YEAR-END TRADITIONS

Two mega-mergers among Top 100 Firms kicked off the usual end-of-year M&A frenzy: BDO USA's acquisition of Ohio powerhouse SS&G, and the combination of Elliott Davis and Decosimo to create a new super-regional firm in the Southeast. More to come.

The new chief accountant of the Securities and Exchange Commission, James Schnurr, told attendees at a conference in early November that he hopes to make a recommendation in the next few months on whether the SEC should move toward switching U.S. companies to IFRS. He did not say whether he favored GAAP or the international standards.

The Securities and Exchange Commission approved the Public Company Accounting Oversight Board's new standard on auditing related party transactions and significant unusual transactions, AS 18.

The U.S. Supreme Court agreed to review a challenge to the tax subsidies allowed under the Affordable Care Act, a critical aspect of the law. Two lower courts had handed down conflicting decisions on the subject, which revolves around the definition of the word "state."

 

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As tax season loomed, the federal government announced that it had brought in $3.02 trillion in tax and other revenues in fiscal 2014 -- its highest take ever. $1.39 trillion came from individual income taxes; $320.7 billion from corporate income taxes; and $1.03 trillion from social insurance and retirement receipts.

Internal Revenue Service Commissioner John Koskinen warned Congress that delays in passing the tax extenders could lead to major problems in tax season. Many experts predict action before year's end, once Congress digests the results of the Republicans' success in the mid-term elections.

Separately, Koskinen also told Congress that tax-related ID theft was "no longer exploding," with the amount issued in fraudulent tax returns dropping significantly in recent years. He credited aggressive prosecution, targeted legislation and coordination with prison officials for driving most "amateurs" out of fraud, leaving only organized crime to deal with.

Meanwhile, the IRS announced the annual inflation adjustments for tax year 2015 for more than 40 tax provisions, including the tax rate schedules, and other tax changes, in Revenue Procedure 2014-61. And it reminded tax pros that, starting in January, only three refunds can be electronically deposited into a single financial account or onto a pre-paid debit card. The fourth and subsequent refunds automatically will convert to a paper refund check and be mailed to the taxpayer.

It also issued guidance clarifying the impact that a 2014 rollover of an individual retirement arrangement has on the one-per-year limit imposed by the Tax Code on tax-free rollovers between IRAs. Beginning in 2015, the limit will apply by aggregating all of an individual's IRAs, effectively treating them as if they were one IRA for purposes of applying the limit, per Announcement 2014-32.

A federal judge dismissed a lawsuit against the IRS by the American Institute of CPAs over its new Annual Filing Season Program, which aims to offer voluntary education and testing of non-CPA tax preparers.

 

IN OTHER NEWS

The majority of CPA firms experienced modest revenue increases in 2013, reflecting either stable or higher profits, according to a new survey by the AICPA and the Texas Society of CPAs.

Former AICPA chair Olivia Kirtley was elected president of the International Federation of Accountants, becoming the first woman and the first representative from business and industry to serve in the position.

The Sustainability Accounting Standards Board, a nonprofit organization leading the effort to create industry-specific accounting standards, announced that Big Four firm PwC will make a $1 million contribution and provide $1.4 million in pro bono services and loaned employee support.

The AICPA said that it is working to secure a new .cpa domain extension on the Internet that could be used by CPAs as "a globally recognized calling card for CPAs in the digital world."

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