November 13, 2018

Accounting News Roundup: Tax Reform Is Hard; Good and Bad Accountants | 02.08.17

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Tax reform is hard

Here’s Richard Rubin of the Wall Street Journal reporting on how Republicans are learning that reforming the tax code is difficult:

A linchpin of the House Republicans’ tax plan, an approach called “border adjustment,” has split Republicans and fractured the business world into competing coalitions before a bill has even been drafted.

A border-adjusted tax would impose a levy on imports, including components used in manufacturing, and exempt exports altogether. Opposing it are retailers, car dealers, toy manufacturers, Koch Industries Inc., oil refiners and others that say it would drive up import costs and force them to raise prices.

Ways & Means Chairman Kevin Brady is quoted: “Yes, I know tax reform is difficult. That’s why it only occurs once a generation.” And if you’re tax nerd who also enjoys some politics, I recommend reading Showdown at Gucci Gulch to give you an idea of what Brady is talking about.

Back in the ’80s, politicians just wanted lower rates and fewer deductions, which seems much easier than what Brady and Speaker Paul Ryan are trying to do. Brady and Ryan want to  fundamentally change the tax system so, naturally, they’re running into resistance.  Rubin does a good job of covering all the moving parts and it’s good reading (especially if your clients end up asking you about it). Companies that import a lot of goods or raw materials would get hit hard by border adjustment, giving companies that make products here a big advantage.

That oversimplifies the problem, but you get the idea — it’s complicated!

Accountants behaving badly

Sometimes the most amusing bad accountants are the ones who simply aren’t doing the work they’re supposed to do (and then taking money on top of it). Like Karla MacCatherine. The Crow Tribe agreed to pay her $70 an hour to get them ready for an audit. Things didn’t really go according to plan:

The tribe had hired MacCatherine to prepare documents for its 2013 annual audit, which was due in June 2014, the prosecution said. The report was not finished by the deadline and no work had been done to prepare the audit, which caused the accounting firm to suspend its audit work, he said.

MacCatherine, however, billed the tribe $44,542 for the work specifically for the audit.

She also submitted over $8k in expenses twice and “overstated her work hours and billed for hours when she was on vacation.” That’s some impressive chutzpah for someone who didn’t complete her assignment.

Accountants behaving goodly

I suppose it wouldn’t hurt to feature the actions of an accountant doing something positive once in awhile. So without further ado, here’s the story of Harrison Feind, who spent a couple weeks of January volunteering in Greece, assisting at a refugee camp:

He was assigned to distribute clothing and food staples — salt, oil and a handful of vegetables — to the approximately 650 people living in crammed containers lining the camp that sits on an old airfield.

Winds howled and temperatures plunged at the camp near the Macedonian border. Bitter cold froze water lines and transformed human waste in the portable toilets into a nauseating block of ice, Feind said.

“It was bleak,” he said. “It was miserable. There’s not really an adjective to really describe how horrible the conditions were.”

But there was a bright spot — the people.

Previously, on Going Concern…

I wrote about small firms and how they don’t really exist in the minds of college students.

In other news:

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Image: Wikimedia Commons

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