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Texas Governor Rick Perry has signed H.B. 2144, which eases restrictions on interstate CPA practices.

The Supreme Court has agreed to decide whether an exception in the Internal Revenue Code allows a trustee to deduct the full amount of fees paid to an investment advisor. The case of Knight v. Commissioner of Internal Revenue, U.S., No. 06-1286, centers on trustee Michael J. Knight, who paid an investment advisor to manage the assets of a trust. When the trust filed its tax return, Knight sought to deduct the full amount of the fees under 26 U.S.C. Section 67(e)(1). However, the IRS said the fees are subject to the 2 percent rule. The U.S. Tax Court agreed with the IRS, as did the U.S. Court of Appeals for the Second Circuit, which ruled against Knight in October. But Knight argued the fees fall under an exception to the general rule because they were paid in connection with the administration of the trust, and because they would not have been paid unless the assets were held in trust. In May, both the New York Bankers Association and the American Bankers Association May 22 filed a brief in support of the trustee, urging the U.S. Supreme Court to hear the case.

Broker/dealer H.D. Vest Financial Services said that its assets under management in advisory accounts recently passed the $5 billion mark. The company said that figure helped propel its total assets under management to roughly $25 billion. The company began offering advisory solutions in 1987, and currently supports over 1,900 independent advisory consultants in its system of 5,500 advisors.

Tax and news publisher BNA has named Robert P. Ambrosini to the post of vice president and chief financial officer. Ambrosini, who officially began with BNA June 18, has held CFO posts at such organizations as Black Entertainment Television and Texfi Industries. He also was senior vice president finance and accounting for the National Geographic Channel. Ambrosini also serves on the board of the Washington Hospital Center Foundation.

ProAdvisors span the nation, consulting with many of the 3.7 million QuickBooks customers on how to get better use of their software. Now Intuit hopes to convince a portion of those 40,000 ProAdvisors, as well as resellers of competitors’ products like Sage Software’s MAS line and Microsoft Dynamics GP, to add QuickBooks Enterprise Solutions to their toolkits. Could this plan be realized, or is it just a pipedream? Intuit began beta-testing this channel strategy a year ago, and by its QuickBooks Enterprise Solutions user conference in San Diego earlier this month, announced that 94 people had signed on, including a handful of the competition’s resellers. The goal is to hit 250 around the time of its 2008 user conference and 750 by July 2010. Unlike its competitors, Intuit essentially is starting from scratch in its attempts to formalize its channel. “We didn’t have a bona fide VAR program with a clear role for the channel,” channel director Jim Gregg acknowledged during the conference. “We don’t have much flesh on the bone right now.” That leads to a challenging path ahead. The QuickBooks ProAdvisor Program began in 1999 and provides members with product discounts, free training and an online resource center to help accountants market and run their practices. These members have formed a community over the years and some even compete with each other to be first to acquire the latest certification. Now Intuit must push them to either upsell their current clients who have outgrown the lower-level application or convince users of more complex and expensive products to switch. What’s challenging is that many accountants who hold the ProAdvisor title are uncomfortable with the selling stage of engagements and are dependent on Intuit for help, according to Gregg. While the vendor aims to provide its channel with 50 percent of their leads, it expects them to generate the other 50 percent, he says. Program participants receive a 25 percent margin, which could jump to 50 percent if they sell two deals per month, and Intuit plans to offer coop marketing assistance in the future and expand the Intuit Developer Network to encourage VARs to sell other products. Sounds fair enough. But when you look at Sage’s highly structured channel program, which offers sales training, marketing coaching and clearly defined plans to help its partners succeed, Intuit’s program looks like the little engine that could—or at least that might. Add that to the fact that Sage execs at their May partner conference in Orlando discussed plans to bring Peachtree Quantum into the channel, and the hill grows a bit steeper for Gregg’s team. He says he hasn’t seen much competition from Quantum yet, but that doesn’t mean it isn’t coming. Dynamics resellers, however, are demonstrating interest, quickly returning inquisition calls from Intuit, according to Gregg. That is not hard to believe being that Microsoft’s channel is so large it doesn’t need to nurture it. What can Intuit do to entice Sage resellers to take on its mid-market product when Sage has its own and rewards partners who sell only its products under the Sage Select program? It might benefit by providing more individualized attention to VARs, demonstrating a clear commitment to helping them grow. It’s on the right track, with plans to add a marketing manager, channel manager and training manager in the next three months. But it’s going to take a lot of steam for this little engine to catch up with the locomotives.

