday with a children’s pool filled with 213,625 pennies.


Now we’re wondering – did Normand roll into his bank that morning to make the withdrawal and demand the smallest denomination possible or had he been saving all the copper coins his entire life for this exact moment?

Whichever it is, we applaud this particular brand of awesome. The only beef we have this move is that he used the kiddie pool to schelp the pennies down to City Hall. What the hell, man? Depriving your kids of fun in the middle of summer? Sure you’re a little bit of smartass (which we like) but it appears also a bit of dick in the Dad Department. Not cool.

Czepial’s property tax bill reportedly rose by nearly $4,000 dollars last year to $6,400. Czepial tried to pay with pennies to protest the hike.

Ripon Mayor Luc Desjardins was surprised to see the stunt, but had to tell Czepial to find another way to pay his bill.

Under the Currency Act, nobody is obliged to accept more than 25 pennies as payment for any product or service. Normand Czepial, unfortunately, was 213,600 over the limit.

Even the Toronto Sun is throwing around the jokes! Everyone that is threatening to move to Canada given a particular election of [insert hated political figure] should take note that it sounds kinda fun up there!

Man tries to pay tax with 200,000 pennies [Toronto Sun via TaxProf]

Add “Slapped with Tax Lien” to Lil Wayne’s Accomplishments While in Prison

Robert Snell over at Tax Watchdog tell us about Lil Wayne’s latest problem. This time it’s a $1.1 million tax lien courtesy of the IRS via Dade County Florida.

It’s probably NBD for LW, as he’s dealt with the Service in the past, paying a $977k lien back in August of ’08.

What is interesting is that this particular legal snag is on top of several other accomplishments that Wayne-o has stacked up while in prison.


Last month, he pleaded guilty to a laundry list of drug charges – possession of a narcotic drug for sale, misconduct involving weapons, possession of drug paraphernalia, possession of dangerous drugs – related to a stop that occurred outside Yuma, AZ in 2008.

He [pleaded guilty] over a live video feed from Rikers, and will most likely get 36 months of probation in return (the official sentencing is scheduled for June 30). For those keeping track at home, the plea bargain follows sports blogging, life-saving, prison-rule flouting, and rapping as things Wayne has accomplished while in jail.

And now delinquent taxes. Very impressive.

Lil Wayne, big debt [Tax Watchdog]
Famously Hardworking Rapper Pleads Guilty to Drug Charges While Already in Prison [Vulture]

Accounting News Roundup: Congress Still Stalling on Tax Bill; ‘Most Americans Have Not Planned Well for Their Futures’; Deloitte’s Schroeder Joining FASB | 07.15.10

As Tax Cuts’ Expiration Date Nears, Little Consensus [WSJ]
“Lawmakers are negotiating a tax bill, but appear increasingly likely to wait until after the November election to take any final action that could anger voters—either by raising taxes, or by cutting them and thereby deepening deficits. Congress ultimately could decide to extend current tax levels for just a few months, leaving the issue for the next Congress to settle. Another option is a short-term extension of a year or two, avoiding for now the huge cost to the Treasury of a permanent extension. It’s even possible Congress might fail to take any action this year.”

From Jail, Conrad Black Fights $71 Million Tax Bill [Forbes]
“Imprisoned former media baron Conrad M. Black is fighting a $71 million bill from the U.S. Internal Revenue Service, which says from 1998 to 2003 he filed no tax returns and paid absolutely nothing on $120 million in taxable income.

In a previously unreported lawsuit in U.S. Tax Court, Black, now serving a six-and-a-half-year-sentence in a Florida federal prison, is challenging the IRS’ demands and asserting the income in question wasn’t taxable in the U.S.”

Americans More Optimistic on Economy Than Their Own Finances, Survey Says [Bloomberg]
Who said Americans only think about themselves? “Americans are generally hopeful, and much of the economic news leads us to conclude that we are out of the recession and a double dip is unlikely,” said Robert Glovsky, chair of the CFP Board and director of Boston University’s program for financial planners. “With that said, most Americans have not planned well for their futures.”

Harvey Golub Resigns as AIG Chairman [WSJ]
“A weeks-long standoff between the chairman and chief executive of government-controlled American International Group Inc. ended Wednesday, when Chairman Harvey Golub resigned, saying, ‘I believe it is easier to replace a chairman than a CEO.’

