REGISTRATION UNDER WAY
The Internal Revenue Service announced that as of mid-October it had issued over 50,000 Preparer Tax Identification Numbers, even though the system experienced some birth pains. It cleared up many of the start-up challenges with help from tax professionals and early adopters, but noted that it will regularly update its online FAQ on PTINs (at www.irs.gov/taxpros), and that registrants should check it before starting the process. At the end of October, the service started sending out letters about registration to approximately 1 million tax preparers.
IASB'S NEXT CHAIR NAMED
Dutch financial markets regulator Hans Hoogervorst was named to succeed Sir David Tweedie as chair of the International Accounting Standards Board next June, when Tweedie retires. A former finance minister, Hoogervorst is currently chair of the Dutch securities and market regulator, chair of the Technical Committee of the International Organization of Securities Commissions, and co-chair of the Financial Crisis Advisory Group. Ian Mackintosh, the chair of the U.K. Accounting Standards Board and former chief accountant of the Australian Securities and Investment Commission, who had also been a contender for Tweedie's position, was appointed vice chairman of the IASB.
The board also amended its standards on financial instrument disclosures in IFRS 7 to beef up the disclosure requirements for financial asset transfer transactions such as securitizations, and to discourage questionable balance-sheet "window dressing."
A VOTE FOR 'LITTLE GAAP'
In early October, the Blue Ribbon Panel on Standard-Setting for Private Companies voted in favor of establishing a separate standard-setting board for private company accounting in early October, but will wait until December to issue its final recommendations. The AICPA endorsed the suggestion at its Fall Meeting of Council (see cover story).
The Financial Accounting Standards Board and the IASB want to know how hard people think it will be for businesses to adapt to the flood of new accounting standards the boards expect to issue in the near future, as well as when stakeholders think standards should be effective. A discussion paper is available at www.fasb.org and www.iasb.org; comments are requested by Jan. 31, 2011.
FASB also proposed changes in the standards for financial reporting about troubled debt restructurings, in large part to make it more consistent.
HARBINGERS OF TAX SEASON
The IRS began releasing many of the forms and rules that will be needed for the upcoming tax season, including a draft of Form W-2; a draft of Form 8839 for claiming the expanded adoption credit; a finalized Schedule UTP for uncertain tax positions (see page 16 for more); a revised Schedule M-3 with new lines for R&D and Section 118 exclusions; and a number of test packages for e-filing different forms.
The service also announced that it would defer a new requirement for employers to report health care costs, making it optional for 2011, and, in Revenue Ruling 2010-25, that homeowners can deduct interest on up to $1.1 million in mortgage debt, $100,000 more than before.
Looking forward, the service issued final regulations that will require reporting of basis and other information by stock brokers and mutual fund companies for most stock purchased in 2011 and all stock purchased in 2012 and later years, making it easier for investors to report their gains and losses next year on their tax returns.
H&R Block sued its refund anticipation loan provider, HSBC, seeking to force the bank to provide funding for RALs and refund anticipation checks next tax season. HSBC had told Block that the IRS's decision to stop providing information on whether individual taxpayers have liens outstanding would make the loans too risky to provide.
Separately, Block agreed to acquire 2nd Story Software's TaxAct tax prep technology business for $287.5 million in cash. It plans to combine TaxAct and its H&R Block At Home digital business into a single unit, but will continue to offer both brands in the marketplace. More than 5 million filers used TaxAct last season.
IN OTHER NEWS
The CPA Exam will be offered outside the U.S. for the first time in 2011, in Japan, Bahrain, Kuwait, Lebanon and the United Arab Emirates. The format will be the same as in the U.S. - computerized and in English.
The AICPA membership voted overwhelmingly to change its admission requirements to allow more people to join the institute. Now anyone who holds or has held a CPA license (provided it wasn't revoked for cause), or qualifies for a license, is eligible.
For the second year in a row, there will be no cost-of-living adjustments to Social Security benefits in 2011, the Social Security Administration announced, because the price index to which they are tied hasn't risen.
Terry Petrzelka, founder and long-time chief of Tectura, the largest Microsoft Dynamics reseller in the country, will be retiring at the end of this year. Chief operating officer Duane Bell will assume his duties.
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