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July 2012 | accounting today 5
INTRODUCING THE PCC
In late May, the Financial Accounting
Foundation announced the creation of the
Private Company Council, which will hopefully mark an end to the decades-long debate
over separate accounting standards for nonpublic companies. (See our cover story.)
;e American Institute of CPAs celebrated
its 125th anniversary at its Spring Council
meeting. (See page 6.)
Mammoth Mid-Atlantic firms J.H. Cohn
LLP and Reznick Group PC said they plan to
merge in September to create the 11th largest ;rm in the country, with more than $450
million in annual revenue, more than 2,000
employees, and 25 o;ces. J. H. Cohn partner
and chief executive Tom Marino and Reznick
managing principal and CEO Ken Baggett
will serve as co-leaders of the new ;rm.
;e Financial Accounting Standards Board
and the International Accounting Standards
Board said in mid-June that they had agreed
on an approach for accounting for lease expenses. (See page 24.)
FASB also announced its intention to issue
a discussion paper in the next few weeks to
solicit feedback on the disclosure framework
it has been preparing for more clearly identifying and communicating the information
that is most important to ;nancial statement
users. ;e project aims to cut down on disclosure overload.
KEEP PAYING
A federal appeals court has upheld a lower
court’s ruling dismissing the complaint of a
tax preparer who argued that the Internal
Revenue Service did not have the right to
charge an annual fee for a Preparer Tax Iden-ti;cation Number.
;e IRS, meanwhile, made a big push in
June to encourage tax preparers to take its
new competency exam as soon as possible.
So far, more than 4,800 people have become
Registered Tax Return Preparers, according
to the IRS, but it estimates that 340,000 preparers will need to. Of course, CPAs, EAs and
certain others are exempt from the test.
;e service also announced plans to close
43 of its smaller o;ces and consolidate other
o;ces, in an e;ort to save over $40 million.
On a more positive note, it did announce
that it would be o;ering more ;exibility in
its Offer in Compromise program to help
distressed taxpayers (see page 18), and also
o;ered guidance in Notice 2012-40 on the
e;ective date of the $2,500 limit on salary re-
duction contributions to ;exible spending
arrangements for health expenses. ;e notice
also provides relief for certain contributions
that mistakenly exceed the $2,500 limit but
are corrected in a timely manner.
In its annual report to Congress, the IRS
Oversight Board said that the IRS needs to reassess its goal of delivering tax refunds within
45 days given the prevalence of electronic
;ling, describing the goal as “a carryover”
from the days of paper and calling for the
development of “realistic, meaningful goals
for refund timeliness.”
A new report from the Treasury Inspector
General for Tax Administration on the VITA
Grant Program found that participants in the
IRS’s Volunteer Income Tax Assistance program prepared thousands of free tax returns
for taxpayers well above the income threshold mandated by the IRS, even for taxpayers
with incomes over $1 million.
Two major personnel changes: At BKD
LLP, Ted Dickman become chief executive
of the Top 10 ;rm at the beginning of June,
succeeding Neal Spencer, and Information
Technology Alliance president Ron Eagle announced that he will step down in September. Dickman started his accounting career
in 1983 with BKD, and had most recently
been regional managing partner for Indiana,
Kentucky and Ohio. Eagle helped found the
ITA, and has led it for 15 years.
NO SHELTER
BDO USA LLP and the IRS reached a settle-
ment that will see the ;rm pay a civil penalty
of $34.4 million for violating tax laws concerning tax shelters that the firm had not
registered between 1997 and 2003, some of
which the IRS said were abusive and fraudulent. BDO will pay an additional $15.6 million
to the Treasury Department in connection
with a charge of tax fraud conspiracy for the
same period.
Not entirely separately, the man who had
been chairman and CEO of BDO at the time,
Denis Field, saw his conviction over the same
tax shelters thrown out because a juror allegedly tainted the trial with her lies.
ACCOUNTANTS CONFIDENCE INDEX
In partnership with ADP®
Accounting Today’s
ACI: Short-term contraction? S O N D J F M A M J J 60 40 50 49.56 52.91 54.33 month
51.63
6 month
A major milestone: For the ;rst
time, one of our ACI ;gures
predicted contraction — the
3-month ACI dipped just slightly
below 50, with the members of
our Executive Research Council
expecting a slight shrinking
over the short term.
They saw particular slowdowns for their small-business
clients, and for the economy
as a whole, but most of the
index components were down
as well. While a ;rst for the ACI,
it was in line with a number
of other measures of current
economic sentiment.
INDEX COMPONENTS
;;;;;;;;;;;;;;;;;;;;;;
60
YOUR FIRM
60
SMALL BIZ
CLIENTS
60
MIDSIZED
CLIENTS
60
LARGE BIZ
CLIENTS
60
U.S. ECONOMY
Scale: ;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
3 MOS. 6 MOS.
50
3 MOS. 6 MOS.
50
3 MOS. 6 MOS.
50
3 MOS. 6 MOS.
50
6 MOS.
50
3 MOS.
I JUST CALLED TO SAY I LOVE YOU
... AND VALUE YOUR PATRONAGE
;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;;
PHONE CALL UNCONNECTED TO SCHEDULED WORK (39%)
SCHEDULED VISIT UNCONNECTED TO SCHEDULED WORK (34%)
E-MAIL UNCONNECTED TO SCHEDULED WORK (27%)
IMPROMPTU IN-PERSON VISIT (24%)
SCHEDULED E-NEWSLETTER (13%)
DIRECT MAILING (9%)
HOSTING A FIRM-SPONSORED WEBINAR OR SEMINAR (8%)
HOSTING A FIRM-SPONSORED SOCIAL EVENT (7%)
FACEBOOK POSTS (5%)
BLOG POSTS (4%)
All responses from a June 2012 survey of the
Accounting Today Executive Research Council, an
online panel of over 1,500 accounting professionals.
The ACI was created in partnership with:
ADP and the ADP logo are registered trademarks of ADP, Inc.
0 8 16 24
32
40
