• The Taxpayer First Act and Innocent Spouse Claims in the Tax Court

    The federal Taxpayer First Act, enacted July 1, 2019, altered the procedures governing innocent spouse relief in Tax Court1 by requiring practitioners to submit all available information to the IRS during an audit. Specifically, Section 1203 amended Internal Revenue Code (IRC) Section 6015 to add a new subsection – (e)(7) – that provides for a de novo standard of review for a Section 6015 determination by the IRS based on “the administrative record established at the time of the determination” and “any additional newly discovered or previously unavailable evidence.” Taxpayers who wish to assert an innocent spouse claim for tax or penalty relief from liability on a joint return should be advised to make a complete disclosure of all relevant facts during the audit.
  • ASU 2016-15, 2016-18, and the Statement of Cash Flows

    Two Accounting Standards Updates (ASUs) from the Financial Accounting Standards Board (FASB) in 2016 may require changes to Dec. 31, 2019, financial statements: ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments, and ASU 2016-18, Restricted Cash.
  • The Next Management Breakthrough: EPM, Non-GAAP Measures, and KPIs in a Digital World

    Tremendous confusion persists about how to successfully implement non-GAAP measures and key performance indicators within an organization for assessing business performance. In this article, we aim to bring more clarity on this topic to CPAs involved in enterprise performance measurement initiatives.
  • Leading Your Finance Team Into the Future

    Finance is on the precipice of drastic transformation. PwC describes the finance function of the future as being smaller than today’s, with resource allocation flipped on its head: transaction processing, reporting, compliance, and other rules-based activities will become increasingly automated, shifting the focus to analysis, decision support, and strategic insight. The major driver of this trend is rapid and rampant technology growth.
  • International Tax Planning in the Changing BEPS Landscape

    In response to a number of highly publicized governmental hearings regarding how certain multinationals (including Apple, Hewlett-Packard, and Starbucks) achieve low effective tax rates on their foreign earnings, in 2013 the Organisation for Economic Co-operation and Development, an international economic organization of 34 countries, undertook a major review of international tax policy and best practices via the Base Erosion and Profit Shifting project.
  • Tax Planning for U.S. Operations of Foreign-Owned Enterprises

    This column discusses the key organizational, operational, and repatriation tax issues of foreign-owned U.S. enterprises. We start from the assumption that the foreign corporation is entitled to the benefits available under a U.S. income tax treaty (the tax treaty).
  • Tax Treatment of Pass-Through Income by Trusts

    Many tax practitioners who work with high-net-worth families are asked to prepare fiduciary income tax returns for trusts. Preparing fiduciary returns for trust accounts that are invested in basic stocks, bonds, and cash is complicated enough.
  • Pa. Conversion Statute Could Spur Reorganizations

    While reviewing a possible re-organization involving a traditional merger, savvy consultants consider whether the restructuring could be accomplished more efficiently through one or more corporation-to-limited liability company conversions.
  • California Malpractice Case Highlights Audit Defenses

    When an audit client is exposed as a corrupt enterprise and a court-appointed receiver pursues claims against the auditors for malpractice and aiding and abetting, what defenses are available to the auditor? There are some, but you must make sure they are strong and in place at the beginning of an engagement.
  • Zero-Based Budgeting: Building for Success Again, and Again, and Again

    There are three ways for a company to increase economic value: increase revenue, cut costs, or do a combination of the two. But a number of “growth-starved” companies have moved toward zero-based budgeting (ZBB) in an effort to stay profitable.
  • IRC 384: Buying a Winner yet Still Losing Out

    You may be familiar with Internal Revenue Code Section 382 of the tax code, which limits an acquiring corporation’s ability to use certain preexisting tax attributes once the target corporation experiences an “ownership change.” The triggering of Section 382 can raise some rather complex issues, and may even serve as a potential roadblock to profitable, tax-paying corporations who are eager to reduce their tax burden by attempting to purchase the tax attributes of “loss corporations.”
  • Can a Value-Added Tax Put Our Debt in Order?

    The projected deficits for the next 25 years raise concern about how long we can continue deficit spending. But is the country ready for a serious debate about an overhaul of our tax system?
  • Intentional Use of a Defective Grantor Trust in Estate Planning

    One commonly used vehicle in gift and estate planning is the intentionally defective grantor trust, or IDGT. An IDGT is a separate and distinct entity from the individual transferor (grantor) who establishes the trust. The transfer in trust is treated as incomplete or “defective” by using strategies that cause the grantor to continue to be the owner for income taxes.
  • Means, Motive, Opportunity: It’s Always the Ones You Trust

    Any closely held business that operates without adequate segregation of duties is exposed to the risk of embezzlement. This is hardly a revelation. In fact, it’s Bookkeeping 101. Yet, time and again, this vulnerability is exploited to devastating effect. There is an odd, overarching irony to it all.
  • Finance and Operating Leases under ASC Topic 842

    A new Financial Accounting Standards Board (FASB) leasing standard is finally available, and it likely will impact many companies in a wide array of industries. The major change in ASC Topic 842 is to put most leases, which reflect the right of the lessee to secure the asset in accordance with the underlying contract, on the lessee’s balance sheet instead of only in the footnote disclosures. This will affect corporate balance sheet and income statement ratios, the nature of corporate financing, and the leasing industry.
  • Understanding Pennsylvania’s Corporate Tax Add-Back Notice

    On Feb. 19, 2016, the Pennsylvania Department of Revenue issued Information Notice Corporation Taxes 2016-01. The notice provides guidance regarding the add-back provision enacted in July 2013. Effective for tax years beginning after Dec. 31, 2014, the add-back disallows certain Pennsylvania corporate net income tax deductions for transactions between affiliates involving intangible expenses and costs.
  • Integrating Higher-Order Thinking Skills in the Classroom

    Higher-order thinking skills are essential for success in today’s workplace. According to a survey in The Wall Street Journal, more than half of college recruiters responded that a combination of critical thinking, problem-solving, and independent thinking were skills that college graduates needed to improve the most. The purpose of this column is to assist accounting educators in preparing students to succeed as accounting professionals by integrating higher-order thinking skills in the classroom.
  • Cloud Computing: Security and Risk Management

    Peter J. Kaye, CPA, and Robert G. Korbeck Jr. explain how cloud computing technology can help many types of companies, but urge those who choose to take the leap to understand the implications of faulty risk management.
  • Why Not-for-Profits Need Both Audit and Finance Committees

    When building a volunteer organization, optimizing volunteer resources and capitalizing on employee time are primary challenges. The common solution is to institute overarching committees of finance, nominating, programming, and fund-raising. Due to this committee consolidation, audit and financial reporting responsibilities are often added into the finance committee.
  • Beyond the Physical: Economic Nexus Developments

    With the advent of economic nexus, out-of-state businesses may now be subject to a state’s taxing jurisdiction merely by selling a threshold amount of goods or services into a state, with or without a physical presence in that state.
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