Practice management

After watching the country's largest home-mortgage loan giants cope with restatement fallout from accounting scandals for years, reports say that the U.S. Treasury might back away from its position to set limits on the portfolios of Fannie Mae and Freddie Mac.

The world is flat, according to the best-selling book by Thomas Friedman. He writes about technological changes that are linking people and breaking open business opportunities at warp speed. That's certainly the case for forward-looking CPAs, especially those in mid-market firms. Just a few years ago, it was unthinkable that a midsized CPA firm could compete and win multi-location opportunities from prospects with operations outside of the U.S.However, more midsized businesses now have operations around the globe. Additionally, what's changed is a result of client dissatisfaction with treatment or results from larger firms. In other instances, regulatory-driven arm's-length relationships between auditors and clients have generated new interest in secondary providers.

SUIT FILED AGAINST PLANS TO REIMBURSE PHONE TAX: A class-action lawsuit has been filed challenging the Internal Revenue Service's plan to reimburse taxpayers for their past three years' worth of long-distance phone taxes.The lawsuit claims that small businesses and low-income taxpayers will be shortchanged, or completely excluded, from the refunds.

So many tax provisions these days are effective so far out into the future, practitioners can't quite figure out how to address them. File them away on a long-term calendar? Start preparing for them immediately? Ignore them?In dealing with the recently passed Pension Protection Act of 2006, where the majority of provisions are not effective until either 2008 or 2011, the answer varies considerably. This article offers some first-off-the-bat timelines to consider.

In many CPA firms, business development skills and techniques aren't even discussed until a manager is ready to move to partnership. And as they say, it's hard teaching an old dog new tricks.The ability to bring in new business for the firm is typically a condition of partnership, and yet firms aren't equipping their managers and senior managers with the skills they need to do so. Your staff is the future of your firm; give them the tools that they need to help build your client base and prepare them to become leaders.

The Internal Revenue Service has announced five director-level appointments in its Large and Mid-Size Business Division, which serves corporations, Subchapter S corporations and partnerships with assets greater than $10 million.New directors were named for four of the LMSB's five industries, as well as for the LMSB's pre-filing and technical guidance unit. Among the changes:

The selection by an entity of its company structure, its fiscal year and its method of accounting are the three main mechanisms that a company can employ in performing substantial tax planning, according to Nicholas Crocetti, CPA, a partner in CBiz Accounting Tax & Advisory."The concept of an accounting method is much broader than what many people believe," he said. "Most companies employ a number of accounting methods. First, they have an overall method of accounting - for example, the cash method, accrual or some form of hybrid method. Additionally, companies need accounting methods for every timing item they encounter in their business, such as how to account for inventory, bad debts, vacation pay and self-insured medical expenses."

As part of the recently signed pension bill, the Treasury Department and the Internal Revenue Service will have to better define what constitutes "good" condition for donations of clothing or household items.The IRS can deny deductions for donated items such as furniture, appliances, linens or electronics if the items aren't in appropriate condition.

A representative from the Justice Department told a Senate panel that the agency is satisfied with the tactics used by prosecutors to pursue corporate criminals.

Continuing with a push to help its own customers grow their business, Intuit Inc. will include a number of Google Inc. services aimed at boosting the online profile of small businesses in its QuickBooks 2007 product line.

Using one of dozens of scenarios, undercover government auditors were mostly satisfied with the levels of assistance they received at several of the Internal Revenue Service's Taxpayer Assistance Centers.

The Internal Revenue Service announced a record settlement for a long-running a transfer pricing dispute with pharmaceutical giant Glaxo SmithKline Holdings Inc. and the company's subsidiaries.

As previously announced, the Internal Revenue Service will soon begin charging user fees for the residency certification letters commonly used to avoid foreign value added taxes.

After months of increasing reports of investigations by both the Securities and Exchange Commission and academics, Congress is now examining the sometimes-questionable timing of stock options granted to executives.

A report from the Treasury Inspector General for Tax Administration estimates that computer programming woes cost the country more than the $200- to $300-million range originally estimated by the Internal Revenue Service.

The reasoning might be sound in the latest recommendations brought forward by the Taxpayer Advocacy Panel , but huge questions remain over how any of the panel's latest handful of suggestions might actually be executed.

Pitney Bowes Inc., a manufacturer of postage meters, mailing systems and other equipment, agreed to a $1.1 billion tax settlement with the Internal Revenue Service.

Recently, we asked marketers nationwide to share their firms' evaluation forms; we were surprised to learn that many respondents do not have a formal evaluation process similar to those that are conducted for their CPA staff.Instead, they said that they summarize their efforts, and offer a report card to firm management. Unfortunately, these subjective reporting efforts frequently feel inadequate, because they are created without much partner support or understanding of the marketing process, its value and its results.

Who needs risk management? All firms do.The passage of the Sarbanes-Oxley Act of 2002 has resulted in significant legal and regulatory changes affecting auditors of publicly traded companies. Given the current litigious climate, the inherent danger of auditing nano- and small-cap firms, and most firms doing larger and larger engagements, risk management may soon become one of the top five issues in managing an accounting practice.

IRS LAUNCHES ONLINE PAYMENT AGREEMENTS: Tax professionals will help launch a new system allowing many individuals who owe delinquent federal taxes to apply online for a payment agreement, the Internal Revenue Service announced.The IRS is implementing the new Online Payment Agreement application through national partnerships with the tax professional community. The application will eliminate the need to write or call the IRS toll-free number for assistance. The goal of the program is to provide an easier way for taxpayers to voluntarily resolve tax liabilities.