Regulatory actions and programs

Accounting firm Citrin Cooperman has added a “Growth & Protection Team” to provide business consulting services to small and midsized businesses.

There are possible tax strategies that are particularly suited to the times that we are in. Here are two that I keep seeing, with the latest in a press release from a major tax publisher. According to analysts with the Tax & Accounting business of Thomson Reuters, C corporations may secure a refund of overpaid estimated taxes, or use projected current-year NOL to offset taxes owed for the previous year.

The Internal Revenue Service has issued proposed regulations that provide rules for assessing penalties against tax advisors who fail to file a true and complete tax return on a timely basis.

President-elect Barack Obama has named venture capitalist Karen Mills to lead the Small Business Administration, drawing fire from one small business group.

The Financial Accounting Standards Board and the International Accounting Standards Board have published a discussion paper that takes a joint approach to solving some perplexing questions about the recognition of revenue.

The American Institute of CPAs has begun investigating the accounting firm listed as the auditor of Bernard Madoff's investment management business after the firm told the institute for 15 years that it did not perform any audit work.

Accounting firm BDO Seidman has been sued in connection with the $50 billion Ponzi scheme run by Bernard Madoff's investment securities business, even though it wasn't Madoff's auditor.

President-elect Barack Obama has named Mary Schapiro as the next chairman of the Securities and Exchange Commission, replacing Christopher Cox.

The Securities and Exchange Commission has officially adopted a rule requiring public companies to begin filing their financial statements in an interactive data format, starting next year.

Marcum & Kliegman has created a task force to advise investors who may have been defrauded by Bernard Madoff and his investment management business.

The Financial Accounting Standards Board has issued a proposed standard to address the controversial issue of applying fair value accounting to assets and liabilities acquired from a business combination.

The SEC, a tiny auditing firm, and some of the most sophisticated financial companies and hedge funds are just some of the players who missed the warning signs in the Bernard Madoff scandal.

The National Federation of Independent Business, a small business advocacy group based here, is calling on Congress to pass a six-month payroll tax holiday as part of any economic stimulus package that would be considered in the upcoming weeks.

The European Union has formalized its waiver allowing companies to file financial statements in European markets using U.S. generally accepted accounting principles -- as well as the accounting standards of five other countries -- without reconciling them to International Financial Reporting Standards. The measures declare U.S. GAAP, as well as accounting standards from Canada, China, Japan, South Korea and India, to be "equivalent" to IFRS as adopted in the European Union. An earlier transitional waiver was due to expire at the end of this year. European Internal Market and Services Commissioner Charlie McCreevy welcomed the measures: "Today's adoption by the commission is a momentous step. It marks the culmination of important work spanning several years." Standard-setters in the U.S. and at the International Accounting Standards Board, which sets IFRS, have been working to converge the two sets of standards. Earlier this year, the U.S. announced that it would allow companies to file here in IFRS without reconciling their accounts to GAAP. The European Commission said that it would review the situation of standards in Canada, China, South Korea and India by 2011 at the latest.

The Securities and Exchange Commission has published its long-delayed roadmap for the transition from U.S. generally accepted accounting principles to International Financial Reporting Standards.

A completely revised Form 990 will require an overhaul of internal policies and procedures for most tax-exempt organizations, according to Joyce Underwood, director of nonprofit taxation at BDO Seidman's Institute for Nonprofit Excellence.

Once again this year, the headline for the Alternative Minimum Tax is another one-year fix with no permanent solution. The Emergency Economic Stabilization Act of 2008 raised the AMT exemption amount for 2008 to $69,950 for joint filers and $46,200 for single filers. This represents another inflation-adjusted extension of the exemption amount designed to preserve the status quo and keep an additional 21 million taxpayers from being subject to the AMT in 2008. And, once again, without further action, the AMT exemption amount reverts to its pre-2001 level in 2009 unless further congressional action is taken.

In the current financial turmoil, what might help is a more presentable presentation of financial statements.

The Securities and Exchange Commission has charged Bernard L. Madoff and his company, Bernard L. Madoff Investment Securities LLC, with securities fraud for perpetrating an alleged multi-billion-dollar Ponzi-style fraud on their advisory clients. The SEC alleged that Madoff himself had described his firm as "a giant Ponzi scheme" that paid returns to certain investors out of principal from other investors, and that he had told two of his firm's senior employees last week, "It's all just one big lie." (According to The Wall Street Journal, the two senior employees were Madoff's sons.) The commission also said that Madoff had estimated that the losses from the fraud were at least $50 billion. "We are alleging massive fraud," said SEC Director of Enforcement Linda Chatman Thomsen. The commission noted that Madoff's company had $17 billion in assets at the beginning of 2008, according to regulatory filings, but that "virtually all assets of the advisory business are missing" now. According to a Bloomberg News report, Madoff's entire company was audited by a three-person accounting firm, Friehling & Horowitz, out of a tiny office in a New York city suburb -- a circumstance that so alarmed a hedge fund advisor that it warned clients away from investing with Madoff. Madoff, a former chairman of Nasdaq, was arrested by federal agents last Thursday morning, and released on $10 million bail, according to his lawyers. At the SEC's request, a federal judge appointed a receiver to secure the firm's accounts and assets.

The Securities and Exchange Commission has scheduled a vote for next Wednesday on whether to begin requiring companies to file financial statements in an interactive data format.