TOP 100 MERGER
As we went to press, Marcum LLP had just combined with fellow Top 100 Firm Stonefield Josephson, expanding its footprint to California and Hong Kong. The merger, which took effect on Oct. 1, will add 150 professionals to New York-based Marcum, along with five offices, in Los Angeles, San Francisco, Irvine, San Diego and Hong Kong. Terms of the deal were not disclosed. Stonefield will be known as MarcumStonefield, a division of Marcum LLP. The combined firm will have 1,100 professionals, including 150 partners.
CHANGES AT FASB
Leslie Seidman was installed as the new chair of the Financial Accounting Standards Board, succeeding long-time chair Robert Herz, whose hasty departure remains largely unexplained. She faces a heavy workload, with the board working overtime on a slew of convergence projects. (For more on Seidman, see "10 Worth Watching," page 8.)
The board also announced the elevation of Russell Golden to one of its three empty seats; Golden had previously been technical director of FASB, with primary responsibility for overseeing staff work on all standards-setting projects.
The Public Company Accounting Oversight Board released a report summarizing the types of problems its inspectors encountered at auditing firms in the wake of the economic crisis. Inspectors identified instances where auditors apparently did not comply with auditing standards in key areas such as fair value measurements, impairment of goodwill, indefinite-lived intangible assets, and other long-lived assets, allowance for loan losses, off-balance-sheet structures, revenue recognition, inventory, and income taxes. The board did acknowledge that auditing firms have made some efforts to respond to the increased risks stemming from the economic crisis, but noted that firms need to continue to focus on making improvements to their quality control systems.
The Securities and ExchangeCommission propose requiring that public companies disclose more information about their short-term borrowing, to shed light on what some refer to as balance-sheet "window-dressing." (See page 15.)
ACTION, INACTION ON HILL
The future of the Bush tax cuts, and even the future of discussions about the future of the Bush tax cuts, remained the subject of congressional dithering and political point-scoring. At press time, the Democrats were planning a vote following the November 2 mid-term elections, leaving open the possibility of another flood of late-in-the-year tax legislation. (See our cover story.)
Congress did, however, manage to pass, and President Obama to sign, the Small Business Jobs Act. Along with more loans and credits for small businesses, the act includes a host of tax changes, among them: eliminating all capital gains taxes on small-business investments held more than five years; increasing for 2010 and 2011 the amount of investments that businesses will be eligible to immediately write off to $500,000, while raising the level of investments at which the write-off phases out to $2 million; extending 50 percent bonus depreciation through 2010; temporarily increasing the amount of start-up expenditures that entrepreneurs can deduct from $5,000 to $10,000; and allowing certain small businesses to "carry back" general business credits to offset five years of taxes. It will also change the penalty for failing to report certain tax transactions from a fixed dollar amount to a percentage of the tax benefits from the transaction.
LET THE REGISTRATION BEGIN
The Internal Revenue Service started taking applications for Preparer Tax ID Numbers - the first step in its long-mooted preparer registration process. You can apply online at www.irs.gov/taxpros for $64.25; if you have technical problems, call (877) 613-PTIN.
The IRS announced that it will no longer mail paper income tax packages containing forms, schedules and instructions for filing a paper returns. It planned to send postcards in early October to individuals who filed paper returns last year and did not use a tax preparer or tax software, and to businesses that normally receive their tax forms and publications from the IRS, explaining how to get the forms and instructions, which will be available in early January 2011.
A report from the Treasury Inspector General for Tax Administration suggested that the IRS Modernized e-File system, which began accepting individual tax returns this February, was not up to snuff, erroneously rejecting large numbers of returns. As of April 15, 2010, the system had only been able to process a fraction of the 1040s it was supposed to, leaving the IRS unable to assess its ability to process large numbers of returns.
In response to a second TIGTA report, the service suggested that it plans to get tougher on businesses that don't pay their employment taxes - though it balked at a suggestion in a third TIGTA report that it freeze more questionable refunds than it currently does. TIGTA had suggested that it use the extra time to compare tax returns with third-party information from employers, government agencies and financial institutions.
IN OTHER NEWS
Intuit released the 2011 versions of its QuickBooks product line, with a host of new features aimed at data analysis and business intelligence. (See New Products, page 40.)
Accounting Today and Best Companies Group announced the members of the 2010 Top 100 Best Accounting Firms to Work For; the final rankings will be announced at Accounting Today's Growth & Profitability Summit in Las Vegas, Nov. 17-18, and published in our December issue.
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