The Internal Revenue Service said it has begun mailing educational letters this month to more than 650,000 small tax-exempt organizations to let them know they need to start submitting a new annual electronic notice known as an e-Postcard.Form 990-N, the electronic notice they have to send, is intended for tax-exempt organizations with gross receipts of $25,000 or less. Until the passage of the Pension Protection Act of 2006, charities of that size weren't required to submit either the Form 990 or 990-EZ.

The European Union has released a report praising the ongoing convergence of accounting standards in Europe, the United States and other parts of the world, but says there's still work to do.EU Internal Market Commissioner Charlie McGreevy welcomed the progress made so far to bring accounting standards in the U.S., Canada, Japan, China and India more in line with International Financial Reporting Standards. The European Commission report also lauded the U.S. Securities and Exchange Commission's announcement that it would consider allowing companies to file IFRS financial statements without first reconciling them with GAAP.

Many people believe in collectibles as another track of asset allocation. In other words, buying and maintaining certain pieces of collectibles is seen as an additional brick in their financial planning foundation. It’s all part of establishing a net worth. For many of my age group, we had a great collection of comic books until we went away to college and returned home to find that our mother had cleaned out the garage and tossed all those dust-carrying original copies of Superman. We all experienced that one. But, as I grew older, the penchant for comic books ceased and I gravitated to something with wheels. I have a car that is now 17 years old. Yes, you read that right. 17! It has a mere 110,000 miles on it and is in mint condition. It was also, when it was unveiled in 1990, rated by most of the motor trend magazines as the car of the year. It certainly, over its lifetime, has lived up to that accolade. I noticed that before it hit the 15-year mark, its valued had certainly dropped. But, as soon as it passed the 15-year threshold, I saw an immediate rise in value as it entered the “classic” stage, which it is today. So, this to me is like money in the bank. As long as I keep it in such great condition with constant mechanic supervision, I have developed a pretty good asset. Some people don’t gravitate toward cars but more toward, let’s say, art. A few weeks ago, I visited the Raymond James Financial center, its corporate headquarters in St. Petersburg, Florida, to talk with various executives to find out where they are heading with the financial planning explosion upwards because of the Baby Boomers. Talk about asset allocation. I was opened up to the Tom and Mary James/Raymond James Financial Arty Collection, one of the country’s largest private collections. It consists of more than 1,850 pieces including original paintings, sculptures, and graphics in both prints and posters. Tom James, Chairman of the Board and CEO of Raymond James Financial, and his wife Mary, own more than 95 percent of the collection. It is on display at the firm’s corporate headquarters. The art is placed on different floors of each campus building according to style and theme. Mr. James has selected almost every piece of artwork himself. While some of the artists in the collection are now deceased, he believes buying works from living artists helps to sustain them in their profession. Although the collection began in the late 1950s with predominately American artists, primarily from Florida, it has grown to include works by such artists as Alfredo Arreguin, Alexander Calder, Mihail Chemiakin, Salvador Dali, Jacob Lawrence, Roy Lichtenstein, Joan Miro, Leonardo Nierman, Robert Rauschenberg, James Rosenquist, Andy Warhol, Jamie Wyeth and Victor Vasarely, among others. In the mid 1980s, while on trips to Colorado and New Mexico, Mr. James began to collect Western and Southwestern art. At the present time, more than half of the collection consists of Western/Southwestern styles of art, including works by Roy Anderson, Earl Biss, J. D. Challenger, Glenna Goodacre, The James family, as well as Raymond James Financial, has long been a supporter of the arts. This year, for the fifth consecutive year, Raymond James Financial will be the major sponsor for the renowned Raymond James Gasparilla Festival of Arts. In addition, Mr. James is currently president of the Salvador Dali Museum Board of Directors. Hmmm. Is he interested in trading a piece of art for my car? Probably not. And I probably wouldn’t, either.

Ernst & Young and Grant Thornton may find themselves fending off legal claims of professional negligence and fraud from Refco shareholders in the wake of a report from the defunct financial company's bankruptcy examiner.

The Securities and Exchange Commission won't require amended filings to correct misclassifications of a new Financial Accounting Standards Board standard for defined-benefit pension plans, says a recent alert from the AICPA's Center for Audit Quality.The new standard, SFAS 158, requires that employers move any surpluses or deficits in their retirement benefit plan funding off the footnotes and onto the face of the balance sheet, while making an adjustment in the ending balance of "accumulated other comprehensive income."

