FASB chair Leslie Seidman lays out a schedule for handling the remaining projects on the convergence agenda

In an exclusive interview with Accounting Today, Leslie Seidman, chair of the Financial Accounting Standards Board, detailed the current status and likely future timeline for the four main remaining parts of the standard-setting board's convergence agenda with the International Accounting Standards Board.

Three of the four items -- on revenue recognition, accounting for financial instruments, and leasing -- were part of the original convergence agenda, while the fourth, on insurance, was added later. As the complexity of the issues involved and the potential effects on stakeholders have become clearer, the projects have been delayed several times, but Seidman laid out a detailed timeline that would see them finished largely by the end of 2013.

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REVENUE RECOGNITION

Seidman considers revenue recognition particularly important, noting, "It's important to have global comparability for the top line of every company in the world." To that end, the boards have been working together to deal with the issues raised in response to the second exposure draft on revenue recognition.

They face a couple of "thorny" issues, specifically accounting for licenses, and whether there should be a threshold for revenue recognition when there's uncertainty relating to the amount of consideration the entity is entitled to. There are also "diverse views" on the appropriate level and nature of the disclosure package, as well as the transition: The boards have exposed a "fulsome" disclosure package, and a full retrospective approach to implementation. Some issuers feel the latter in particular is too burdensome, but investors want it, so the standard-setters are holding workshops to find common ground.

Going forward, Seidman said that FASB would hold joint meetings in November and December with IASB, with the aim of finishing their discussions late this year, and targeting an issuance date in March or April of 2013. She noted that they haven't voted on an effective date, but plan to provide ample time. "I would be very surprised if we moved with an effective date before 2015," she said.

A smooth transition is important so that investors won't be confused by the new information being released. She added that the board is planning extra educational efforts: "We don't want to end up with a bunch of detailed rules to support what is widely viewed as a principles-based standard, but we want to have enough information available to stakeholders as they implement the standard that we have a high level of comparability at the end of the day."

LEASING

Convergence on leasing has been in progress for some time, Seidman said, despite wide support from investors for its key objective of reporting lease obligations on the balance sheets of lessees. (Currently most leases are reported off-balance-sheet.)

"If I were to try to identify one cause for the difficulty of making progress on this project," she explained, "it would be that in the early days of the project, we focused primarily on the lessee, rather than on both the lessee and the lessor, and I think that strategy could have delayed the timely recognition of some of the thorny issues that we're currently dealing with."

Nonetheless, the boards are ready to release a second converged exposure draft in the next few months, which they hope will address concerns about the complexity of the standard that emerged from the first exposure draft. "We are substantially converged on the leasing proposal from top to bottom," Seidman said.

The second ED would require that all leases go on the balance sheet of the lessees, unless they are under one year of duration. It also would recognize leases in one of two categories: as purchase or financing transactions, which would use the asset financing model, with the lease asset amortized, or "more like a service or rental," where a significant amount of the value or utility of the asset would not be transferred, and the pattern of income statement recognition would be straight-line.

For the first category, lessors would recognize a receivable and derecognize a proportionate amount of the lease asset and then account for a residual; for the second, they would leave the asset on the balance sheet and account for the lease as a rental stream over time.

"Most stakeholders do not believe that all leases are the same," Seidman noted.

She expected the second converged ED to be released in the first quarter of 2013.

ACCOUNTING FOR FINANCIAL INSTRUMENTS

Seidman explained that the boards have been managing this in separate workstreams over the past few years.

Regarding classification and measurement, Seidman said, "If you had asked me two years ago what I thought the prospects of a converged standard [for accounting for financial instruments] would be, I would have told you I thought they were very low. But through persistence and the willingness of both boards to take a fresh look at their conclusions, we now are in a position of going out with a converged proposal. The FASB made some pretty significant changes to its original conclusions, and the IASB opened IFRS 9 to make a few limited changes. So I'm pleased to say that we will be going out with EDs in the next couple of months that are largely converged."

The model would classify financial assets based on their cash flow characteristics and the business purpose for which they are held. "Plain vanilla" instruments held for cash flow would be eligible for cost accounting. "Assets that fail the 'plain vanilla' or principal-and-interest test, would be required to be carried at fair value net income, full stop. So if they have 'exotic cash flow characteristics,' they would have to be carried at fair value through net income," Seidman said.

