Monday, June 30, 2014

Supreme Court decides against unions

Fox News - WASHINGTON –  The Supreme Court, in a 5-4 decision, ruled Monday that public-sector unions in Illinois cannot collect fees from home health care workers who don't want to be part of a union.

The ruling is a setback for labor unions that have boosted their bargaining power -- as well as their bank balance -- in states like Illinois, by signing up thousands of in-home care workers and forcing them to fork over union dues.

The ruling, however, was limited to health care workers and not all private-sector unions. It also stopped short of overturning decades of practice that allowed public-sector unions to pass representation costs to non-members.
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Supreme Court issues pro Hobby Lobby ruling

Fox News -  The Supreme Court ruled Monday that certain "closely held" for-profit businesses can cite religious objections in order to opt out of a requirement in ObamaCare to provide free contraceptive coverage for their employees.

The 5-4 decision, in favor of arts-and-crafts chain Hobby Lobby and one other company, marks the first time the court has ruled that for-profit businesses can cite religious views under federal law. It also is a blow to a provision of the Affordable Care Act which President Obama's supporters touted heavily during the 2012 presidential campaign.

Friday, June 27, 2014

Accounting News Weekly Wrapup

As we prepare to wrap up the end of Q2 of 2014, here's a recap of the week's top stories and articles.

Businesses are cutting back on supplying cell phones to employees

Do you feel a tad screwed when your employer calls you on your personal cell phone and doesn't offer to reimburse you? Well, get used to it because, according to the Sage Mobile Device Survey, its not happening much these days.
Fewer businesses are supplying their employees with mobile devices this year over last, according to the second annual mobile device survey from Sage, with a little more than half of responding companies (54 percent) giving their staff devices, down from 69 percent in 2013.

Respondents are seeing the positive effects of mobile technology, however, with the biggest impact in customer service, according to 70 percent of the 1,090 U.S. small businesses polled. They also reported devices to be helpful for performing business in bad weather (32 percent), bringing more work to the company (21 percent) and enabling them to conduct meetings remotely (20 percent).

Despite these benefits, most businesses (more than three quarters) report they are not budgeting for mobile devices and instead purchasing them as the need arises. Five percent said that their business sets an annual budget for mobile items and sticks to it and 12 percent set an annual budget and adjust expenditures as needed.
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Congress working to simplify education tax credits

The legislation, H.R. 3393, the Student and Family Tax Simplification Act, emerged from one of the 11 tax reform working groups that Ways and Means chairman Dave Camp, R-Mich., set up last year to study ways to improve areas such as education tax credits. Rep. Diane Black, R-Tenn., chaired the committee’s Education Tax Reform Working Group and she applauded passage of the bill Wednesday.

“It’s a well-known fact that the cost of education is climbing, and that for too many, the ability to save and pay for college without ending up under a mountain of debt is simply out of reach,” Black said in a statement.

CPA pleads guilty in Madoff corruption scheme

Peter Konigsberg, an accountant and lawyer who provided services to numerous clients of Bernard Madoff’s investment firm, and who was a personal tax and business adviser to Madoff, pleaded guilty Tuesday in a Manhattan federal court to various charges and faces up to 30 years in prison.

Konigbserg pleaded guilty to a three-count superseding information charging him with one count of conspiracy to falsify the books and records of Madoff Securities and to obstruct the administration of the tax laws, as well as two substantive books and records counts. In addition to pleading guilty, Konigsberg has agreed to cooperate with the government in its ongoing investigation of the fraud at Madoff Securities.
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IRS hard drive failure ignites more furor in halls of Congress

(Bloomberg) U.S. lawmakers argued late into the night over a computer hard drive that crashed in 2011, taking the controversy surrounding the Internal Revenue Service to a new level of acrimony.

Republicans said the broken device that belonged to former IRS official Lois Lerner is crucial evidence in their investigation of the agency and said the IRS was covering up its misdeeds. Lerner headed the IRS office that gave extra scrutiny to small-government groups seeking tax-exempt status.

