The Current Future of AMT

Via Investment News

The most current AMT patch exempts 26 million people from Alternative Minimum Tax, but is set to expire after 2009. So, as always, the future of the alternative minimum tax remains uncertain, Joseph W. Walloch writes in an InvestmentNews commentary.  It is unclear what Congress will do for 2010 and beyond. Congress is not expected to repeal the AMT altogether.

Filed under: AMT, Tax, Tax Legislation

How Will IFRS Effect the Tax Practice?

Via AICPA

It may be easy to assume that IFRS only applies to financial statement preparation services, but any switch from U.S. GAAP to International Financial Reporting Standards would require a review of the tax accounting policies and procedures of tax practices as well.  This article explores the potential impact of IFRS on the tax practice.

Filed under: IFRS

Exposure Draft Issued Proposing Revisions to Compilation and Review Standards

Via the AICPA

Based on recommendations form the Private Company Practice Section Reliability Task Force, the exposure draft includes three proposed standards:

- Framework and Objectives for Performing and Reporting on Compilation and Review Engagements

- Compilation of Financial Statements

- Review of Financial Statements

The full text of the exposure draft can be found here.

The PCPS task force recommended revising the standards to allow an accountant to issue a review report in situations where the accountant’s independence is impaired in connection with the performance of a nonattest service relating to the design or operation of an aspect of internal control over financial reporting.

According to the Journal of Accountancy article, significant changes to the standards would include:

• - The introduction the new terms such as moderate assurance, review evidence and review risk to the review literature to harmonize with international review standards.

• - A discussion of materiality in the context of a review engagement.

• - A requirement that an accountant establish an understanding with management regarding the services to be performed through a written communication, that is, an engagement letter.

• - The establishment of enhanced documentation requirements for compilation and review engagements.

• - Guidance for practitioners who are engaged to perform a compilation or review engagement when they have also been engaged to perform nonattest services.  The guidance includes reporting requirements for instances in which the accountant’s independence is impaired due to the performance of these services.

• - The ability for an accountant to include a general description in the accountant’s compilation report regarding the reason(s) for an independence impairment.

Barry Melancon, president of the AICPA, has issued a brief explanatory video here.

The comment deadline is July 31 and the proposed effective date fo the changes is for financial statements for periods on or after December 15, 2010.

Filed under: CPA Professional Standards, Financial Statements

Obama Tax Plan Aims at Corporate Tax Avoidance and Outsourcing

Via ABC News

President Barack Obama and Treasury Secretary Timothy Geithner announced plans for tax law overhauls intended to crack down on companies that avoid corporate taxes. The effort is expected to focus on tax laws that involve companies sending jobs overseas and on international tax shelters.

Filed under: Tax Legislation

Legislation Would Make Estate-Tax Exemptions Permanent

Via InvestmentNews

The estate tax is currently set to expire in 2010, and without further legislation will be reinstated in 2011 with higher rates and reduced exemptions.  Proposed legislation by Senate Finance Committee Chairman Max Baucus, D-Mont., would make permanent the 2009 estate-tax exemption of $3.5 million for an individual.

Filed under: Estate & Gift Taxes, Tax, Tax Legislation