In July, the Financial Accounting Standards Board announced that its agenda now includes a major project on lease accounting. As justification, the board cited encouragement from its own advisory councils and the Securities and Exchange Commission staff, all of which apparently concurred that "current lease standards fail to provide complete and transparent information."The announcement also stated that "lease arrangements have evolved considerably over the past 30 years and the standards are outdated." We're tempted to say, "Well, duh!" but we won't because of our great satisfaction that the board is preparing to throw out this example of WYWAP (Whatever You Want Accounting Principles) and POOP (Pitifully Old and Obsolete Principles).

I speak at numerous conventions and conferences, and attendees sometimes contact me for additional information about abusive tax shelters and Circular 230.Among other things, Circular 230 sets forth the requirements for disclosure of certain tax shelter transactions by tax professionals. Regulations also impose new obligations on tax professionals, and on taxpayers engaged in any kind of tax-avoidance transaction.

A surviving spouse who is the sole beneficiary of the balance remaining in their deceased spouse's traditional IRA may leave the account as it is, or roll over the decedent's IRA into their own IRA, or elect to treat the IRA as their own for all purposes, including the rules of IRC §72(t) as to the imposition of a 10 percent penalty tax if the amount in the IRA is withdrawn before age 59-1/2.Whether a rollover to the surviving spouse's own IRA or an election to treat the deceased spouse's IRA as their own should be made depends mainly on the surviving spouse's age.

Poor oversight and shaky internal controls on the use of government purchase cards to make relief transactions for victims of Hurricane Katrina led to widespread abuse and fraud, according to a report issued by the Government Accountability Office.

The threat by Sen. Max Baucus, D-Mont., to hold back the appointment of Eric Solomon as assistant secretary for tax policy at the Department of the Treasury is misplaced, according to observers.Baucus, the ranking member of the Senate Finance Committee, said that he would place a hold on President George W. Bush's nominee for the Treasury's top tax position unless the department details how it will close the tax gap.

The Securities and Exchange Commission and the Department of Justice formally supported the constitutionality of the Public Company Accounting Oversight Board with the filing of a 46-page legal brief just before Labor Day.The brief outlined the government's arguments in support of the PCAOB's constitutionality, and was submitted in the U.S. District Court for the District of Columbia in a case brought by the Free Enterprise Fund in February.

Should governments provide more information on their economic conditions? How should changes in the fair value of government investments be measured? Is the Statement 34 reporting model working well enough?Such questions being crucial to financial reporting by government entities, the Governmental Accounting Standards Board has put out a call for proposals for research projects. Offering up to $5,000 per project, the board is seeking input on several questions relating to three general issues:

-- The Financial Accounting Standards Board has released a standard that, in essence, would shuttle obligations of pension and defined benefit plans to the balance sheets instead of often being submerged in footnotes.

Alan Haft is the president of 5th Avenue Financial, a financial planning firm based in Boca Raton, Florida. He is a pretty savvy guy when it comes to financial planning and recently set forth what he considers the five biggest financial retirement planning mistakes that Baby Boomers make. At the outset, he says that most Baby Boomers, and even retirees, realize rather quickly that their so-called bulletproof retirement savings plan is actually riddled with bullet holes. To Haft, living longer could mean outliving nest eggs that were intended to secure that financial comfort zone. Haft is well known in helping the wealthy become even wealthier and the not-so-wealthy achieve financial security. “Most of what I’ve seen in the industry in terms of poor retirement planning,” he says, “involves improper guidance or self-guidance, and a lack of foresight.” Here are what he considers the five biggest mistakes in such planning: 1) It’s Too Late to Start Planning. Once you reach your 50s or 60s, many people think that the parade has passed them by. But Half points to the power of compounding, boosted by the tax-deferred growth offered by IRAs, 401(k) plans, and the like. So, building up that nest egg may not be too late. 2) Underestimating Life Expectancy. He says studies show that some 20 percent of workers expect their retirement to last 10 years or less but according to the 2000 Retirement Confidence Survey by the Employee Benefit Research Institute (EBRI), half of the men reaching age 65 have an additional life expectancy of some 17 years while half of the women reaching that age are spun out 21 years. 3) Miscalculating Needs. Most financial planners say that you must plan on needing 60-85 percent of your pre-retirement income in your retirement years. According to that EBRI survey, only 53 percent of workers have tried to determine how much money they’ll need in retirement. 4) Looking at Inflation. Many investors, Haft says, particularly older ones, are uncomfortable with market volatility. They invest solely in Treasury bills, fixed-rate CDs, and savings accounts. He feels it is important to consider keeping some money in growth investments such as stocks and stock mutual funds. 5) Putting Other Financial Goals First. Haft points out that to many people, retirement probably isn’t the only financial goal--not when you may be saving for a child’s college education or for a down payment on a second home. But he cautions not to place them ahead of a financially secure retirement. Of course, easier said than done.

