Practice Management

Comptroller General David Walker delivered testimony this week at the Senate Finance Committee’s hearing on “Our Business Tax System: Objectives, Deficiencies and Options for Reform.” Walker, who runs the Government Accountability Office, framed his testimony around the need for broader tax reform, telling the senators that the size of business tax revenues makes them very relevant to any plan for addressing the nation's long-term fiscal imbalance. In a report prepared by the GAO that accompanied Walker’s testimony, the office said that the design of the current system of business taxation is flawed. “It distorts investment decisions, hurting the performance of the economy,” the report said. “Its complexity imposes planning and record keeping costs, facilitates tax shelters and provides potential cover for those who want to cheat.” Walker said that some features of current business taxes channel investments into tax-favored activities and away from more productive activities, reducing the economic well-being of all Americans. Walker said principles that should guide the business tax reform debate include:

The U.S. government recorded record-high overall and corporate tax receipts on Sept. 15 -- a quarterly deadline for tax payments, the Treasury announced.

Carpathia Corp., a provider of accounting consulting, staffing and executive search and placement, announced its investment in a trio of California-based accounting services firms -- Irvine's Corporate DNA, Walnut Creek's the Nolan Group and San Francisco's A4C.

A church in Pasadena, Calif., says that the Internal Revenue Service has asked it to turn over all the documents and e-mails it created during the 2004 election year containing any references to political candidates.

After watching the country's largest home-mortgage loan giants cope with restatement fallout from accounting scandals for years, reports say that the U.S. Treasury might back away from its position to set limits on the portfolios of Fannie Mae and Freddie Mac.

The world is flat, according to the best-selling book by Thomas Friedman. He writes about technological changes that are linking people and breaking open business opportunities at warp speed. That's certainly the case for forward-looking CPAs, especially those in mid-market firms. Just a few years ago, it was unthinkable that a midsized CPA firm could compete and win multi-location opportunities from prospects with operations outside of the U.S.However, more midsized businesses now have operations around the globe. Additionally, what's changed is a result of client dissatisfaction with treatment or results from larger firms. In other instances, regulatory-driven arm's-length relationships between auditors and clients have generated new interest in secondary providers.

SUIT FILED AGAINST PLANS TO REIMBURSE PHONE TAX: A class-action lawsuit has been filed challenging the Internal Revenue Service's plan to reimburse taxpayers for their past three years' worth of long-distance phone taxes.The lawsuit claims that small businesses and low-income taxpayers will be shortchanged, or completely excluded, from the refunds.

So many tax provisions these days are effective so far out into the future, practitioners can't quite figure out how to address them. File them away on a long-term calendar? Start preparing for them immediately? Ignore them?In dealing with the recently passed Pension Protection Act of 2006, where the majority of provisions are not effective until either 2008 or 2011, the answer varies considerably. This article offers some first-off-the-bat timelines to consider.

Net@Work, one of the largest Sage-only software resellers, announced that it has purchased Eagle Consulting Group, a top Sage Software MAS 90 and MAS 500 reseller in the tri-state area.Eagle Consulting Group's founder and chief executive, Debra Ellis, will serve as manager of consulting services.

In many CPA firms, business development skills and techniques aren't even discussed until a manager is ready to move to partnership. And as they say, it's hard teaching an old dog new tricks.The ability to bring in new business for the firm is typically a condition of partnership, and yet firms aren't equipping their managers and senior managers with the skills they need to do so. Your staff is the future of your firm; give them the tools that they need to help build your client base and prepare them to become leaders.