SEC APPROVES SOX 404(B) EXTENSIONWashington, D.C. — The Securities and Exchange Commission has approved a one-year extension of the compliance date for smaller public companies to meet the Section 404(b) auditor attestation requirement of the Sarbanes-Oxley Act.
With the extension, smaller companies will now be required to provide the attestation reports in their annual reports for fiscal years ending on or after Dec. 15, 2009. SEC Chairman Christopher Cox first proposed the one-year delay for small businesses during December 2007 testimony before the House Small Business Committee, and the SEC formally proposed this extension on Feb. 1, 2008.
Section 404 has two provisions: 404(a) requires company management to assess the effectiveness of the company’s internal controls over financial reporting, while 404(b) requires an auditor attestation on management’s assessment. Larger companies, comprising more than 95 percent of the market capitalization of U.S equity securities markets, have been subject to both provisions since 2004.
The extension of the Section 404(b) compliance date for smaller companies is the latest in a series of SEC efforts to help reduce unnecessary compliance costs for smaller companies while preserving investor protections. In 2007, the SEC issued new guidance for management’s Section 404 assessment to help companies focus their reviews on the internal control issues that matter most to investors.
Companies of all sizes, including smaller companies, are filing their first 404(a) reports this year with the benefit of the new guidance. Furthermore, the SEC and the Public Company Accounting Oversight Board voted unanimously to replace the standard for the 404(b) auditor attestation, which is intended to make the process more efficient. This year, larger companies are filing their first 404(b) reports under the new audit standard.
IRS UPS MILEAGE RATES AS GAS PRICES RISE
Washington, D.C. — The Internal Revenue Service is trying to cope with rising gas prices by increasing the optional standard mileage rates that taxpayers can use to calculate the deductible costs of operating an automobile.
The change will take effect on July 1, earlier than usual. The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008, an increase of 8 cents from the 50.5 cent rate in effect for the first six months of 2008, as set forth in Rev. Proc. 2007-70.
The IRS made the special adjustment for the final months of 2008 in recognition of recent gasoline price increases. It normally updates the mileage rates once a year in the fall for the next calendar year.
The new six-month rate for computing deductible medical or moving expenses will also increase by 8 cents to 27 cents a mile, up from 19 cents for the first six months of 2008. The rate for providing services for charitable organizations is set by statute, not the IRS, and remains at 14 cents a mile. Taxpayers also have the option of calculating the actual costs of using their vehicle, rather than using the standard mileage rates.
HOUSE COMMITTEE PASSES AMT RELIEF BILL
Washington, D.C. — The House Ways and Means Committee has passed a bill aimed at forestalling the spread of the Alternative Minimum Tax for another year.
H.R. 6275, the Alternative Minimum Tax Relief Act of 2008, would prevent the AMT from hitting more than 25 million families with a tax increase this year, according to its sponsors.
The bill tries to make up for the lost revenue by closing loopholes in the Tax Code and repealing tax breaks for major oil and gas companies. Those provisions are likely to provoke a backlash from members on the other side of the aisle.
