Audit & Accounting

While friends and family are more concerned with the holidays at hand, tax practitioners are taking last-minute steps to ensure that they and their clients have a successful tax season.Training people to be able to staff the offices properly is key for Peoples Income Tax Inc., said chief executive Charles McCabe. "There just isn't a supply of qualified preparers out there who are willing to work for three months. And if someone is available, you have to ask why they are available - you don't want to hire someone else's problem."

FASB DELAYS FIN 48 FOR PRIVATE COS.Norwalk, Conn. - The Financial Accounting Standards Board has decided to defer the effective date for FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, for nonpublic entities.

The House has voted to approve a $78 billion bill that would provide a temporary fix to prevent the alternative minimum tax from spreading to about 23 million more taxpayers this coming tax season.Congress was under pressure to pass an AMT fix in time to allow the Internal Revenue Service to produce the necessary tax forms without delaying processing and refunds. However, in a sign of the controversy over provisions to raise taxes on some high-income taxpayers and close loopholes, no Republicans voted for the bill and eight Democrats voted against it.

Creating opportunities for mid-tier audit firms to enter the international market could include relaxing ownership rules to permit investment from outsiders - non-accounting professionals - according to an independent study prepared for the European Commission.The report suggested that such a revision would result in opportunities for the mid-level firms to cope with the needs of larger clients, most of whom are currently served by the Big Four.

The current wrangling over the alternative minimum tax is a symptom of the larger problems with having a Tax Code built on patchwork over nearly a century, to the point that it resembles a Rube Goldberg contraption, according to David A. Lifson, president of the New York State Society of CPAs and a co-managing partner at New York-based Hays & Co. LLP.Lifson, who recently testified before the Select Revenue Measures Subcommittee of the House Ways and Means Committee on the AMT, also chaired the NYSSCPA Committee on Tax Reform that issued a comprehensive proposal to revise the current tax system.

One week after Ways and Means Committee Chairman Rep. Charles Rangel, D-N.Y., introduced his massive, dream tax reform proposal, and after acknowledging that that proposal had no chance of passage this year, Chairman Rangel introduced a more modest stop-gap proposal, H.R. 3996, including primarily one-year fixes for expiring provisions and some proposals to address the mortgage crisis.Most commentators seem to feel that this legislation has a fairly good chance of passing this year in something close to its present form.

Our previous two columns addressed the Securities and Exchange Commission's recently appointed Committee on Improvements to Financial Reporting, which has been charged with suggesting things that can be done to strengthen the system.Specifically, we have looked at some of the premises and other points in a discussion paper produced by the chair, Robert Pozen (available online at www.sec.gov), finding a few flaws here and there.

Inadequate internal controls and insufficient prevention programs are the primary contributors to corporate fraud, according to a newly released survey.

Financial Executives International has launched an Internet TV service with the help of Mash Networks that is designed to appeal to CFOs, treasurers, controllers and other senior financial executives.

You know what a Honey is? No, it’s not my wife, at least not in this context. It’s $100,000. Suppose you hit one of those lotteries or publishing prizes and a cool $100,000 is dropped into your lap. And let’s say you or your client (if you’re the financial planner or CPA involved) is between the ages of 62-75. Well, my friend Frank Piemonte, of River Communications, who is a fount of information and has his finger on the pulse of what’s happening with the senior community, told me about this new Senior Sentiment Survey from Financial Freedom, one of this country’s largest reverse mortgage lenders. The study explored the financial, social, and quality of life attitudes of older Americans. What were the results? Basically, 55 percent of seniors would bank the windfall. In fact, according to the survey, more than half of those seniors interviewed felt confident that they will have enough income to meet their needs during retirement and 51 percent say that the top two sources of income are Social Security and income from pension plans or other defined benefit plans. Insofar as debt is concerned, the majority (69 percent) do not have, or do not plan to have, any debt in retirement. Of those with debt, 79 percent have more than $15,000 and 23 percent never expect to pay it off. By the way, 40 percent of homeowners plan to still carry a mortgage into retirement. Survey While we’re at it, it’s interesting to note that 79 percent of seniors live in a single family home that is not part of a retirement community. They say that they would drop the $100,000 in a savings account or CD as their top choice, followed by paying off debt, making a charitable donation, and investing it in conservative, low risk investments, So, here’s the way it stacks up: - 55% Bank it (savings account or CD) - 48% Pay off debt (loan, mortgage, etc.) - 41% Donate some money to charity - 41% Invest the money in conservative, low risk investments - 24% Give the money to children/relatives - 21% Make a major change or renovation to home - 17% Invest the money in stocks, thereby assuming a higher level of risk - 15% Purchase a luxury item such as a car, boat, RV, etc. - 10% Use it to underwrite health care costs - 8% Purchase a new home - 4% Become a benefactor and donate some of the money to an alma mater - 3% Retire - 6% Other - 3% Nothing, just hold on to the money Now, as a financial planner, consider where you may come into all of this. In order to build trust among seniors, direct contact is still the key. Seniors are most likely to trust professionals if they deem the person to be of good character (67 percent) or deem the person to be an expert in the field. Bottom line? Become a honey to the honey. Seniors desire personal contact to build trust among professionals.