Practice Management

When Congress managed to agree on a budget resolution this year with $70 billion set aside for tax breaks, it seemed to assure smooth passage for extending President Bush's expiring tax breaks by avoiding risk of a Senate filibuster. In reality, however, the legislation is proving to be very difficult.First, there are more expiring provisions than the $70 billion will protect, so the tax writing committees have been struggling with what to leave in and what to leave out. Then, as deficits started swelling again following Hurricane Katrina, Congress decided that they should not use the full $70 billion, but no more than $60 billion, leaving space for even fewer provisions.

There is a clear link between Sarbanes-Oxley Section 404 compliance work and dramatically higher profiles for senior tax executives, particularly with audit committees and boards of directors, according to a survey of senior tax executives conducted by KPMG.Some 57 percent of respondents to the KPMG survey said that they believed both their role and stature had grown with peer groups over the past year, while 58 percent and 42 percent of respondents reported greater visibility and prominence before audit committees and boards of directors, respectively. That heightened attention has also resulted in support from top management for additional tax department resources, as nearly all (92 percent) respondents indicated plans to add staff over the next 12 months.

Two Rhode Island firms announced a merger deal that will be effective as of Jan. 1. Terms of the deal were not disclosed.

Until now, individual taxpayers who were unable to meet the April 15 tax return filing deadline could file a Form 4868 and receive an automatic four-month filing extension until August 15. And if August 15 didn't provide enough time to get the tax return completed, taxpayers could provide a good reason for the delay on a Form 2688 and request another extension for two months until October 15.Effective for tax returns due after Jan. 1, 2006, the kinder, gentler, more cost-effective Internal Revenue Service has done away with the second extension request and changed the initial automatic extension period from four months to six. Not only will this action remove the need for taxpayers to come up with a reason for requesting the extra two months to file tax returns, it will cut back on lots of paperwork and processing time.

Public companies, for better or worse, have completed the first year of compliance with the Sarbanes-Oxley Act. Now is a good time for CPAs in industry and their external auditors to reflect on the Year One experience, identify lessons learned, and change their compliance strategies accordingly.For example, many companies only cleared the Year One Sarbanes-Oxley hurdle via an "all hands on deck" approach. Sarbanes-Oxley compliance, however, is not a one-time event; it is an ongoing requirement. So this tack is too disruptive to be allowed to continue.

Regional CPA and business advisory firm Blum Shapiro will merge in the Fairfield, Conn.-based firm of Leask & Leask.Terms were not disclosed.

The Ohio Department of Taxation will begin accepting tax amnesty applications on Dec. 15.

High-profile investment research and products provider Morningstar will buy privately held Ibbotson Associates, an asset allocation service concern, for $83 million.

A new study out of think tank the Center on Budget and Policy Priorities says that despite recent revenue growth and budget surpluses in some states, most states continue to feel the after-effects of a recession that hit in 2000.

The market for mergers and acquisitions is expected to remain strong into 2006, according to a new study released by the corporate financial advising arm of KPMG International.