The model would apply to all debt instruments, including securities and loans, which is different from current GAAP; other key changes include narrowing which liabilities are eligible for the fair value option, and, for those items that are eligible for the fair value option, changing the way companies present the change attributable to their own credit quality; that would now be isolated and reported in other comprehensive income, instead of net income.

She noted that FASB would be issuing application guidance to clearly articulate how they intend it to be applied, and to help explain how it's different from FAS 115.

On impairment, in response to "pervasive concerns" expressed by stakeholders, FASB revised its approach, so that now, every period, the entity will evaluate the assets it holds for credit-worthiness, and then record an estimate of expected losses. The major changes are that, "There is no trigger before you start recognizing expected losses, and that you consider all available reasonable and supportable information. You don't limit the information set to what has already occurred."

FASB planned to share a draft of its standard with the IASB and "fatal flaw" reviewers in early October, and had a joint meeting on impairment planned for November. The board plans to expose before the end of 2012, as well as getting feedback on the IASB's tentative conclusions.

"If we don't seem to be ready to reach different decisions at the meeting in November," Seidman said, "it's my hope that by explaining the alternatives to stakeholders during the comment period, and then considering all of that feedback, we're in a better position to potentially reach converged conclusions." She also noted that the IASB has begun to hear some of the same concerns that FASB had been hearing from stakeholders earlier in the process.

Finally, on hedging, Seidman noted that the IASB is moving forward with a more "comprehensive" approach, but that FASB believes that hedging is related to the classification and measurement phase of the standards, so they plan to approach hedging after they have finished with classification and measurement.

INSURANCE

On insurance, Seidman said that the boards have agreed in principle that insurance obligations should be reported at a current estimate of the present value of the cash flows that are required to fulfill the contract. "Basically, it's a current measure as opposed to a locked-in measure," she said.

"But there are a number of detailed differences in our decisions, which after a few trips to the board table to try and work them out, we have not been able to resolve," she said. "The good news is we're both going out for exposure, and based on the feedback from around the world, there's still an opportunity to revisit these issues."

FASB plans to put out an exposure draft in this area in the first quarter of 2013. 

GOING FORWARD

In conclusion, Seidman noted, "It's true that we're not agreeing on everything - but we're agreeing on a lot of things."

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Tax Strategy: IRS Whistleblower Program Ramps Up for Increased Activity

Large whistleblower awards have been making headlines lately. News of a record $108 million award paid out by the Internal Revenue Service in September, followed by media coverage of $38 million and $2 million awards only weeks later, seem almost more akin to reports on lottery jackpots than informant compensation

These awards -- and recent and pending improvements to an IRS Whistleblower Program that has been in operation since December 2006 -- will likely generate a flood of new claims and questions from potential whistleblowers. Employers, too, are becoming more anxious over the cost of nuisance suits, or worse, that may be encouraged by these whistleblower success stories. Strategies dealing with whistleblower claims require an understanding of what is and what is not possible under Code Sec. 7623(b), as well as the consequences of claims that end up not meeting the varied dollar and procedural requirements for a whistleblower award.

The success era 

BACKGROUND

The IRS Whistleblower Office was established in 2007 in response to the expanded scope of Code Sec. 7623 under the Tax Relief and Health Care Act of 2006. The 2006 amendments, which created Code Sec. 7623(b), imported concepts used within the False Claims Act proceedings into the Tax Code, enhanced by recoveries from 15 to 30 percent in certain situations. The existing IRS informant program was further enhanced by making qualifying awards mandatory (informant awards had been discretionary on the part of the IRS) and allowing for Tax Court review.

In June 2012, Stephen Whitlock, director of the Whistleblower Office, reported that since 2007, "Thousands of whistleblowers have reported hundreds of millions of dollars in suspected tax compliance issues, resulting in a wide range of audits and investigations. " 

TWO AWARDS PROGRAMS

Two types of whistleblower awards exist, as currently described inSecs. 7623(a) and (b):

• A mandatory Code Sec. 7623(b) award: If the taxes, penalties, interest and other amounts in dispute exceed $2 million (and, if the case deals with an individual, gross income for the year of the offense exceeds $200,000 for at least one of the tax years in question), the IRS will pay 15 percent to 30 percent of the amount collected; and,

• A discretionary Code Sec. 7623(a) award: If the disputed amounts do not meet the criteria in 7623(b), the awards are limited to 15 percent up to $10 million, the awards are discretionary, and the informant cannot dispute the IRS's decision in Tax Court.

