Texas Governor Rick Perry has signed H.B. 2144, which eases restrictions on interstate CPA practices.

The Supreme Court has agreed to decide whether an exception in the Internal Revenue Code allows a trustee to deduct the full amount of fees paid to an investment advisor. The case of Knight v. Commissioner of Internal Revenue, U.S., No. 06-1286, centers on trustee Michael J. Knight, who paid an investment advisor to manage the assets of a trust. When the trust filed its tax return, Knight sought to deduct the full amount of the fees under 26 U.S.C. Section 67(e)(1). However, the IRS said the fees are subject to the 2 percent rule. The U.S. Tax Court agreed with the IRS, as did the U.S. Court of Appeals for the Second Circuit, which ruled against Knight in October. But Knight argued the fees fall under an exception to the general rule because they were paid in connection with the administration of the trust, and because they would not have been paid unless the assets were held in trust. In May, both the New York Bankers Association and the American Bankers Association May 22 filed a brief in support of the trustee, urging the U.S. Supreme Court to hear the case.

Tax and news publisher BNA has named Robert P. Ambrosini to the post of vice president and chief financial officer. Ambrosini, who officially began with BNA June 18, has held CFO posts at such organizations as Black Entertainment Television and Texfi Industries. He also was senior vice president finance and accounting for the National Geographic Channel. Ambrosini also serves on the board of the Washington Hospital Center Foundation.

Prosecutors are urging a U.S. district Judge to dismiss indictments against 13 of executives of Big Four firm KPMG on charges of marketing illegal tax shelters. According to The Wall Street Journal U.S. District Judge Lewis A. Kaplan had previously ruled that the government had overreached in its years-long investigation, violating the defendants' constitutional rights to counsel and due process. In a June 22 filing in federal court in Manhattan, prosecutors said that Kaplan's decision showed that there was a fundamental flaw in the proceedings and that he must dismiss the indictments. As a result, 13 of the 18 defendants may now never stand trial, including the accounting giant's former vice chairman, Jeffrey Stein, the highest-ranking executive named in the indictment. However, legal experts opined the petition was a strategy to allow allowing prosecutors to appeal Kaplan's ruling, a maneuver that may yet allow prosecutors to resume the proceedings against all 18 of the defendants. The indictments were initially handed down in 2005 accusing the defendants of selling fraudulent tax shelters from 1996 through 2002, that cost the government some $2.5 billion in revenues. In striking an agreement to escape a potentially fatal criminal indictment that could have shuttered the firm, KPMG agreed to pay a $456 million fine to the federal government and spend the next 16 months on probation overseen by a federal monitor. The firm also agreed to close its tax business for high-net-worth individuals. Kaplan has scheduled a hearing July 2. A decision regarding the government's argument, as well as the motions to dismiss the indictments, could be issued this summer.

Taxes have overtaken health care as the leading concern for small business owners, according to the latest Small Business Research Board study. Taxes were the leading concern of business owners during the second quarter of 2007, replacing health care, which previously was cited as being the single greatest issue impacting small businesses. Some 770 small business owners in the U.S. who responded to the nationwide poll, co-sponsored by International Profit Associates, indicated that taxes were tops among key concerns of small business owners followed closely by overall economic conditions and energy/fuel costs. Health care was fifth on the list of concerns. The quarterly poll of small business owners and managers also indicated that taxes were the leading concern in two of the four U.S.. regions -- ranking number one in the South/Southeast and in the Western states. Taxes were ranked second in the Midwest and fourth in the Northeast. Meanwhile, economic conditions were identified as the leading concern by business owners in the both the Northeast and Midwest. However, neither energy and fuel nor health care finished in the top five in the Western U.S., where taxes and economic conditions were followed by foreign competition, the cost of materials and finding quality employees as the leading concerns.

The Joint Committee on Taxation has issued a report on the individual alternative minimum tax in advance of a Senate Finance Committee hearing scheduled for Wed., June 27. The JCT report listed several selected reform options, which include: indexing or increasing the exemption amounts; allowing the deduction for personal exemptions and standard deductions to be used when computing the AMT; permitting state and local taxes against the AMT; reducing the minimum tax rates; eliminating the phase-out of the minimum tax exemption; allowing nonrefundable personal credits to offset the minimum tax after 2006; and repealing the AMT. The report is available at: http://www.house.gov/jct/x-38-07.pdf.

Struggles at its subprime lending unit have resulted in tax-prep giant H&R Block Inc. posting a fourth-quarter loss of $85.5 million and a full-year loss of $433.6 million for the period ended April 30. The company said its latest quarter included roughly $677 million in losses from discontinued operations - the majority of that stemming from its Option One mortgage subsidiary.