Losing respect over Bush plan 'endorsement'I used to have great respect for Accounting Today. As a result of William Carlino's editorials regarding Social Security and some of the letters to the editor that were selected for publication, I no longer have that respect.
Let me lay out some simple facts regarding President Bush's "Social Security reform:"
First, there is no crisis, as potential insolvency 40 years away does not meet the definition of a crisis.
Second, if the president cared as he claims, potential Medicare insolvency is obviously a more urgent problem.
Third, President Bush's plan does not mention the vital insurance benefits provided by Social Security - survivor benefits and disability. I personally have seen the importance of that benefit to a widow left with three young children.
Fourth, we already have the ownership society the president is pushing. Billions of dollars are invested in the stock market. The defined-benefit pension plan is a thing of the past for the vast majority of working Americans, who rely on IRAs, 401(k) plans and their cousins for their retirement financial security.
Fifth, the stock market has not recovered to its March 2000 market highs. It is over five years, and the stock market is still down. Furthermore, the stock market is lower today then it was on the day President Bush took office.
Sixth, the first rule I learned about stock market investing was not to invest more money in the stock market then you could afford to throw away. The wisdom of that rule is demonstrated by the stock market's poor performance since March 2000. It is further demonstrated by the financial carnage caused to people who invested their 401(k) money in Enron, or had their IRAs invested in MCI WorldCom, Tyco, et. al.
Seventh, the future economic prosperity of this country is being threatened by the massive twin deficits of an unsustainable trade deficit and the massive federal budget deficit. Furthermore, the president presides over an administration that is still showing a net job loss after being in office for over four years.
If the president were serious about caring for working people, he would be pursuing economic policies that create jobs and insure our great country's future economic prosperity. A president whose top priority is a program that promotes risky stock market investments at the expense of a 70-year-old proven government program that has kept millions out poverty, while refusing to take actions needed to address the mortgaging of our economic future, is nothing more then a con man.
That you have chosen to endorse the actions of a con man has caused me to lose respect for you and your newspaper.
Gary Konecky, CPA
konecky@earthlink.net
Editor's note: A closer scrutiny of the opinion pieces on Social Security reform - in particular the column of April 18-May 1, 2005 - would reveal that this paper neither endorses nor condemns the president's plan for reform. Our apologies if readers have been given that impression.
Sarbanes-Oxley has limited scope
I read the commentary titled "What is the profession?" from Mr. Edwin J. Kliegman in the April 18-May 1, 2005, issue of Accounting Today (page 6). Mr. Kliegman makes some interesting and somewhat provocative statements in his commentary.
In discussing the Sarbanes-Oxley Act of 2002, better known as SOX, Mr. Kliegman wrote, "States are now faced with the task of changing the rules and regulations of the accounting profession to conform to SOX. A major part of the problem is that the solution to the problem is being applied to the entire accounting profession."
I believe that statement, as I read it and understand it, to be inaccurate. The 54 licensing jurisdictions are technically not required to make any changes to existing legislation concerning public accounting. Contrary to Mr. Kliegman's comments, the "solution" is definitely not being applied to the "entire accounting profession."
There was no attempt to regulate the accounting profession as a whole in SOX. Only those registered CPA firms servicing public companies are subject to SOX. The legislation does not apply to the overwhelming majority of the 47,000 CPA practice units.
The SOX legislation was narrowly crafted to apply to "registered" CPA firms performing audits of "issuers." Issuers are commonly known as public or registered companies.
SOX gives a new quasi-governmental agency, the Public Company Accounting Oversight Board, the authority to regulate only those CPA firms auditing public companies, not business or CPA firms in general. The SOX legislation, H.R. 3763, under Title I, Section 101, states in part that "there is established the Public Accounting Oversight Board, to oversee the audit of public companies that are subject to securities laws and related matters."
Senator Paul Sarbanes, the Sarbanes of Sarbanes-Oxley, was quoted in The CPA Journal as saying, "This bill applies only to public companies that are required to report to the Securities and Exchange Commission." That is as specific as a politician can be.
The licensing jurisdictions have continued to look to the American Institute of CPAs, via the Auditing Standards Board, as the standard-setter for public accounting.
Fred Shelton, CPA, MBA, CVA
fred@constructioncpas.com
Social Security solution
Everyone in Washington D.C. knows that the solution to the so-called Social Security crisis is to increase the cap or to eliminate it completely ("A social look at security," Accounting Today, April 18-May 1, 2005, page 6) - but where do you find politicians who serve the public interest rather than their own personal interest?
Eli Mason
J.H. Cohn LLP
New York City
Victims of the consumption tax
Regarding your article on consumption taxes ("Is a consumption tax the answer?" Accounting Today, April 4-17, 2005, page 1): In the long run, I believe that a national sales tax probably is a hell of a lot better than what we have now.
There are some of us out here, however, who will get screwed all over again.
Many people - Baby Boomers like me - have no substantial tax-deferred qualified pension. I don't work for a big corporation, and the tax rules have not allowed me to do much; I am a small CPA in my own practice.
The money I have managed to save is mostly after-tax. I have already paid taxes on it!
Now the playing field/rules are being changed so that the government can again sales-tax me on this same money. Has anybody thought about this?
Name withheld by request
Saginaw, Mich.
IRS propaganda?
I read "Don't bring your gun" by Gail Perry that you placed on the front page of your April 18-May 1, 2005, issue.
My first observation is that your publication is a "trade" publication for the accounting profession. My impression of this article is that it is a propaganda piece trying to promote the Internal Revenue Service to the average taxpayer. Thus, I was quite confused, since the average taxpayer not only does not read this publication, but probably has no access to it.
As a tax practitioner who deals with the IRS on a regular basis, I can clearly state that in the vast majority of cases, the IRS personnel that I have dealt with do not resemble, in any fashion or manner, the IRS personnel portrayed in this article. In fact, using the term "flexible" in any sentence involving the IRS is truly an oxymoron.
In the past, many of these issues could be worked out at the local IRS offices. Now, most of these issues have to be resolved at one of the regional processing centers. This is accomplished either over the phone or through correspondence. In either event, it is truly impersonal.
I have been successful in obtaining abatements of penalties and interest. However, I can count on one hand - and have fingers left over - the number of times that I have been able to accomplish it without having to go to appeals. I am often reminded of the movie of several years ago where all claims filed with the health insurance company were summarily rejected, and only if you fought long enough and hard enough could you ever collect on a claim.
In summary, if you are going to place an article on the front page, it should be something that is beneficial to those of us who pay to receive your publication, and it certainly should not be a propaganda piece for the benefit of the IRS.
Milton Gene Friedman, CPA, CFE, CIRA, DABFA
Friedman Duque & Co.
Fort Lauderdale, Fla.
