The CPA Journal

The CPA Journal is a monthly refereed accounting journal. It has been published by the New York State Society of CPAs since 1930.Subjects for The CPA Journal inlcude accountants and accounting. Carolyn Morrisroe is the managing editor and Anthony H. Sarmiento is a contributing editor.

Articles from Vol. 68, No. 8, August

1998-99 New York State Budget
On April 28, 1998, Governor George Pataki signed into law (Chapter 56, Laws of 1998) a budget for the 1998-99 state fiscal year that began on April 1. Although the governor vetoed more than $1.6 billion in legislative spending and borrowing, the final...
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Accounting for Joint Activities under SOP 98-2
The Accounting Standards Executive Committee (AcSec) of the AICPA undertook a project in 1992 to provide clearer guidance for allocating costs of joint program and fund-raising activities than was provided under SOP 87-2, Accounting for Joint Costs of...
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American Express Acquires Goldstein Golub Kessler
American Express Tax and Business ervices (TBS) announced on July 13, 1998, that it had acquired the nonattest assets of Goldstein Golub Kessler & Company (GGK), which according to TBS is the largest singleoffice accounting firm in the United States,...
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Application of SAS No. 82 to Audits of Small Businesses
In February 1997, the Auditing Standards Board (ASB) issued Statement on Auditing Standards (SAS) No. 82, Consideration of Fraud in a Financial Statement Audit. SAS No. 82describes fraud and its characteristics; requires the auditor specifically to assess...
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Audit of the Federal Government's Financial Statements
A Major Effort Produces a Disclaimer of Opinion The GAO issued a first ever report on the consolidated financial statements of the U.S. Government on March 31, 1998. It audited specific agencies and funds as well as the consolidation and made use of...
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Big Time Estimating
The IRS has an array of methods available to reconstruct income if it suspects a taxpayer may have filed a fraudulent return or has not filed one. Courts will allow the use of income reconstruction if the taxpayer has no records or if the records do...
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Cash Distribution Require Cash Contributions to Rollovers
The Tax Court, in Lemishow v. Commissioner, a case of first impression, ruled that certain otherwise excludable rollovers from Keogh and individual retirement accounts (IRAs) were taxable due to a change in the character of the property deposited into...
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Court Rules Work Product Doctrine Protects CPAS' Memoranda
The Second Circuit Court of Appeals, reversing a lower court opinion, recently held that a CPA firm's tax memoranda, which had been requested by a corporate client's tax vice president, can be protected by the work product doctrine. A concept distinct...
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CPAs and the Unauthorized Practice of Law
In BriefThe Line of Demarcation Is the Federal Law. As CPAs continue to expand their services beyond what the public may regard as the "traditional" practice of accounting, the need to understand the boundaries established for unauthorized practice of...
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Designing Qualified Retirement Plans to Maximize Wealth Accumulation
Today's qualified retirement plan marketplace is dominated by 401(k) plans, under which eligible employees may defer a component of compensation on a pre-tax basis. Section 401(k) plans make fine employee benefit programs. But for business owners and...
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EPA Challenges Privilege Issue in Environmental Self-Audits
An environmental audit is a selfinitiated, voluntary inspection of a company's facilities and records to evaluate and identify compliance (or noncompliance) with environmental regulations. To encourage more companies to conduct these audits voluntarily,...
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Income Reconstruction
Forensic accounting is a practice whereby accountants use their business skills to investigate fraud, embezzlement of funds, theft of assets, or perhaps find evidence of hidden assets in divorce cases. One of the most useful tools available for the application...
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Is Your Client Service Delivery Model Up to Date?
It seems there's so much written lately about our changing profession. From professional journals to general business magazines, from newly published books to internet web sites, it seems everyone is talking the same language. Nontraditional work such...
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It's Time to Study the New UAA and Get Involved
The AICPA and the National Association of State Boards of Public Accountancy (NASBA) have hoisted a third edition of the Uniform Accountancy Act (UAA) up the flagpole. The purpose of the act is to promote uniformity of state laws governing the practice...
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Knowledge Management Consulting Gives CPAS a Competitive Edge
