Practice Management

Super-regional CPA and business advisory form Crowe Chizek & Co. said it completed its merger of Mount Laurel, N.J.-based Enterprise Financial Consulting Group. Terms were not disclosed. Going forward, EFC will operate under the Crowe brand. The deal was first announced in May. The union brings 20 professionals to Crowe including two partners. The 11-year-old EFC provides risk consulting, governance and compliance solutions to primarily East Coast businesses. In addition to New Jersey, EFC also has an office in Atlanta.

RiskMetrics, a global risk management and consulting concern, agreed to acquire the Center for Financial Research & Analysis, a forensics accounting firm. Terms were not disclosed. RiskMetrics said it planned to merge CFRA with its Institutional Investor Services unit, which grades corporate governance and advises investors. CFRA was founded by former American University professor Howard Schilit in 1994. Schilit, once dubbed as "the Sherlock Holmes of Accounting," sold his stake in the firm in 2003.

The Hong Kong member firm for Grant Thornton International said that six partners and 80 employees from CPA firm Moores Rowland Mazars have joined the firm. The partners include Mark Fong, the current president of the Hong Kong Institute of CPAs. As a result, Grant Thornton will now have 21 partners and 480 employees in Hong Kong. The addition comes as a result of the restructuring at MRM, which will split into two firms -- Mazars and Moores Rowland. Grant Thornton currently has offices in Hong Kong, Beijing, Shanghai, Guangzhou and Shenzhen.

CPA and business advisory firm Maddox Ungar PLLC has merged with Ronald N. Silberstein PLLC of Farmington Hills, Mich. Terms were not disclosed. Going forward, the firm will now operate under the brand Maddox Ungar Silberstein, PLLC. The union brings principal Ronald Silberstein and three staff members to MUS. The consolidated entity will have three principals and 14 staff members. Silberstein specialized in the audits of franchised businesses as well performing SEC work.

I have always found regional accounting firms fascinating. Just take three recent developments regarding the regional firm of Virchow, Krause & Company. One was that Wells Fargo Insurance Services of Minnesota, a subsidiary of Wells Fargo & Company, acquired Virchow, Krause & Company's Twin Cities employee benefits operations, including the head of the employee benefits practice in Minneapolis and his team. It is a good example of how regional firms view these very specialized practice areas. The acquire them and spin them off reminding me of many businesses that view the acquisition and the selling of a portion of their business as a regular means for increasing profitability.

Fewer taxpayers took advantage of the Internal Revenue Service's free electronic tax-filing service in 2007 than in previous years, according to a new audit report by the Treasury Inspector General for Tax Administration. In 2005, a record 5.12 million taxpayers used the Free File Program. That number fell to 3.9 million in 2006, in large part due to a new requirement that limited eligibility for the program to taxpayers with an adjusted gross income of about $50,000 a year or less. In testimony before the House Ways and Means Committee's Oversight Subcommittee last year, Inspector General J. Russell George expressed concern about the eligibility limitations, which he said, could contribute to a significant slowing of the growth in electronic filing. Although no further adjustments were made to the program in 2007, as of April 14, auditors found that only 3.3 million taxpayers filed returns using the free service -- a decline of 4.7 percent below the same period last year. "It is imperative that the IRS carefully examine the reasons this free service is not being used by more taxpayers," George said. "The IRS must review its marketing strategy to better target taxpayers who file paper returns even though they are eligible for this program. Equally important, the IRS must ensure that the software it promotes on its Web site provides taxpayers with accurately calculated tax returns," he said. The decline in the Free File Program comes at a time when the IRS is under pressure to increase the number of taxpayers who file electronically. In 1998, Congress established a goal for the IRS to have 80 percent of all federal tax and information returns filed electronically by the end of 2007. The Free File Program was one of several initiatives designed to help meet that goal, which is unlikely to be fulfilled this year.

By a margin of 240-179, House lawmakers approved funding for the Internal Revenue Service for fiscal 2008 and in the process eliminated a provision that would have capped spending on the service's private debt collection program at $1 million. The program, which has divided Congress along party lines, allows the IRS to contract with private debt agencies to collect delinquent taxes. Having a $1 million limit would have ended the program. Currently the IRS has contracted with two private agencies, but is looking to expand the program this year according to reports.

The IRS has publicized a new draft version of Form 1118, "Foreign Tax Credit - Corporations," used by U.S. corporations to compute the foreign tax credit for taxes paid or accrued to foreign countries or U.S. possessions. "They adjusted the form to accommodate changes made by the 2004 American Jobs Creation Act," said Selva Ozelli, a New York-based CPA and international tax attorney. Under the act, the number of separate foreign income categories has been reduced from eight to two, and U.S. source income is re-characterized as foreign source income in cases where a taxpayer's foreign tax credit limitation has been reduced in an earlier year due to an overall domestic loss. "The most important change is that they've added a column to help taxpayers determine U.S. income that could be recharacterized due to recapture of overall domestic losses," said Ozelli. "This column will also help them in tracking their balances of overall domestic losses," she said.

Accounting firm roll-up concern CBiz Inc. agreed to sell its New York office to regional firm Marcum & Kliegman, a deal that includes two partners and 15 professionals. Terms were not disclosed. M&K chief executive Jeffrey Weiner told WebCPA that following the close of the deal, the CBiz office and personnel will be consolidated into M&K's New York City venue. M&K also has offices on Long Island and in Connecticut. He estimated the deal would close sometime in September. "They were looking to sell it and we were the best bidder," Weiner said. "The addition [of CBiz] just augments what we do already." Executives of CBiz did not return calls by presstime. CBiz and its audit and attest arm, Mayer Hoffmann McCann, ranked No. 8 on Accounting Today's 2007 Top 100 Firms list with revenues of $466.8 million. Marcum & Kliegman ranked No. 25 with revenues of $85 million.

Internal Revenue Service chief counsel Donald L. Korb has named Stephen Kesselman to become deputy chief counsel, operations, succeeding IRS veteran Donald T. Rocen. Kesselman is currently serving as counsel in the IRS' Small Business/Self-Employed Division. Rocen, who has held a number of posts in the Office of the Chief Counsel for 15 years, will leave the service July 27 for the Washington law firm of Miller & Chevalier. Lon B. Smith, associate chief counsel of financial products and institutions, will now become national counsel to the chief counsel for special projects. He has served in the Office of Chief Counsel for 30 years.