A ROCKY START
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
Tax season didn't even start in January, and yet it was one of the taxiest months in quite some time. It kicked off with Congress and the administration cobbling together a deal that kept us from falling off the fiscal cliff, which was good. But it came so late, and had so many tax-related elements, that the Internal Revenue Service had to delay the start of tax season, from January 22 to January 30, which was bad.
Then a federal court ruled that the IRS didn't have the statutory authority to enforce its Registered Tax Return Preparer program, which was certainly confusing, and a huge distraction for the IRS, which vowed to appeal the ruling.
In the meantime, it got on with its usual hectic work of preparing for filing season. This year, that involved issuing a list of 30 or so forms that won't be available for filing until late February or early March, once they're updated to account for changes legislated in the fiscal cliff deal, and then announcing guidance for relief for farmers and fishermen who would be unable to file their estimated tax payments by March 1 because those forms wouldn't be available.
The IRS also offered guidance in Revenue Procedure 2013-16 on how to handle mortgage principal reductions from a popular federal mortgage modification program, and elsewhere showed how to report mortgage insurance premiums as qualified residential interest (another fiscal-cliff related change).
And it aired a proposal in Rev. Proc. 2013-13 to make it easier for small-business owners and home-based employees to claim the home office tax deduction, which will be available for 2013 returns filed in early 2014.
Finally, it nicely balanced its "service" and "enforcement" roles with two different initiatives: It named January 25 Earned Income Tax Credit Awareness Day, an outreach to promote the credit to the many taxpayers who are eligible for it, but don't claim it. On the other side, it issued a report noting that it had audited over a million individuals in 2012, increased examinations across all categories of business returns, and collected more than $50 billion in enforcement revenue. So go ahead and claim that EITC -- but remember, they're watching you.
Taxpayer Advocate Nina Olson delivered one of her two annual reports to Congress. Among the highlights: The IRS needs to do more to help the victims of identity theft, Congress needs to pay more to help the IRS do its job, and Congress also needs to simplify the Tax Code to help everyone.
Separately, the Government Accountability Office issue a report saying that the IRS faced challenges last tax season providing phone service to taxpayers and responding to their correspondence, continuing the negative trends of recent years despite some efficiency gains and efforts to improve service.
On a final tax-related note, the National Society of Accountants released its biennial survey of what it costs to prepare a variety of tax returns. An itemized Form 1040 with a Schedule A and a state tax return averages $246, in case you're interested.
A flurry of small and midsized mergers among accounting firms marked the end of 2012 and the beginning of 2013. (See our M&A Watch roundup.)
President Obama nominated former prosecutor Mary Jo White as the next chair of the Securities and Exchange Commission. A former U.S. Attorney for the Southern District of New York who served from 1992 to 2002, she has a reputation as a no-nonsense prosecutor who won convictions against terrorism suspects and mobsters. White would succeed Elisse Walter, who took over as acting SEC chair after Mary Schapiro stepped down.
The Financial Accounting Standards Board issued a proposal to improve accounting for repurchase agreements.
The Governmental Accounting Standards Board approved a new standard that provides guidance for determining whether a specific government combination is a government merger, a government acquisition, or a transfer of operations.
The American Institute of CPAs issued amendments to its auditing standards for when to reference the audit of a component auditor in the auditor's report on the group financial statements. Statement on Auditing Standards No. 127, Omnibus Statement on Auditing Standards -- 2013, amends Sections 600 and 800 of SAS No. 122.