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One quarter of all individual tax returns so far this filing season are being processed by the Internal Revenue Service's modernized account information computer system. The Customer Account Data Engine, or CADE, has processed 15.1 million individual tax returns through March 7, more than 25 percent of all those processed so far this year by the IRS. The number of tax returns processed this year by CADE has already topped the 11.2 million returns the system handled for all of last year. CADE, which is at the core of the effort to replace many of the agency's aging systems, dramatically speeds up internal IRS processing, permitting taxpayer accounts to update on a daily basis, rather than the older system's weekly basis. The IRS is rolling out CADE in a series of "releases," each improving on and adding to the system capabilities. The current release, launched in January, permits CADE to process certain 1040, 1040A and 1040EZ forms, as well as Schedules C, E and F for Form 1040 and a number of other IRS schedules, such as the Earned Income Tax Credit.

The American Institute of CPAs sent a letter to the Senate Finance Committee prior to its March 12 hearing on estate tax reform urging lawmakers to make permanent changes to the estate tax prior to the current law expiring in 2010.In a letter, the institute reiterated a prioritized series of reforms -- a list that the AICPA had previously sent to Congress in 2005 and again in 2006.

Sen. Max Baucus, D-Mont., chairman of the Committee on Finance, and Sen. Chuck Grassley, R-Iowa, ranking member, have written to several religious ministries to urge cooperation with an earlier information request from Grassley. The ministry inquiry that Grassley launched last November is meant to gauge the effectiveness of certain tax-exempt policies. "This ought to clear up any misunderstanding about our interest and the committee's role," Grassley said. "We have an obligation to oversee how the tax laws are working for both tax-exempt organizations and taxpayers. Just like with reviews of other tax-exempt organizations in recent years, I look forward to the cooperation of these ministries in the weeks and months ahead." Grassley wrote to six ministries in November, asking a series of questions on the nonprofit organizations' expenses, treatment of donations and business practices. The questions were based on presentations of material from watchdog groups and whistleblowers and on investigative reports in local media outlets. One of the six ministries, Joyce Meyer Ministries of Fenton, Mo., has cooperated substantially with his request and provided the requested information. Benny Hinn Ministries of Grapevine, Texas, has indicated a willingness to cooperate and provided answers to five of the 28 questions so far. Representatives for Randy and Paula White of Without Walls International Church/Paula White Ministries, Tampa, Fla., have verbally indicated to Finance Committee staff that they would cooperate. The remaining ministries have not cooperated, citing privacy protections or questioning the committee's standing to request the information. Baucus and Grassley wrote to them on March 11 to describe the committee's jurisdiction and role in determining the effectiveness of tax policy developed by the committee, distinct from the Internal Revenue Service's role, which is to enforce existing law. The three ministries are: Kenneth and Gloria Copeland of Kenneth Copeland Ministries, Newark, Texas; Creflo and Taffi Dollar of World Changers Church International/Creflo Dollar Ministries, College Park, Ga.; and Eddie L. Long of New Birth Missionary Baptist Church/Eddie L. Long Ministries, Lithonia, Ga.

The Securities and Exchange Commission and the Commodity Futures Trading Commission have put aside their regulatory turf wars and entered into a memorandum of understanding that fosters cooperation between the two enforcement bodies in market oversight and regulation. The agreement includes an information-sharing platform along with guidance for new product reviews - particularly if the products can trade as both a security or a commodity. The first order of business under the joint relationship is notices requesting public comment on two new products --the first is an option that would be traded on options exchanges, and the other is a future that would trade on a single stock futures exchange. The requests for comment will be published in the Federal Register.

Sage Customer Relationship Management Solutions, part of the Sage Group plc, has unveiled its global CRM strategy in an effort to guide development of its CRM product line which includes Act! by Sage, SageCRM and Sage SalesLogix. The strategy, dubbed "Sage CRM Solutions 2010," targets distinct business requirements; creates inter-use among Sage's CRM products; applies open Web standards to enable a connected front and back office; and incorporates Web 2.0 technologies. "We've been working on this for about a year," Larry Ritter, senior vice president of product management and marketing for Sage CRM Solutions, told WebCPA. "We really wanted to say let's take our time and even though we have success in the market, let's try to articulate some longer term vision so we can maintain the momentum. Now is really the outgrowth of the efforts over the last year." To support the strategy, Sage is implementing what it termed a "holistic" technology approach that includes the following: * Common components to provide a consistent user experience, workflow, data access and analytics across the Sage CRM product line; * Services-based integration to help organizations manage end-to-end business processes with standards-based integration to back-office applications; * Interoperability to enable organizations to more seamlessly migrate from one CRM application to another as their business evolves; * A software-as-a-service (SaaS) business platform will allow Web-based or on-premise access to any Sage CRM Solutions product; * An ability to incorporate Internet and Web 2.0 services, allowing customers to add Web-based business functionality to their CRM products; and, * "Anywhere workforce awareness" that will let users access their applications from any location. "What we see when you look at a lot of that end-to-end experience customers have interest in, CRM becomes like of a nexus point in that," Ritter said. "Every company has sales and marketing and service and support teams and pretty much every company has some type of a back office that they are working on. The more we can kind of step forward and identify ourselves certainly not as only players, but as leaders in that space, we think that's good." For more information regarding the Sage CRM Solutions 2010 strategy, download a white paper at www.sagecrmsolutions.com/products/collateral.