Knowledge management (KM) is hot, according to a recent study by Kennedy Information, a publisher of newsletters, directories, and research on management consulting. The survey found that the Big Five accounting firms have the largest practices. However,...
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Letters to the Editor
DON'T FORGET ELECTRONIC FILING James Woehlke in his article "The Future of Tax Practice" in the May 1998 CPA Journal did not mention the electronic filing of tax returns. This is the biggest area of expansion afforded to a tax practitioner. Many CPAs...
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Mission Matters
A good mission statement captures an organization's unique and enduring eason for being, and energizes stakeholders to pursue common goals. It also enables a focused allocation of organizational resources because it compels a firm to address some tough...
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Mortage Interest Deductible by Beneficial Owner of Property
Can a taxpayer deduct mortgage interest paid with respect to a residence owned by someone else who is also the only person named as a borrower on the mortgage? In a recent tax court decision, the taxpayers were allowed such a deduction on the particular...
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New York Requires Combined Reporting for Trademark Licensing Subsidary
The New York Division of Tax Appeals (DTA) has held that a New York company may be required to file a combined report with its Delaware trademark licensing subsidiary (Burnham Corporation, DTA No. 814531, 7/10/97). This determination addresses the issue...
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Obstacles to Fair and Comparable Reporting among Not-for-Profits
Unfortunately, the credibility of a not-for-profit is tied much too closely to a set of flawed relationships and assumptions. Few would deny that magazines, regulators, and, consequently, the public point first to the amount of money spent on fund-raising...
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PBGC Extends Deadlines and Relaxes Certain Penalities
Pension Benefit Guaranty Corporation (PBGC) issued final rules on November 7, 1997 with respect to the filing, distribution, and post-distribution certification deadlines associated with standard terminations of single-employer defined benefit plans....
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Roth Conversions after 70 1/2 Some Seniors Face Obstacles
Amajor problem has developed for some IRA owners who have passed their required beginning date (RBD). The RBD is the April 1st after the calendar year in which a taxpayer turns 7012 years old. This is the date that mandatory distributions from IRAs must...
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Supplemental Needs Trusts Offer Planning Options for the Disabled
THE PRIMARY PURPOSE OF THE SUPPLEMENTAL NEEDS TRUST IS to pay the disabled person's bills without jeopardizing that individual's eligibility for public benefits. Supplemental needs trusts are useful planning tools for qualified disabled individuals....
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Supreme Court Overrules Ben Franklin: Collection of Federal Tax Liens Are Not Certain
In 1789, Ben Franklin wrote "in this world nothing can be said to be certain, except death and taxes." He may have been referring to the common law prerogative that was exercised by the English Crown, and later enacted into U.S. Law in 1797 as the Federal...
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The Alaska Trust Act
The old adage, "north to Alaska," is as appropriate today as anytime in the past. Specifically, the new Alaska Trust Act allows Alaskans and residents of other states to establish perpetual trusts in Alaska for the benefit of themselves and their families....
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The Federal Accounting Standards Advisory Board
Which organization provides the accounting standards for the United States government to follow in the preparation of its consolidated financial statements? FASB? GASB? No, the standards established for this purpose are those promulgated by the FASAB...
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The New Uniform Accountancy Act
One of the major initiatives affecting professional practice to emerge in recent years is the proposed Uniform Accountancy Act (UAA). The UAA grew out of an agreement between the American Institute of CPAs (AICPA) and the National Association of State...
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Using the Internet to Promote Your Practice
Establishing a web site can be an excellent way to promote and publicize your firm. Some 30 million people now have access to the web, and new users join the ranks daily. Before heading down the information superhighway, it's important to establish the...
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What Form of Ownership Is Best?
One of the first major problems in the establishment of a business organization is choosing the best form under which to operate. Undoubtedly, consultants are often called upon for advice on selecting the best form of operation. From the Federal income...
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