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Former construction worker and Coast Guard employee Rhiannon O’Donnabhain is suing the Internal Revenue Service after she was disallowed from deducting $25,000 in medical expenses for her sex change operation.The IRS claims the operation was cosmetic surgery and not a medical necessity. In another case in 2005, the IRS Chief Counsel made a similar determination. However, the United States Tax Court has not ruled on any similar cases, and its decision could set a precedent.

The movie, “Minority Report,” showed what technology could be, someday. No, this is not arresting before they commit crimes. It’s about scenes in which Tom Cruise’s character walks through a mall and animated holograms address him by name. Technology isn’t quite that personal, yet. But there are signs in the emerging generation of computing and telephony devices of yet-another revolution in hardware and software. Two devices have the potential to change our platforms: Microsoft’s Surface computer and Apple’s iPhone. Most of us are not going to be using iPhones to make calls, or using Surface technology to turn our coffee tables into computer devices soon. But the incredible clarity of the display of the iPhone and its wafer-thin profile and it ability to shift its image when the phone is turned, and Surface’s touch-screen technology in Surface, which is beyond what most of us have seen, will force technology companies back to the R&D labs. Surface is harder to grasp. At Microsoft’s World Wide Partner conference, Surface was on displayed to enthralled crowds. One demonstration involved what looked like glass blocks being shuffled across the computer’s surface. Separate, each showed the same picture. When put together, the picture grew to the size of the number of blocks that were contiguous “Like an insect’s eyes,” I remarked. “Exactly,” responded the demonstrator. I said I could see an immediate market—places like Casinos that have money and need “flash.” Indeed, a casino is one of the early buyers. The screen showed a graphical map of the facility, tailored so an individual could find show times and restaurants, make reservations, and accumulate and spend the points awarded valued gamblers. Mobile technology was already in turmoil before the iPhone. Surface is likely to have a less direct impact, and will be incorporated into other devices. This comes at a time when the role of operating systems and applications are likely to change dramatically over the next three years, certainly the next five. Or take the iPod, whose newest version can hold 20,000 songs. Of course, most teenagers won’t spend 99 cents a song: Hopefully, they’ll copy songs like most already do. No, this is about what the new capacity enables us to do that we couldn’t do before, and probably hadn’t thought of.

Securities and Exchange Commission Chairman Christopher Cox told a Town Hall Los Angeles meeting that he wants Congress to give more power to the Governmental Accounting Standards Board so GASB can police accounting practices at the state and local government level and better regulate the municipal bond market.He would like the SEC to be able to enforce GASB accounting rules when it sees a violation by a state or local government, similar to the way the SEC can take action against companies that flout Financial Accounting Standards Board rules. Texas and Connecticut have both passed bills recently allowing alternative accounting rules, although Connecticut Governor Jodi Rell has vetoed that state’s bill.

The National Association of Tax Professionals and the IRS are warning about the latest trend in e-mail scams: fake messages purportedly from the IRS "Fraud Department" threatening taxpayers with a "tax avoidance investigation."

A group of companies and organizations in the United Kingdom has responded to the Financial Reporting Council's report on constraints in the audit market that have forced most large public companies to rely on one of the Big Four accounting firms for audit services.

Louisiana accounting firms LaPorte Sehrt Romig Hand CPAs and the Gautreau Group plan to merge on October 1.

Usana Health Sciences said that Grant Thornton has resigned as the independent accounting firm for the company, which markets vitamins and nutritional supplements through a network of distributors.The company said there were no disagreements on any accounting principles or practices, financial statement disclosure, or auditing, but did admit that it had a disagreement with the firm over the scope of the review procedures that would be followed after allegations about Usana appeared in the media in March. At that time, The Wall Street Journal published a story about a damaging report on the company's business practices by an investigator.

The United States Tax Court has decided that wages earned in Antarctica are still subject to taxation.

Channel partners have to start focusing on serving instead of selling if they want to survive and stand out among the masses. With thousands of resellers and consultants competing for the same business, impeccable service could be one of the best ways for firms to differentiate themselves. Customers rate service and support after the sale as the No. 1 reason for choosing one reseller over another, according to Gartner research. That is followed by ease of integration with existing systems, ease of doing business with the provider, provider knowledge of their industry and total cost of ownership. During a session at Microsoft’s Worldwide Partner Conference in Denver last week titled, “Reading the Tea Leaves: Industry Trends and Building Your Competitive Edge,” Tiffani Bova, research director of IT channel sales, programs and alliances worldwide for Gartner, outlined ways for resellers to capitalize on this knowledge for future success. The days of enjoying 50-point margins are over, she says. Now, if five people stood before a prospect and that person asked all of them what they were going to do to help him succeed, would all the answers sound the same? Only about one-third of the audience said they measure customer satisfaction after every project. That could be dangerous if those VARs don’t know they need to improve. “When vendors start losing market share, before that happens you hear grumblings about poor service,” Bova points out. It’s clear from speaking to various accounting software providers that many of them are changing the way they select—and keep—VARs in their channel programs. Tier-based programs concentrating on sales volume, which “killed the little guy,” are beginning to encompass value, according to Bova. Customer satisfaction metrics, vertical expertise and value-add are high on their consideration lists. Philosophies are changing and vendors are beginning to do more with less partners, focusing on quality instead of quantity. They are moving from mass partner recruitment to targeted recruitment efforts, certifying specialists and encouraging partner collaboration. “It’s a great way to date before you get married,” Bova says, referring to the growing number of mergers and acquisitions popping up in the reselling space. Partner to scale instead of hiring to scale. Oftentimes, clients will approach their reselling partners with a situation they’ve never encountered. Don’t wait to start looking for help when faced with this type of challenge, like needing someone in a different region or country if the client is looking to expand. Do it before you need it. “If you’re going to enter a body-building contest, you go to the gym beforehand,” Bova says. “Don’t rely on your vendor to create a partner ecosystem. Determine goals and best ways to approach the situation.” Other recommendations include: Become a case study. “Use what you sell,” Bova says. “Prove out total cost of ownership and ROI calculations. Tell them how you’ve improved using the system.” Specialize. Move away from a generalist who offers everything from soup to nuts to concentrating on a specific niche or niches. Consult on business strategy, not technology. Consultants who started as technologists may be at a competitive disadvantage to those who have been strategists from the start, Bova says. Change the nature of the conversation so your clients perceive you as a strategic advisor and a gatekeeper of technology with whom they want to continue a long-term relationship. Use what you’ve got. Take advantage of vendor programs. Maximize use of enablement tools. Don’t leave money on the table. Enhance marketing efforts. “Marketing competency is lacking,” Bova says, noting that only one in 10 partners has a full-time dedicated marketing person, which she believes is necessary for lead generation. Set up referral programs for your customers. Invest in your business. Take classes to learn how to motivate and compensate employees. There are 600,000 Microsoft partners out there. That’s a big pool for prospects to choose from. How do you differentiate yourself?

A tax manager who left her firm in Hawaii and moved to South Carolina was the subject of a very interesting article in the July 2007 Boomer Bulletin from Boomer Consulting Inc. What was so interesting was that not much changed for the Hawaiian firm, as she continues to work for it remotely from South Carolina.