August 30, 2005

Quote of the Day (083005): On Accounting Firm KPMG’s “Abusive Tax Shelters” Settlement with the Feds

Filed under: Economy,Quotes, Etc. of the Day,Taxes & Government — Tom @ 4:35 pm

The Wall Street Journal, on the $400-plus million-dollar settlement accounting firm KPMG has agreed to with federal prosecutors over “abusive tax shelters”:

In the meantime, the finger-waggers in Congress might acknowledge their role in creating the 6,000-page, 2.8-million-word, tax code Frankenstein that facilitates the tax-avoidance industry. President Bush’s tax-reform commission is due to report at the end of September. Here’s hoping that a simple system with a low rate that encourages voluntary compliance will lead its list of recommendations.

The Journal notes that KPMG could have fought, gone to trial, won, and found itself in the same position as Arthur Andersen ended up in with Enron: a dead winner. Then we’d have three dominant international accounting firms instead of four, with all the negative competitive implications that situation would have caused.

Don’t get me wrong; I have plenty of bones to pick with fellow members and the large firms in the profession whose credential I carry. I just think that the Feds should be indicting individuals, including the managing partners and other firm executives. Instead, they are indicting (or threatening to indict) the firms themselves, which in Andersen’s case ended up killing the firm, and in KPMG’s case would likely have done the same, punishing everyone in the firm equally regardless of innocence or guilt. In the meantime, the actual perpetrators, if they are indeed guilty (which thanks to the lack of individual trials we’ll never know), are getting off the hook.

But, getting back to the quote, the more complex the code, the more opportunities there are for being “creative.” If Congress would gut the current Internal Revenue Code and replace it with a flat tax, or go with the most ambitious idea of totally replacing the income tax with something like the FAIR tax, the opportunities for “creativity” would mostly go away.

Beginning West Coast Blogging Week: Free Credit Reports Available to All on Sept. 1; Ignore “Free Report” Pretenders

Filed under: General,Money Tip of the Day,Scams — Tom @ 11:08 am

BizzyBlog will be on business in California most of the week; hence the late morning post. Hopefully during the rest of the week I’ll be able to get posts ready the previous evening and defer them until the next morning so you, dear readers, can have new info to look at here early each Eastern-Time morning.

The Money Tip of the Day is that the final phase of the Fair and Accurate Credit Transactions Act (FACTA) relating to the availability of annual free credit reports kicks in just two days from now on September 1, allowing those in the following states to get free reports once every 12 months: CT, DE, DC, ME, MD, MA, NH, NJ, NY, NC, PA, RI, VT, VA, WV. Some of the states just mentioned (MA for one) already had this availability under previous state laws.

So finally, two days from now, everyone will be able to get their credit report from each of the three bureaus once every 12 months using one of three methods: Internet, phone, or mail.

The contact info is:

Phone: 877-322-8228
Mail: Annual Credit Report Request Service
P.O. Box 105281, Atlanta, GA 30348-5281

Credit reports are free. Credit scores are not.

This previous post suggested, thanks to online crooks who appear to have gained the ability to compromise Secure Sockey Layer security and successfully pose (site seal and all) as someone else, that getting your free reports by phone is safer that going online.

Since everyone in the country is now eligible for the annual report using the above means, you can officially once and for all ignore all the other noise you hear on the radio and see on TV about how to get “free credit reports.” These ads are really come-ons for free credit-monitoring services. The Federal Trade Commission recently cracked down on deceptiveness of these ads, so if we’re lucky we won’t be hearing or seeing any of them again.