The amount of the award under the Whistleblower Code Sec. 7623(b) provision has a 15 percent statutory minimum. From there, the Whistleblower Office is instructed to apply positive and negative factors, but with the analysis "not reduced to a single mathematical equation." Significant positive factors, considered first, can increase the award from 15 percent to 22 percent or 30 percent. Then significant negative factors may decrease those higher awards to 15, 18, 22, 26 or 30 percent. There are no dollar caps to an award under Code Sec. 7623(b).

A claim under either program must be submitted on IRS Form 211, Application for Award for Original Information. Form 211, among other information, requests the facts and all supporting information in the claimant's possession pertinent to the alleged violation, how the information was obtained, and the amount owed. Attachment of an explanation of facts and supporting documentation is required and other attachments are permitted. The Paperwork Reduction Statement on the back of the form claims that the average time to complete Form 211 is estimated at 35 minutes. Taking considerably longer to file a claim would certainly be advised, particularly since the IRS is not obligated to ask the whistleblower for supplemental information before rejecting a claim.

While submissions that do not qualify under Sec. 7623(b) will be processed under Sec. 7623(a), that section is far less advantageous. Under Code Sec. 7623(a), the award is at the discretion of the IRS, there is no statutory award percentage, and there is no appeal to the Tax Court or elsewhere.

Under either Sec. 7623(b) or (a), the IRS requires "specific and credible information" that results in the "collection of taxes, penalties, interest or other amounts from the noncompliant taxpayer." Whistleblowing is allowed only if there is substance behind the claim. The IRS will not act on "unsupported speculation." The IRS Web site, www.irs.gov, advises, "This is not a program for resolving personal problems or disputes about a business relationship."

All awards are considered taxable income. Attorney fees and court costs deductible above the line in the year the Sec. 7623(b) award is paid may qualify the recipient of the award to reduced withholding. The IRS has emphasized, however, that the reduced-withholding program is not an opportunity to determine a whistleblower's tax liabilities.

ACCELERATED TIMELINES

As late as 2011, Sen. Charles Grassley, R-Iowa, expressed concern about the timely processing of whistleblower claims by the IRS. The lack of timeliness on the part of the service in processing an award from start to finish has been a major complaint leveled by those representing whistleblowers. The IRS continues to warn applicants, "The process, from submission of complete information to the service until the proceeds are collected, may take several years." The Whistleblower Office reported that the first case under the 2006 act had been processed in fiscal year 2011.

Effective Aug. 1, 2012, the IRS implemented a new set of internal rules for its whistleblower program designed to streamline the award process. These new guidelines to internal IRS personnel (IRM 25. 2. 2) are a direct response to the many complaints leveled over the length of time it had been taking from filing an initial claim to receiving an award. Pending permanent rules, IRM 25. 2. 2 requires IRS personnel to follow this timeline:

Claims should be initially evaluated by the Whistleblower Office within 90 days;

Review by subject matter experts in IRS Operating Divisions and Criminal Investigation should be completed within 90 days of receipt from the Whistleblower Office; and,

Whistleblowers should be notified of an award decision within 90 days of when collected proceeds can finally be determined.

Whitlock has reiterated that timely and comprehensive evaluation of information provided by whistleblowers is essential to the success of the Whistleblower Program and that timeliness is the shared responsibility of the Whistleblower Office, the Operating Divisions, and Criminal Investigation. He also has admitted, however, that circumstances may not always permit action within this timeline, but that those situations should be the exception to the rule. The nature of the award itself also guarantees a significant wait between a claim and IRS notification of an award, since payment of the targeted tax liability by the taxpayer and expiration of refund and appeals periods are first required.

