Audit & Accounting

The Internal Revenue Service has shifted its enforcement priorities from tax shelters to high-impact tax cheats -- including attorneys and CPAs.

If too many cooks spoil the pot, what do a bunch of auditors from various firms do to an engagement?Don't answer that.

When criticism of the Internal Revenue Service's revision of its more-than-30-year-old preparer disclosure rules first surfaced, it came as an attack from consumer groups outraged that rules were being eased to permit the marketing of taxpayer information.However, contrary to press reports, the IRS said that the proposed rules actually tighten existing requirements regarding the customer consent that a return preparer must obtain to disclose the customer's tax return information to third parties. In fact, explained IRS Commissioner Mark Everson, "For over 30 years, under the law, return preparers have been able to disclose tax return information with the consent of taxpayers."

Code Section 7216 governs the disclosure and use of tax return information by tax return preparers. Late last year, in Notice 2005-93, the Internal Revenue Service issued a proposed revenue procedure purportedly to update the disclosure rules to account for changes in return filing, particularly to account for the growing use of electronic filing and electronic signatures and the foreign outsourcing of tax preparation work.The proposals have set off some apparently unexpected protests from several consumer protection groups, basically concerned that the proposals make it too easy for taxpayers to unknowingly grant permission for disclosure of their tax information.

Government isn't an enterprise. Though it raises and spends money, owns things, has pension funds, works with budgets, and reports to stakeholders, it is fundamentally different from a business. And so its accounting must take a different form and serve a different purpose.Oddly enough, many accounting professionals in the private sector don't even know there's a difference, or if they do, they don't know why.

The Internal Revenue Service has released updated draft instructions for the new Schedule M-3, filed by large and midsized corporations, and which should be rolled out for the 2006 tax year.

Supermarket chain Ingles Markets Inc. settled charges that it improperly accounted for vendor rebates and allowances with the Securities and Exchange Commission.

KPMG moved a bit closer to putting another piece of its tax shelter troubles in the past, filing court papers that more than 200 investors have agreed to a settlement in a class-action lawsuit against the accounting firm and law firm Sidley Austin Brown & Wood LLP.

The Securities and Exchange Commission announced an effort to provide broader and more timely public notice of important actions.

Whatever happened to account aggregation?