THIS WEEK'S NEWS HEADLINES
July 30, 2014
IRS issues final regulations on material adviser reportable transaction penalties
The IRS issued final regulations regarding the imposition of the Sec. 6707 penalty on material advisers for failing to furnish correct information regarding a reportable transaction and the factors considered in determining whether to grant a request for rescission of the penalty.
LAST WEEK'S NEWS HEADLINES
July 25, 2014
IRS issues guidance on health insurance premium tax credits
The IRS issued regulations and revenue procedures addressing how to calculate the Sec. 36B premium tax credit, including how the credit is calculated in conjunction with the Sec. 162(l) deduction for health insurance premiums of self-employed individuals.
ASB issues SAS No. 129 to amend letters for underwriters auditing standard
The AICPA Auditing Standards Board issued Statement on Auditing Standards No. 129 to amend its auditing standard on letters for underwriters and certain other requesting parties by addressing implementation issues and avoiding unintended changes to previous practice.
July 24, 2014
Convergence unachieved after IASB publishes financial instruments standard
The International Accounting Standards Board issued a new financial instruments standard that creates an expected-loss model for impairment but is not converged with the standard FASB is developing.
Restatements dropped after initial post-SOX surge, study shows
Restatements by SEC-registered companies have dropped significantly since a surge in the years after implementation of the Sarbanes-Oxley Act, new research commissioned by the Center for Audit Quality shows.
July 23, 2014
New IRS rules simplify compliance for money market fund shares
To help taxpayers comply with new SEC rules on money-market fund share prices, the IRS issued guidance making easier to calculate gains and losses on certain floating net asset value funds.
Technology plays a role in board members’ top two concerns
In a business environment where a damaging Twitter post can have disastrous effects on a company’s financials, reputational risk remains the top nonfinancial concern for corporate directors, according to a new survey report.
July 22, 2014
Federal courts disagree on health care credits for federal exchanges
Two federal appellate courts issued conflicting decisions regarding the availability of the Sec. 36B premium tax credit for taxpayers who purchase health insurance on exchanges set up by the federal government.
Big Data tops issues facing forensic and valuation accountants
Electronic data analysis, also known as “Big Data,” is the most pressing issue that forensic and valuation services (FVS) accountants expect to face in the near future, according to survey results released by the AICPA.
What the PCAOB’s new related-party standard means for auditors
As a result of the PCAOB’s new related-party auditing standard, audit firms may need to revise their audit plans and methodologies to ensure that newly required procedures are fully incorporated.
Final rules issued on bona fide indebtedness and terminating partnership’s startup expenses
The final regulations were adopted without substantive change, other than changes to the effective/applicability date and minor clarifying revisions.
July 21, 2014
PCAOB reaches agreement with audit regulator in Denmark
The PCAOB and Denmark’s audit regulator have entered into a cooperative arrangement for oversight of audit firms in their respective jurisdictions, the PCAOB announced.
New rules on covered asset acquisitions will shut down transactions to avoid Sec. 901(m)
The IRS announced that it would issue regulations to prevent taxpayers from misapplying the statutory disposition rule in cases where the gain or loss from the disposition of the relevant foreign asset (RFA) is recognized for U.S. income tax purposes but not for foreign income tax purposes.
NEWS HEADLINES FOR JULY 13–19, 2014
July 18, 2014
Definitions of R&E expenditures are amended under final rules
The IRS issued final regulations that change the tax treatment of certain research and experimental expenditures incurred by a company in developing a product.
Revenue transition group debates difficult implementation issues
The joint transition resource group created by FASB and the International Accounting Standards Board gave the boards plenty to think about while discussing implementation questions during the group’s inaugural meeting.
July 17, 2014
Effective date of fiduciary fee unbundling rules delayed until 2015
This will give fiscal-year trusts and estates of decedents dying this year more time to implement changes required by the new rules.
Court halts IRS regulation of contingent fees for refund claims
A federal district court has permanently enjoined the Internal Revenue Service from prohibiting tax practitioners from charging contingent fees for the preparation of ordinary refund claims.