The Institute of Internal Auditors has appointed Gerald D. Cox as chairman of the board and elected a slate of other board members.Cox heads the internal audit partnership at South West Audit Partnership in Yeovil, U.K. Joining him on the board is Patricia K. Miller, a partner at Deloitte & Touche in Pleasant Hill, Calif., who was elected as senior vice chairwoman.

The Securities and Exchange Commission voted to adopt a sweeping anti-fraud rule that targets money managers who deliberately mislead investors.The new rule, which was first proposed by the SEC in December, also has been expanded to include hedge funds.

The IRS said it is reconsidering some of the private letter rulings its associate chief counsel’s office has issued regarding the gift tax consequences of trusts that employ distribution committees.The IRS’s chief counsel has discovered that some of the conclusions in the rulings may disagree with some prior revenue rules.

I first came across the term a number of years ago when consultants stressed to me the importance of identifying where a business was in its life cycle. These consultants believed businesses and industries have a life cycle, and the key is identifying where the business is at that time. In the case of a business, its life cycle includes progressive identifiable stages, such as the “seed,” start-up, growth, established, etc.

A survey of internal auditors around the world found increasing adherence to standardization and a growing impact on organizational governance and risk management.

Accounting firm Spear Safer has agreed to pay $3.5 million to settle allegations of improperly auditing a financial company, Mutual Benefits, accused of defrauding 30,000 investors out of $830 million.

Thinking about expanding your services to encompass financial planning? Ask yourself this: Are you entering into the business for the right reasons?"I think the first thing a CPA should consider is the why. Why do they want to be in the business?" asked Bob Palmer, president of Plante Moran Financial Advisors in Southfield, Mich. "I think the proper answer is because [CPAs] are being asked by their clients for help in this area. They think they have a unique perspective because of the intimate relationship they've developed, the knowledge of the history of the individuals and their businesses."

Small business concerns over Sarbanes-Oxley Act compliance resurfaced on Capitol Hill as the Securities and Exchange Commission and the Public Company Accounting Oversight Board came under new pressure to delay costly and cumbersome internal control audit requirements on small companies for at least another year.At the beginning of a new round of congressional hearings, House Small Business Committee chair Nydia M. Velázquez, D-N.Y., called on both the SEC and the PCAOB to scuttle plans to implement a freshly revised set of SOX rules.

E&Y DISMISSED AS CYGNE AUDITORCygne Designs, a New York-based clothier, dismissed its auditor, Big Four firm Ernst & Young, and named Mahoney Cohen & Co. as its new independent accountant.

This column is approximately the 250th that has appeared under the title of "The Spirit of Accounting." Paul Miller has been around for all of them, and Paul Bahnson for the latest 150. As we were looking ahead to what to write about next, we looked back to the first few columns we published to see whether their messages might still be relevant for today.It turns out that they were, and we thought it would be insightful to reprint this one that first appeared in September 2000. One of the issues being debated at that time was the question of whether non-audit fees could compromise auditor independence. In those days, Enron was considered to be an amazing company, instead of the economic disaster that we now know was going to happen in 2001.

Donor-advised funds have captured headlines since the millennium changed, often for their meteoric rise in popularity. There was an estimated $5.5 billion in donor-advised funds nationwide in 1995, while the current estimate is nearly $20 billion.These giving vehicles have existed for more than 70 years. Despite their longevity and impressive growth, numerous misperceptions about donor-advised funds persist. These common "myths" underplay the real value that a DAF can have in helping you meet your clients' philanthropic needs.

SEC WON'T APPEAL COURT DECISIONThe Securities and Exchange Commission said that it would ask a court to allow four months for investors and their brokers to respond in light of a court decision affecting an estimated 1 million fee-based brokerage accounts.

A new nationwide research study on family businesses commissioned by Seattle-based Laird Norton Co., a diversified financial concern, shows that overwhelming optimism of the owners of family businesses about their future might prove to be premature because of a lack of strategic vision, succession planning and governance policies.The survey showed that nearly 60 percent of majority shareowners in family businesses are 55 or older, while 30 percent are 65 or older. However, less than 30 percent of those respondents even have succession plans in place, and fewer than 40 percent have a successor lined up.

Big Four firm PricewaterhouseCoopers agreed to pay $225 million to settle a securities and accounting fraud class-action lawsuit brought by Tyco shareholders. The accounting giant's payment, combined with Tyco's share, will bring the total amount of the settlement to $3.2 billion including interest, according to the three law firms representing the plaintiffs: Grant & Eisenhofer, Schiffrin Barroway Topaz & Kessler, and Milberg Weiss.

Little Rock, Ark. - Arkansas accounting giant Moore Stephens Frost has acquired a North Carolina firm, Lynch and Howard.