The National Public Accountant

The FASB issued Statement of Financial Accounting Standards (SFAS) No. 123, 'Accounting for Stock-Based Compensation,' to remedy perceived deficiencies in Accounting Principles Board Opinion No. 25, 'Accounting for Stock Issued to Employees.' SFAS No. 123 takes effect for all transactions made in fiscal years beginning after Dec. 15, 1995.

Ethical standards for return preparation.

Income tax returns Preparers of income tax returns can seek guidance from ethical standards included in IRS regulations governing practice. These regulations are found in Treasury Dept. Circular No. 230, a reprint of Title 31 Code of Federal Regulations, Part 10. These guidelines address such issues as due diligence and dependence on client-provided information.

FASB 119 & derivative financial instruments: disclosure & fair value.

The FASB's Statement of Financial Accounting Standard No. 119, 'Disclosure about Derivative Financial Instruments and Fair Value of Financial Instruments,' introduces more stringent requirements on the reporting on companies' use of these complex instruments. This is in response to the explosive growth of the derivatives market and the risks these instruments entail.

Hanging onto what's yours: how to weather a divorce and still keep your home.

Cover Story Joint ownership of a principal residence can present financial and tax-related problems to divorcing couples. These problems include the retitling of the property and the rollover of gains under IRC Sec. 1034 if the property is sold. The consequences of divorce on these two issues are discussed to serve as a guide to couples in the process of separation.

Hiring household help is now less taxing.

The passage of the Social Security Domestic Employment Reform Act of 1994 is intended to make the process of hiring household help easier. The new legislation not only lessens the paperwork involved in employing domestics, it also eases the employment tax liabilities of these workers. Compliance with this law is explained and those covered by it are identified.

HR 1485: opening the doors to the US Tax Court.

House Resolution House Resolution No. 1485 was proposed by Congressman Leon Panetta (D-CA) in 1991 to introduce changes in the Internal Revenue Code of 1986 that would enable CPAs and enrolled agents to represent their clients before the Tax Court in cases involving taxes not exceeding $10,000. Unfortunately, the bill was shot down in 1992. Accountants are urged to lobby for its passage.

NSPA federal affairs resolution for 1996.

National Society of Public Accountants The National Society of Public Accountants (NSPA) is encouraging its members to contribute to its efforts in becoming an influential force in Capitol Hill on behalf of small businesses. The challenge for the society is passing on relevant information gathered by practicing members to decision makers who can use it for the benefit of the NSPA membership and accounting clients.

On the road again: deducting transportation costs.

The conflicting positions taken by the courts and the IRS are adding to the difficulty of ascertaining tax deductions for tranportation costs related to every day travel from the taxpayer's home to another work location and back. The opinions of the courts and the Service are reviewed to provide guidance in determining deductable costs when the residence is a regular place of business.

Understanding the internal control structure for an audit.

Statement on Auditing Standards No. 55, 'Consideration of Internal Control Structure in a Financial Statement Audit,' requires auditors to familiarize themselves with the control structure and to record it for all audits. A study was conducted to examine auditors' compliance with this standard in relation to their small business audits. The results are discussed.