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. 206, No. 3, September

Abusive Insurance and Retirement Plans: Single-Employer Section 419 Welfare Benefit Plans Are the Latest Incarnation in Insurance Deductions the IRS Deems Abusive
EXECUTIVE SUMMARY * Some of the listed transactions CPA tax practitioners are most likely to encounter are employee benefit insurance plans that the IRS has deemed abusive. Many of these plans have been sold by promoters in conjunction with life...
Audit Quality Leader: EBSA's Chief Accountant Discusses Major Changes Afoot in Employee Benefit Audits
[ILLUSTRATION OMITTED] Ian Dingwall is the chief accountant of the Department of Labor's Employee Benefits Security Administration (EBSA). Dingwall is EBSA's primary adviser on accounting and auditing issues stemming from the agency's responsibilities...
FLPs Revisited
The Tax Court ruled, contrary to the IRS's argument, that the step transaction doctrine did not apply where gifts of interests in a family limited partnership (FLP) were made only six days after the funding of the partnership with stock. However, the...
Full Charge on Alternators
The Tax Court required an auto parts remanufacturer to include in income charges it normally waived in exchange for used parts from its customers. In so ruling, the court underscored that where a taxpayer's accounting method does not clearly reflect...
Hiring Forensic IT Specialists: Ask the Right Questions
Understanding forensic IT specialists' capabilities and defining their roles is critical to a successful engagement. Take these steps to ensure the candidate you're considering is fight for the assignment: * Determine if the engagement will be a...
How Reasonable Is Your Royalty?
EXECUTIVE SUMMARY * In recent years, focus has shifted to the increased value of intangible assets. As such, competition, sometimes unlawful, has resulted in extensive litigation and/or negotiation between parties for the use of intangibles. ...
Is 2008 a Good Year to Elect out of Installment Sale Accounting?
[ILLUSTRATION OMITTED] The sale of investment real estate is often a large taxable transaction, frequently involving deferred payments. Installment sale accounting is automatic under IRC [section] 453, although taxpayers may elect out and recognize...
Knowing but Innocent
The Tax Court held that the IRS abused its discretion in denying a stay-at-home mom's request for innocent spouse relief because it did not consider all of the relevant factors. Chrystina Nihiser filed for relief after her husband stopped paying their...
Lack of Records Equals Recapture
The Tax Court held that a taxpayer had to recapture the majority of his prior-year section 179 deduction since he failed to show that the business use of his GMC Suburban remained above 50% in the following tax year. His testimony of the business use...
Making the Invisible Visible: Identifying the Enablers of Future Value
Recent research confirms that while most executives agree that intellectual capital is critical to the future success of their businesses, their approaches to measuring and managing this performance enabler are either poor or nonexistent. This has...
Managing Multiple Identities: Determine the Best Identity and Access Management Solution for Your Organization
EXECUTIVE SUMMARY * Identity management addresses the difficulties encountered when one physical user has separate user IDs and passwords on multiple systems and applications. Access management addresses the challenges associated with the specific...
Organizations Involved
In April 200l, the International Accounting Standards Board (IASB), an independent accounting standard-setter based in London, assumed accounting standard-setting responsibilities from its predecessor body, the International Accounting Standards Committee....
SEC Leadership in International Effort
The U.S. Securities and Exchange Commission has for many years been a strong leader in international efforts to develop a core set of accounting standards that could serve as a framework for financial reporting in cross-border offerings. R has repeatedly...
The Last Word
As a tax and financial adviser to professional athletes, I enjoy working with them and helping them manage their wealth. Their issues are not unlike yours and mine, really, only on a larger scale. They need to learn to budget their money, be committed...
The Taxpayer Advocacy Panel: An Opportunity to Collaborate with the IRS: Here's Another Way CPAs Can Serve the Taxpaying Public at the Grass-Roots Level
EXECUTIVE SUMMARY * The Taxpayer Advocacy Panel (TAP) of the IRS is another way CPAs can serve their clients and all taxpayers, by listening to their concerns and recommending improvements to the Service. * Some of the many measures the TAP has...
Top Things to Know about Roth 401(k)s
Roth IRAs have become popular retirement vehicles, but the low contribution limits and participant income limitations have prevented many people from taking advantage of them. The Economic Growth and Tax Relief Reconciliation Act of 2001 provided for...
Two Sides of the Story
Growing interest in the global acceptance of a single set of robust accounting standards comes from all participants in the capital markets. Many multinational companies and national regulators and users support it because they believe that the use...
What CPAs Need to Know
The increasing acceptance of IFRS, both in the United States and around the world, means that now is the time to become knowledgeable about these changes. Most CPAs will somehow be affected. Once a critical mass of non-U.S., companies in a certain...
What's in Their Wallet?
The Tax Court rejected an attempt by credit card issuer Capital One to retroactively defer its recognition of income from fees for late payments of card balances. Capital One sought to do so by taking advantage of a law change allowing such payments...
Worldcom Shareholder's Loss Not Theft
Criminal conviction of corporate officers for misconduct is not enough to allow shareholders to claim a theft loss, the Tax Court ruled. In cases where a shareholder's stock becomes worthless due to corporate theft, it would generally be advantageous...
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