NEWS HIGHLIGHTS FOR MONDAY - 8.8.16

By:
Maya Lindsay
Published Date:
Aug 8, 2016

NYSSCPA Members in the News


John Lieberman and Robert Tobey (Manhattan/Bronx)

"Unusual" accounting: Inside a Trump business audit

CBS News

In a three-sentence letter on April 22, 1987, Donald Trump signed off on a series of accounting changes that allowed his first hotel to shortchange New York City nearly $3 million in rent, city auditors later concluded. A decade before, Trump struck a unique deal freeing the hotel of $160 million in property taxes over the course of 40 years, while guaranteeing the city a small financial stake in its success: New York City received annual rent payments tied to the Grand Hyatt's profits.

 

Jamie Block (Rochester)

Digital Estate Planning

WROC Rochester First

CPA Jamie Block of Wealth Design Services discussed the rising need for digital estate planning Monday on News 8 at Sunrise. "Digital estate planning is the process of organizing your electronic data, which would be online accounts, your social media, and making sure you have a plan for what happens to them when you pass," said Block.  She said you need to take the proper steps to protect your personal life story and loss of data.  "In Facebook, under your Account Settings and Security, there's an option to create a Legacy Contact," said Block.

 

Other Accounting and Financial News Stories


Why I’ve Changed My Strategy on Tax Withholdings

Wall Street Journal

I used to ensure that I’d give the IRS the minimum withholding in order to maximize my earnings. Since interest rates are now so low, that has changed. Extra withholding is now one of my cash sources for rebalancing my taxable accounts and replenishing emergency and replacement reserves. When I was younger, I never dreamed I’d be advocating that I’d tell anyone to let the government help you save, much less that the agency would be the IRS.

 

IRS Tax Inversion Rule Change Draws Chamber of Commerce Suit

Accounting Today

The U.S. Chamber of Commerce challenged an Internal Revenue Service rule change it claims improperly stymies the ability of U.S. companies to shift their headquarters overseas to shelter global profits from American tax collectors. The Washington-based chamber and a Texas trade group sued the government Thursday, objecting to a policy the IRS implemented in April that they say wasn’t made available for public comment first.

 

A 401(k) From a Robot? Digital Advice Pushes Further Into Consumer Finance

Wall Street Journal

A funny thing happened on the way to the robo-adviser revolution. Robo advisers—automated investment services that assess risk tolerance and manage a portfolio of exchange-traded funds at a low cost—are running into the realities of the highly competitive wealth-management market, including thin profit margins. So they are expanding in areas that didn’t used to be associated with robo advisers, including managing “529” college-savings plans, administering 401(k) retirement accounts and adding account features that involve partnerships or co-branding deals.

 

Tax Payments Can Be Delayed For A Very Long Time

Forbes

It is really amazing how long you can stretch out paying anything on a tax deficiency , if you have the right sort of constitution. I wrote about a Tax Court decision in the case of Bruce Hauptman not quite two years ago.  At issue were income taxes from the years 1992 through 1996. There is no dispute as to the amount of the taxes.  In 2007, when the IRS started getting more serious about actually collecting, the tab was around $13 million.

 

New Audit Rule Limits Tax Discharges By Partnerships

Law360

A new rule forcing partnerships to declare they won’t voluntarily file for bankruptcy as a prerequisite for electing a revamped tax audit regime is being billed by experts as an unexpected move by the Internal Revenue Service to prevent the new regime from being abused to avoid tax liabilities. The agency released the eagerly anticipated rules on Thursday after Congress in November signed the new audit regime into law as part of the Bipartisan Budget Act of 2015.

 

Bitcoin Exchange to Spread Losses of Hack

Wall Street Journal

Bitfinex, the digital-currency exchange that lost $65 million to hackers last week, plans to spread the losses among all its users, including those not directly affected by the hack. The Hong Kong-based digital-currency exchange said in a statement Sunday that the losses from the theft would be shared, or “generalized across all accounts and assets” of its clients, with each taking a loss of around 36%.

 

Gold Is Hot This Year. So Are Fakes

Wall Street Journal

David Myers, a pharmacist in New York, wanted to increase his gold holdings, but he had a concern. How could he know if the gold coins he examined in a shop were real? “I knew there were a fair amount of fakes out there, “Mr. Myers said.  ”There were a lot of good deals that I passed up on because I didn’t want to take the chance.” Counterfeit gold is nearly as old as the precious metal itself. But dealers worry that this year’s powerful rise in gold prices is attracting new crowds looking to profit by peddling fake gold.

 

Accounting Error May Not Derail a Deal, but Ex-Director Bails Early Anyway

New York Times

When a company delays the release of its financial results because of an accounting error, spooked investors typically flee, and shares plummet. Not so for Diamond Resorts International, a timeshare operator based in Las Vegas. Its stock has fallen just 2.2 percent since it postponed its second-quarter earnings release on Aug. 1. The reason for the delay, the company said, was a last-minute discovery by its auditor of a problem with the way Diamond had been valuing its inventory of unsold timeshare units since 2014. A restatement of the company’s net income may result.

 

IRS Levies Caused Taxpayer Hardship, Says TIGTA

Tax-News

Some Internal Revenue Service (IRS) revenue officers, when issuing levies on US taxpayers, took action against Social Security recipients that likely caused or exacerbated economic hardship, according to a report released by the Treasury Inspector General for Tax Administration (TIGTA). It was pointed out that to satisfy tax debts, the IRS may levy Social Security benefits. Nevertheless, a provision of the Internal Revenue Code requires the IRS to release levies that cause economic hardship, particularly for those older and low-income taxpayers whose benefits are their primary source of income.

 

IRS Announces New Changes, Including Rolling Renewals, To ITIN Procedures

Forbes

Everyone agrees that tax refund fraud is a real problem. The challenge, however, has been in finding a solution that effectively curbs fraud without making life difficult for honest taxpayers. As part of those efforts, the Internal Revenue Service (IRS) has made a number of changes over the past few years, including new controls over Individual Taxpayer Identification Numbers (ITINs) which took effect in 2013 and 2014. This week, IRS announced additional changes to help taxpayers comply with revisions to the ITIN program made under a new law, the Protecting Americans from Tax Hikes (PATH) Act, which was passed by Congress in December of 2015.

 

Back-to-School Sales Tax Holidays May Be Skimpier This Year

New York Times

Many states are holding annual “back to school” sales tax holidays in the coming weeks, but some are cutting back on the potential savings offered. Seventeen states are holding sales tax holidays tied to school schedules this year, according to the Federation of Tax Administrators. Details vary by state, but generally consumers can buy clothing and school supplies, and sometimes computers and other electronics, without having to pay state and, in some cases, local sales taxes.

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