STRICTER PEER REVIEW IN HAWAII
Honolulu - The Hawaii legislature has overridden the veto of Governor Linda Lingle and passed a strict mandatory peer review law for public accountants. The law would require all CPA firms doing attestation work in Hawaii, regardless of size or the location of their home office, to have their Hawaii office and Hawaii work product peer reviewed. There are to be no exemptions for international and multi-state firms whose Hawaii offices are seldom selected for peer review because of their small size relative to the size of their other offices in the U.S.
The focus of the peer reviews would be educational and remedial. Punitive measures would only be employed in egregious circumstances. If the Board of Public Accountancy authorizes a third party to provide peer review services (such as a trade association), CPA firms, firm owners or firm employees would not be required to join that third-party organization, and the same price for peer review services would be charged to both members and non-members.
The focus of the peer reviews would be educational and remedial. Punitive measures would only be employed in egregious circumstances. If the Board of Public Accountancy authorizes a third party to provide peer review services (such as a trade association), CPA firms, firm owners or firm employees would not be required to join that third-party organization, and the same price for peer review services would be charged to both members and non-members.
IRA NONCOMPLIANCE RISING
Washington, D.C. - The federal government is losing millions of dollars every year due to increasing taxpayer noncompliance with Individual Retirement Account requirements, according to a new report by the Treasury's Inspector General for Tax Administration.
TIGTA reviewed the actions taken by the Internal Revenue Service to identify and correct individual excess contributions to IRAs and non-disbursements of required minimum distributions from IRAs, but discovered that over half a million people are not complying with the rules. It found that 295,141 individuals made more than $1.5 billion in excess contributions to their IRAs in 2006 and 2007, resulting in an estimated loss of $94 million in excise tax and $17 million in income tax. In addition, TIGTA found that 255,498 individuals did not take required minimum distributions totaling $348 million during that time, resulting in an estimated revenue loss of $174 million.
TIGTA recommended the IRS develop a strategy to address noncompliance with limits on IRA contributions. The IRS agreed that such a strategy is necessary and plans to incorporate compliance, education and outreach components.
