Finance

The Senate Finance Committee heard testimony from Roby B. Sawyers, a professor in the College of Management at North Carolina State University and a member of the American Institute of CPAs' Tax Executive Committee, about the institute's recommendations for estate tax reform.

Senate Democratic and Republican leaders have reached a compromise on a bill to provide tax breaks and refinancing assistance to beleaguered homeowners hit by the mortgage crisis.

A new coalition wants to eliminate the taxation of Americans working abroad.

It didn't take long for critics to start throwing eggs at Treasury Secretary Henry Paulson's plan for overhauling the structure of the government's financial regulatory agencies.

On January 24, 2002, I gave a presentation, at the Large- and Medium-Sized Firms Practice Management Committee of the New York State Society of CPAs, entitled "Like the Energizer Bunny, the Enron Mess Keeps Going and Going." It seems I was right as Citigroup just settled a lawsuit in which it agreed to pay $1.66 billion to the Enron Bankruptcy Estate, which had filed bankruptcy and fraud claims against Citigroup in the United States Bankruptcy Court in New York.

The Center for Audit Quality marked its first anniversary with a report on its progress in improving public confidence in the audit process.The CAQ, which is affiliated with the American Institute of CPAs, originated in January 2007. Last year, it began a Public Dialogue Tour to gather ideas from investors about how to accomplish its goal. The CAQ plans two more stops on the tour this year, in Boston and its home base of Washington, D.C.

If you thought that the tax legislation passed at the end of 2007 — both the Alternative Minimum Tax relief legislation and the mortgage debt forgiveness relief legislation — finally resolved the issues that would have to be addressed for the 2007 tax return filing season, you were mistaken. Congress was not done creating issues that would impact those returns. The Economic Stimulus Act of 2008, signed by President Bush on Feb. 13, 2008, has created additional issues for 2007 return filers.Most of the direct impact will be on lower-income individuals — individuals who are not normally required to file tax returns but who may wish to do so in order to qualify to receive a rebate check authorized under the new legislation.

Presidential hopeful Sen. Barack Obama, D-Ill., has released seven years of tax returns, putting added pressure on rival Sen. Hillary Clinton, D-N.Y., to release her tax returns.

Senate Finance Committee leaders have questioned the terms of the recent taxpayer-backed sale of Bear Stearns to JPMorgan Chase.

A federal judge has ruled against some of the main provisions of a New Jersey law restricting interest rates and fees that can be charged on tax refund anticipation loans, even though the annual percentage rates average 115 percent.

Sen. Joseph Lieberman, I.-Conn., has written a letter to the Internal Revenue Service asking for an explanation of its investigation of a speech by Sen. Barack Obama, D-Ill., at the United Church of Christ.

The Senate has confirmed Douglas H. Shulman as the new commissioner of the Internal Revenue Service.

Sage Software has updated its Sage FAS software with a service update to reflect the economic stimulus package recently enacted by Congress.

The ink hadn’t dried on the new economic stimulus bill before federal tax authorities began receiving complaints about vicious new tax rebate scams targeting taxpayers and their accountants.The new flurry of fraudulent activity is directed at taxpayers expecting to receive the rebates of up to $1,200 per couple that Congress voted to send out after the close of this year’s tax filing season.

David Walker, comptroller general of the United States and head of the Government Accountability Office, has resigned to take over as president and CEO of the newly established Peter G. Peterson Foundation. His resignation was effective March 12.Walker had been comptroller general since November 1998.

There’s an 800-pound gorilla on the presidential campaign trail, but none of the candidates is talking about it.That gorilla has doom written all over it, to the tune $55 trillion - and counting.

The administration’s budget proposal to conform the penalty standards applicable to preparers and taxpayers has been welcomed by tax professionals concerned about possible conflicts of interest between preparers and their clients.The budget, the administration’s blueprint for legislative proposals, also calls for making permanent the 2001-2003 tax cuts, and offers measures to increase savings and investment and to improve compliance with the tax system. Rather than address Alternative Minimum Tax reform, it proposes a one-year patch to keep the number of taxpayers subject to the tax at around 4 million.

The Senate has voted to extend $340 billion worth of President Bush's tax cuts that were due to expire in 2010, but has rejected extensions of some other tax cuts.

The nation's economic policy heads outlined sweeping recommendations to strengthen the nation's credit markets -- calling for stronger licensing standards for mortgage brokers, more duel diligence from credit-rating agencies and stronger trading systems for complex instruments in an effort to avoid another credit meltdown. "Regulation needs to catch up with innovation and help restore investor confidence but not go so far as to create new problems, make our markets less efficient or cut off credit to those who need it," Treasury Secretary Henry Paulson said during a speech at the National Press Club. "We are encouraging financial institutions to continue to strengthen balance sheets by raising capital and revisiting dividend policies; we need those institutions to continue to lend and facilitate economic growth." Paulson, who heads the President's Working Group on Financial Markets, said the recommendations emanate from seven months' work by the group, which is comprised of the heads of the Treasury, the Federal Reserve Board, the Securities and Exchange Commission, the New York Federal Reserve Board and the Commodity Futures Trading Commission. Specifically, the PWG recommended strengthening the credit markets in the following areas: transparency and disclosure, risk awareness, risk management, capital management, regulatory policies, and market infrastructure. Paulson stressed that both state and local regulators need to strengthen oversight of mortgage originators, while credit rating agencies, must "perform robust due diligence" of originators of assets that are securitized or used as collateral for structured credit products. Federal Reserve Chairman Ben Bernanke labeled the recommendations an "appropriate and effective response to deficiencies in our financial framework that contributed to the current turmoil in financial markets," in a release accompanying the working group's policy statement. Securities and Exchange Commission Chairman Christopher Cox said the agency would use its new authority to address rating agency issues to restore investor confidence. "This effort is not about finding excuses and scapegoats. Those who committed fraud or wrongdoing have contributed to the current problems; authorities need to and are prosecuting them. But poor judgment and poor market practices led to mistakes by all participants," Paulson said. Paulson's remarks can be read at: http://www.treas.gov/press/releases/hp872.htm

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.