A slow response to a Freedom of Information Act request has lead the L.A. Gay & Lesbian Center to sue the Internal Revenue Service. The center said that the documents requested in March 2005 are related to the rejection of its application for non-profit status in the early 1970s. In the court filing, the center accuses the IRS of attempting to “cover up its misconduct,” while chief executive Lorri Jean has said members are interested in reviewing the documents as a historical exercise. In October 2005, the center said it had received a written response to its information request from the IRS, which said that the documents had been located and were being reviewed by the IRS Office of Collection Policy. Since then, the center has not received any updates on its request. According to the center, then operating as the "Gay Community Services Center," it was the first organization with the word "gay" in its name to apply for non-profit status from the federal government. That application was rejected on the grounds that the center was not "organized and operated exclusively for charitable and educational purposes." Following several appeals, the IRS eventually awarded the center non-profit standing in August 1974, but included a number of caveats -- including that the center would not "contend that homosexuality is normal" and that the center's officers and directors not be “avowed homosexuals." Among the documents requested on behalf of the center are all records analyzing, discussing or considering its original 501(c)(3) application; a copy of the original IRS denial letter; all records in conjunction with the original denial letter; and all records in conjunction with the later IRS approval letter. The lawsuit requests that the court order the IRS to produce the requested records, provide a detailed explanation of why the requested documents were withheld and reimburse the center for its legal fees.

A sampling of tax returns filed by fishermen in 2004 revealed that thousands of workers had overpaid an average of $530, after failing to take advantage of the averaging provision in calculating their income tax liability. According to the report from the Treasury Inspector General for Tax Administration, more than 4,600 taxpayers -- about 90 percent of the fishermen who could have benefited from the averaging provision -- didn't take advantage of the provision included the American Jobs Creation Act of 2004. TIGTA said that the overpaid taxes for the individual returns filed during the 2004 tax year totaled more than $2.4 million; and a startling 90 percent of the fishermen’s returns were prepared by paid tax preparers. The 2004 law allows fishermen to elect to compute their tax liabilities by averaging all, or a portion, of their taxable fishing income from the prior three years. The measure was designed to help fishermen recover from low-income years by keeping more of their income in successful years and offsetting potentially high tax burdens in isolated years. At the time of its enactment, the Joint Committee on Taxation estimated the provision could save fishermen up to $61 million in taxes over the next decade -- between $3 million and $10 million annually. During a prior audit, TIGTA noted that less than one half of taxpayers who could benefit from a similar provision for farmers, had actually taken advantage of the measure. The inspector general recommended to a variety of federal offices that a better and broader effort be made to educate both fishermen and tax preparers about the averaging provision. The full report is available at www.treas.gov/tigta/auditreports/2006reports/200630158fr.pdf.

The Internal Revenue Service has issued details on the process for military reservists called to active duty to receive payments from individual retirement accounts, 401(k) plans and 403(b) tax-sheltered annuities, without penalities.

Three former executives at a Bermuda-based reinsurer are facing fraudulent accounting charges from the Securities and Exchange Commission.

The just-released 2006 Rosenberg Associates MAP Survey found the accounting profession to be in the midst of its best year since 2000.The CPA industry posted revenue growth of 9.7 percent for 2005, up from 7 percent in 2004, according to the eighth annual survey of firms. The growth is the best since 2000, when firms saw an 11.8 percent increase.

