Just last week we mentioned the American Bankers Association and its efforts to undermine the FASB’s latest fair value proposal that, in the ABA’s mind, could bring down civilization as we know it.
Because of this danger, the ABA encouraged “investors” through email and on its website to write individual letters to the FASB, expressing their displeasure with the worst idea in the modern history of double-entry accounting. We say “investors” because the ABA not-so-subtly asked everyone (i.e. who felt the overwhelming urge to write Bob Herz & Co.) to refer to themselves as such.
Further, the ABA provided a template of a letter to send to the Board for the “investors,” however, it did warn to resist using the example as their own because A) this is far too important and telling the FASB that fair value pains you in the deepness of your soul and takes food out of your children’s mouths will be a far more effective narrative; and B) the FASB hates form letters. HATES. So much so that Bob Herz rips up all his gold stars that he gives for the constructive letters he receives and then your unoriginal ass gets negative points.
The group urges investors to “write your own letter — the FASB does not appreciate ‘form’ letters, and often discounts them in their analyses.”
Simple enough, right? Well, maybe. But In his column today, Jonathan Weil gives an example of one ABA soldier that wasn’t very good at following instructions:
Among the letter writers was Terry L. Stevens of Francesville, Indiana, who identified himself as a bank investor, as the ABA had suggested. He didn’t mention that he also is chief financial officer and executive vice president of Alliance Bank, a closely held lender in Francesville with $270 million of assets.
“As a bank investor, of utmost importance to me regarding the banks in which I own stock is their financial position, and transparent financial reporting is key in order for me to make investment decisions,” Stevens’ letter said. “With this in mind, I am writing to express my deep concerns and opposition to the portion of the proposal that requires all financial instruments to be marked to market.”
Stevens didn’t write those words himself. He copied them verbatim from a sample letter the ABA posted on its Web page. So, too, did a bunch of other bankers who submitted comment letters to the FASB opposing its proposal, notwithstanding the ABA’s warning that they shouldn’t do cut-and-paste jobs.
This had to be a mistake, right? This is far too important of an issue to the banks of this country that a mishap like this could just happen. Bankers are responsible people that take this stuff very seriously and would never risk going through the motions just to serve at the whims of their lobby’s voice…would they?
Stevens told me he didn’t have time to write his own letter from scratch. “The points that I grabbed out of their paragraphs did a good job of explaining how I felt about the situation,” he said.
Oh.
Stealth Bankers Bomb as Anti-Reform Crusaders [Jonathan Weil/Bloomberg]
We are a small business and had a ton of companies approach us to apply for this credit. We researched it and determined it did not apply to us. We did not take a dime. The IRS should run the numbers on anyone that did.
start with the Law Firms that got $350K+ , then the Drs- they did the same as Liars/Lawyers
What’s ERC?
Employee Retention Credit – it is the “$26,000 per employee” ads that have been everywhere for the last 3 years. It was originally part of the CARES Act along with the PPP but originally you couldn’t do both. It was changed at the end of 2020 to allow that – unscrupulous promoters jumped on it and the IRS paid out indiscriminately without enough upfront screening. IRS is now starting to audit after the fact and bring the hammer down.
Yeah, basic law of journalism, don’t assume.
ERC is Employee Retention Credit, the refundable tax credit for certain eligible businesses and tax-exempt organizations that had employees and were affected during the COVID-19 pandemic.
This is a publication for accounting professionals, they know what ERC is as we’ve been covering the fallout extensively. We didn’t expect this article would get so much attention from civvies.
“Employee Retention Credit” is right there in the first sentence.
As a “civvie” business owner I have been scouring the web for an explanation why we have not received our ERC money which we qualified for to my detriment, kept every paid when there was no work and I assumed loans to keep my talent.
We applied last March, in house with known accountants that we have been working with for years, I paid a fair percentage and them knowing me I would not tolerate anything that would compromise my name and integrity.
We are now a year in and the loans have not been paid back, as soon as if and when that ERC check hits it is gone and I have to pay tax on it next year. I appreciate your article at least I have insight but I am angry that as a rule follower and always putting my customers and employees first that I am now in limbo because of others greed.
We prepared several dozen of these and have had 2 audits which we passed with flying colors. If the IRS wants to look at any others we prepared, my PTIN, name and number are at the bottom of each of them, they know where to find me.
We also turned away many people who did not qualify and more who qualified for only a small number. I’m sure those folks went out and and got one of the ERC mills.
If a complete and honest accounting is ever done of this credit I believe is will prove to be the largest fraud in history. Billions were paid out with no verification or oversight. Dishonest “$26,000 per employee” service providers based their marketing pitch on “your CPA doesn’t know what he’s talking about” and charged a preposterous 25% contingent fee (which flies in the face of Circular 230). They are closing up shop and heading for the hills with millions in ill-gotten taxpayer money.
I have a modicum of sympathy for the business owners who were duped into this, but exactly none for the ERC mills and their owners / employees. We should all be rooting for the IRS to nail these people – they belong in jail.
I had a small business, with an annual payroll of about 120,000. I did get some ERC money, nothing near the 26K per employee because you had to not count wages paid with Payroll Protection Program money, and any other programs. It was extremely complicated, per person wage caps etc, even when my CPA tried to explain it to me with a color coded spread sheet, still was lost (and I was Mensa in college). But I got SO many mailings of misleading information promising large sums. These companies sprang up, charge an exhorbitant percentage (which makes no sense, my cpa charges set rates) and they will be long gone when you get audited and fined and have to pay it all back. Good luck explaining their math. My cpa turned down many of his clients that did not qualify, and now is having to file amended returns for them, when they had the ERC credit done by one of these gypsy companies, since you must report the money back in the year you had the wages for the ERTC (is what I knew it as). I never want trouble with the IRS, too stressful.