NEWS HIGHLIGHTS FOR THURSDAY - 10.13.16

By:
Maya Lindsay
Published Date:
Oct 13, 2016

Accounting and Financial News Stories

The New Plan to Bail Out ‘Too-Big-to-Fail’ Banks
Wall Street Journal
Regulators want to prevent taxpayers from having to ever again bail out big banks. The latest idea: make the banks bail themselves out. Previously, banks had struggled to persuade regulators they had a plan—called a “living will”—that would allow them to be dismantled and shut down if they got into trouble without taxpayers taking a hit.

Unintended Consequences of Firm Management Decisions
CPA Practice Advisor
Sometimes people and organizations launch a new philosophy, policy or approach with the best of intentions, but fail to consider an unintended consequence that threatens to negate the purpose of the original initiative. Here’s an example. When CPA firms give all the “good clients” to their best staff while idling average performers, they may be denying staff the opportunity to learn and grow.

Accountants More Concerned About Senate than Presidency
Accounting Today
Almost half of accountants think that control of the Senate matters more to the profession than who wins the presidential race, according to a new Accounting Today survey. The survey asked 328 accountants and CPAs from across the country this week which outcome matters more to the accounting profession, and 48 percent of respondents said that Senate races were more important.

Fed Minutes See Rate Rise ‘Relatively Soon’
New York Times
The Federal Reserve expects to increase its benchmark interest rate “relatively soon” if the economy continues to advance at a reasonable pace, according to an account published Wednesday of the bank’s most recent policy meeting. The account strengthened expectations that the Fed may raise rates at its final meeting of the year, in December.

The Compliance and Enforcement Environment: Where Things Stand in the Autumn of 2016
Lexology
Corporate compliance is under greater scrutiny and enforcement pressure than ever. SEC Whistleblowers and Penalties (including Foreign Corrupt Practices Act Sanctions): In August 2016, SEC whistleblower awards topped $100 million, with six of the top ten awards in 2016. Whistleblower bounties are also awarded by the CFTC and the IRS, with whistleblower retaliation protections available from the SEC, OSHA and numerous other federal and state agencies.

Yes, You Still Need To Be on the Lookout for Tax Scams
Credit.com
You may have easily missed a major piece of news that broke last week amid the media-feeding frenzy generated by the release of Donald Trump’s “Access Hollywood” tapes and Hillary Clinton’s Wikileaked Wall Street speeches. Authorities in India busted nine — yes, nine — bogus IRS call centers, arresting 70 people on suspicion of tricking (and often scaring) Americans into sending money to settle “pressing” but nonexistent tax bills.

Transferee Liability: The [Unlikely] Situation that your Nonprofit Receives a Charitable Gift with Expensive Tax Strings Attached
JD Supra Business Advisor
On August 15, 2016, the Tax Court decided in Salus Mundi Foundation et al v. Commissioner, T.C. Memo. 2016-154, that two foundations were liable as transferees for a corporation’s unpaid federal tax liability after another foundation distributed to the foundations the proceeds of the sale of the corporation’s stock. The history in this case involves a marital trust that initially owned all of the stock in a C corporation called Double-D Ranch.

IRS Sending EITC Due-Diligence Letters
Accounting Today
The IRS is sending due diligence letters to paid preparers who may be noncompliant in meeting their Earned Income Tax Credit due-diligence requirements. These letters are sent to raise awareness of questionable returns and remind paid preparers of their due-diligence requirements. The IRS will continue to monitor the EITC returns prepared in the upcoming filing season to see if the quality of the preparers’ returns improves, the agency said.

Is Wall Street Climbing Out of Its Slump?
Wall Street Journal
All winning streaks need to start somewhere. As earnings season for banks begins Friday, investors are looking for the second straight quarter of improving investment-banking results after a dismal start to the year. J.P. Morgan Chase & Co. joins Citigroup Inc. in reporting third-quarter earnings Friday, followed by Bank of America Corp. Monday, Goldman Sachs Group Inc. Tuesday and Morgan Stanley Wednesday.

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