A roundup of the pre­vi­ous month’s news

Accounting Today - - Contents -

The Se­nate Fi­nance Com­mit­tee nar­rowly

voted on party lines to con­firm Pres­i­dent Trump’s nom­i­na­tion of tax at­tor­ney Charles Ret­tig as the next com­mis­sioner of the In­ter­nal Rev­enue Ser­vice. The com­mit­tee had held a con­fir­ma­tion hear­ing at the end of June where it heard tes­ti­mony from Ret­tig, who was asked about Trump’s re­luc­tance to re­lease his tax re­turns. Ret­tig is a tax prac­ti­tioner at the Bev­erly Hills law firm Hochman, Salkin, Ret­tig, Toscher & Perez PC, who has spent most of his ca­reer rep­re­sent­ing clients be­fore the IRS.

Pub­lished re­ports said that Deloitte CEO

Cathy En­gel­bert hasn’t been nom­i­nated for a sec­ond four-year term — though it is too early in the process to say that she won’t be able to serve again, ac­cord­ing to the Big Four firm. An email sent to part­ners at the firm in­formed them En­gel­bert hadn’t been renom­i­nated by the board, ac­cord­ing to The Wall Street Jour­nal. En­gel­bert was elected to lead the firm in 2015, mak­ing her the first fe­male CEO of a Big Four firm in the U.S.

Na­tional Tax­payer Ad­vo­cate Nina Olson

re­leased her mid-year re­port to Congress, spot­light­ing her top ar­eas of con­cern, par­tic­u­larly how the new tax over­haul will be im­ple­mented. She noted that the most sig­nif­i­cant chal­lenge that the IRS faces in the year ahead is putting in place the Tax Cuts and Jobs Act of 2017, which re­quires pro­gram­ming an es­ti­mated 140 sys­tems, writ­ing or re­vis­ing some 450 forms and pub­li­ca­tions, and is­su­ing guid­ance on dozens of pro­vi­sions in the new tax law. Olson is con­fi­dent the IRS is up to the task — but she re­peated her long­stand­ing con­cern that IRS fund­ing cuts have un­der­mined its abil­ity to pro­vide high-qual­ity tax­payer ser­vice and to mod­ern­ize its ag­ing com­puter in­fra­struc­ture. She noted that IRS fund­ing has been re­duced by 20 per­cent since fis­cal year 2010 on an in­fla­tion-ad­justed ba­sis. Olson also high­lighted the IRS’S cus­tomer ser­vice prob­lems, say­ing that the ser­vice uses nar­row per­for­mance mea­sures that sug­gest the agency is per­form­ing well but don’t re­flect the tax­payer ex­pe­ri­ence. For ex­am­ple, the IRS re­ports it achieved a “level of ser­vice” on its toll-free phone help lines of 80 per­cent dur­ing the 2018 fil­ing sea­son, which is gen­er­ally in­ter­preted to mean IRS tele­phone as­sis­tors re­sponded to 80 per­cent of tax­payer calls. In fact, Olson’s re­port pointed out IRS tele­phone as­sis­tors an­swered only 29 per­cent of the calls the IRS re­ceived.

The IRS and the Trea­sury Depart­ment

un­veiled a draft ver­sion of the post­card-size Form 1040 that was promised from last year’s tax re­form ef­fort. For the 2019 tax sea­son, the shorter Form 1040 will re­place the cur­rent Form 1040, along with the Form 1040A and the Form 1040EZ. The IRS plans to work with the pro­fes­sional tax com­mu­nity to fi­nal­ize the stream­lined Form 1040 over the sum­mer. Al­though the form is post­card-size, it still asks for a tax­payer’s So­cial Se­cu­rity num­ber, so it should still be mailed in an en­ve­lope to pro­tect tax­payer pri­vacy. Also, while the form it­self has been short­ened, it may not ac­tu­ally sim­plify the tax prep process, since it now re­quires at­tach­ing as many as five other sched­ules, in ad­di­tion to Sched­ule A for tax­pay­ers who choose to item­ize.

Separately, the IRS is­sued a draft of a new Form W-4 that drew strong re­sponses from both the Amer­i­can In­sti­tute of CPAS and the Na­tional As­so­ci­a­tion of En­rolled Agents.

The Se­cu­ri­ties and Ex­change Com­mis­sion

de­cided to ex­pand the num­ber of com­pa­nies that can qual­ify for scaled­back dis­clo­sure re­quire­ments, with the com­mis­sion­ers vot­ing to adopt amend­ments to the “smaller re­port­ing com­pany” def­i­ni­tion, thereby in­creas­ing the num­ber of com­pa­nies that don’t need to meet the stiffer dis­clo­sure rules re­quired of larger com­pa­nies. The new smaller re­port­ing com­pany def­i­ni­tion al­lows a com­pany with less than $250 mil­lion of pub­lic float to pro­vide scaled dis­clo­sures, com­pared to the $75 mil­lion thresh­old un­der the pre­vi­ous def­i­ni­tion of the term. The fi­nal rules ap­proved by the SEC also ex­pand the def­i­ni­tion to in­clude com­pa­nies with less than $100 mil­lion in an­nual rev­enues if they also have ei­ther no pub­lic float or a pub­lic float that is less than $700 mil­lion. For now, the SEC isn’t chang­ing the thresh­old in the “ac­cel­er­ated filer” def­i­ni­tion that re­quires, for ex­am­ple, that fil­ers pro­vide the au­di­tor’s at­tes­ta­tion of man­age­ment’s as­sess­ment of in­ter­nal con­trol over fi­nan­cial re­port­ing.

The com­mis­sion also voted to al­low In­line XBRL as an amend­ment to its re­quire­ments for com­pa­nies and funds to file their fi­nan­cials in Ex­ten­si­ble Busi­ness Re­port­ing Lan­guage, aim­ing to im­prove the qual­ity and ac­ces­si­bil­ity of XBRL data. In­line XBRL in­volves em­bed­ding XBRL data di­rectly into the fil­ing so dis­clo­sure doc­u­ments are eas­ier to read by both com­put­ers and hu­man be­ings. The SEC has been pi­lot test­ing IXBRL tech­nol­ogy af­ter propos­ing a rule over a year ago to re­quire com­pa­nies to use the tech­nol­ogy in their op­er­at­ing com­pany fi­nan­cial state­ment in­for­ma­tion and mu­tual fund risk/re­turn sum­maries.

Cor­rec­tion In “Wealth Mag­nets: The Top 150 CPA

Firms by AUM,” ( June, page 11), we gave the wrong lo­ca­tion for Siena Wealth Ad­vi­sors; they are in Grand Ledge, Michi­gan.

All re­sponses from a July 2018 sur­vey of the Ac­count­ing To­day Ex­ec­u­tive Re­search Coun­cil, an on­line panel of over 1,500 ac­count­ing pro­fes­sion­als. The ACI was cre­ated in part­ner­ship with: ADP and the ADP logo are regis­tered trade­marks of ADP, Inc.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.