“I’m sick and tired of your game-playing in response to congressional oversight,” Representative Darrell Issa, chairman of the House Oversight and Government Reform Committee, said to IRS Commissioner John Koskinen at a hearing last night.

AICPA nixes IRS' Voluntary Tax Preparer Program

The American Institute of CPAs has sent a letter expressing strong concern with the Internal Revenue Service’s proposed voluntary certification program for tax return preparers, saying it “would cause significant legal problems that may ultimately frustrate the IRS’s goals, confuse the public, and lead to litigation.”

The AICPA expressed its concerns to IRS commissioner John Koskinen in a meeting and letter last month, but has increased its level of concern in the latest letter (see AICPA Opposes IRS Voluntary Tax Preparer Certification).

In a letter Tuesday to Koskinen, AICPA chairman Bill Balhoff and AICPA president and CEO Barry C. Melancon wrote, “We have repeatedly expressed to you and your colleagues that our members have very significant concerns regarding a voluntary certification program...

Lerner is alleged to have targeted Sen. Grassley for audit

House Republicans are accusing Lois Lerner, the former director of the Internal Revenue Service’s Exempt Organizations unit, of emailing a colleague about subjecting Sen. Charles Grassley, R-Iowa, the former chairman of the Senate Finance Committee, to an IRS examination.

House Ways and Means Committee chairman Dave Camp, R-Mich., has been among those investigating the scandal that erupted after Lerner revealed that the IRS had been using terms such as “Tea Party” and “Patriot” to screen applications from groups applying for tax-exempt status. 

He revealed a series of emails Wednesday between Lerner and a colleague over an invitation that had been sent to Grassley to speak at a seminar to which Lerner had also been invited to speak. The unidentified group offered to pay for both Grassley and his wife to attend the event. In the email messages, Lerner says...

Regions Bank hit hard by fraud charges

Regions Bank plans to pay $51 million to resolve charges related to the intentional misclassification of loans and accounting fraud.

The Securities and Exchange Commission said Wednesday it has filed fraud charges against three former senior managers of Regions Bank for intentionally misclassifying loans that should have been recorded as impaired for accounting purposes

The SEC said the scheme resulted in the bank’s publicly-traded holding company overstating its income and earnings per share in its financial reporting.

IRS apparently ignoring AICPA and proceeds with program

The Internal Revenue Service is moving ahead with a voluntary tax preparer education program after legal challenges derailed an earlier mandatory testing and continuing education program.

The IRS said Thursday that guidance will soon be issued outlining the new voluntary program to encourage education and filing season readiness for paid tax return preparers. The program will be in place to help taxpayers during the 2015 filing season. It does not include a testing component, although the IRS hopes to add it in future years.

“Today we’re announcing a new program that will help taxpayers by improving the tax know-how and filing season readiness of paid tax preparers,” said IRS commissioner John Koskinen in a conference call with reporters. 

ObamaCare could benefit from tax season enrollment

A new study suggests that tax filing season could be the best time to sign up clients for health coverage under the Affordable Care Act rather than the current open enrollment period.

The study, by Katherine Swartz of Harvard University and John Graves of Vanderbilt University, published Wednesday in the journal Health Affairs, offers strong evidence for why the ACA open enrollment period should be changed to align with tax season. Currently, Americans who are eligible for tax credits for assistance with paying health insurance premiums only have from until February 15 to apply. The open enrollment began last October 1 during a botched rollout that quickly revealed technical glitches in the federal government’s health insurance exchange, along with many state-run exchanges.

The study evaluates the misalignment of the financial calendar of average low-income Americans with the open enrollment period for ACA health coverage, along with the impact that financial stress has on purchasing decisions. The researchers used data on Google search engine queries to evaluate when people were using search terms such as “health insurance.”

