December 2009
An NYSSCPA Year in Review
New York is getting a snowy end to 2009 -- a year of new rules, recovery and reform. The last day of the year is a good time to look back at what the past 12 months have brought to the nation, to the individual ... and to the noble profession of accountancy.
The year 2009 kicked off with a major shift in the rules regulating the profession, while at the same time the nation welcomed its first black president. Collective agony over the Madoff affair was still fresh, and the price of Yankees tickets was a major topic of discussion. Effects of the financial crisis born in 2008 had begun to level off.
Here's a look at some of the other milestones we reached on the road to 2010:
January
- The accountancy reform law is approved by lawmakers and signed by Gov. David A. Paterson.
- The nation gets a new president.
- The GAO criticizes the Treasury for its lack of oversight of the TARP program.
- The FASB formally defers FIN 48.
- Everyone's upset about the Madoff fraud and other Ponzi schemes.
- National Taxpayer Advocate Nina E. Olson speaks at a FAE conference.
- Former Senate Majority Leader Bruno finds himself in hot water.
Clinging to Life for Estate Tax Exemption
It's December 24. Your rich old great-aunt Jane is in the terminal stages of cancer, and in the past few weeks has deteriorated to the point that her life is now being sustained by medical machinery. There's little hope she'll ever wake, let alone leave the hospital. It's the holiday, but everyone's already in mourning.
After many tears and a long talk, you and her other close family members, as well as Jane's doctors, have decided that it's kindest to pull the plug and let Aunt Jane go.
But there's a dilemma: The total of your great-aunt's estate is in the $5 million to $7 million range, and an estate tax levy of 45 percent means a big chunk of that will be left to the government.
But if you keep Aunt Jane alive for one more week, hooked up to the machines, and pull the plug after New Year's, her estate will be exempted completely from the tax.
What do you do?
This may be a hypothetical situation here, but according to the Wall Street Journal, it's a choice some are currently facing as the clock ticks toward a one-year reprieve from the tax.
Times-Union: DiNapoli to Audit Division of State Attorney General's Office
Although there's no announcement on his Web site yet, the Albany Times-Union is reporting that State Comptroller Thomas P. DiNapoli has launched an audit of a branch of Attorney General Andrew Cuomo's office.
Specifically, DiNapoli's office will audit the Civil Recoveries Bureau, a division assigned to recover money owed to state agencies through litigation.
Want a Raise? Become a Tax Accountant
Finally, 2009 -- a year of big losses, few raises and rampant unemployment -- is about to end, and the folks at CNN Money are already trying to predict the winners and losers of 2010.
Among the winners: tax accountants.
DiNapoli Subpoenas NYRA Financial Records
Calling the New York Racing Association "the same old NYRA in new sheep’s clothing, trying to shortchange taxpayers again," New York State Comptroller Thomas P. DiNapoli subpoenaed its financial records after the NYRA denied a request to access them.
He said in a press release that the NYRA will be audited whether or not it continues to try to hide its books from auditors.
Estate Tax Uncertainty for CPAs, Clients
It seems that Democrats and Republicans can agree on at least one thing: the estate tax is a mess, and it's about to get messier.
Eight years ago, in 2001, a Republican-led Congress approved a reduction in estate tax rates, as well as an increase in the size of estates that would be hit with the tax. The current rules cap the rate at 45 percent on estates valued at more than $3.5 million, or about 5,500 estates annually.
After a "year off," the tax is set to return in 2010, with a 55 percent rate that will be applied to all estates over $1 million. More than 99 percent of estates are exempt.
That will change if the exemption level is reduced to $1 million.
According to a New York Times editorial, the bottom line is "there will be many more losers than winners under estate-tax repeal, and the losers will be among Americans who are farther down the wealth ladder."
Earlier this month, the House voted to permanently extend the estate tax, approving a measure that would lock in a top rate of 45 percent on some multimillion dollar estates. The vote was 225 to 200, with only Democrats voting for the extension. A group of 26 Democrats joined Republicans in voting against the plan.
The Wall Street Journal notes that Senate Democratic leaders have failed to push through an extension, and many doubt that it will come before the beginning of the New Year, if at all.
In the interim, people will continue to die -- leaving families and their accountants scrambling for answers.
The NYSSCPA is hosting a Breakfast Briefing on the Estate Tax Jan. 26 from 8:30-10:30 a.m. The event will also be webcast. For more information or to sign up, click here for the live event, or click here to sign up for the webcast. The event is free and CPE is not available.
Healthcare Reform Passes Senate
Senate Healthcare Reform Bill: passed, 60-to-39 on "the 25th straight day of debate on the legislation."
The bill would require most Americans to have health insurance and would subsidize private coverage for low- and middle-income people, costing the government $871 billion over a decade, according to the New York Times. That same article says that if the bill becomes law, "it would be a milestone in social policy, comparable with the creation of Social Security in 1935 and Medicare in 1965. But unlike those programs, the new initiative lacks bipartisan support."
Only one Republican voted for the House bill last month, and no Republicans voted for the Senate version.
There are also significant differences between the House and Senate versions of the legislation.
Reuters offers a look at some sticking points:
Obama Meets With Community Bankers to Urge Lending
Community bankers got their first exclusive meeting last night with President Barack Obama, in which he reiterated his push for bankers to do more lending to small businesses.
Among the attendees was the NYSSCPA's own Paul P. Mello, a member of the Society's Syracuse Chapter.
SEC Orders More Disclosures for Corporate Shareholders
The Securities and Exchange Commission (SEC) has approved rules to enhance the information provided to shareholders so they are better able to evaluate the leadership of public companies.
Beginning in the upcoming annual reporting and proxy season, the new rules will heighten disclosure requirements regarding risk, compensation and corporate governance matters when voting decisions are made.
Good idea, no? As SEC Chair Mary L. Schapiro said in response: "[A]ccountability is impossible without transparency."
It seems the SEC has been considering the recent compensation controversy, and the new rules make it far more likely shareholders will make noise over excessively high salaries.
DiNapoli: Millions Leaking From Medicaid
New York State Comptroller Thomas P. DiNapoli today called on the state Department of Health (DOH) to increase scrutiny of Medicaid payments and recover any improperly made payments after his auditors identified as much as $92 million in overpayments, billing errors and other problems, according to a press release from his office. The findings of the audits were referred to the Office of the Medicaid Inspector General.
DiNapoli released three audits today examining New York’s Medicaid program.