Practice management

The Senate Finance Committee continued its examination of whether to raise taxes on the earnings of managers of private equity firms and hedge funds by looking at the impact of carried interest taxation on pension funds.

Two upstate New York CPA firms are merging, with the Rochester-based firm of Bernardi & Russo joining forces with Buffalo-based Freed, Maxick & Battaglia.

Small businesses added 44,000 jobs in the United States in August, according to a new report, but large companies shed 6,000 jobs last month, bringing the total number of new jobs to 38,000.

The House Ways and Means Committee held hearings on proposals to raise taxes on managers of private equity firms and hedge funds, and to combat the expanding impact of the alternative minimum tax, as well as listening to testimony about the impact of the Bush tax cuts.

CPA firms saw big gains in both income and fees last year, thanks to the demand for Sarbanes-Oxley compliance services, according to a newly released survey.

Relatively few taxpayers are making use of the Advanced Earned Income Tax Credit, but many of those who do receive the AEITC do not comply with the requirements of the program, according to a government report.

President Bush made several proposals late last week to relieve homeowners from the burden of the imploding mortgage market, just in time to grab Congress's attention as it returns this week from summer recess.

The federal government is itself a tax delinquent, owing approximately $45 million in employment taxes, according to a report from a Treasury Department watchdog.

House Ways and Means Committee Chairman Charles Rangel, D-N.Y., plans to hold a hearing on fairness and equity in the Tax Code.

It’s nice to see that CPAs and their firms are doing very well. According to the just-released 2007 Rosenberg MAP Survey, firms with net fees over $2 million enjoyed annual net fee growth of 11.4 percent in 2006, compared to 9.7 percent in 2005. The average income for partners in these firms, according to the survey, is $350,000.

Two high-ranking senators are calling for the Government Accountability Office to investigate the growing problem of tax fraud related to identity theft and how it contributes to the tax gap.

The Internal Revenue Service introduced a Voluntary Closing Agreement Program that will help financial firms avoid harsh penalties for violating federal tax laws on arbitrage investment restrictions for municipal bonds.

Three accounting firms are expanding their presence in California and Florida.

The Internal Revenue Service appointed four people to high-ranking positions at the agency.

Rep. John Dingell, D-Mich., said he plans to issue a proposal when Congress returns from recess that would impose stiff new taxes on gasoline and end the mortgage interest tax deduction on "McMansions," or homes greater than 3,000 square feet, as a way to discourage over-consumption of fuel.

The Internal Revenue Service has problems with its tax return preparation assistance, but still offers helpful advice with tax laws, said a report issued by a Treasury Department watchdog group.

Sen. Charles Schumer, D-N.Y., has written letters to the Big Four accounting firms asking what they are doing to let their financial institution clients know about waivers on mortgage accounting standards that could let borrowers refinance their loans.

If you didn’t see the WebCPA news item last week or the write-up in the 08/17/07 AICPA News Update e-mail newsletter, I’m telling you about the subject of those two pieces now. It is the AICPA’s Professional Ethics Executive Committee’s exposure draft that proposes a new Interpretation 101-17, Networks and Network Firms, under Rule 101, Independence, of the AICPA Code of Professional Conduct. I suggest you read the exposure draft.

CPA firm WithumSmith+Brown has outgrown its current location in downtown New Brunswick and is moving to a new location around the corner.

The Internal Revenue Service is encouraging more midsized companies to file their corporate returns electronically as the Sept. 17 deadline approaches for calendar-year filers who asked for extensions.