Interest on Individual Refunds to Run from April 15.
The IRS stated that overpayment interest on individual 2019 refunds with respect to returns filed by July 15 will run from April 15 until the date of the refund. In the case of a refund, the interest is allowed and paid from the date of the overpayment to a date (to be determined by the IRS) preceding the date of the refund check by not more than 30 days, whether or not such refund check is accepted by the taxpayer after tender of such check to the taxpayer. If any overpayment of tax imposed is refunded within 45 days after the last day prescribed for filing the return of the tax (determined without regard to any extension of time for filing the return) or, in the case of a return filed after such last date, is refunded within 45 days after the date the return is filed, no interest shall be allowed under IRC section 6611(a) on such overpayment. For individuals, the date of overpayment of income taxes is the due date of the income tax return, without regard to extensions. Overpayments are shown on Form 1040 as a refund.
New FASB Chairman Signals Board to Focus on Maintaining, Improving Existing Rules.
New FASB Chairman Richard Jones said, in effort to glean insight that would aid in understating financial reporting challenges companies uniquely face at this point in time, his priority is to listen and learn. Jones said the Board will “press pause” to listen to companies’ challenges from their unique vantage points will enable the board to continue to nimbly address issues “in ways that provide investors with better information in the most cost-effective way.” He added, “I believe we already have a solid set of standards, so I anticipate most of our work will focus on maintenance and improvement rather than dramatic accounting changes. … That said, there should be opportunities to strike a balance between the user’s desire for more granular information with the preparer’s call for less cost and complexity. Your input helps us discover how to do that.”
Credit Unions Appeal for Exemption from Credit Loss Accounting Rules.
The Credit Union National Association (CUNA), the main organization representing credit unions nationwide, said it hopes new FASB Chairman Richard Jones will get behind a request that would exempt credit unions from applying the current expected credit loss (CECL) standard. In addition to the compliance costs and other resources necessary to comply with CECL, “we are concerned with the impact the standard will have on credit unions’ financial positions,” CUNA told Thomson Reuters on July 8. “The forward-looking, life-of-loan approach necessary under CECL will require credit unions to increase—in some cases substantially—their loan loss reserve accounts,” said Luke Martone, CUNA senior director of advocacy and counsel. CUNA wrote to Jones on July 1, stating that the new accounting standard places considerable strain on resource-strapped credit unions though the changes are not relevant to issues they grapple with.
Revised Standard to Improve Audits of Accounting Estimates.
The AICPA’s Auditing Standards Board (ASB) has issued a revised standard intended to improve audits of accounting estimates and encourage auditors to exercise professional skepticism. Statement on Auditing Standards (SAS) 143, Auditing Accounting Estimates and Related Disclosures, supersedes SAS 122, AU-C Section 540, Auditing Accounting Estimates, Including Fair Value Accounting Estimates, and Related Disclosures. The AICPA wants auditors to focus on factors driving estimate uncertainty and potential management bias. Company management has an incentive to record estimates that make their books look better. Moreover, inspection findings have shown that this is an area in need of improvement. “This new auditing standard provides more robust guidance for auditors who are addressing an increasingly complex financial reporting environment,” AICPA Chief Auditor Bob Dohrer said in a statement. “In our current period of economic uncertainty and volatility, management’s asset impairment estimates are particularly important, and this standard will aid auditors in assessing them.”
State and Local Governments Get Clarifying Guidance for Reporting CARES Act Provisions.
On July 2, the GASB issued a Technical Bulletin (TB) to clarify how to report transactions related to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) when using current accounting rules. The TB addresses the application of recognition requirements of GASB Statements (GASB) 33, Accounting and Financial Reporting for Nonexchange Transactions, GASB 56, Codification of Accounting and Financial Reporting Guidance Contained in the AICPA Statements on Auditing Standards, and GASB 70, Accounting and Financial Reports for Nonexchange Financial Guarantees, to financial distributions obtained from certain programs established by the CARES Act. It also clarifies presentation rules for certain inflows of CARES Act resources and the additional unplanned outflows of resources incurred in response to COVID-19. The guidance takes effect immediately.