July 16, 2014
Partnership interest expense allocation rules are finalized
The IRS has finalized, without substantive changes, proposed regulations that were issued in conjunction with temporary regulations in January 2012.
FASB votes in favor of new consolidation standard
FASB voted to approve an accounting standard that is intended to increase transparency and consistency in financial reporting about consolidation.
July 15, 2014
AICPA sues IRS to stop return preparer program
The complaint alleges that the IRS’s implementation of the program violates the Administrative Procedure Act and amounts to an end run around the recent decision striking down the IRS’s mandatory preparer registration program.
FASB proposals on inventory, extraordinary items seek simplification
Proposals released by the Financial Accounting Standards Board seek to simplify inventory measurement and alleviate uncertainty for preparers, auditors, and regulators by eliminating the concept of extraordinary items.
No answer yet for private companies on acquired intangible assets
Despite more than three hours of deliberations, the Private Company Council could not arrive at a GAAP alternative to simplify accounting for intangible assets in a business combination for private companies.
July 14, 2014
Fighting identity theft, IRS issues final rules on truncated identification numbers
The Internal Revenue Service issued final regulations that allow the use of truncated taxpayer identification numbers, such as Social Security numbers, on information returns provided to payees.
NEWS HEADLINES FOR JULY 6–12, 2014
July 10, 2014
One-IRA-rollover-a-year rule will be effective in 2015, IRS says
Starting in 2015, taxpayers will only be able to make one rollover per year no matter how many IRAs they own.
July 9, 2014
E-filing of amended returns, elimination of Form 1040X among TIGTA recommendations
The Treasury Inspector General of Tax Administration recommended in a report that the Internal Revenue Service do away with Form 1040X for amended returns and instead allow taxpayers to simply make amendments on Form 1040.
July 7, 2014
Limit on direct deposit of refunds will go into effect in 2015
In its latest attempt to fight tax refund fraud, the IRS said that, beginning in January 2015, it will impose a limit of three electronic direct deposits of tax refunds into a single financial account or prepaid debit card.
How internal audit can meet growing expectations
Internal audit’s responsibilities are evolving along with the business environment. Focusing on some key strategies can help internal audit provide more value in this changing environment.
Six ways not-for-profits can get value from risk management
Although not-for-profits trail public companies in use of formal enterprise risk management, experts say they are paying a lot of attention to how managing risk can further their mission.
NEWS HEADLINES FOR JUNE 29–JULY 5, 2014
July 1, 2014
Streamlined tax-exempt application process introduced
The IRS introduced a streamlined application process for small organizations that want tax-exempt status under Sec. 501(c)(3). Final and temporary regulations were also issued on July 1 to allow the IRS to adopt this streamlined application process.
ITINs will expire after five years under new IRS policy
The IRS announced a new policy concerning individual taxpayer identification numbers (ITINs): ITINs that are not being used will expire after five years (IR-2014-76). The policy will go into effect in 2016.
IRA participants can purchase longevity annuities
The rules allow participants in 403(b) and eligible governmental 457 plans as well as IRAs (but not Roth IRAs or defined benefit plans) to purchase these contracts, which are called qualifying longevity annuity contracts.
June 30, 2014
Complete rules for the IRS’s voluntary return preparer certification program are released
The IRS published guidance introducing its new, voluntary Annual Filing Season Program, which permits tax preparers who are not CPAs, attorneys, or enrolled agents to complete tax education requirements and receive a certificate, called a Record of Completion.
NEWS HEADLINES FOR JUNE 22–28, 2014
June 27, 2014
Department of Commerce hasn’t met conflict minerals obligations, GAO says
Although U.S. public companies were required to file their first conflict minerals disclosures earlier this month, a new government report shows that the U.S. Department of Commerce has not met its obligations with regard to new conflict minerals regulations.
Regulations provide guidance for small-employer premium tax credit
The IRS issued final regulations on the Sec. 45R credit for small employers that offer health insurance coverage for employees.
June 26, 2014
IRS reveals details of voluntary preparer certification program
The IRS announced that it will soon introduce a voluntary program for tax return preparers called the Annual Filing Season Program.