KEEPING CLAIMANTS INFORMED

The IRS in the past typically would not communicate at all with a whistleblower for years after a claim was submitted. Not until the tax was collected and an award determined was there any subsequent contact, or even acknowledgement of the claim by the IRS. Although Code Sec. 7623(b) authorizes the IRS to request assistance from the whistleblower and their counsel, such contact was infrequent at best. That may be changing as the continued participation of knowledgeable insiders becomes recognized as a valuable asset. In a recent directive to personnel, Whitlock commented that whistleblowers may have insights and information that can help the service understand "complex issues or hidden relationships."

The August 2012 directive advises that debriefing, whether in person or by telephone, is an important component of the evaluation of whistleblower information prior to a decision on whether the information should be referred to the field for audit or investigation. In fact, Whitlock hopes that "debriefings will be the rule, not the exception." He also recognizes that, with appropriate controls, interaction with a whistleblower during an audit "can assist in timely and correct resolution of issues." He goes so far as to recommend a Code Sec. 6103(n) confidentiality contract for services when disclosure of taxpayer information "is necessary to obtain a whistleblower's insights and expertise into complex technical or factual issues." 

MORE GUIDANCE COMING?

An August 2011 Government Accountability Office report recommended increased data collection to make the IRS's existing case management system a more effective tool for identifying aging cases, as well as for tracking decisions made by various IRS offices in the evaluation of whistleblower submissions. The IRS response to this report included a commitment to incorporate GAO recommendations into a broader review of user requirements. The IRS committed to full implementation of the GAO recommendations by Oct. 15, 2012, with "additional improvements during the winter of FY 2013." As of the submission of this article, no "implementation" has been made public, but an announcement was expected shortly.

Treasury officials have also promised new proposed regulations under the whistleblower section. They are expected to cover, among other issues, eligibility, the submission of claims and the administrative procedures under which a whistleblower can have a claim reviewed.

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10 things you can do today to have a great tax season

Many tax practitioners focus on improving their efficiency during tax season, but there are plenty of things they can do in advance to ensure success from January to April, according to 2020 Group chairman and CEO Chris Frederiksen.

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1. Make sure you have good scanners. He recommends the Fujitsu 6130, which scans up to 50 pages a minute, duplex, and offers despeckling and decrumpling, among other features. "You're going to scan at the front end," he said. "The days of having people with lots of stuff to key off, those days are over with. We scan everything at the front end."

2. Get multiple monitors. "Go home tomorrow and buy another monitor. It's ridiculous to have just one monitor. You've got to have at least two," he said, noting that at his office, staff have three, and they're contemplating moving to four, while a McKinsey study says that knowledge workers are most productive when they have six. He also described a portable monitor that can hook into the USB port on most laptops.

3. Software: scan, organize, populate. Make sure you're using tools that do these things. "Clients bring in their stuff -that's the polite word for it -- and normally this 'stuff' would go to a tax preparer and they'd sort it and move it around and copy it and put yellow stickies on it and highlight it," Frederiksen said. "No more -- now it goes to the administrative person who does the scanning. He counts the number of sheets, runs them through the scanner and makes sure the scanner sees the same number of pages. Then we upload it to [a service like 1040 Scan or GruntWorx]. They put all the documents in the correct order so they follow the organizer." When the file is returned approximately 10 minutes later, the practitioner takes care of the miscellaneous items that the system can't recognize. The system also takes the numbers from the source documents and populates them in the tax return. "We find it populates approximately 60 percent of the return," he said. The services are generally priced per return.

4. Send direct mail to homeowners. Frederiksen said that he gets most of his clients from direct mail. He buys lists of all the new homeowners in his area (a number of companies provide them, but his firm uses Homeowners Marketing Services). He generally sends as many as five letters - an introductory letter, a letter on December 1 offering a free half-hour consultation, a letter on February 1 offering a 10 percent discount if they come in before February 15, a similar letter on March 1, and a final postcard on April 1. "It's the best two weeks in the year to get new clients," he said.

5. Thank-you letters. These should be sent out within five days of completing a client's return, and ask for referrals. The trick is to write them out now, before January, so they're ready to mail during tax season, and also to include at least two business cards for the client to give out to friends and family: "You've got to make it easy for people to refer business to you," he said.