Startups concerned about US tax structure

Nearly two times as many startup business owners cite the U.S. tax structure over health care reform as the issue they anticipate having the biggest impact on their business this year, according to a new survey by the payroll technology provider Paychex.

Of the more than 250 business owners surveyed, 47 percent ranked the U.S. tax structure as the top issue affecting their small business, nearly double the number that selected health care reform (25 percent).

Overall government regulation (20 percent), potential government inaction (6 percent), and immigration reform (2 percent) ranked below those among the top issues.

Exports of unrefined American oil could begin soon

The Obama administration cleared the way for the first exports of unrefined American oil in nearly four decades, allowing energy companies to start chipping away at the longtime ban on selling U.S. oil abroad.

In separate rulings that haven't been announced, the Commerce Department gave Pioneer Natural Resources Co. and Enterprise Products Partners LP permission to ship a type of ultralight oil known as condensate to foreign buyers. The buyers could turn the oil into gasoline, jet fuel and diesel.

The shipments could begin as soon as August and are likely to be small, people familiar with the matter said. It isn't clear how much oil the two companies are allowed to export under the rulings, which were issued since the start of this year. The Commerce Department's Bureau of Industry and Security approved the moves using a process known as a private ruling.

BMW looking to build new plant; choosing between US and Mexico

MUNICH—German luxury car maker BMW AG BMW.XE -0.13%  will decide before Bavarian summer vacations whether to build a new auto plant in Mexico or the U.S., Chief Executive Norbert Reithofer said on Wednesday.

Speaking at industry event in Munich, Mr. Reithofer said BMW would decide on the location of a second plant to serve the North American market "clearly before the summer break."

Summer school vacations in Bavaria begin on July 30 this year.

BMW said earlier this year that it was considering building a second factory in North America to meet growing demand. BMW delivered about 376,000 vehicles in the U.S. last year, according to Autodata, about 19% of its world-wide deliveries.

It is widely expected that BMW will locate the new plant in Mexico instead of Spartanburg, S.C., an existing factory that builds its X series sport utility vehicles. Earlier this year, the company said it would invest $1 billion over several years in Spartanburg to expand production, including a proposed seven-seat SUV.

by Hendrik Varnholt, Wall Street Journal

Wednesday, June 18, 2014

Lerner Loses Emails

Disgraced IRS official Lois Lerner and a number of her colleagues have lost their emails. That's right. The emails that congress had subpoenaed some 18 months ago are now mysteriously missing.
Here's what the media has to say about the subject:

Fox News

Republican lawmakers are slamming the Internal Revenue Service, with one calling for an immediate investigation, after the agency notified Congress Friday that it was unable to recover former official Lois Lerner’s e-mails from January 2009 to April 2011 because of a computer crash.

The agency made the disclosure in a letter sent to Congressional investigators Friday afternoon, according a statement from Rep. Charles Boustany Jr., R-Louisiana. Read More

Nada thing.

Wall Street Journal
From a June 16 letter sent by Cleta Mitchell, attorney for True the Vote, to the Justice Department. TTV sued the IRS over alleged harassment in 2013:

Late Friday, the IRS apparently advised the Ways & Means Committee that the IRS has "lost" Lois Lerner's hard drive which includes thousands of Defendant Lerner's e-mail records. However, several statutes and regulations require that the records be accessible by the Committees, and, in turn, must be preserved and made available to TTV [True the Vote] in the event of discovery in the pending litigation. . . . We are deeply troubled by this news and . . . seek your consent to immediately allow a computer forensics expert selected by TTV to examine the computer(s) that is or are purportedly the source of Ms. Lerner's "lost" emails, including cloning the hard drives, and to attempt to restore what was supposedly "lost," and to seek to restore any and all "lost" evidence pertinent to this litigation. Read More

New York Times
WASHINGTON — Six additional Internal Revenue Service workers lost emails sought by congressional investigators when their computers crashed, investigators announced Tuesday, escalating Republican suspicions that the employees may have been trying to cover up political targeting of Tea Party organizations.