Additional ASB interpretations address GASB pension issues
The AICPA Auditing Standards Board issued two interpretations designed to help governmental pension plans, participating employers, and their auditors as they implement new GASB standards.
PCAOB staff provides guidance for broker-dealer auditors
The PCAOB staff issued new guidance for SEC-registered auditors of brokers and dealers as they make the transition to PCAOB standards from the generally accepted auditing standards that previously governed such audits.
June 25, 2014
Final regulations cover various tax rules for disregarded entities
The IRS issued final regulations that govern how disregarded entities are treated for purposes of the indoor tanning excise tax. They also extend certain family employment and religious exceptions to the FICA and FUTA rules to disregarded entities.
June 24, 2014
AICPA reiterates its strong concerns about IRS voluntary certification program
The AICPA on Tuesday sent a 14-page letter to the IRS, expressing its strong concerns that a proposed IRS voluntary certification program for unenrolled tax return preparers “would cause significant legal problems that may ultimately frustrate the IRS’s goals, confuse the public, and lead to litigation.”
Critical skills needed for finance to cut through complexity
The roles of finance professionals are expanding at a fast pace in a constantly changing global economic environment, new AICPA research shows, creating an urgent need for accounting and finance professionals to grow their skills.
June 23, 2014
New rules allow one-month orientation period before 90-day health plan waiting period begins
The rules permit employers to require new employees to undergo a maximum one-month orientation period before the 90-day period for qualifying for health care coverage begins.
NEWS HEADLINES FOR JUNE 15–21, 2014
June 20, 2014
FASB updates accounting for stock compensation
FASB updated accounting standards on stock compensation to resolve diverse accounting treatments of awards linked to performance targets.
Key observations from the CAQ’s field-testing of proposed changes to auditor’s reporting model
The Center for Audit Quality released results of field-testing proposed changes by the PCAOB to the auditor’s reporting model. The field-testing resulted in four observations related to the classification and description of critical audit matters.
Five barriers restricting risk management progress
Less than 15% of companies see a strong link between their enterprise risk management (ERM) processes and their business strategy, according to a new survey.
June 19, 2014
Supreme Court issues decision on IRS summons enforcement
The Supreme Court issued a decision that allows individuals to question IRS employees regarding their reasons for issuing a summons if the individual can point to specific facts that plausibly raise an inference of bad faith on the part of the IRS employee.
New streamlined procedures and changes to the Offshore Voluntary Disclosure Program are announced
The IRS announced changes to its streamlined filing compliance procedures and its Offshore Voluntary Disclosure Program (OVDP) designed to make it easier for taxpayers to comply with their obligations to report offshore assets and accounts.
June 17, 2014
International forum aims for cohesion in corporate reporting
Organizations with key roles in corporate reporting have formed an international forum to promote coherence, consistency and comparability.
June 16, 2014
GASB’s OPEB proposals may have big impact
The Governmental Accounting Standards Board published Monday new accounting standards for other post-employment benefits.
NEWS HEADLINES FOR JUNE 8–14, 2014
June 12, 2014
Six key developments for not-for-profit CPAs
Not-for-profits face new challenges with the development of new accounting standards and emerging demands for transparency in an increasingly complex world. CPAs who work with not-for-profits won’t want to ignore these developments.
Substantial new disclosures required by revenue standard
Expanded disclosures required by the new, converged revenue recognition standard are expected to provide useful information to investors but may cause challenges for preparers. Learn more about the disclosures the standard requires.
Supreme Court holds inherited IRAs are not retirement funds
The U.S. Supreme Court held that moneys in an inherited IRA do not qualify as “retirement funds” for purposes of the Bankruptcy Code provision that exempts retirement funds from a debtor’s bankruptcy estate.
FASB revises standard for accounting of repurchase agreements
FASB issued a revised standard that addresses investors’ concerns with the financial reporting of repurchase agreements and brings U.S. GAAP accounting for such transactions into closer alignment with IFRS.
June 11, 2014
Two tips CFOs can use to cut costs
Nearly every industry has had to deal with dizzying changes in business models over the past couple of decades because of the technological revolution that is the internet. The hospitality industry is no exception.