6. Tax organizers. "We are big believers in tax organizers as a marketing device," Frederiksen said. His firm sends full electronic organizers from its tax prep software, but it has also created a condensed, four-page organizer, which often helps drive referrals. Among other things, they printed up 5,000 and had them inserted in a local paper on February 1. "It wasn't a stampede of new clients, but it certainly paid for itself, and it helped in terms of our branding," he said.

7. Create an audit prepayments and correspondence program. As an add-on at 10 percent of your fee, or $100, offer to cover any audit, and to deal with "nuisance mail" from the Internal Revenue Service. Very few clients will get audited, so it's worth the risk. He also recommends offering new clients a guarantee on all prior returns for $350. "What are my odds that they're going to get audited?" he asked.

8. Preschedule mail-ins. Tell clients to send information in by February 25, even if they don't have everything ready.

9. Preschedule appointments. "You can spend a huge amount of time during tax season messing around with appointments. You end up with all of this phone tag going back and forth," Frederiksen said. Clients should be prescheduled, with a postcard that includes a map of your location. "They want to know how to find you, and what to do with their car when they get there," Frederiksen said. You should have someone on your staff follow up both the week before and the day before.

10. Expand your capacity. Because of the shortage of skilled preparers, Frederiksen said that there will only be about a third of the preparers available that the industry needs, so practitioners may want to start exploring outsourcing returns to India, and locally through firms like Xpitax and SurePrep.

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Roundtable: States Loom Large in SUTA Debate

With states still hungry for revenue, the Internet changing the way retailers do business, and sales tax issues of growing concern to accountants and their business clients, Accounting Today convened a virtual roundtable of experts to discuss the most important trends in the area.
Our panel includes: Cory Barwick, lead corporate tax expert at CCH, a Wolters Kluwer business; Tom Corrie, JD, LLM, director of state and local tax at Top 100 Firm Friedman LLP; Steven Roll, assistant managing editor of state tax at Bloomberg BNA; Rory Rawlings, founder of sales tax solution provider Avalara; and Bernadette Sablan, senior tax manager at Thomson Reuters.

Its money time 

What would you say are the biggest issues in the sales and use tax arena?

Barwick: The three biggest issues are remote seller nexus; increased efforts by states to enforce compliance (for instance, through audits, nexus questionnaires, and filing frequency modifications); and the issue of use tax (i.e., purchasers remitting tax to the jurisdictions on transactions where they did not remit any to the vendor).

Corrie: I think the concept of what constitutes taxable property is a big issue. Moreover, the location of delivery and transfer of possession has become cloudy. Traditionally, tangible personal property was easy to identify, as was the time and place that the product was transferred to the consumer. However, with the advent of technology and different modes of delivering intangible products to consumers (e.g., e-books, downloaded music and computer programs), the water has become quite a bit more murky.

In addition, identifying when a nexus-creating event has taken place is becoming more difficult. As states struggle in today's economy with the "physical presence" standard set forth in Quill, they are continuously trying to expand the parameters of what is considered physical presence forsales tax purposes.

Roll: One big issue is lack of uniformity among states. A certain level of uniformity has been achieved among the 24 states that enacted legislation that conforms to Streamlined Sales and Use Tax Agreement provisions. But even here, important differences remain. For example, the SSUTA member states have yet to adopt a uniform policy addressing the tax treatment of remote access to software and cloud computing models. The states that have not enacted SSUTA provisions include California and New York.

Rawlings: From a business perspective, especially those selling goods in multiple states, one of the biggest issues is the continually changing and complex nature of tax compliance - understanding complex sourcing rules, trying to interpret state definitions on product exemptions and exceptions, and keeping track of the ever-changing tax rates and geographic boundaries of the 11,000 jurisdictions, along with jurisdictions that enact new sales taxes.

Sablan: Oneissue is audits. During our annual user conference, 87.5 percent of our customers said that they have seen increased activity by the taxing authorities over the last few years, with more businesses undergoing audits, especially at the local level. Taxing jurisdictions are still in dire need of revenue, resulting in more scrutiny of businesses.

Are there any "hidden dangers" -- SUTA issues that people should be concerned about that they're not?

