February 2019 Article Archives

How AI Is Transforming the Jobs of Accountants

Published on February 22, 2019

Artificial intelligence has become a buzz-phrase of sorts in recent years, and while it's become hard to separate the hype from its practical potential, AI is rooted in a very realistic notion. Put simply, AI is one of the most advanced concepts in intelligent systems and decision-making in years, and the initial wave of academic research and early engagements with consumer electronics have evolved into real, practical methods and technologies that are positioned to change the way humans make decisions, and eliminate the risk of human error altogether. 

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Controllers Feel Pressure to Cook the Books

Published on February 22, 2019

Nearly two-thirds of corporate controllers feel pressure to "cook the books," according to a new international survey, and many of them feel that misrepresenting their company's performance is just part of their job. 

The survey, by FloQast, a provider of close management software for corporate accounting departments, found that 64 percent of controllers feel pressure to "cook the books," with 10 percent of them stating it's just part of their job. 

The respondents were asked if they have ever felt pressure, either directly or indirectly, for financial reporting to be less accurate in order to produce a better view of company performance. Only 36 percent of the controllers surveyed by FloQast and Dimensional Research indicated they have never felt such pressure. Among the 64 percent who said they have felt pressure to misrepresent their company's performance, 10 percent reported this is a regular part of their job. For 32 percent of the respondents, it does happen but is an exception. The remaining 22 percent indicated they are in a position where there is never direct pressure that they might be able to respond to head on, but instead there are unspoken expectations about a desired outcome.

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New Safe-Harbor Guidance for First-year Depreciation Deduction for Cars

Published on February 22, 2019

The Treasury Department and the IRS have issued guidance that provides a safe harbor method for determining depreciation deductions for passenger automobiles that qualify for the 100-percent additional first-year depreciation deduction. Affected vehicles must also be subject to the depreciation limitations for passenger automobiles. 

Under the Tax Cuts and Jobs Act, the additional first-year depreciation deduction applies to qualified property, including passenger automobiles, acquired and placed in service after Sept. 27, 2017, and before Jan. 1, 2027. Generally, the Sec. 179 and depreciation deductions for passenger automobiles are subject to dollar limitations for the year the taxpayer places the passenger automobile in service and for each succeeding year. For a passenger automobile that qualifies for the 100-percent additional first-year depreciation deduction, the TCJA increased the first-year limitation $8,000. 

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The Eternal Question: What Are a Taxpayer's Chances of an IRS Audit?

Published on February 22, 2019

As IRS budgets and audit staff continue to diminish, audit numbers are at an all-time low. But when you file your clients' returns, the most common question persists: "How likely am I to be audited?"

Taxpayers whose returns stray far away from the norm or have “large, unusual or questionable items” can always be singled out for audit. But overall, as the statistics bear out, the IRS likes to audit taxpayers with certain characteristics.

To start, individuals get more audits than business and specialty taxpayers. In 2017, the IRS reported a 1 in 184 (0.542 percent) chance of being audited for all taxpayers. For taxpayers filing individual returns, the likelihood of audit is 1 in 161 (0.623 percent). Corporations (1120, 1120-S) and partnerships are audited less than individuals – with an audit rate of 1 in 224 (0.445 percent). In 2017, the IRS audited only 1 in every 568 (0.176 percent) employment tax returns (Forms 940/941).

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