Finance

The Treasury Department issued rules last week aimed at dismissing some of the uncertainties around Roth 401(k) plans.

Criticism is nothing new to either the Financial Accounting Standards Board or the Governmental Accounting Standards Board. They get it from investors who want more information. They get it from corporations that say they already offer too much information. And recently, they've gotten it from both the Securities and Exchange Commission and from a former SEC chairman.

When it comes down to it, it’s with surprisingly little debate or complaint that the general populace submit to the payment of taxes.

Financial Executives International, a 15,000-member body of chief financial officers, controllers and other c-level financial executives, has thrown its support behind the Senate's efforts to modify Sarbanes-Oxley's Section 404. In a letter to Sens. Chris Dodd, D-Conn., and Richard Shelby, R-Ala., the chairman and ranking Republican, respectively, of the Senate Banking Committee, FEI president and chief executive Michael Cangemi lauded their leadership in "allowing the SEC and the PCAOB to resolve the challenges of improving Section 404." Cangemi told Dodd and Shelby that FEI's position is that "Section 404 needs to be made more efficient. However, we remain encouraged that the forthcoming SEC and PCAOB guidance will achieve a greater balance in the implementation of the annual compliance process of Section 404." FEI's letter comes on the heels of an overwhelming 62-35 defeat in the Senate of an amendment put forth by Sen. Jim DeMint, R-S.C., which would have made 404 compliance optional for companies below a certain market cap. Shortly thereafter, the chamber voted unanimously 97-0 to approve an amendment from Dodd, suggesting that the SEC and the PCAOB forge ahead with their previously announced plans to develop guidance for smaller filers to make SOX more manageable.

I’m a sucker for financial calculators -- you know, those little widgets that help you find out how much you’ll pay monthly on your 30-year mortgage, how long it’ll take to pay off your student loans, or what you can save when you switch your balances to a new credit card.So it was with some interest that I came across a little application last week, courtesy of journalist Kay Bell’s “Don’t Mess with Taxes” blog (http://dontmesswithtaxes.typepad.com), that allows users to calculate what their income tax liability would have been under the original Form 1040 -- issued in1913. (The calculator can be accessed directly at http://politicalcalculations.blogspot.com/2007/04/income-tax-original-form-1040.html).

At first glance, the recent testimony of Treasury Secretary Henry Paulson, Jr. before the Senate Finance Committee on ways to reduce the tax gap was fairly typical, in that he urged Congress to approve the Presidential-submitted budget with increased IRS funding, and to pass 16 legislative proposals aimed at narrowing the tax gap.

The leaders of the Senate Finance and the House Ways and Means Committees have reached agreement on a tax package aimed at providing nearly $5 billion in tax relief for small businesses.

The Senate Finance Committee didn’t get the answers it was hoping for during a hearing this week with Treasury Department representatives on how to reduce the tax gap.In testimony before the committee, Treasury Secretary Henry Paulson said that Congress should focus its efforts on reducing the complexity of the tax code, as well as approving the entire budget request from the Internal Revenue Service and enacting the Treasury’s February legislative proposals that are backed by President Bush. Paulson said that in developing more than a dozen proposals to minimize the gap, the Treasury focused on changes that would come with minimal additional burdens.

If Democrats are serious about rolling back the alternative minimum tax, then they should be happy to have gotten a little more fodder last week to use in whatever PR campaign accompanies the unveiling of their plan.The White House released copies of the tax returns for both the Bushes and the Cheneys last Friday, and both families somehow found their way to avoiding the AMT.

The White House released copies of the tax returns for both the Bushes and the Cheneys late last week.

It figures that it would be Tom Allen who took on the single biggest accounting issue in the country, if not the world.It was Allen who, as chairman of the Governmental Accounting Standards Board, ushered in Statement 34, which moved state and local governments to accrual accounting - arguably one of the biggest changes ever to impact governmental accounting.

Like their GOP predecessors, the Democrats in charge of Congressional tax committees continue to wring their hands over the fiscal train wreck looming due to the escalating alternative minimum tax.But agreement on a way to stop that runaway AMT locomotive - a step that many tax accountants say is needed to head off a tax revolt by millions of middle-income American families - seems just as elusive as ever.

Treasury Secretary Henry Paulson said that U.S. rulemakers should consider adopting "principles-based" regulations and accounting standards, in a speech at the Capital Markets Competitiveness Conference.Paulson said that in particular, there should be a focus on three issues in the U.S. - the country's regulatory structure, its accounting industry, and its legal and corporate governance environment.

One of my former employers has been the occasional subject of this column -- particularly when the topic centered on how not to run a business.

The American Enterprise Institute has released a new public opinion study that focuses on Americans’ historical attitudes to taxes.The study, “Public Opinion on Taxes,” was compiled by senior fellow Karlyn Bowman, who used available polling data to examine how attitudes toward paying taxes have changed over the past half century.

Along with making the case to keep executive compensation the way it is, the Financial Executives International recently said that investors are not well served by the complexity of financial reporting and released a four-point plan to address the problem.

The Office of Federal Housing Enterprise Oversight says that changes still need to come at mortgage lending giants Fannie Mae and Freddie Mac.

According to published reports, House Democrats are preparing legislation to permanently shield all but the wealthiest of taxpayers from the alternative minimum tax.According to the New York Times, the plan is still in its early stages, but would have the end goal of exempting millions from the tax -- although how exactly the revenue loss would be offset remains to be determined. The newspaper said that by the close of May, House Democrats hope to draft a permanent overhaul of the AMT that would exclude anyone who earns less than about $200,000 a year -- which covers about 97 percent of taxpayers.

A survey of chief executive compensation figures found that the median year-over-year percentage increase in pay was just short of 10 percent for 2006.

Plans by the Public Company Accounting Oversight Board to overhaul the organization's standards for internal control audits don't go far enough to correct the problems of the PCAOB's original ground rules - or they go too far in watering down the original Sarbanes-Oxley Act protections for investors by yielding to powerful business groups.Or they muddy the waters for accountants who are already swimming upstream to interpret and implement Auditing Standard No. 2, which governs audits of internal controls.