Sablan: Businesses can underestimate how dangerous it can be to get just one tax rate incorrect. So even if your systems are 95 percent accurate, your company is still at high risk. Let's take for example an e-commerce store that inadvertently under-taxes its customers. By the time the error is discovered, it could equate to thousands of invoices and, depending on the invoice amount, hundreds of thousands of dollars in uncollected taxes.

Barwick: Sales tax is full of hidden dangers, but one that is increasingly becoming problematic is the trend of states going paperless. States are beginning to issue notices directly to the taxpayer account via their online filing systems, and we are seeing a drastic tick up in notices and tax liens due to the fact that the taxpayer has not updated their contact's e-mail address with the state since the account was set up. Taxpayers are simply missing these changes to their accounts and are having to fight with states to get out of assessments, or they have to cave and pay a notice that they may feel is invalid, all over an honest oversight in most cases. Tie into that increased efforts by states to require electronic filing and the matter becomes more cumbersome for small to medium-size businesses that may not have the resources to comply.

Corrie: Based on my experience, many people, including businesspeople, either are not clear regarding what exactly use tax is, or make a conscious decision to ignore their use tax obligations. State tax departments are aware of the problem and are concentrating more resources on remedying it. I've heard of the purchaser of a highly publicized painting being approached by authorities of the New York State Department of Taxation and Finance regarding use tax due on the painting after an article about its purchase and subsequent importation into the state appeared in the New York City newspapers.

Roll: Perhaps the biggest "hidden danger" are enforcement mechanisms that go beyond state tax revenue agencies. If a retailer collects too much tax, they may anger customers and become a defendant in a class-action lawsuit. If they don't collect enough tax, they may be targeted for a qui tam or whistleblower lawsuit in states such as Illinois and New York.

Rawlings: The biggest danger is in making a mistake in calculating and remitting sales tax, and an auditor discovering it three years later and assessing heavy penalties and interest when the mistake was made three years earlier and there is nothing the business can do other than pay the state.

Where do you see things going in the next six to 12 months?

Barwick: I definitely think that state efforts to increase their revenues will continue. What this means to the taxpayer is increased audits that are going to scrutinize their businesses in ways that they may not have done in the past. We have already seen many rate increases across the board to deal with budget deficits as well, and I expect for this to continue unless Congress comes to a consensus on addressing remote seller (or Internet tax) nexus ... . As much as I would like to see the Internet nexus issue addressed in the next six to 12 months, I do not currently believe that it will be resolved in that time period.

Rawlings: If Congress decides to act and pass a law that mandates collection of the currently uncollected sales tax on Internet sales, states will change their focus from enforcing their law and auditing sellers to implementing the new federal law and dealing with the huge influx of registrations and returns from the Internet retailers affected by the legislation. The big question is whether Congress will act.

Roll: States will continue to be aggressive on the Internet tax issue and continue to resort to their own enforcement tactics. At the state level, there seems to be an erosion taking place in the argument that the imposition of sales tax on Internet purchases amounts to a "new tax." Traditionally, "red" states such as Georgia and Utah have enacted so-called click-through legislation requiring online retailers with in-state affiliates to collect tax.

One trigger that might spur congressional action on the online sales tax issue is the looming expiration of the Internet Tax Freedom Act in 2014. While the ITFA is limited to the issue of taxing Internet access, it might become a vehicle for the tax treatment of other forms of online commerce.

Corrie: On a short-term basis, I think state taxing authorities will ramp up their audit activities, and more of them will look to third-party auditors to perform audits on behalf of the states. As a longer-term remedy, it is likely that states will look to legislative, regulatory or administrative solutions in an attempt to buttress their budgets with additional sales and use tax revenue, either by subjecting new products or services to tax, by expanding the scope of what they consider to be taxable under existing legislation, or by adopting new nexus standards aimed at internet sales.

Sablan: We believe that taxing jurisdictions will continue the aggressive pace they have set this year, in which we have seen an 85 percent increase in new taxes, as well as rate hikes. For example, we already know that California's state tax rate will rise by a quarter percent, and Arkansas by half a percent.

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Profession Watch -- December

What may possibly have been the most excruciating election campaign in human history ended in early November, allowing a weary nation to move from being uncertain about who would win to being uncertain about what they would do afterward.

