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. 61, No. 10, October

Accountant-Be Careful What You Write
Sometimes what an accountant puts in writing can cause more problems in litigation than what he fails to put in writing. For years, accountants have been cautioned to be sure to put their retainer agreements in writing (engagement letters), so that there...
Another 'Final Word' in Estate Planning
Before delving into IRC Sec. 2702, the latest final word involving the use of trusts in estate planning, a basic understanding of its evolution, is necessary. In its formative years, the estate freeze was a collection of various concepts. The buy-sell...
A Review of the FASB Supermajority Rule
The trustees of the Financial Accounting Foundation (FAF), by a vote of 11-5, recently enacted a requirement to increase the necessary votes for FASB to adopt a Statement of Financial Accounting Standards (SFAS), or to issue an exposure draft. Previously,...
Becoming a Financial Planning Specialist: What the APFS Designation Is All About
Personal financial planning (PFP) remains a thriving field of practice for CPAs, with many enjoying a healthy profit and solid client base. You just have to know how to play the game to be a winner. That's where the Accredited Personal Financial Specialist...
Book Review: IRS Practice and Procedure Manual, Forms and Analysis, 1991 Edition
As the owner of a small firm and a CPE instructor, I am always looking for practice aids that make my job easier. My job is to communicate tax and accounting information to clients and other accountants who look to me as the expert in a particular subject.I...
Client Presentations Made Easy with Aldus Persuasion
Did you ever wish that you could make a presentation to a client that would really have marketing oomph? Well Aldus's Persuasion version 2.0 is the way to do it. Available in both PC and Macintosh versions, Persuasion provides you with the ability to...
Client Representation Letters: Optional or Required?
(Editors Note: This article is a continuation of a series that focuses on how to improve the quality of practice in your firm by complying with professional standards. Quality takes effort but it has its own rewards. Not only will it result in a successful...
Determination of Administration Expense Is Question of Federal Law
The U.S. Court of Appeals for the Fourth Circuit has joined the Second, Fifth, and Ninth Circuits in holding that federal law controls in the determination of whether an expenditure is deductible as an administrative expense (Love Est. v. Comr., 91-1...
Dickman Expanded to Cover Failure to Exercise Right of First Refusal
The IRS keeps trying to expand the scope of the Dickman decision (465 U.S. 330, 1984) in which the Supreme Court ruled that interest-free loans resulted in taxable gifts. Recently, it has ruled in PLR 9117035 that a son made a gift to his father by failing...
Estate Tax Freezes - in Terms You Can Use with a Client Who
RRA 90 had major impact on estate planning by retroactively repealing the estate freeze provisions of IRC Sec. 2036(c) and substituting in its place a new Chapter 14. To best understand the effect of this change, we should review where we were before...
Estate Tax Freezes - in Terms You Can Use with a Client Who Is a Candidate
RRA 90 had major impact on estate planning by retroactively repealing the estate freeze provisions of IRC Sec. 2036(c) and substituting in its place a new Chapter 14. To best understand the effect of this change, we should review where we were before...
Ethics in the Workplace and in the CPA Firm
A large problem looming in American business is unethical behavior. The violation of federal regulations by a major securities brokerage firm involving the trading of government securities has shocked the financial community and may even lead to a significant...
Here's an Expert System-Based Support Tool for Making Accounting Decisions
In 1987, the AICPA published a management advisory service special report entitled, An Introduction to Artificial Intelligence and Expert Systems. The goal of the report was to present information about expert systems, including: basic components, opportunities...
Luxury Tax
One of the more controversial provisions passed by Congress in its attempt to reduce the burgeoning federal deficit was the luxury excise tax. The tax, introduced as part of RRA 90, levies a 10% surcharge on certain high-priced items to the extent that...
Maquiladoras: Should U.S. Companies Run for the Border?
The pros and cons about establishing a low cost manufacturing and assembly plant in Mexico are presented in this article. The authors discuss the conditions for organization, taxation, import and export requirements, and other factors that will be of...
Mortgage Interest
With the passage of TRA 86, tax practitioners and their clients have faced substantial tax law changes. In particular, the phase-out of the personal interest deduction has moved the mortgage interest deduction into the limelight as an important tax planning...
New Jersey Mail Order Outfit Subject to New York Sales Tax
Foreign mail order companies are only required to collect New York Sales Tax when a sufficient nexus exists between the company and New York State. In a recent Advisory Opinion, TSB-A-90(49)S, New York State determined that a New Jersey mail order company...
Nonresident Aliens and Foreign Corporations May Be Subject to Full Income Taxes on Their Gross U.S. Receipts
The IRS has published final regulations, Secs. 1.874-1 and 1.882-4, which predicate the ability of nonresident aliens and foreign corporations to claim deductions and credits against their U.S. effectively connected income on filing a true and accurate...
Practitioner's Guide to Making Student Presentations; Recruiting: Critical Success Factors
As an accounting practitioner, you may be called upon to make an on-campus presentation to students. The invitation may come from a professor who wants your "real world" perspective to complement the "theoretical" approach often found in textbooks. Perhaps,...
Real Estate Workouts - Problems and Opportunities for the CPA
The declining real estate market of the 1990s presents a unique opportunity for CPAs to offer business advice and provide accounting services to clients facing real estate foreclosure. The authors offer a comprehensive review of what is happening in...
Record Keeping for U.S. Corporations with Foreign Ownership
The IRS wants its fair share of tax on international activities and trading. To achieve that end the IRS must know the extent of the transactions between U.S. corporations and related foreign entities New final regulations set forth the record keeping...
Redeeming Corporate Stock to Take Advantage of 1991's Lower
The tax rules for 1991 present an opportunity to taxpayers who are seeking a more favorable environment in which to make a partial corporate liquidation and achieve the benefits available as a capital gain rather than a dividend. The transaction must...
Redeeming Corporate Stock to Take Advantage of 1991's Lower Rates
The tax rules for 1991 present an opportunity to taxpayers who are seeking a more favorable environment in which to make a partial corporate liquidation and achieve the benefits available as a capital gain rather than a dividend. The transaction must...
Taxpayers Claiming Florida Domicile
A number of cases have come before the New York State Division of Tax Appeals regarding retired New York taxpayers who maintain homes in both New York and Florida, but claim Florida as their domicile. New York State's Audit Division has been aggressively...
The Impact of a Client's Own Actions
Many claims that are asserted against accountants are brought by the accountant's own client seeking to recover damages. This could result from a client-employee embezzlement or as a result of a failure to pay taxes. Occasionally, such claims are the...
The Impact of SFAS 88 Transactions: Puff or Economic Reality?
Is there a loophole? Can unrecorded amounts be used to boost earnings when needed? This may be the situation in certain companies probably not foreseen when SFAS 88 became effective. The authors' research shows how reorderings of pension obligations...
Where Would We Be with It?
The preceeding article presented the immediate background and the discussions surrounding the change to a supermajority for FASB voting. This article examines the history of majority requirements by the prior authoritative boards and what the state of...