GLG News by Tax Professionals (US)

Thomas KleinManaging MemberKleinCPA PLLC

Obama Expected to Sign Generous NOL Carryback Bill on Friday

November 5, 2009

Analysis of:Congress Passes Unemployment Bill With Tax Items | www.journalofaccountancy.com

On Thursday, Congress sent a bill to the White House containing enhanced net operating loss (NOL) carryback opportunities for most companies. The bill contains a provision extending the NOL carryback period from two years to five years for losses incurred in 2008 or 2009. President Obama is expected to sign the bill on Friday which would result in the immediate filing for refunds by many companies.

Thomas KleinManaging MemberKleinCPA PLLC

Obama Administration Moves Foreign Earnings Tax Deferral Reform to Back Burner

October 13, 2009

Analysis of:Business Fends Off Tax Hit | online.wsj.com

Once again, a proposal to reform how a U.S. based multinational company's foreign earnings are taxed has failed to gain congressional support. Similar proposals introduced over the past twenty years have consistently failed to gain traction. The current proposal was part of the Obama administration's fiscal year 2010 budget which made reference to additional tax revenues in excess of $200 billion related to the reform of corporate taxation on foreign earnings.

Gil ManzonAssociate ProfessorTRUSTEES OF BOSTON COLLEGE

Is Western Union Market Share Taking Market Share from Competitors?

April 24, 2008

Analysis of:Western Union 1Q profit rises 7 percent on international | biz.yahoo.com

I think the information presented in the article is consistent with Western Union picking up market share from competitors. Despite flat U.S. revenues over 05-07 period and likely near flat revenues from the U.S. in Q108 in part attributable to the Mexican results, Western Union has gained significant international market share over the 05-07 period and, with Q108 gains coming from China and India, this trend appears to be continuing (international revenues up 9% relative to total in 05-07 period and 43% in absolute terms). Absent a significant shift in the size of the market for money transfers, these gains would have come at the expense of competitors.

Thomas KleinManaging MemberKleinCPA PLLC

Security Writedowns Today May Lead to Massive P&L Charges Later for C, MER and Others

April 21, 2008

Analysis of:A Way Charges Stay Off Bottom Line | online.wsj.com

Depending upon management's classification of a security (i.e., either "trading" or "available for sale"), a charge may or may not appear on the income statement in the same period as the write-down on the balance sheet. If the security is classified as a trading security, the charge on the income statement will occur in the same period as the write-down. However, if the security is classified as available for sale, the charge bypasses the income statement and is taken directly to stockholders equity. If the value of the security does not recover prior to its liquidation, the charge typically is taken in the year of liquidation. The potential charge for write-downs related to available for sale securities can be quantified by looking at the statement of stockholders equity, particularly other comprehensive income.

Thomas KleinManaging MemberKleinCPA PLLC

Investors Punish GM Stock, in Part on Large Deferred Tax Adjustment.

November 7, 2007

Analysis of:GM Posts Huge Loss | online.wsj.com

Investors fled General Motors following the release of its Q3 results.  The reported loss for the quarter was $38.96 billion of which 99% of the loss ($38.6 billion) resulted from the write-down of deferred tax assets.  Have investors overreacted to the noncash charge or is the decline in market value justified?

Gil ManzonAssociate ProfessorTRUSTEES OF BOSTON COLLEGE

FIN 48: What it does and what it will do

February 12, 2007

Analysis of:FIN 48: Accounting for Uncertain Tax Benefits | www.fasb.org

FIN 48 potentially throws firms' tax positions into sharp relief.  Relatively modest preemptive actions and changes in internal control can significantly blunt the extent to which firms are subject to undesired disclosure with respect to their tax positions.

Thomas KleinManaging MemberKleinCPA PLLC

Despite Protests, FASB Will Not Defer Effective Date of New Tax Accounting

January 17, 2007

Analysis of:FASB to Implement Tax Changes Without Delay | www.msnbc.msn.com

The FASB received over 400 letters representing more than 1,000 companies’ concerns about implementation issues related to FASB Interpretation #48 (FIN 48).  The vast majority of the letters requested a deferral of the effective date of the new Interpretation; fiscal years beginning after December 15, 2006 (i.e., the quarter ending December 31, 2007 for calendar year companies).  The FASB voted overwhelmingly not to defer the effective date.  This means that most companies' financial statement will be affected beginning Q1 of 2007.

Thomas KleinManaging MemberKleinCPA PLLC

FASB to Consider Deferral of New Tax Accounting for Uncertain Tax Positions

January 16, 2007

Analysis of:FASB Weighs One-year Delay for FIN 48 | www.cfo.com

FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, is scheduled to become effective for a company's first quarter beginning after December 15, 2006 (i.e., the quarter ended 3/31/07 for calendar year companies).  The FASB announced today that it will consider deferring the effective date by one year when it meets on January 17, 2007.  The possible delay was likely prompted by numerous concerns that have been expressed to the FASB by hundreds of companies.  Implementation of FIN 48 will impact most companies' balance sheets, earnings and cash flows.

Thomas KleinManaging MemberKleinCPA PLLC

2007 Q-1 Marks First Quarter Accounting for Uncertain Tax Positions Becomes Effective

January 9, 2007

Analysis of:Uncertainty Reigns Over Taxes | www.cfo.com

FASB Interpretation No. 48 ("FIN 48"), Accounting for Uncertainty in Income Taxes, becomes effective in a company's first quarter beginning after December 15, 2006 (i.e., the quarter ended 3/31/07 for calendar year companies).  Adoption of the new interpretation will have an immediate impact on most companies balance sheets; in some cases, a material impact.  Thereafter, earnings will likely be impacted as well.  The long-term impact on earnings is still unknown.  Companies that are less aggressive from a tax perspective will see less of an impact on earnings; those that have been more aggressive will likely see a greater impact on earnings (i.e., a reduction in earnings).  In addition to the balance sheet and statement of earnings impact, companies will also have to provide far more information regarding its tax strategies in its income tax footnote.

Thomas KleinManaging MemberKleinCPA PLLC

Adverse Tax Consequences of Option Backdating Becoming More Evident

November 9, 2006

Analysis of:UnitedHealth expects bigger charges due to options | www.bizjournals.com

Restatement charges for option backdating were initially perceived to be a largely noncash adjustment to earnings.  However, it is becoming apparent that the backdating may result in very significant tax liabilities, with a material impact on a company's cash flows.

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