June 10, 2014
New rules for providing written tax advice are finalized
The regulations require practitioners to base written advice on reasonable factual and legal assumptions and to consider all relevant facts that the practitioner knows or reasonably should know.
IRS adopts “Taxpayer Bill of Rights”
The Internal Revenue Service released a "Taxpayer Bill of Rights" to let taxpayers know of existing statutory and administrative protections.
FASB adds narrow-scope projects; aims to simplify GAAP
FASB has added two new projects to its agenda in an attempt to simplify U.S. GAAP and reduce complexity while maintaining usefulness in financial reporting for users.
PCAOB approves new related-party auditing requirements
The PCAOB approved new rules that require specific audit procedures to evaluate related-party transactions and significant unusual transactions, among other new requirements.
FASB relaxes rules for development-stage entities
FASB issued new accounting rules that are designed to relax financial reporting requirements for development-stage entities.
NEWS HEADLINES FOR JUNE 1–7, 2014
June 5, 2014
Finding the right people a challenge for generally upbeat U.S. finance professionals
Finance professionals continue to express optimism about the U.S. economy and their own businesses, according to the latest AICPA quarterly survey by the American Institute of CPAs.
Regs. tighten Form 5472 filing requirements
The IRS issued final (T.D. 9667) and proposed (REG-114942-14) regulations amending the rules for filing Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.
June 4, 2014
PCAOB to consider new rules for auditing related-party transactions
The Public Company Accounting Oversight Board will consider rules that would require new audit procedures when auditors are examining transactions with related parties or significant unusual transactions.
June 3, 2014
Revenue recognition transition issues to be tackled by new group
The group created by the Financial Accounting Standards Board and the International Accounting Standards Board to deal with implementation questions related to the new revenue recognition standard will meet six times in the next 18 months.
June 2, 2014
How preparers can make revenue recognition implementation smooth
Reading and understanding more than 700 pages of documentation is the first task for financial statement preparers following the issuance of the new revenue recognition standard last week. Find out what preparers need to do next as they implement the standard.
Regulations permit election of alternative simplified research credit on amended returns
Reversing a policy they introduced in 2011, the IRS issued temporary and proposed regulations that will allow taxpayers claiming the research and development credit to elect the alternative simplified credit method on an amended return.
NEWS HEADLINES FOR MAY 25–31, 2014
May 30, 2014
GASB pension reporting: How to obtain and audit key numbers
State and local government employers who participate in multiple-employer defined benefit pension plans—and the governments’ auditors—may have difficulty obtaining data required by GASB’s new pension standards to prepare employer financial statements and auditing such information.
May 29, 2014
Accounting may need help in revenue recognition implementation
Many companies are going to find that the attention of finance and accounting will not be enough to ensure successful implementation of the new revenue recognition standard.
May 28, 2014
FASB, IASB release historic revenue recognition standard
The Financial Accounting Standards Board and the International Accounting Standards Board released a new revenue recognition standard designed to create comparability across industries and jurisdictions for a critical item in financial statements.
6 things to consider about new revenue recognition guidance
After releasing the much-awaited new revenue recognition standard, members of FASB and the International Accounting Standards Board shared some of the most important things to consider in the guidance.
EU publishes law requiring mandatory audit firm rotation
New European Union rules requiring mandatory audit firm rotation and prohibiting provision of many nonaudit services to firms’ audit clients were published in the authoritative source of EU law.
GASB proposals would address post-employment health care liabilities
GASB approved three exposure drafts in an effort to require a more accurate depiction of state and local governments’ liabilities for other post-employment benefits, which consist mostly of health care obligations.
May 27, 2014
Practitioners suspended or disbarred from practice before the IRS can prepare tax returns
The IRS Office of Professional Responsibility has concluded that the Service cannot ban practitioners from preparing returns as part of its Circular 230 disciplinary procedures.
Proposed peer review change would remove inconsistencies for engagement reviews
Changes to peer review standards proposed last week by the AICPA Peer Review Board (PRB) are designed to remove inconsistencies and improve the transparency of reports for engagement reviews.