Grassley, Baucus call for OIC probe
Senate Finance Committee chair Chuck Grassley and ranking member Max Baucus called for an independent investigation of the Internal Revenue Service's Offer in Compromise program by the Government Accountability Office.
The move followed a Sept. 2 letter to Treasury Secretary John Snow, in which the senators questioned the IRS and Treasury's implementation and administration of the OIC program - specifically the apparent failure to use the Effective Tax Administration provision enacted as part of the IRS Restructuring and Reform Act of 1998. That provision was enacted to address offers made where collection would impose an economic hardship on the taxpayer due to illness or lack of financial resources.
"While there remains room for improvement, we have made considerable progress in the OIC program," IRS Commissioner Mark Everson wrote in a response to questions regarding the program that were released by the senators earlier this month.
Responding to a charge that the IRS has placed improving inventory management above quality casework, Everson wrote, "I can assure you that we are maintaining a focus on quality casework while accomplishing improvements to inventory management and cycle time. The expectation is to efficiently and conscientiously evaluate each case based on its individual merits." According to Everson's response, through August of this year, the IRS accepted 17,740 offers in compromise, rejected 23,115, returned 30,035 deemed processable, and returned 35,764 as not processable. The IRS noted that it recently revised the OIC application package to reduce the number of unprocessable offers.
Carr Riggs boosts Ala., Fla. presence
Carr, Riggs & Ingram, a Southeastern accounting and business consulting firm headquartered here, has fortified its presence in Alabama and Florida by merging with Birmingham-based Mackle, Splawn, Tindall & McDonald, and Weathersby, D'Aoust, Harris & Lynn of Panama City, Fla.
The mergers became effective Oct. 1. Terms were not disclosed. The unions boost Carr Riggs' equity partner total to 33 and its office locations to 12 throughout the Southeast.
The Mackle Splawn marriage gives Carr Riggs penetration in the Birmingham market, while the firm said that Weathersby D'Aoust's location in Panama City would be merged with CRI's existing office there. Brian Barksdale of Mackle Splawn will serve as managing partner of CRI's Birmingham unit, while Mike Scott of Weathersby D'Aoust will oversee the Panama City office.
CRI ranked No. 46 on Accounting Today's 2004 Top 100 Firms roster with revenues of $30.5 million.
Weaknesses push fees up, CFOs out
The Hague, the Netherlands - A recent report identified two trends among companies that report material weaknesses - skyrocketing audit fees and disappearing chief financial officers.
According to a study by consulting firm ARC Morgan of 350 Securities and Exchange Commission-registered companies that disclosed material weaknesses, more than 60 percent of CFOs from companies with weaknesses leave or are pushed out either immediately before or within three months of the disclosure. The study, "Using Reported Weakness Disclosures to Benchmark Internal Controls," also found that auditor fees soar when a weakness is found, typically by 150 percent, compared to between 30 and 50 percent for companies with no weaknesses reported.
According to ARC Morgan, more than 390 companies have disclosed weaknesses in 2004, and over 86 percent of the disclosures so far appear to have been discovered by the external auditors and not by management (or consultants) as part of their compliance projects
In addition, more than 65 percent of filers with disclosed weaknesses restate earnings, according to the report.
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