A Boston-based investment fund has received the go-ahead from a state court in Virginia to move ahead with a $51 million lawsuit against accounting firm Goodman & Co. LLP.

The fugitive former chief executive of voicemail software manufacturer Comverse Technology Inc. was tracked down in Namibia, Africa, this week after spending the past two months on the lamb. Jacob ''Kobi'' Alexander, 54, was charged in August with conspiracy related to backdating stock options by the Securities and Exchange Commission. Two other defendants, former Comverse finance chief David Kreinberg and former senior general counsel William Sorin, surrendered in August and were each released on $1 million bonds. Before he disappeared, Alexander allegedly transferred $57 million to Israel, prompting speculation that he may have fled there. The SEC complaint accuses the trio of men of profiting from stock options by backdating prices to a low point in the stock's value. From 1991 through 2005, Alexander reportedly exercised options and sold stocks worth approximately $150 million, making $138 million profit -- about $6 million by backdating options -- according to the complaint. Kreinberg and Sorin each also earned about $1 million on backdated options. In addition, the SEC alleges that the company awarded thousands of stock options to fictional employees, then secretly transferred the awards to an internal account. The scheme allowed Alexander to award those options to employees and himself without board of directors approval.

Two major players in the accounting scandals at energy giant Enron Corp. and telecom powerhouse WorldCom Corp. moved a step closer to punishment for their crimes.

The Securities and Exchange Commission has awarded a trio of contracts -- totaling $54 million -- to transform the financial statements in its Edgar database to interactive information. The SEC hopes that the spending will propel the agency’s 1980s-vintage public company disclosure system from a form-based electronic filing cabinet to a real-time search tool with interactive capabilities. The investment is a likely precursor to widespread adoption of interactive data filing by companies that report their financial information to the SEC, which has been part of a voluntary pilot program loudly praised by SEC Chairman Christopher Cox. Financial organizations such as the Federal Deposit Insurance Corp., the Federal Reserve and the Comptroller of the Currency all already require banks to use the Extensible Business Reporting Language format. XBRL is a technology that tags financial information through disparate applications and carries it through the business reporting chain. The SEC hasn’t required companies to file their information in an interactive format largely because the XBRL labels haven’t all been completed, and because the commission’s own database can’t utilize the capabilities of the programming language. XBRL US Inc. received one of the contracts, for $5.5 million, to complete the writing of XBRL “taxonomies,” so that every item in a company’s financial statement, such as net income or gross sales, can be assigned a unique computer-readable label. The company, originally formed as a volunteer committee of the American Institute of CPAs, also announced that it will operate independently in the future -- as a nonprofit, member-supported entity of XBRL International Inc. XBRL US will have responsibility for the development of the computer standard in America and is expected to complete the SEC work within a year. The remaining contracts were awarded to: · Keane Federal Systems Inc., for $48 million, to modernize and maintain the database. The contract covers up to a six-year period -- an initial three-year contract term, plus three additional one-year terms. As part of the contract, Keane will partner with other technology firms, including BearingPoint, Microsoft, Rivet Software, EMC and Akamai. · Rivet Software and Wall Street on Demand, for $500,000, to create a new generation of interactive investor tools on the SEC’s Web site. The existing Edgar system is already one of the largest U.S. government presences on the Internet. Over 700,000 documents and data sets are filed on the system each year. However, the information Edgar stores is locked in essentially the same kinds of forms that the SEC has used for 72 years, since it first introduced Form A-1 for securities registration in 1934.

A federal appeals court ruling has essentially thrown the issue of whether shareholders should be able to nominate candidates in corporate board elections back to the Securities and Exchange Commission. A SEC has scheduled an Oct. 18 hearing on the issue, and Chairman Christopher Cox has said he wants the matter resolved before 2007 corporate meetings begin taking place. The Sept. 5 court ruling said that SEC staff improperly allowed American International Group Inc. to block a measure that would have made it easier for investors to nominate their own candidates for the board.

On the heels of the new risk assessment standards rolled out by the American Institute of CPAs, Thomson Tax & Accounting and the PPC brand are offering two new audit tools. PPC’s Smart e-Practice Aids focused on risk assessment, allows users to automatically generate customized audit programs based on risk assessments. Specifically, the aid will: