June 3rd, 2010
SAS 70 is an auditing standard put forth by the AICPA that is utilized by auditors for examining internal controls in service organizations. Service organizations include: business process outsourcing (payroll, general accounting), data centers, outsourced IT functions, software providers, claim processors, benefit plan administrators, trust administrators, investment advisors, and billing and collections companies.
As part of its project to converge with International Auditing and Assurance Standards Board (IAASB) standards, the AICPA issued SSAE No. 16, which will be effective for reporting periods on or after June 15, 2010.
The new standards include a number of changes for both auditors and companies obtaining SAS 70 audit reports. Two changes that service organizations should be aware of include:
- The auditor will be required to document the criteria used when auditing a service providers internal controls.
- The company will be required to provide a written assertion on the subject matter of the engagement.
If you are a service provider with questions on internal control reports or SAS 70 reports, please feel free to contact Scott McAuliffe, Keiter Stephens’ Principal in charge of Risk Advisory Services, at 804-273-6247 or smcauliffe (at) kshgs (dot) com.
Tags: Auditing Standards Changes, SAS 70
Posted in SAS 70 | No Comments »
May 27th, 2010
It comes as no surprise that provisions changing the tax characteristics of carried interests from long term capital gain to ordinary income will probably be passed, but Ways and Means Chair Sander Levin reinforced the possibility yesterday by noting that carried interests will probably be used as an offset in the extenders bill we expect to be deliberated in the next two weeks. Levin also noted that he expects the carried interest provisions to be expanded to include interests in all industries (most notably gas/oil and real estate) and not just financial management firms. Timing about the introduction of the new extenders bill is still sketchy, and as the articles appended below show there is still some uncertainty about when the bill will be introduced. But we should probably expect it to be deliberated by the Memorial Day recess. The excerpt below details Levin’s expectations of this legislation.
Levin Expects Phased-In Carried Interest Change to Be Key Offset for Extenders
House Ways and Means Committee Chairman Sander Levin (D-Mich.) said May 11 that he expects a phased-in change to the tax treatment of carried interest to be a main offset for the tax extenders legislation moving toward the House floor.
Levin said the exact details of the carried interest provision are still being worked out, but the legislation (H.R. 4213) would not include any carve-outs to exempt particular industries and would ultimately match the tax rate paid on carried interest income to ordinary income tax rates.
The bill, which was renamed the Promoting American Jobs and Closing Tax Loopholes Act, will have a total of roughly $50 billion in fully offset tax provisions. It is expected to go to the House floor during the week of May 17, Levin said. He added that there will not be any full committee hearing or markup of the legislation because most of the provisions have already been vetted by the committee in prior bills.
The legislation will include a slightly scaled back version of the Build America Bonds provision originally in the small business tax bill (H.R. 4849). Levin said he and Senate Finance Committee Chairman Max Baucus (D-Mont.) opted to tailor bonds provision back because of its cost.
Levin also said lawmakers are still discussing whether to include a provision from the small business tax bill that would raise $7.7 billion by stopping companies from using subsidiaries to channel deductible payments through U.S. tax treaty countries before earnings are repatriated to a tax haven. Information provided by BNA.com – posted May 11, 2010
Tags: small business tax
Posted in Business Taxation, Tax Legislation | 2 Comments »
May 26th, 2010
The Internal Revenue Service exempt organizations division will not be auditing organizations for lack of appropriate governance policies, but it will be looking at organizations more often and talking to them about particular issues, if agents see from the required Form 990 filings that charities do not have mechanisms in place to ensure good governance, an IRS official said April 21.
“The more we can use the Form 990 to figure out who needs our attention and who doesn’t, the less likely we are to show up on your doorstep when you are a compliant taxpayer,” said IRS Tax Exempt and Government Entities Commissioner Sarah Hall Ingram.
Speaking at a nonprofit governance conference cosponsored by the Independent Sector and IRS, Ingram also said it is too early to discuss trends, but IRS is exploring why some organizations have failed to answer new questions or fill out new schedules on governance on the revised Form 990.
“We would like to look a little more closely at the patterns on blank spaces,” she said, “and we will be talking with some folks on some of those.” The IRS may address the lack of compliance by talking to stakeholders, sending letters to charities, or adding clarifications to the instructions for the Form 990 for the coming year, she said, in case there is any “ambiguity” on whether IRS wanted something filled out.
Information provided by BNA.com – posted April 21, 2010
Please contact Tom Denson or Ginny Gunther at 804-747-0000 if you would like to discuss your nonprofit’s Form 990.
Tags: irs form 990, revised 990
Posted in Not For Profit Taxation | No Comments »