The revelation follows the news last week that Lois Lerner, the former chief of the I.R.S. division that grants tax-exempt status to organizations, had also lost two years’ worth of files when her computer crashed in mid-2011. Together, the growing trail of disappearing records has heightened Republican concerns that the tax agency conducted politically motivated reviews. Read More

CBS News
The Internal Revenue Service says it has lost a trove of emails to and from a central figure in the agency's tea party controversy.

The IRS told congressional investigators Friday it cannot locate many of Lois Lerner's emails prior to 2011 because her computer crashed that year. Lerner headed the IRS division that processed applications for tax-exempt status.

The IRS acknowledged last year that agents had improperly scrutinized applications for tax-exempt status by tea party and other conservative groups. Read More

NBC News
Republican lawmakers called for a new probe of the Internal Revenue Service on Friday after it told congressional investigators that it had lost more than two years of emails from the central figure in a yearlong inquiry into improper IRS reviews of Tea Party tax documents.

House Republicans have already voted to hold Lois Lerner in contempt of Congress for refusing to testify about the special targeting of Tea Party and other conservative groups applying for tax-exempt status.

Lerner was placed on administrative leave from her position as head of the agency's section on tax-exempt organizations in May 2013, after she admitted that the IRS gave special attention to applications for tax-exempt status that included words like "Tea Party" and "patriot." She retired in September. Read More

ABC News
The Internal Revenue Service has lost more emails connected to the tea party investigation, congressional investigators said Tuesday.

The IRS said last Friday it had lost an untold number of emails when Lois Lerner's computer crashed in 2011. Lerner used to head the division that handles applications for tax-exempt status.

On Tuesday, two key lawmakers said the IRS has also lost emails from six additional IRS workers whose computers crashed. Among them was Nikole Flax, who was chief of staff to Lerner's boss, then-deputy commissioner Steven Miller.

Miller later became acting IRS commissioner, but was forced to resign last year after the agency acknowledged that agents had improperly scrutinized tea party and other conservative groups when they applied for tax-exempt status. Documents have shown some liberal groups were also flagged.

Investigators from the House Ways and Means Committee interviewed IRS technicians Monday. The technicians said they first realized that Lerner's emails were lost in February or March — months before they informed congressional investigators, said a statement by two top Republicans on the Ways and Means Committee, chairman Dave Camp of Michigan and subcommittee chairman Charles Boustany of Louisiana. Read More

Neikirk, Mahoney & Smith PLLC won't lose your emails. Call if you have a business accounting question. 502-896-2999 or by clicking here!

Bloomberg BNA Has Nice Offer

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Returns Are Up, According to IRS

The Internal Revenue Service said Thursday that only three weeks after the opening of tax season, it has already received about one-third of the individual income tax returns it expects to receive in 2014.
The IRS reported that tax season has gone smoothly so far, despite the two-week delay before kicking off tax season on January 31.  The IRS has processed almost 98 percent of the 49.6 million returns received so far. Each week this filing season, the IRS has processed a greater percentage of the returns received than during comparable weeks last year.
For more, check out Michael Cohn's article in Accounting Today. If you need help with preparing your 2013 tax returns, contact Neikirk, Mahoney & Smith PLLC.

Boehner Seeks Contempt Charges Against Lerner

(Bloomberg) House Speaker John Boehner said an IRS official should be held in contempt if she continues to refuse to testify on the agency’s scrutiny of Tea Party groups.
Lois Lerner, who retired from the Internal Revenue Service in September amid the inquiry, exercised her Fifth Amendment right against self-incrimination at a hearing today after 10 questions from Representative Darrell Issa, the Republican chairman of the House Oversight Committee.
“She has to testify or she should be held in contempt,” Boehner, an Ohio Republican, told reporters, adding that he would wait for a report from Issa.
Neikirk, Mahoney & Smith PLLC, an accounting firm in Louisville, Ky. keeps up with what's going on in Washington so you don't have to.