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. 225, No. 4, May

Bipartisan Budget Act Contains Tax Provisions: Tax Relief for Victims of California Wildfires, Extension of Many Lapsed Temporary Incentives, and a New Short-Form Return for Seniors Are among the Act's Revenue Provisions
The Bipartisan Budget Act of 2018, P.L. 115-123, enacted in February, contains many tax provisions, including retroactive extension of a number of tax provisions for 2017 only and relief for victims of the California wildfires. CALIFORNIA WILDFIRE...
Carry Your Losses (Further) Forward
Although P.L. 115-97, known as the Tax Cuts and Jobs Act (TCJA), cut the top corporate income tax rate from 35% to 21% and provided a 20% deduction for qualified passthrough and sole proprietor-ship business income (see "Mechanics of the New Sec. 199A...
CEO of Tax-Exempt Organization Hit with Excess Benefit Taxes: The Association for Honest Attorneys' Founder Used the Organization's Bank Account for Personal Expenses and Cash
The Tax Court held that a taxpayer who was the CEO and a member of the board of directors of a tax-exempt organization engaged in excess benefit transactions that were not corrected within the required period. As a result, the taxpayer was subject...
Corporation's Self-Leasing Rental Expense Deduction Denied: The Tax Court Holds That the Payments Were Not for Rent
The Tax Court ruled that a corporation was not entitled to its claimed deduction for rent paid to its sole shareholder and employee for using part of his personal residence as an office. The court noted that the corporation did not produce any evidence...
Customizing Talent Development: Walter & Shuffain's Homegrown Leadership Program Helps the Firm Advance Its Most Promising People
Fast-growing firms must confront the challenge of keeping pace with succession and staff development demands. Boston-based Walter & Shuffain PC is meeting this challenge with a customized leadership and staff development program that sets a framework...
Establishing Quality Control in a Tax Practice
When managing a tax practice in a CPA firm, one of the primary goals is to establish and comply with best practices by operating with due professional care. Tax practices come in all shapes and sizes, where best practices may be interpreted and implemented...
Giving Employees Skin in the Game: Educating Employees in a Fun Way about Profitability Paid Dividends for One CFO and Her Company
Many finance leaders are challenged by how to convey financial information to nonfinancial employees in interesting and meaningful ways. Because of this, employees can have varying degrees of interest and concern regarding their employer's profitability....
IRS Pursuing Self-Employment Taxes from LLC Members: The Service Has Been Challenging LLC Members on Their Treatment of LLC Income as Not Subject to Self-Employment Taxes
Ambiguity in the tax law often provides opportunities for taxpayers. For nearly three decades, how earnings of a limited liability company (LLC) are reported for self-employment tax purposes has been unsettled. (LLC in this article also refers to limited...
Leases: A Portfolio Approach
Shifting application from an individual lease to a portfolio level offers practicality and cost minimization for companies adopting FASB's new lease accounting standard. Here are tips for applying a portfolio approach: Assess the lease population....
Mechanics of the New Sec. 199A Deduction for Qualified Business Income: Here's a Step-by-Step Guide to Calculating the New Deduction for Passthrough Businesses and Determining Who Qualifies for the Break
One of the more important provisions in P.L. 115-97, known as the Tax Cuts and Jobs Act, enacted Dec. 22, 2017, is new Sec. 199A, the deduction for qualified business income (QBI). Sec. 199A allows a deduction for up to 20% of QBI from partnerships,...
Round Numbers: A Fingerprint of Fraud; Auditors and Forensic Accountants Are among the CPAs Who Can Benefit from an Understanding of When the Overuse of Certain Numerals Might Be a Red Flag for Malfeasance
Three types of fraud schemes are of special interest to CPAs--financial statement fraud, occupational fraud, and bribery. Many, but not all, of these types of fraud schemes require the fraudster to invent a series of fraudulent numbers in the execution...
The Trouble with Nondisclosure Agreements in Attest Engagements: Agreeing to Keep Certain Items Confidential May Result in a Breach of Professional Standards
Client requests for confidentiality agreements or nondisclosure agreements (NDAs) are becoming common in the accounting profession. CPAs receive NDA requests in connection with both exploratory discussions about future business relationships and as...
Understand Your Firm's Risk Profile
No service, industry, area of practice, or CPA is immune from a professional liability claim. Fortunately, information is power. This infographic provides data that CPA firms can use to evaluate the risks in their practice and help address them appropriately....
Virgin Islands 'Cover Over' Partial Return Transmittal Constitutes IRS Filing: The Tax Court Finds an Assessment Is Barred by the Statute of Limitation
The Tax Court held that the Virgin Islands Bureau of Internal Revenue's (VIBIR's) sharing of information with the IRS amounted to the filing of a return. Specifically, the transmittal of Form 1040, U.S. Individual Income Tax Return, although without...
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