Journal of Accountancy

A monthly publication of the American Institute of Certified Public Accountants focusing on the latest news and developments related to the field of accounting, and written for CPAs and other accounting professionals.

Articles from Vol. 214, No. 4, October

Choose Wisely: New Brochures Can Help CPAs Vet Investment Advisers
EXECUTIVE SUMMARY * CPAs can perform due diligence on registered investment advisory firms and their representatives with the help of brochures the SEC recently began requiring advisory firms to produce. CPAs who refer clients to investment advisers...
Commission Issues Seven Recommendations for Bolstering the Future of Accounting Education: Three-Year Implementation Phase Begins
Integrating accounting education, practice, and research in new teaching models and curricula is among the recommendations from the Pathways Commission's final report now being implemented. The report on the future of higher education in accounting,...
Ethics IQ Quiz: Find out How Well You Know Your Profession's Standards of Conduct
[ILLUSTRATION OMITTED] The AICPA Code of Professional Conduct (AICPA Professional Standards) is an ever-evolving document. Periodically, the JofA publishes answers from AICPA Professional Ethics Division staff to questions asked by AICPA members...
Evaluate Your BV Skills
With a wave of Baby Boomers nearing retirement, there is a good chance CPAs will come across clients who need a business valuation. A valuation may be necessary for gift and estate purposes, transfers of ownership, tax planning purposes, and divorce....
From Practice to the Classroom: By the Ph.D. Route or Professionally Qualified, CPAs Have Much to Offer
EXECUTIVE SUMMARY * Becoming a tenure-track, or academically qualified (AO.) faculty member of a college or university usually involves obtaining an advanced terminal degree, such as a Ph.D. The route for professionally qualified (PC) faculty is...
Handling an Inadvertent Termination
The general definition of an S corporation includes restrictions on the type and number of shareholders as well as the type of corporation that may qualify for the election. If an S corporation violates any of these restrictions, its S status is automatically...
IRS's "Fresh Start" Program Expands Payment Options: New Rules Make It Easier to Qualify for Installment Agreements and Offers in Compromise
EXECUTIVE SUMMARY * The economic downturn has made R more difficult for many people to pay their taxes when they am due. * Practitioners should ensure their clients know that the worst thing they can do when they cannot pay their taxes is to...
No Deduction for Bringing Down the House
The Tax Court disallowed the taxpayers' charitable contribution deduction for the value of a donated house that would later be destroyed in a training exercise by a county fire department. The court held that a deduction should not be allowed since...
Plan Now for Inside Buyouts: Business Owners and Their Advisers Must Weigh Tax Consequences, Tax Cliff or Not, When Considering a Sale
EXECUTIVE SUMMARY * Inside buyouts are often an attractive option for business owners looking to sell. The owners know and trust the buying group and have control over the process, including the timing of the transaction, specific percentage of...
Prop. Regs. Clarify Application of Meal and Entertainment Deduction Limit
The IRS released proposed regulations under Sec. 274 clarifying which party is subject to the Secs. 274(a) and (n) limit on deductions for meals and entertainment to 50% of the expenses incurred (REG-101812-07). As the IRS emphasized, only one party...
Responding to a 90-Day Letter
Under Sec. 6212(a) the IRS can issue a statutory notice of deficiency, also known as a 90-day letter, when it determines a deficiency in an income or estate and gift tax liability. A 90-day letter is a formal legal notice, sent by certified or registered...
Restorative Benefits and Equity-Based Performance Plans for "Carve-Out" Retirement Plans Can Help Those Whose Benefits May Otherwise Be Limited by IRS Requirements That Benefits Be Nondiscriminatory
EXECUTIVE SUMMARY * As the employment market and the economy both improve, the competition for the best employees increases. * Many of the employee benefit rules intended to prevent discrimination in compensation limit the ability to provide...
Self-Employed Can Deduct Medicare Premiums IRS Chief Counsel Advises
Explaining a recent reversal of a long-held IRS stance, the Office of Chief Counsel advised IRS attorneys that self-employed individuals may deduct Medicare premiums from their self-employment income. Chief Counsel Advice (CCA) 201228037 clarifies...
Tax Court's Denial of Easement Deduction Deemed Unreasonable
The First Circuit recently held that a Tax Court decision disallowing a couple's deduction for a qualified conservation contribution of a facade easement was an unreasonable and overly restrictive interpretation of the extinguishment provision of Regs....
The Accounting Doctoral Scholars Program: Status Report
EXECUTIVE SUMMARY * The Accounting Doctoral Scholars Program and its sponsoring organizations are working to increase the pool of academically qualified accounting faculty in tax and auditing with recent experience in public accounting at U.S. universities,...
The Last Word
I've driven race cars a couple of times. Driving is fun, but those cars don't have speedometers and they're so well-built, you don't really have the sensation of speed. On the racetrack, when everybody is doing 80, 90, 100 mph, it doesn't feel as fast....
The Merits of Thinking the Unthinkable
You're about to embark on an important project. You think it will be a success, but you can t be sure. So you imagine that, a year down the track, your project has failed. Then you seek answers: What killed it? How could failure have been avoided?...
TIGTA Recommends Identity Theft Safeguards
The Treasury Inspector General for Tax Administration (TIGTA) reported that the IRS had failed to detect 1.5 million tax returns with potential identity-theft-related fraudulent tax refunds exceeding $5.2 billion for the 2011 filing season (TIGTA Rep't...