As the federal income tax celebrated its 100th anniversary, the Internal Revenue Service officially opened this tax season on January 30 -- though there was still a long roster of tax forms it couldn't accept, because it was still dealing with changes from the fiscal cliff legislation. By mid-month it was accepting forms for education credits and depreciation; on the other hand, at one point it had to ask taxpayers to limit their use of the online "Where's My Refund?" tool due to high traffic. It also reported technical glitches in accepting some returns from Puerto Rico.
It reminded tax preparers to include complete Earned Income Tax Credit checklists with any tax returns they file claiming the tax credit, and asked software companies to remind preparers that they could be assessed a penalty if they fail to comply with the due diligence requirements. What's more, it warned preparers that if they incorrectly fill out the forms for the Child Tax Credit (that's Schedule 8812 to you and me), then there might well be delays in the processing of those returns. And it asked authorized e-file providers to make sure that their applications were up to date and still current.
On the plus side, after shutting down its PTIN registration site as a result of a court order enjoining it from continuing with its Registered Tax Return Preparer program, the service got the registration site back up and running. It continued to give some very welcome relief to victims of Hurricane Sandy, and also extended the deadline for including mandatory language in consent forms that tax preparers are expected to send to clients before disclosing or using their tax return information. And it trumpeted the fact that a nationwide sweep that it conducted to fight identity thieves nabbed 389 suspects in January, amid 734 "enforcement actions" in 32 states and Puerto Rico.
And it joined Tumblr.
President Barack Obama called for serious tax reform in his State of the Union address. He also gave a not-entirely-flattering shout-out to "high-powered accountants."
In its annual report to Congress, the IRS Oversight Board warned that the tax service is operating in a "high-risk environment" with budget constraints leading to lower staffing levels and reduced customer service for taxpayers.
THE WORLD BEYOND TAX
The Securities and Exchange Commission unanimously approved the Public Company Accounting Oversight Board's 2013 budget and the related annual accounting support fee that it charges issuers and broker-dealers. The budget totals $245.6 million and will be funded primarily by the collection of an accounting support fee totaling $234 million, as mandated under the Sarbanes-Oxley Act.
The Private Company Council met in early February and decided to tackle three main projects for its agenda.
The Financial Accounting Standards Board was extremely busy: It released an updated accounting standard for reporting amounts reclassified out of accumulated other comprehensive income; issued an updated financial instruments standard clarifying how some fair value requirements do not apply to private companies and not-for-profit organizations, ASU No. 2013-03, Financial Instruments (Topic 825): Clarifying the Scope and Applicability of a Particular Disclosure to Nonpublic Entities; issued an exposure draft of a revised set of proposals for the financial instruments accounting standards it has been working to converge with International Financial Reporting Standards, Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities; issued a new ASU that aims to clarify the kinds of transactions that are subject to disclosures about offsetting, ASU 2011-11, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities; and it made available the first in a series of implementation guides to help users of its U.S. GAAP Financial Reporting Taxonomy understand how disclosures are structured with Extensible Business Reporting Language, or XBRL, technology.
In a speech at a conference, Public Company Accounting Oversight Board member Jeanette Franzel said that the PCAOB has taken a brief pause in its deliberations around a concept release proposing mandatory audit firm rotation, but would make a decision on the next steps later this year. She also said that the board is making progress on negotiating a memorandum of understanding with the Chinese government regarding inspecting auditing firms in China.
The Financial Accounting Foundation plans to conduct a post-implementation review of the standard governing accounting for income taxes to gauge how well it has performed. The FAF has been conducting post-implementation reviews of several accounting standards to determine how well they have been performing for preparers and users of financial statements. The next review will be of FAS 109, Accounting for Income Taxes.
Candidates in Utah and Missouri had the highest average pass rates on the CPA Exam in 2012, according to the National Association of State Boards of Accountancy. (See page 6.)
Theodore J. Flynn, the long-time presi- and CEO of the Massachusetts Society of CPAs, announced that he plans to retire at the end of 2013, after 43 years of leading the organization. A search committee comprising board members and the leadership of the 11,000-member organization will be evaluating both internal and external candidates for the job. The committee is expected to announce their decision this fall.
A New York judge gave the go-ahead for a class-action lawsuit against KPMG by female employees claiming gender discrimination by the firm. The Big Four firm had filed a motion to dismiss the case, but a district judge said that it could proceed.
"The 2013 Top New Products" (February 2013, page 1) gave the incorrect name for Bloomberg BNA's new information platform; it is the Financial Accounting Resource Center, not the Financial Accounting Research Center. Our apologies for the error.