SENATE PASSES TAX EXTENDERS, AMT PATCH
Washington, D.C. - The Senate passed a bill that would extend expiring tax cuts, patch the Alternative Minimum Tax for another year, provide clean energy incentives and equalize the disclosure standards for tax preparers and taxpayers.
The bill won overwhelming support by a vote of 93-2. The legislation includes a provision advocated by the American Institute of CPAs that would equalize the tax return preparer penalties on understatement of tax liabilities, reversing a 2007 law that raised the reporting standards for undisclosed, non-tax-shelter transactions for preparers to a level higher than that required of taxpayers. The proposal changes the standards for imposition of the tax return preparer penalty, reducing the standard for undisclosed positions to "substantial authority." The preparer standard for disclosed positions is "reasonable basis."
Other provisions in the bill include clean energy tax incentives totaling approximately $18 billion, paid for by several offset provisions, including a delay of the tax deduction for domestic manufacturing activities of major American oil and gas companies.
The bill also provides several extensions of expiring family and business tax cuts and other policies, including an expansion of the child tax credit, legislation providing parity for mental health treatment in the U.S. health care system and tax relief for victims of natural disasters.
AICPA MULLS IFRS FOR PRIVATE COMPANIES
New York - The American Institute of CPAs' Private Company Financial Reporting Committee is considering whether International Financial Reporting Standards should apply to private companies in the U.S.
Judy O'Dell, chair of the PCFRC, said that the committee, which met in September, did not come to any definite decision on the matter. However, a document on its private entities project from the International Accounting Standards Board could potentially be used as a model for financial reporting by private companies in the U.S. as domestic standards converge with those of IFRS. The document is scheduled for a January 2009 release.
U.S. standards-setters could take IFRS and create a version of the IASB private entities document that would be applicable to U.S. companies. Or, the AICPA indicated that it could decide instead to remain with U.S. generally accepted accounting principles for private companies.
WOLTERS KLUWER BUYS DUBLIN CONSULTANCY
Riverwoods, Ill. - Wolters Kluwer Tax and Accounting has acquired CI Consultancy Limited, an Irish developer of operational risk control systems for financial institutions and corporations. Ci3, based in Dublin, provides enterprise risk management software, governance, risk and compliance software, and IT consulting services to corporations.
The consultancy's flagship product, Sword, offers financial institutions a configurable system for measuring, monitoring and managing operational risk and compliance.
