FASB, IASB ISSUE PROGRESS REPORT ON CONVERGENCE
Norwalk, Conn. - The Financial Accounting Standards Board and the International Accounting Standards Board have published a report detailing their progress on achieving convergence of U.S. GAAP and International Financial Reporting Standards. As of March 31, the boards said that they had achieved substantially all of the milestone targets they had set for the first quarter of 2010, and are on track to publish by mid-2010 exposure drafts for five major projects, including areas such as consolidations, revenue recognition, financial instruments with the characteristics of equity, and financial statement presentation.
However, on two major projects, financial instruments and insurance contracts, the two boards admitted that they have reached different conclusions on some important technical issues. The boards also agreed in late March to explore an alternative approach to lease accounting, and that decision could affect the project timetables.
IRS TO STEP UP AUDITS OF SOLE PROPRIETORS
Washington, D.C. - The Internal Revenue Service plans to check for unfiled tax returns and look for unreported income from sole proprietors of small businesses during correspondence audits.
The IRS conducted more than 5.1 million correspondence examinations between fiscal 2004 and FY 2008 that recommended that the IRS collect approximately $35 billion in additional taxes, according to the Treasury Inspector General for Tax Administration. For each tax return examined, a correspondence examination generated about $6,800 in recommended additional taxes.
Unlike procedures for audits conducted in the field, procedures for correspondence audits of sole proprietors do not require examiners to complete minimum checks for unfiled returns (employment tax and information returns) and to probe for unreported income. In response to TIGTA's report, the IRS agreed to develop inventory selection filters to identify and refer to field examiners those sole proprietors who did not file required employment tax or information returns, and those with indicators of unreported income.
