CPA Practice Advisor - 5

AICPA NEWS
AICPA Thanks
Treasury and IRS
for Penalty Relief
The American Institute of CPAs (AICPA) issued a formal
thank you to both the U.S. Treasury and the IRS for
providing taxpayers with more extensive relief from
penalties associated with underpayment of their 2018
tax liability in response to the IRS announcement that
they are lowering the threshold to qualify for penalty
relief from 85 percent to 80 percent.
■ Edward Karl, CPA, CGMA, vice president of taxation for
the American Institute of CPAs, believes that as a result
of the Tax Cuts and Jobs Act (TCJA), and the elimination of
personal and dependency exemptions, many Americans
were unable to accurately estimate taxes and may have
inadvertently underpaid their tax liability for 2018. "Our
members have continued to tell us that an 85 percent
threshold was not sufficient, as many taxpayers continue
to struggle with the uncertainty and changes created by
the Tax Cuts and Jobs Act (TCJA)," said Karl. ■

TIPS & TRICKS

FINANCIAL TIPS FOR
CONSUMERS

The AICPA estimates that 63 percent of Americans
can't pass a basic financial literacy test. With April being
National Financial Literacy Month, they have shared the
following financial tips:
■ Use credit cards cautiously

U.S. BUSINESS EXECUTIVES GLOOMY
ABOUT GLOBAL ECONOMY
A recent AICPA survey has found
that an increasing number of business executives are concerned
about the global economy, with only
34 percent of CFOs and senior-level
CPAs expressing optimism about
the current prospects for the global
economy, down from 71 percent a
year ago. Respondents cited continuing trade tensions, a cooling

economy in China, and Brexit fallout
in the U.K. and European Union as
the factors contributing to a sense
of pessimism. In fact, 43 percent
of respondents cited a global economic slowdown as their biggest
concern, with respondents indicating decreased optimism about their
own company's prospects for the
coming year. ■

Angela Newell to Chair of Financial
Reporting Executive Committee
The AICPA recently named Angela
Newell, CPA, CGMA, Chairman of
the Financial Reporting Executive
Committee (FinREC), which serves
as the AICPA's official voice on
financial reporting matters. The
committee membership currently
includes representatives from
business and industry, public
practice and academia.

Newell, currently national
assurance partner, BDO Dallas,
TX, will replace outgoing chair Jim
Dolinar, and will assume the chair
position after the Committee's May
2019 meeting. She currently holds
a Bachelor of Science in Mathematics and an M.S. in Accounting
from the University of Arkansas,
Fayetteville, AR. ■

AICPA COMMENTS TO IRS
ON PROPOSED FOREIGN TAX
CREDIT REGULATIONS

The AICPA recently made recommendations to the IRS about its proposed
regulations Guidance Related to the Foreign Tax Credit, Including
Guidance Implementing Changes Made by the Tax Cuts and Jobs
Act (TCJA) (REG-105600-18).
Recommendations were made in the following areas:

■ It's never too early to start saving

■ Stock basis determination in connection with IRS Code section 965(b)

■ Do a financial checkup

■ Allocation/apportionment of research and experimentation expenses

■ When purchasing a vehicle, plan ahead and read all of the
fine print

■ Stock characterization of a noncontrolled 10-percent corporation

■ Have a financial emergency backup plan
■ Do your homework when it comes to student loans
Visit the AICPA's 360 Degrees of Financial Literacy
Website for additional tips, tools and resources.
https://www.360financialliteracy.org ■

■ Attributing current year taxes to a Controlled Foreign Corporation's earnings and profits
■ Modification of the definition of an "exempt asset" as it relates to assets
generating foreign-derived intangible income
■ Clarification when a withholding tax imposed on a disregarded dividend is
related to Subpart F or Tested Income Group ■
MAY 2019 ■

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