CALLS FOR TAX REFORM
In his State of the Union address, President Obama called for an overhaul of the Tax Code to make it simpler for both individuals and businesses. He also asked Congress to make the tuition tax credit permanent, repeated his opposition to the permanent extension of the Bush tax cuts for the wealthiest 2 percent, and recommended repeal of the 1099 reporting requirements of his health care reform act. Senators on both sides of the aisle pledged to act on the last item.
Super-regional accounting firm Dixon Hughes and Virginia powerhouse Goodman & Co. announced plans to merge this March, creating a Top 15 firm that will stretch from Alabama to West Virginia, and from Florida to Ohio. At the same time, apparently every other firm in the country bought, or was bought by, another firm. (See our expanded M&A Watch section, page 32.)
The Financial Accounting Standards Board announced a tentative decision to permit accounting for "plain vanilla" financial instruments at amortized cost, a reversal of a proposal from last year under which most types of financial instruments would have to be reported at fair value. The new position would be closer to the approach adopted by the International Accounting Standards Board.
The Financial Accounting Foundation released the 2011 U.S. GAAP Fine_SDHpancial Reporting Taxonomy for XBRL, pending final acceptance by the Securities and Exchange Commission.
NEW REGULATORS
The Securities and Exchange Commission appointed securities lawyer James R. Doty chairman of the Public Company Accounting Oversight Board, and Jay Hanson and Lewis Ferguson as members of the auditing firm overseer. Two board members, Bill Gradison and Charles Niemeier, will be retiring. Acting chair Daniel Goelzer will remain on the board.
As expected, the Blue Ribbon Panel on Standard-Setting for Private Companies issued a report recommending the creation of a separate board to determine private company accounting standards, focusing on making exceptions and modifications to U.S. GAAP, but not establishing a separate, self-contained set of standards.
The FAF appointed two new members,Daryl Buck and R. Harold Schroeder, to FASB, increasing the board to seven members.
The National Association of StateBoards of Accountancy named Ken Bishop as its next president and CEO, to succeed current president and CEO David Costello when he retires at the end of the year.
SLOW START
The Internal Revenue Service provided a dispensation for tax preparers who have tried unsuccessfully to register for a Preparer Tax Identification Number so they can go ahead and prepare tax returns for compensation, even though they have not yet received a PTIN (Notice 2011-11). Some preparers had been having trouble with the online application system, and paper applications can take as much as six weeks.
Not that there seemed to be much hurry - while the IRS began accepting e-filed returns on January 14, it also said it wouldn't begin processing returns affected by the tax law changes made in December until February 14. Returns claiming itemized deductions on Schedule A, the higher education tuition and fees deduction on Form 8917, and the educator expenses deduction will have to wait until Valentine's Day, as will a number of other forms, including Form 3800 (General Business Credit), Form 4684, Form 5405 (First-Time Homebuyer Credit), Form 6478, and Form 8834, among others.
On the plus side, the agency did release some nifty tools: the IRS Tax Map (http://taxmap.ntis.gov/taxmap/), which lets you search tax law by topic; IRS2Go, an app for iPhones and Droid smart phones that lets taxpayers check the status of their refund, and follow the latest tax news; and Order a Transcript, an online tool for ordering tax returns, tax transcripts and return information through IRS.gov or by phone.
Less excitingly, it offered guidance in Revenue Procedure 2011-15 that should allow more small tax-exempt organizations to file the simpler Form 990-N e-Postcard; and released Revenue Procedure 2011-14 on the new procedures for obtaining consent for a change in accounting method.
The Treasury Department launched a pilot program to provide tax refunds on prepaid debit and payroll cards. It planned to mail letters to 600,000 low- and moderate-income taxpayers inviting them to participate, and also wants to encourage payroll card users to have their refunds deposited on their cards.
The Supreme Court ruled unanimously in favor of the Internal Revenue Service, saying that medical residents are full-time employees who are subject to payroll taxes and don't qualify for the student exemption.
OTHER NEWS
The Tax & Accounting business of Thomson Reuters bought the publishing division of Chicago-based consultancy PDI Global Inc., which produces newsletters, tax guides and custom content, for undisclosed terms. PDI Global chief executive and well-known consultant Allan Koltin, meanwhile, is spinning off the consulting division of the company, which will be rebranded Koltin Consulting Group and offer consulting, M&A and recruiting services.
CORRECTIONS
Our profile of WTAS ("All tax, allthe time," January 2011, page 6) incorrectly broke down the firm's revenues; in fact, 55 percent of its revenues come from the individual side of the business, and 45 percent from the corporate side. The article also gave the incorrect title for the firm's George Lyons. He is managing director of the New Jersey, Philadelphia and Harrisburg, Pa., offices. Our apologies for the errors.
NOTE
Due to the ever-increasing volume of announcements sent our way, we will be moving our People, Firms and Coming Events sections online to AccountingToday.com, where we will be able to update them on a much more timely basis. Send your announcements to AcToday@SourceMedia.com.