Accountants and tax practitioners in particular will be eager to see what Washington plans to do about the many tax-related issues that remain up in the air, from the fate of the Bush tax cuts to the possibility of the country going over the "fiscal cliff." Early signals indicated that "Nothing" was a very strong contender, running neck and neck with "Something, but not anytime soon," thus threatening yet another late-starting and confusing tax season. Brace yourself.

Hurricane Sandy brought disaster to large stretches of the Northeast, but it also brought prompt and, in many cases, heartwarming reactions. Accounting firms reached out to staff and clients; state CPA societies offered resources, support and help with communications to societies in the affected states; and everyone offered as much tax relief and as many extended deadlines as possible. The Financial Accounting Standards Board pushed back a current deadline for comment on its disclosure framework, and the Securities and Exchange Commission offered some extensions for affected filers; and state and local tax authorities offered a variety relief.

Particularly conspicuous was the Internal Revenue Service, which promptly announced deadline relief; issued timely warnings about disaster-related scams; streamlined or waived rules to help tax-exempt organizations get aid to Sandy's victims; and even announced a program whereby its employees can donate time off as cash to qualified nonprofits.

The American Institute of CPAs released an exposure draft of its proposed Financial Reporting Framework for Small- and Medium-Sized Entities. The "other comprehensive basis of accounting" or special purpose framework is aimed at the more than 20 million private U.S. businesses that are not currently required to follow GAAP, with the goal of offering them a "reliable, relevant and simplified financial reporting solution." Comments are due by Jan. 30, 2013.

Separately, at its Fall Meeting of Council, the institute officially installed McGladrey partner Richard Caturano as its new chairman. One of his chief priorities as chairman, he said, will be to promote broader diversity among CPAs, particularly at the leadership level. Besides promoting diversity, Caturano said that the accounting profession must continue to be nimble in its response to globalization, cyber-security concerns, the need to create a better financial reporting framework for private companies, and making the profession more attractive to the best and brightest of the new generation, among other issues.

The IFRS Foundation announced that it was creating an Accounting Standards Advisory Forum of national accounting standard-setters and regional bodies with an interest in financial reporting. FASB is expected to be one of the standard-setters participating in the group, which will be advising the International Accounting Standards Board, but it will be among at least a dozen standard-setters from around the world.

The trustees of the IFRS Foundation have published their own staff's analysis of the Securities and Exchange Commission's final staff report on International Financial Reporting Standards, in an effort to address some of the findings and prod the U.S. into embracing IFRS. The foundation's staff's detailed analysis addresses matters raised in the SEC staff report regarding IFRS as global accounting standards, the IASB as a global accounting standard-setter and the challenges for a U.S. transition to IFRS, including adoption and endorsement matters.

IRS Commissioner Douglas Shulman stepped down in early November, as expected; Deputy Commissioner for Services and Enforcement Steven Millerstepped in as acting commissioner. Shulman's tenure, which began in 2008, was marked efforts to combat international tax evasion and a focus on using technology to both improve service and close the tax gap, but most notably by the introduction of the tax preparer registration regime.

Speaking of which, the IRS opened the renewal period for Preparer Tax Identification Numbers; tax preparers have until December 31 to renew. It also sent off warning letters to preparers whom it suspected of filing inaccurate Earned Income Tax Credit claims, and promised to crack down on refundable tax credits in general.

The staff of the Public Company Accounting Oversight Board put out a set of frequently asked questions relating to issues connected to the implementation of the board's funding rules as they related to brokers and dealers. In particular, the staff FAQ discusses the broker-dealer accounting support fee, and which broker-dealers are required to contribute (primarily, those whose average, quarterly tentative net capital is greater than $5 million).

The Center for Audit Quality released a guide to help auditing firms cope with the Public Company Accounting Oversight Board inspection process. Guide to PCAOB Inspections provides a high-level overview of the PCAOB's process for inspecting public company auditing firms, including the process for selecting and reviewing audits for conformance to audit standards, and the assessment of a firm's audit quality program. It's available for free on the CAQ Web site, www.thecaq.org.

The chairman of the board of directors of the CFP Board of Standards, Alan Goldfarb, and two members of the Disciplinary and Ethics Commission resigned after an investigation over potential violations of provisions of the CFP Board's Standards of Professional Conduct.

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