NOT ALL TAX
Even as tax season hit its home stretch, the profession took a couple of days in late March to discuss a Public Company Accounting Oversight Board concept release on mandatory auditor rotation. Arguments mainly came in against the idea, but it had some supporters. Perhaps more important, many offered other suggestions than rotation for improving auditor independence. (See our cover story.)
BUT MOSTLY ...
Tax season itself ended with its usual midnight madness -- though we noted that more of that took place inside offices and in front of computers, rather than at public places like post offices, as the steady conquest of everything by e-filing continued.
Meanwhile, before the 2012 season was officially over, Internal Revenue Service Commissioner Doug Shulman warned in both a speech and a congressional hearing that the 2013 season could be "a real disaster" if Congress failed to decide on major provisions, including the fate of the Bush tax cuts, before December 31. At the House hearing, Shulman also told Congress that if budget cuts at the service continued, it would be forced to cut down on its audits. A report from the IRS Oversight Board also urged Congress to restore recent budget cuts to improve enforcement and taxpayer service. It called for a 2013 budget of $13.034 billion, an increase of $1.218 billion over the enacted budget in fiscal 2012.
Separately, the IRS announced that it was giving tax professionals a priority phone number that they can call when their clients are undergoing a Campus Correspondence Examination audit. They'll be able to access the CCE Practitioner Priority Service by calling (866) 860-4259 and selecting the "Correspondence examination" option. CCE PPS will address up to five clients per call and transfer or refer issues outside the CCE scope to the appropriate IRS functions.
In no way connected to this was the fact that the recent release of its FY 2011 Data Book showed that the IRS has been increasing its audits and examinations of high-income individuals, examining nearly 30 percent of the returns of those earning $10 million and more, nearly twice the rate of a year earlier.
Finally, tax services firm Ryan filed a suit in a federal court in Washington, challenging Circular 230 provisions from 2007 that more or less ban contingency fee arrangements.
LESS TAXING
The Financial Accounting Standards Board added a new item to its agenda to revise the accounting standards for repurchase agreements in response to the problems that led to the collapse of financial firm MF Global, which relied on a form of repurchase agreement known as "repo to maturity." The existing guidance for repurchase agreements and similar arrangements was originally established in 1996 by FASB Statement No. 125. Because repos involve shared rights to the transferred financial assets, they were, and continue to be, difficult to characterize because they possess attributes of both sales and secured borrowings, FASB noted.
The Governmental Accounting Standards Board issued two new accounting statements. Statement No. 65, Items Previously Reported as Assets and Liabilities, clarifies the appropriate reporting of deferred outflows of resources and deferred inflows of resources to ensure consistency in financial reporting. Statement No. 66, Technical Corrections-2012, contains technical corrections to resolve conflicting guidance.
BDO USA LLP elected Wayne Berson as its next chief executive officer, starting November 1. He'll succeed longtime CEO Jack Weisbaum, who announced his October 31 retirement in February. Berson plans to expand the firm's presence in major cities in the U.S. through mergers and acquisitions.
As of April 1, the U.S. had the highest combined federal and state corporate tax rate in the industrialized world, after Japan dropped its top rate.
CORRECTION
The Firm Highlights section of our Top 100 Firms report incorrectly stated that Reinsel Kuntz Lesher had acquired ParenteBeard's Senior Living Services Consulting Group; in fact, a partner and three staff from the group left ParenteBeard and joined RKL to start a senior living services practice. ParenteBeard continues to provide consulting services to the senior living industry.
