Tax

A provision in a bill that recently made its way through the House would correct the imbalance between tax payers and preparers that was created by legislation last year.Changes to the Tax Code by the Small Business and Work Opportunity Act of 2007 tightened the disclosure requirements for tax preparers under Code Sec. 6694 by requiring preparers to disclose any tax positions taken by a taxpayers that didn’t meet the code’s “more likely than not” standard.

With the 2008 presidential election looming, proposals that could turn the most sanguine tax accountants into habitual nailbiters came under serious discussion on both sides of Capitol Hill.In the Senate, congressional leaders called together a panel of top economists to help plot a course for tax reform next year, but the discussion produced more conflict than consensus.

One of the consequences of the credit crisis that began in the summer of 2007 was the deterioration in the U.S. housing market, rendering the valuations of securitized or structured mortgage-backed assets volatile.The contracting demand for these assets — which had been dramatically overvalued by brokers who earned substantial commissions by pushing over 600 varieties of these assets to hedge fund managers through repos that were leveraged without regulatory bounds — precipitated the tightening of unsecured term funding. That led to credit downgrades, massive write-downs of MBS assets by financial institutions according to mark-to-market accounting rules, and illiquidity.

International work assignments — both inbound and outbound, short-term and long-term — have become more common as the world gets “smaller” and “flatter.”While on foreign soil, most employees feel that they deserve additional compensation and that they should be at least somewhat released from the growing number of domestic tax rules that restrict compensation packages. Some of the more irksome rules restricting compensation arrangements lately are contained in the final regs under Code Sec. 409A on nonqualified deferred compensation.

In 1994, the Governmental Accounting Standards Board established standards for public employee pension plans. Government and public employers have to report and account for pension benefits costs.However, until recent years, there was no such standard in place for other post-employment benefits for state and local government workers.

The Internal Revenue Service is falling short on inspecting the international tax transactions of small businesses for compliance problems, according to a new report.

Reeling from an unfavorable court decision on its tax strategy, banking giant KeyCorp said it would take an after-tax accounting charge of between $1.1 billion and $1.2 billion in the second quarter, cut its dividend in half and raise another $1.5 billion by issuing shares.

The Internal Revenue Service said its e-Services online tools will be out of service the last weekend in June.

The Virginia Society of CPAs Educational Foundation has established a scholarship fund to honor the victims of last year's Virginia Tech shooting.

Senate Finance Committee Chairman Max Baucus, D-Mont., introduced the Energy Independence and Tax Relief Act of 2008 as Democrats and Republicans haggle over how to pay for extending expiring tax provisions.