Despite the downturn in the economy, salaries for internal auditors are rising an average of 5 percent, according to a salary guide from Robert Half International.The report also identified internal auditing as one of five jobs positioned for growth in 2008.

Next year's budget proposals offered by Senate Democrats contain a material increase in spending that is contrary to sound fiscal policy, according to Senator Chuck Grassley, R-Iowa, ranking member of the Committee on Finance. In his opening statement on the Senate floor debate of the Fiscal Year 2009 Budget, Grassley noted that the proposals would raise discretionary spending by 9 percent over last year's spending. "How many Americans got a 9 percent raise? How many American families raised their discretionary household spending by 9 percent? You would think proponents of fiscal responsibility would be looking at spending cuts, not 9 percent increases," he said. The consequences are not merely imposed on high-income taxpayers, according to Grassley. "Low-income folks, including millions of seniors, pay no tax on their dividend or capital gain income," he said. "If this budget stands, even with the Baucus amendment, millions of these low-income taxpayers, especially seniors, will pay a 10 percent rate on capital gains and could pay as high as a 15 percent rate on dividends."

The 80 percent e-filing goal by 2007 has been moved forward five years to 2012, now making it entirely possible that it will actually be reached. Calling the new goal "difficult but doable," the IRS Oversight Board blamed the inability to meet the original 2007 goal on a number of factors, including problems and delays with the IRS Business Systems Modernization program and a public wariness about transmitting personal data over the Internet. The good news is that the board singled out the professional tax prep industry for praise. "Particularly impressive has been the growth in individual returns prepared by tax professionals and filed electronically, which increased from approximately 27 percent of paid preparer returns in 1998 to around 70 percent today." Moreover, the report said that achieving the new goal is doable only with the help of the preparer community. "Given Current progress and strategic planning, the Board believes that the IRS can meet an 80 percent e-file goal by 2012--but will need the help of the professional tax community and Congress to do so," it said. Just in case, though, it recommends some initiatives first proposed by ETAAC (the Electronic Tax Administration Advisory Committee) that will have an impact on the life of tax preparers. Among them are lifting the congressional prohibition on the IRS' ability to require the electronic filing of Form 1040 returns, and giving the IRS the discretion to implement e-file mandates for individual returns in the future, "particularly for those returns prepared by paid tax professionals." Fortunately, the board softens the blow by recommending that the IRS exhaust all reasonable steps to maximize voluntary participation first, and that it study the trade-offs between the expected benefits from increased e-file and the burden imposed on filers and preparers before setting any mandates. It goes without saying that if 2011 comes and the 80 percent goal hasn't been reached, it will be tempting to issue mandates to push the results over the goal line. That's not a good idea. Here's hoping Congress and the IRS resist the temptation to resort to draconian measures in order to achieve what should be voluntary behavior.

The Internal Revenue Service needs to improve oversight of its process for interpreting tax laws through its published guidance program, according to a new audit publicly released today by the Treasury Inspector General for Tax Administration. The audit, "The Public Guidance Program Needs Additional Controls to Minimize Risks and Increase Public Awareness," examined the process by which the IRS Office of Chief Counsel develops tax guidance, including a pilot guidance program to request and evaluate public submissions before considering changes to existing regulations. The chairman and ranking member of the Senate Finance Committee requested the review after news articles questioned whether the pilot program was putting special interest before the public's interests when developing tax guidance. "We believe the pilot program does not present an increased risk of influence by special interest groups in the selection of guidance projects," TIGTA Inspector General J. Russell George said. "The pilot program did not directly create tax guidance or circumvent existing internal controls." "Although Counsel considers ideas from a wide variety of sources when selecting guidance projects for its annual business plan, it does not track all open projects on the business plan, which could lead to an increased risk of untimely actions, less management oversight, and less public awareness," George added. The audit makes seven recommendations to IRS, including expanding written procedures for developing and monitoring the guidance business plan, issuing more frequent updates to and establishing a reasonable expectation in the Priority Guidance Plan, and improving recordkeeping.

The Center for Audit Quality has weighed in on the Securities and Exchange Commission's proposal to delay certain internal control reporting requirements for smaller companies, in a letter suggesting that the commission use the postponement to better assess the costs and benefits of implementing new standards and guidance. The SEC has proposed pushing back by one year the Sarbanes-Oxley Section 404 deadline for non-accelerated filers to provide auditors' attestation reports on internal controls over financial reporting in annual reports, to fiscal years ending on or after Dec. 15, 2009. While stating that, "The benefits of complete 404 reporting ... should be available to investors in smaller companies," the comment letter from CAQ executive director Cindy Fornelli acknowledged the potential benefits of the delay in allowing the integration of forthcoming guidance from the Public Company Accounting Oversight Board and the Committee of Sponsoring Organizations into auditor assessments. The letter also urged the SEC to broaden its effort to evaluate the cost effectiveness of new regulations and guidance, particularly the PCAOB's Auditing Standard No. 5, by including input not only from reporting companies, but from investors, audit committee members, auditors and others. An affiliate of the American Institute of CPAs, the CAQ is dedicated to fostering investor and market confidence in the audit process.