WHERE'S MY REFUND?
That was the question many taxpayers and preparers were asking, as the week-long delay the Internal Revenue Service warned about at the beginning of tax season stretched into the middle of February. Not all refunds were affected, and the IRS promised that it expected to have the issues resolved in days.
On other fronts, the IRS was a little more proactive: For estates with assets of $5 million or less, it extended the deadline for filing tax returns and making a portability election to benefit the surviving spouses of married individuals who died during the first six months of 2011; it released a clarification on how to report credit and debit card transactions on the new Form 1099-K information reporting form; and offered advice on how to report unemployment benefits on tax returns.
The service released a set of proposed regulations expanding the list of tax preparers who may obtain and renew a Preparer Tax Identification Number, providing for two additional categories - namely, certain supervised preparers, and preparers who prepare returns and claims for refund that are not covered by a competency exam.
Commissioner Doug Shulman also took time in a speech to warn tax executives that they face substantial tax risks from uncertain tax positions, international enforcement efforts, and impermanent tax credits that expire every year or two.
In happier news, Congress agreed on extending the payroll tax cut and unemployment benefits through the remainder of the year. The act passed by wide margins in both houses of Congress.
The Obama administration released its budget proposals for fiscal 2013, including allowing the expiration of the 2001 and 2003 tax cuts for high-income taxpayers, enshrining the "Buffett Rule," and taxing dividends at ordinary tax rates. It would also impose a "Financial Crisis Responsibility Fee" on large financial institutions, create a 10 percent tax credit for new jobs and payroll increases, and provide tax credits to support domestic clean energy manufacturing.
In a speech in mid-February in London, Securities and Exchange Commission Chief Accountant James Kroeker said he was "optimistic" about finding a framework for the U.S. to adopt international accounting standards, and hoped to make a proposal in the coming months. He also explained that the SEC had delayed its decision in order to focus on implementing the Dodd-Frank legislation.
The Financial Accounting Foundation said that it will conduct post-implementation reviews of several business and government accounting standards pertaining to business combinations, reportable operating segments, deposits, investments, and repurchase agreements, following a test review of FIN 48 that was released in January.
The Financial Accounting Standards Board and the International Accounting Standards Board have planned a series of outreach meetings around the world on their latest proposals for changes in the standards for revenue recognition to take place this month, and in April and May.
FIRM NEWS
California firms Burr, Pilger & Mayer and Windes & McClaughry called off the merger they had announced last September. They were unable to agree on the terms. Every other firm in the country, meanwhile, is merging. (See M&A Watch, page 29.)
The Public Company Accounting Oversight Board imposed a $2 million penalty on Big Four firm Ernst & Young - the board's largest penalty date - and censured it for audit failures, while sanctioning four current and former E&Y partners. The punishment relates to the firm's audits of Medicis Pharmaceutical in 2005, 2006 and 2007. E&Y settled without admitting or denying the board's findings.
In the same get-tough vein, the PCAOB also revoked the registration of a small New York firm for failing both to file its annual report and pay its annual fee. It ordered Gaynes Stein to pay a $5,000 fine.
Two significant figures in the profession announced their impending retirements. First, Neal Spencer, who has led Top 10 Firm BKD for nearly five years, will step down in June. He plans to remain with the firm, which he has been with since 1986. Meanwhile, J. Clarke Price will retire at the end of the year as president and chief executive of the Ohio Society of CPAs. At press time, no successor had been named for either position.