Mr. Golub’s decision marks a victory for Robert Benmosche, the company’s hard-charging chief, who chafed under Mr. Golub’s oversight. Mr. Benmosche had told the board their working relationship was ‘ineffective and unsustainable,’ Mr. Golub said in his resignation letter.”

FASB hires expert to review how new rules perform [Reuters]
“Mark Schroeder, a recently retired senior partner at Deloitte & Touche [DLTE.UL], will serve as the board’s first “post-implementation review leader” and also serve a similar role for the Governmental Accounting Standards Board, FASB said.

The hiring of Schroeder is one of the big steps that FASB has taken to formalize its process for review of how new standards are performing. Banks and investors had complained during the financial crisis that FASB’s new rules on mark-to-market accounting had contributed to freezing the credit markets, but there was no formal process for reviewing the rules.”

Accounting News Roundup: BP in Talks to Sell Assets, Including Alaska Ops; Koss Lawsuit Details Embezzlement ‘Spurts’; The Estate Planing Debacle | 07.12.10

BP Mulls Selling Off Billions in Assets [WSJ]
“BP PLC is in talks with U.S. independent oil and gas pron a deal worth as much as $10 billion that could include stakes in BP’s vast Alaska operations, according to people familiar with the matter.

A deal, which would go a long way to helping BP cope with the financial stress of paying for the clean-up of the Gulf oil spill, could be reached in the coming weeks, though there is no guarantee it will succeed, one of these people said.”

Bank Profits Depend on Debt-Writedown `Abomination’ [Bloomberg]
This abomination has an official name, SFAS 159, The Fair Value Option for Financial Assets and Financial Liabilities

“Bank of America Corp. and Wall Street firms that notched perfect trading records in the first quarter are now depending on an accounting benefit last used in the depths of the credit crisis to prop up their results.

Bank of America, the biggest U.S. bank by assets, may record a $1 billion second-quarter gain from writing down its debts to their market value, Citigroup Inc. analyst Keith Horowitz estimated in a June 23 report. The boost to earnings, stemming from an accounting rule that allows banks to book profits when the value of their own bonds falls, probably represented a fifth of pretax income, Horowitz wrote.”

Koss embezzlement ran in spurts, lawsuit says [Milwaukee Journal-Sentinel]
The most impressive “spurt?” $478,375 over three days in 2006. According to Koss’ lawsuit against S-squared and Grant Thornton, $145,000 also disappeared from the petty cash fund over the years, amongst other “unauthorized transactions.”


Bias At Work: To Sue or Not to Sue? [FINS]
Harassed? Discriminated against based on age, sexual orientation, race et al.? Of course suing your employer is an option. This is America after all, where the opportunity to slap someone with a lawsuit is your god-given right. But is it always the right move?

Bolt running from the taxman – Usain snub for British meeting [Daily Mail]
The fastest man in the world would prefer to keep a little money for himself, “Under present tax rules, if Bolt competes once in Britain and only five races elsewhere, the British taxman will demand one-sixth of everything he earns, whether in Britain or not. His taxable earnings would not only include his considerable appearance fees but also his hefty endorsement contracts.”

The Big Four’s UK Firms Pick Up Non-Executive Directors — And Then …? [Re:Balance]
Jim Peterson expands on his thoughts about the Big 4 non-executive directors in the UK, “Not only can good governance not be inflicted or imposed, in other words, because resistant leaders will find ways to disturb or subvert the purpose, but a virtuous culture will display its legitimacy without the need for pietistic overlays.”

Too Rich to Live? [WSJ]
The estate tax debate has gotten even more morbid than it would ordinarily be, ” ‘You don’t know whether to commit suicide or just go on living and working,’ says Eugene Sukup, an outspoken critic of the estate tax and the founder of Sukup Manufacturing, a maker of grain bins that employs 450 people in Sheffield, Iowa. Born in Nebraska during the Dust Bowl, the 81-year-old Mr. Sukup is a National Guard veteran and high school graduate who founded his firm, which now owns more than 70 patents, with $15,000 in 1963. He says his estate taxes, which would be zero this year, could be more that $15 million if he were to die next year.”