NEWS HIGHLIGHTS FOR FRIDAY - 10.7.16

By:
Maya Lindsay
Published Date:
Oct 7, 2016

Accounting and Financial News Stories

Former New Jersey Governor Jon Corzine Near $5 Million CFTC Settlement
Wall Street Journal
Former New Jersey Gov. and Goldman Sachs Group Inc. Chief Executive Jon Corzine is nearing a deal to pay $5 million to end a U.S. regulator’s lawsuit stemming from the 2011 collapse of commodities brokerage MF Global Holdings Ltd., according to people familiar with the matter. Mr. Corzine reached the tentative settlement with the Commodity Futures Trading Commission in June, submitting to a ban from trading client money in commodities and others assets regulated by the commission, the people said.

Lessons For The U.S. From Canada's Ambitious Carbon Tax Plan
Forbes
Earlier this week, Canadian Prime Minister Justin Trudeau dropped a bombshell:  He’ll require every province to adopt either a carbon tax or develop a carbon trading system by 2018. Polluters in those that don’t would be hit by a gradually increasing federal tax starting that year. The idea—particularly the provincial option– could prove an interesting model for the U.S. Some of the most populous Canadian provinces have already moved towards pricing curbs on carbon.

IRS Finalizes Rules for Internal Use Software and R&D Credit
Accounting Today
The Internal Revenue Service has issued final regulations on whether software that has been developed by companies for their own internal use can qualify for the research and development tax credit. The final regulations also include some examples to illustrate the application of the experimentation requirement to software under Section 41 of the Tax Code.

Fake IRS Collection Job Lands India ‘Scam Center’ Workers in Jail
Wall Street Journal
Minaz Husain Ladaf couldn’t believe his luck this summer when he was offered a 40% bump in salary and other perks to work for what he thought was the U.S. government. But when he went to his new workplace to pick up his paycheck this week, he was picked up by the police instead. Mr. Ladaf and dozens of fellow call-center workers have been locked in dusty jail cells in this booming Mumbai suburb since Wednesday. Police say they managed a telephone “scam center” where close to 700 workers called targeted Americans, pretending to be from the U.S. Internal Revenue Service, and raking in an estimated $150,000 a day.

Designing a Tax That Doesn't Reward Failure
BloombergView
Most of us haven’t seen Donald Trump’s tax returns, and we may never get that chance. But one thing we do know, thanks to the New York Times, is that Trump declared a $916 million loss in 1995, mostly likely from his troubled casinos and other businesses. The revelation has sparked a lot of controversy, as many people are looking for ways that Trump might have exploited loopholes in the system. John Hempton, the chief investment officer of hedge fund Bronte Capital, suggests that Trump may have taken losses that he didn’t really deserve, using a probably legal but ethically dubious technique known as debt parking, in which a shell company created by Trump holds all his debt and never collects it.

CPA firms should get away from building an accounting department to grow their business
AccountingWEB
CPA firms are required to work really hard to build & maintain a well-managed internal accounting team which is equipped with expertise and experienced enough to implement accounting and bookkeeping best practices, for the firm as well as for those clients to the CPA firm also. But it is time that CPA firms can get away from building an accounting and bookkeeping team, and instead can focus on growing their business.

Treasury to Sell $194 Billion in Debt
Wall Street Journal
The U.S. Treasury Department will auction $194 billion in securities next week, comprising $80 billion in new debt and $114 billion in previously sold debt. The market will be shut Monday for the Columbus Day holiday. Details (all with minimum denominations of $100): Tuesday: $40 billion in four-week bills, a reopening of an issue first sold on Nov. 12, 2015, maturing Nov. 10, 2016. Cusip: 912796HQ5. Also, $42 billion in 13-week bills, a reopening of an issue first sold on July 14, 2016, maturing Jan. 12, 2017.

CPA Financial Planning Clients Worry They Will Run Out of Money
Accounting Today
The top retirement concern cited by financial planning clients of CPAs is running out of money, according to a new survey by the American Institute of CPAs. The latest AICPA PFP Trends Survey found that running out of money was cited by 41 percent of CPA financial planners as the top financial concern of their clients who are planning for retirement. Maintaining their current lifestyle and spending level was the next biggest financial concern for clients, at 29 percent. A distant third was increasing health care costs, cited by 11 percent.

IRS Permits Self-Certification for Late Rollovers to Qualified Retirement Plans
JDSupra Business Advisor
Generally, an amount distributed from a qualified retirement plan (including an employer-sponsored plan and an IRA) is excluded from income if it is transferred to another plan within 60 days following receipt. In the past, if the 60-day deadline was missed, the IRS required that the taxpayer request a private letter ruling (and pay a fee) to obtain a waiver of the 60-day requirement based on hardship. Pursuant to recent IRS guidance,1 if the 60-day deadline is missed, a taxpayer can now (as of August 24) self-certify, subject to verification during an audit, eligibility for a waiver of the 60-day rollover requirement.

Ten ‘Scam’ Commandments: Lessons From a Criminal Call Center’s IRS Extortion Script
Wall Street Journal
Police in a Mumbai suburb busted what they called a “scam” call center this week which allegedly used hundreds of people impersonating U.S. tax officials to terrify Americans into paying millions to avoid jail and fake fines. Authorities arrested 70 people, alleging they helped manage nine call-centers where around 700 people posing as Internal Revenue Service officials made calls to Americans through the night, accusing them of failing to pay their taxes and threatening them with arrest and financial ruin if they didn’t pay up. Local police estimate the business took in more than $150,000 a night.

IRS Now Accepting ITIN Renewal Applications; Taxpayers Encouraged to Act Soon to Avoid Processing Delays in 2017
IRS.gov
The Internal Revenue Service reminds taxpayers affected by recent changes involving the Individual Taxpayer Identification Number (ITIN) program that they can now begin submitting their ITIN renewal applications to the IRS. Under the Protecting Americans from Tax Hikes (PATH) Act of 2015 passed by Congress and signed into law last year, any ITIN not used on a federal tax return at least once in the last three years will no longer be valid for use on a tax return as of Jan. 1, 2017.

IRS Issues New EPCRS Guidelines to Coordinate with Limited Determination Letter Program
The National Law Review
On September 29, 2016, the IRS released new guidelines under its Employee Plans Compliance Resolution System (EPCRS). EPCRS consists of three programs by which plan sponsors can correct plan documentation or operational errors – the Self-Correction Program, the Voluntary Correction Program and the Audit Closing Agreement Program.   Rev. Proc. 2016-51 supersedes the older guidelines (Rev. Proc. 2013-12) and incorporates certain more recent developments affecting qualified plan corrections.

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