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The Daily

NEWS HIGHLIGHTS FOR WEDNESDAY - 3.16.16

By:
Maya Lindsay
Published Date:
Mar 16, 2016

NYSSCPA Members in the News

Joseph Falbo Jr. - NYSSCPA President
Non-CPA ownership legislation in stalemate
Long Island Business News
Despite widespread agreement that people other than CPAs should be able to own a stake in accounting firms, legislation has remained in limbo amid a disagreement over the percentage of ownership that should be allowed. In 1994, Nebraska became the first state to allow non-CPA ownership, followed by North Carolina in 1995. Today, only New York, Delaware and Hawaii do not allow for non-CPA ownership. “Firms throughout New York State have gotten behind this legislation substantially,” said Joseph Falbo Jr., president of the New York State Society of Certified Public Accountants and a tax partner at Tronconi Segarra & Associates in Buffalo.

John Petosa (Syracuse)
The IRS Audit Survival Guide
Yahoo Finance!
You may hate bills and junk mail, but you'll probably never complain about either again if you receive an audit letter. As you likely are keenly aware, an audit letter is a piece of correspondence that no taxpayer wants to receive in the mail, and it means that the Internal Revenue Service wants to get to know you a little better. But instead of chit-chatting over coffee like old friends, your pals at the IRS want to examine your tax records for the last three years. 

Sheila Brandenberg (Manhattan/Bronx)
Common Mistakes to Avoid When Filing Taxes
Rhythmandsoulradio.com
Tune in tonight at 7pm!!! Topic: Common Mistakes to Avoid When filing Taxes! Tonight’s guest is Ms. Sheila Brandenberg. She is a CPA and owner of her own firm. She is a member of the New York State Society of CPA's, one of the largest non-profit accounting organizations and a former tax director at Grant Thornton.

Other Accounting and Financial News Stories

U.S. Stocks Waver Ahead of Fed Statement
Wall Street Journal
U.S. stocks wavered, ending little changed, amid a two-day meeting of Federal Reserve officials that began Tuesday. Trading has been calm in recent sessions, a shift compared with the sharp swings that were common earlier this year. The S&P 500 has moved less than 1% in 10 of the last 13 trading days, the longest such stretch in about four months.

IRS now allows Cuban tax credit
Bankrate.com
President Barack Obama is heading to Cuba next week. When Air Force One lands on that island nation on March 20, Obama will become the first U.S. commander in chief to visit Cuba in 88 years. In advance of that historic visit, which the administration hopes will eventually lead to fully normalized relations, the U.S. Treasury is making some changes in the tax treatment of some Cuban earnings.

IRS and Taxpayers Continue Fight over Regulations Intended to Overrule Judicial Precedent
The National Law Review
In March 2013, 3M filed a petition with the US Tax Court challenging the Internal Revenue Service’s (IRS) determination that additional royalty income should be allocated to 3M’s US headquarters from its Brazilian subsidiary.  See 3M Co. v. Commissioner, T.C. Dkt. No. 5186-13.  Specifically, the IRS determined that Brazilian legal restrictions on the payment of royalties to the US parent should not be taken into account in determining the arm’s-length price between 3M and the subsidiary under Treas. Reg. § 1.482-1(h)(2).

Mid-Year Changes to Safe Harbor 401(k) Plans: IRS Adopts Flexible Position in Notice 2016-16
The National Law Review
Since the concept of a safe harbor 401(k) plan was first introduced in 1996 as part of the Small Job Protection Act of 1996, the IRS has broadly sought to limit the ability of plan sponsors to make changes to safe harbor plans after the start of the plan year. Unfortunately, however, the IRS provided relatively little official guidance on what sort of changes would be permitted, leaving practitioners to take a conservative stance and generally avoid any mid-year change, no matter how tangential to a plan’s safe harbor design.

Bloomberg BNA Adds NOL Manager to State Tax Analyzer
Accounting Today
Bloomberg BNA has upgraded its BNA State Tax Analyzer with a new NOL Manager function that predicts and analyzes the financial impact of state net operating losses on a business’s cash, effective tax rate and earnings per share. While the federal tax code allows 20 years of NOL carryforwards and two years of NOL carrybacks, states vary widely in their NOL rules, Bloomberg BNA noted. Corporations often have to file for multiple entities in multiple states and may need to deal with hundreds or even thousands of returns in a single year.

IRS Correction Program Lawsuit Unlikely to Lead to More
Bloomberg BNA
“Interesting,” “unusual” and “unprecedented” are just three of the words practitioners used to describe a recent lawsuit that was allowed to move forward against the Internal Revenue Service, alleging that the agency mismanaged its Voluntary Correction Program. The lawsuit, Info. Sys. & Networks Corp. v. IRS, may be the first of its kind, but probably isn't a signal that an avalanche of cases against the IRS's program is on its way.

FBAR, FATCA Filings Top 1 Million As IRS Increases Scrutiny On Foreign Accounts
Forbes
A record high 1,163,229 Report of Foreign Bank and Financial Accounts (more commonly, FBARs) were filed in 2015, up more than 8% from the prior year. That growth, however, is nothing new: FBAR filings have grown on average by 17% per year during the last five years , according to data from the Treasury Department’s Financial Crimes Enforcement Network (FinCen). The FBAR requirements (31 CFR 103.24) are part of the Banking Secrecy Act (BSA).

Top 10 Form W-2, 1099 and 1095 Myths vs. Realities
Accounting Today
Greatland Corporation has compiled a list of misconceptions when it comes to tax-reporting requirements. Failing to understand the real truth behind these myths can cost a business extra money to file again or, even worse, to pay steep fines if reporting is not done in compliance with regulations. Myth: Affordable Care Act reporting and filing of Form 1095 is not required for reporting year 2015. Reality: Along with the yearly adjustments mandated by the Internal Revenue Service related to W-2 and 1099 forms, brand new 1095 forms have been added to the list of required forms for filers this year. Myth: State 1099 reporting is not required if there is no state tax withheld.

FASB Eases Derivatives Reporting on Contingent Calls, Puts
Bloomberg BNA
New derivatives-related guidance on how to account for certain put and call options embedded in a host contract will ease reporting burdens of banks and other companies and remedy diversity in practice, leading bank, derivatives and other trade groups say. The American Bankers Association, the Clearing House Association and the International Swaps and Derivatives Association expressed support for the accounting standards update issued March 14 by the Financial Accounting Standards Board—ASU No. 2016-06.

Crime Scene: Who Stole $100 Million From Bangladesh’s Account at the New York Fed?
Wall Street Journal
Someone using official codes stole $100 million from Bangladesh’s account at the New York Fed over a recent weekend. Authorities in four countries are still piecing together what happened. The breach funneled $81 million from the country’s account at the New York Federal Reserve to personal bank accounts in the Philippines. Another $20 million was directed to a bank in Sri Lanka. In scenes that would be right at home in Hollywood, the unknown criminals sent 35 transfer requests through the Swift interbank messaging system, a Bangladesh Bank official and an official of the Ministry of Finance have said.