Accountants and tax practitioners had a busy time this past year keeping up with all the changes in the profession. Here’s our annual list of the top stories in the past year that kept our readers coming to the site for the latest developments:
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1. Senate Passes 1099 Repeal Amendment. The expanded 1099 information reporting requirement in the health care reform law attracted opposition far and wide among lawmakers in Washington. The main problem, as usual, was getting Democrats and Republicans to agree on a way to do something about it. An important step in that process came when the Senate passed the repeal as part of a reauthorization bill for the Federal Aviation Administration in February. Unfortunately, the FAA legislation ran into trouble too, and it took a few more tries before the repeal was actually signed into law in April (see President Signs 1099 Repeal into Law).
2. IRS Delays More Forms for Filing This Season. The last-minute passage last December of a deal to extend the Bush tax cuts left the IRS scrambling to get all of its forms ready this year, particularly for taxpayers with itemized returns. The IRS did its best to keep practitioners informed about the delayed forms, and we passed along the information as it came in. Several of the top stories this year related to the delays: IRS Begins Accepting E-file Returns, IRS Says Tax Season Will Be Delayed for Some, IRS Starts Processing Itemized Returns, and IRS Asks E-file Transmitters to Slow Down.
3. Best Accounting Firms to Work For 2011. Our annual list of the Best Accounting Firms to Work For also attracted a lot of attention from readers, particularly our slide show of the awards presentation.
4. Tax Preparers Hesitate on IRS E-file Mandate. Senior editor Roger Russell’s column on the IRS’s new requirements for electronic filing this past tax season, and the AICPA’s reaction to the mandate, had tax practitioners commenting on the IRS’s efforts to make the profession embrace electronic filing.
5. IRS to Require Manual Entry of Tax ID Numbers. Another IRS mandate, which kicks in next tax season, will force preparers to manually enter the Taxpayer Identification Number shown on W-2 forms received from employers for all taxpayers with Individual Taxpayer Identification Numbers who are reporting wages. Software packages won’t be able to auto-populate that field anymore, in an effort to combat fraud.
6. Top 10 Most Outrageous Tax Deductions. The Minnesota Society of CPAs’ list of the most outrageous deductions proposed by tax clients gave our readers a much-needed laugh during a hectic tax season.
7. 12 Tax Breaks Homeowners Need to Know. CCH’s list of tax-saving opportunities for homeowners provided readers and their clients with some valuable information.
8. Obama Calls for Tax Reform. President Obama devoted a major part of his State of the Union address last January to tax reform, and he urged Congress to work across party lines to accomplish that goal. Guess how that worked out?
9. Biggest Tax Changes for This Season. William Massey, senior analyst with the Tax & Accounting business of Thomson Reuters, provided a rundown of the most significant tax changes for both individuals and businesses last tax season.
10. IRS to Examine Rental Losses More Closely. The Treasury Inspector General for Tax Administration provides eye-opening reports all year long on the IRS. The report that got the most attention this year from readers was one that urged the agency to increase its examinations of individual tax returns that report losses from rental real estate activity. That could be a big problem for some taxpayers.
Currently, the major tax story is the effort to extend the payroll tax cuts beyond this year. As you can see from the list above, the most popular stories on the site this past year were tax related. But of course that doesn’t mean there was nothing going on in the accounting and auditing fields. There were a great many developments there too, such as the the American Institute of CPAs tussling with the Financial Accounting Standards Board and the Financial Accounting Foundation over setting up a separate board to control private company standards (see AICPA Issues Ultimatum on Private Company Accounting Standards).
FASB and the International Accounting Standards Board also continued their work on harmonizing U.S. GAAP with International Financial Reporting Standards by re-proposing and re-exposing several of the most contentious standards. But the leaders of the two boards recently indicated they are ready to give up on their decade-long convergence efforts once they finish their work on major projects such as revenue recognition, financial instruments, leasing and insurance contracts. They now appear to favor an endorsement, or "condorsement," approach going forward (see FASB Pushes for ‘Modified Incorporation’ of IFRS). Meanwhile, the Securities and Exchange Commission has pushed back the deadline for deciding on whether or not to allow U.S. companies to use IFRS (see SEC Postpones IFRS Decision).
Accounting firms continued with their mergers and acquisitions activity, with a boatload of deals in October and November (see M&A on Viagra). Probably the biggest deal was the merger of Clifton Gunderson and LarsonAllen into CliftonLarsonAllen (see Clifton Gunderson and LarsonAllen to Merge).
As in previous years, 2011 brought its share of accounting scandals, including high-profile cases like Olympus and MF Global (see Olympus Tries to Clean up Its Accounting and Corzine Faces Congress over MF Global Bankruptcy).
In the tech realm, CPA firms and accounting departments are increasingly migrating their systems online to the cloud and leveraging mobile devices like the iPhone, iPad and Droid smartphones (see CPAs Warm—Slowly—to the Cloud).
In the auditing world, the Public Company Accounting Oversight Board did its best to make auditing firms more accountable across the world, signing inspection agreements with a variety of other countries such as Dubai, Israel, the Netherlands, Norway and Switzerland (see PCAOB Reaches Inspection Deal with Netherlands). But a deal with Chinese authorities remains elusive despite accounting irregularities at a number of Chinese companies whose shares trade on U.S. markets. The PCAOB has also been proposing a series of other changes in how auditing firms should be regulated, including the possibility of mandatory rotation of auditing firms (see PCAOB Proposes Mandatory Auditor Rotation). In Europe, the European Commission has proposed a draft law that would require not only mandatory audit firm rotations, but also the splitting up of the Big Four audit firms to separate their consulting practices from their auditing practices (see Europe Proposes Splitting Audit Firms).
We’ll be keeping a close eye on these and other regulatory efforts, both in the U.S. and abroad next year. You can expect to see more talk in Congress about tax reform as part of its deficit reduction efforts and more from the IRS on its latest moves to regulate the tax preparation profession and build a "real-time" tax system (see Doug Shulman Speaks Out).
And with the election caucuses and primaries just around the corner, the candidates will surely be talking about taxes and other economic matters in the months ahead (but probably not the 9-9-9 plan). In the meantime, thanks for reading us and have a great holiday season and a prosperous New Year.