As we went to press, it looked more and more like the lame-duck session of Congress might turn into an inconclusive battle over the future of the Bush tax cuts. Congressional Republicans, fresh from landslide-scale victories in the mid-term elections (see cover story), seemed determined to stick to their pledge to extend all of the cuts - though there were some signs that individual members of the GOP leadership might be willing to accept the Obama administration's proposed compromise of extending them only for those making under $250,000.
Among other unfinished legislation, Congress had thus far failed to pass its annual "patch" for the Alternative Minimum Tax - though a bipartisan group of key committee chairs did write to the Internal Revenue Service in mid-November promising to do "everything possible" to enact AMT relief. The lawmakers pledged legislation that would "allow the personal credits against the AMT and the exemption amounts for 2010 to be set at $47,450 for individuals and $72,450 for married taxpayers filing jointly."
A spate of firm mergers of all sizes marked November, with large Top 100 Firms like BDO, cbiz/Mayer Hoffman McCann, Citrin Cooperman and Clifton Gunderson acquiring smaller firms, and a number of smaller firms merging amongst themselves (see M&A Watch, page 38).
In a speech last month, International Accounting Standards Board Chairman Sir David Tweedie said that the board would be making more of an effort to complete its major convergence projects by the middle of next year, due to pressure from countries aiming to adopt International Financial Reporting Standards in the next two years. The IASB and the U.S. Financial Accounting Standards Board had earlier pushed back the deadline for completing some of their major convergence projects from mid-2011 to the end of 2011.
Meanwhile, the trustees of the IFRS Foundation, which oversees the IASB, are asking the public for input on its future strategy. The trustees are seeking the views of stakeholders on four strategic fronts - the foundation's mission, governance, standard-setting process, and financing. The strategy review consultation document is available online at http://go.ifrs.org/strategyreview.
FASB issued an exposure draft outlining changes in the standards for repurchase agreements and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The proposals are intended to simplify the accounting for these transactions by removing from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets, as well as implementation guidance related to that criterion.
GEARING UP FOR TAX SEASON
The IRS launched the testing system for its Modernized e-File system in early November, uncovering and working through errors in the process. On the bright side, it announced that just shy of 70 percent of individuals e-filed their returns in 2010, up almost 3 percent from 2009.
To help with the 2011 season, among other things, it posted videos highlighting difficult areas of the rules for the Earned Income Tax Credit, and describing how to become an authorized e-file provider. It also released Revenue Procedure 2010-44, offering two safe harbors for auto dealerships to treat certain sales facilities as retail sales facilities, and to be treated as resellers without production activities; Rev. Proc. 2010-45, with a safe harbor for certain grants related to electric car batteries; and Rev. Proc. 2010-46, with a safe harbor for corporate taxpayers for capital projects under certain Department of Transportation programs.
On the enforcement side, in response to a Treasury Inspector General for Tax Administration report, the IRS said it would take additional steps to check on whether sole proprietors are hiding sources of income during field audits, and to improve its procedures to make sure the government gets its share of foreclosure sales by delinquent taxpayers.
Looking forward, the service announced cost-of-living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2011, and, in Revenue Procedure 2010-40, inflation adjustments for a number of other items for 2011, including the Kiddie Tax, the adoption credit, and medical savings accounts.
H&R Block released an update on itslawsuit against its refund anticipation loan provider, HSBC, saying the two have been "in discussions." Block sued HSBC in October, seeking to require the bank to provide the funding for RALs and refund anticipation checks next tax season.
IN OTHER NEWS
XBRL US has appointed Campbell Prydeasits new president and chief executive officer, succeeding Mark Bolgiano. Pryde has been chief standards officer at the business reporting standards consortium for three years, and previously worked at KPMG and Morgan Stanley.
An international monitoring group reported that the International Federation of Accountants had carried out a series of reforms to rebuild confidence in its standard-setting for audits through greater transparency, diversity and accountability, but suggested that more could be done, and that it would be examining whether standard-setting boards within professional membership organizations can operate in the public interest.
CALL FOR TOP FIRMS
Accounting Today is in the midst of collecting information for its annual Top 100 Firms and Regional Leaders lists. If your firm is one of the top 20 in your region and you haven't been contacted yet, let us know at AcToday@SourceMedia.com. To check your firm against last year's list, visit the Reports and Rankings section of AccountingToday.com.
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