Last year, I wrote a column entitled, “Do You Have a Chief Knowledge Officer?” (webcpa.com/article.cfm?articleid=14079) aimed at encouraging smaller accounting firms to think about applying knowledge management concepts in their firm operations. One example I gave was an accounting firm that had different individuals responsible for certain subject matter and practice areas so they could inform other firm members by e-mail alerts of important developments.

Florida A&M University has been given a six-month window to straighten out its accounting problem or risk losing its accreditation by the Southern Association of Colleges and Schools. The school has come under fire after a state auditor revealed that the school's inspector general's office had gone 40 months without any formal reports on internal investigations, and that $39 million in transactions and budget amendments were made without approval of the school's board of trustees. In addition the school has some $1.8 million in missing receipts for athletic-event tickets and $11,000 in bad checks were written by the administration. Students attending an unaccredited school are typically not eligible for financial aid.

Prosecutors are urging a U.S. district Judge to dismiss indictments against 13 of executives of Big Four firm KPMG on charges of marketing illegal tax shelters. According to The Wall Street Journal U.S. District Judge Lewis A. Kaplan had previously ruled that the government had overreached in its years-long investigation, violating the defendants' constitutional rights to counsel and due process. In a June 22 filing in federal court in Manhattan, prosecutors said that Kaplan's decision showed that there was a fundamental flaw in the proceedings and that he must dismiss the indictments. As a result, 13 of the 18 defendants may now never stand trial, including the accounting giant's former vice chairman, Jeffrey Stein, the highest-ranking executive named in the indictment. However, legal experts opined the petition was a strategy to allow allowing prosecutors to appeal Kaplan's ruling, a maneuver that may yet allow prosecutors to resume the proceedings against all 18 of the defendants. The indictments were initially handed down in 2005 accusing the defendants of selling fraudulent tax shelters from 1996 through 2002, that cost the government some $2.5 billion in revenues. In striking an agreement to escape a potentially fatal criminal indictment that could have shuttered the firm, KPMG agreed to pay a $456 million fine to the federal government and spend the next 16 months on probation overseen by a federal monitor. The firm also agreed to close its tax business for high-net-worth individuals. Kaplan has scheduled a hearing July 2. A decision regarding the government's argument, as well as the motions to dismiss the indictments, could be issued this summer.

Taxes have overtaken health care as the leading concern for small business owners, according to the latest Small Business Research Board study. Taxes were the leading concern of business owners during the second quarter of 2007, replacing health care, which previously was cited as being the single greatest issue impacting small businesses. Some 770 small business owners in the U.S. who responded to the nationwide poll, co-sponsored by International Profit Associates, indicated that taxes were tops among key concerns of small business owners followed closely by overall economic conditions and energy/fuel costs. Health care was fifth on the list of concerns. The quarterly poll of small business owners and managers also indicated that taxes were the leading concern in two of the four U.S.. regions -- ranking number one in the South/Southeast and in the Western states. Taxes were ranked second in the Midwest and fourth in the Northeast. Meanwhile, economic conditions were identified as the leading concern by business owners in the both the Northeast and Midwest. However, neither energy and fuel nor health care finished in the top five in the Western U.S., where taxes and economic conditions were followed by foreign competition, the cost of materials and finding quality employees as the leading concerns.

After collating some 80 comment letters on valuation guidance for financial reporting, the Financial Accounting Standards Board unveiled plans to form a resource group on the subject. Specifically, the cadre will provide the standard-setter with input on potential clarifying guidance on issues relating to the application FASB Statement No. 157 on Fair Value Measurements. FASB said the composition of the group will comprise of a cross section of constituents and added that its initial meeting will be sometime during the third quarter of 2007.