INTRODUCING THE PCC
In late May, the Financial Accounting Foundation announced the creation of the Private Company Council, which will hopefully mark an end to the decades-long debate over separate accounting standards for non-public companies.
The American Institute of CPAs celebrated its 125th anniversary at its Spring Council meeting.
Mammoth Mid-Atlantic firms J.H. Cohn LLP and Reznick Group PC said they plan to merge in September to create the 11th largest firm in the country, with more than $450 million in annual revenue, more than 2,000 employees, and 25 offices. J.H. Cohn partner and chief executive Tom Marino and Reznick managing principal and CEO Ken Baggett will serve as co-leaders of the new firm.
The Financial Accounting Standards Board and the International Accounting Standards Board said in mid-June that they had agreed on an approach for accounting for lease expenses.
FASB also announced its intention to issue a discussion paper in the next few weeks to solicit feedback on the disclosure framework it has been preparing for more clearly identifying and communicating the information that is most important to financial statement users. The project aims to cut down on disclosure overload.
A federal appeals court has upheld a lower court's ruling dismissing the complaint of a tax preparer who argued that the Internal Revenue Service did not have the right to charge an annual fee for a Preparer Tax Identification Number.
The IRS, meanwhile, made a big push in June to encourage tax preparers to take its new competency exam as soon as possible. So far, more than 4,800 people have become Registered Tax Return Preparers, according to the IRS, but it estimates that 340,000 preparers will need to. Of course, CPAs, EAs and certain others are exempt from the test.
The service also announced plans to close 43 of its smaller offices and consolidate other offices, in an effort to save over $40 million.
On a more positive note, it did announce that it would be offering more flexibility in its Offer in Compromise program to help distressed taxpayers, and also offered guidance in Notice 2012-40 on the effective date of the $2,500 limit on salary reduction contributions to flexible spending arrangements for health expenses. The notice also provides relief for certain contributions that mistakenly exceed the $2,500 limit but are corrected in a timely manner.
In its annual report to Congress, the IRS Oversight Board said that the IRS needs to re-assess its goal of delivering tax refunds within 45 days given the prevalence of electronic filing, describing the goal as "a carryover" from the days of paper and calling for the development of "realistic, meaningful goals for refund timeliness."
A new report from the Treasury Inspector General for Tax Administration on the VITA Grant Program found that participants in the IRS's Volunteer Income Tax Assistance program prepared thousands of free tax returns for taxpayers well above the income threshold mandated by the IRS, even for taxpayers with incomes over $1 million.
Two major personnel changes: At BKD LLP, Ted Dickman become chief executive of the Top 10 firm at the beginning of June, succeeding Neal Spencer, and Information Technology Alliance president Ron Eagle announced that he will step down in September. Dickman started his accounting career in 1983 with BKD, and had most recently been regional managing partner for Indiana, Kentucky and Ohio. Eagle helped found the ITA, and has led it for 15 years.
BDO USA LLP and the IRS reached a settlement that will see the firm pay a civil penalty of $34.4 million for violating tax laws concerning tax shelters that the firm had not registered between 1997 and 2003, some of which the IRS said were abusive and fraudulent. BDO will pay an additional $15.6 million to the Treasury Department in connection with a charge of tax fraud conspiracy for the same period.
Not entirely separately, the man who had been chairman and CEO of BDO at the time, Denis Field, saw his conviction over the same tax shelters thrown out because a juror allegedly tainted the trial with her lies.
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