KPMG ANNOUNCES NEW TAX SERVICES HEADS: Moving on from its recent legal troubles, KPMG named vice chairs for its tax services and tax services operations.Shaun T. Kelly, 46, and Frederick S. "Rick" Smith, 49, will take over the respective tax leadership roles effective at the end of the fiscal year on Sept. 30. Tax services vice chair James Brasher will assume other significant duties within KPMG's organization, while operations vice chair John Chopack will retire in early 2006, as previously planned.
In a statement, chairman and chief executive Timothy P. Flynn said that the moves were part of a series of structural, organizational and leadership changes planned for implementation after the conclusion of an investigation into the firm's sale of legally questionable tax shelters.
KPMG reached an agreement in August with the U.S. Attorney's Office for the Southern District of New York and the Internal Revenue Service, requiring, among other things, that the firm pay a $456 million fine and implement elevated standards for its tax business.
Kelly is based in Chicago, and earlier this year was named global transaction services chairman for KPMG. He joined the KPMG firm in Dublin in 1980, and was admitted to the U.S. partnership in 1999. Smith is based in Philadelphia, and serves as Mid-Atlantic area managing partner for tax services. He joined KPMG in 2002, following a career with Arthur Andersen.
GAO SAYS TAXPAYERS NOT USING EDUCATION BREAKS: Although Congress has authorized tens of billions of dollars in tax breaks to help American families cope with rising college costs, millions of taxpayers are failing to cash in on this government assistance.
Investigators at the Government Accountability Office are blaming what they say are overly complex rules for claiming educational tax credits or deductions.
In a report to the Senate Finance Committee, the GAO said that many taxpayers struggling with tuition expenses for their children are not "making the most effective use of certain postsecondary tax preferences" and, therefore, "fail to minimize their federal income tax liabilities."
One study cited by the GAO found that 27 percent of the families eligible for an educational tax preference failed to claim either a tuition deduction or a tax credit.
The tax preferences cited in the report include the current $1,500 Hope tax credit, a separate $2,000 federal Lifetime Learning tax credit for tuition and course-related fees, and a new $4,000 tax deduction for tuition expenses created under the 2001 Economic Growth and Tax Relief Reconciliation Act.
- Ken Rankin
CREATIVE SOLUTIONS AND PPC INTEGRATE PRODUCTS: Creative Solutions and PPC, both tax and accounting software providers and part of the Thomson Corp., unveiled a new integration between tax prep software UltraTax CS and PPC's IRS form preparation software, 1040 Deskbook.
"This is just the latest example of our ongoing efforts to integrate Thomson's software, guidance and research products," said Jon Baron, executive vice president of professional accounting markets at Thomson Tax & Accounting and president and chief executive officer of Creative Solutions, in a statement. "By integrating CS Professional Suite and PPC's most authoritative guidance and RIA's accurate and up-to-date research, Thomson customers can experience unprecedented levels of productivity and precision."
With the new integration, the "Key Issues" in PPC's 1040 Deskbook can now be directly accessed from UltraTax CS's input screens. Key issues are commonly encountered problems such as issues of increased importance due to recent changes in tax law, or troubles in understanding unclear IRS guidelines when preparing a 1040. The PPC application provides answers by drawing on expert analysis, practical examples containing completed forms, and practice aids.
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