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Some balance-due notices on joint returns issued in error, IRS says

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Post date 04/08/2022
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Some taxpayers who filed tax returns for 2021 using the married-filing-jointly filing status may receive or have already received an IRS notice CP14 erroneously demanding a remaining tax balance owed or an incorrect amount owed, the Service said in a statement posted on its website Wednesday. Generally, the error occurs when a payment was made by a spouse who was the second-listed taxpayer on the return (secondary spouse). The IRS said its programming does not credit payments made by the secondary spouse to the couple’s joint account when they are either (1) not made electronically; (2) made electronically but posted “before the joint return indicator is present to identify the primary taxpayer”; or (3) made by the secondary spouse via the Make a Payment feature of an online IRS account. Affected taxpayers who have fully paid the correct amount of taxes due do not need to respond to an erroneous notice, the IRS said. Those who paid only part of their taxes due should pay the remaining correct balance either in full or enter into an installment agreement or other collection alternative. Taxpayers with an online account under the Social Security number of the taxpayer who made the payment can check the account to ensure the payment was credited. Although it does not refer specifically to this glitch, a Tax Tip posted by the Taxpayer Advocate Service (TAS) on July 22 advises taxpayers generally on how to deal with a CP14 notice. “The first thing to know is don’t panic!” the article urges. And it implies some notices may be erroneous. Under a subheading “What should I do if I receive a CP14 notice by mistake?” TAS recommends taxpayers retain the erroneous notice and verify their taxes were in fact paid and credited properly, which can be done with an IRS online account.

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PCAOB, SEC chairs look to strengthen oversight of auditing practices

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Post date 04/08/2022
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Days before the 20th anniversary of the Sarbanes-Oxley Act (SOX), PCAOB Chair Erica Y. Williams and SEC Chair Gary Gensler discussed its impact and its future in separate virtual events.

The PCAOB, which revealed its short- and midterm projects earlier this year, used the occasion of the SOX anniversary to identify three key areas for moving its investor-protection mission forward:

Modernizing auditing standards.
Enhancing inspections.
Strengthening enforcement.

“Those who break the rules should know that the PCAOB means business,” Williams said during a virtual event hosted by the Council on Institutional Investors. “We intend to use every tool in our enforcement toolbox and impose significant sanctions, including substantial penalties, to ensure there will be consequences for putting investors at risk.

“Working together, strong standards, inspections, and enforcement will reinforce each other and help keep investors protected.”

SOX chartered the PCAOB in 2002 and charged it with being the standard setter for public company audits. Gensler, who worked closely with Sen. Paul Sarbanes to develop SOX, said Congress initially allowed the PCAOB to use existing audit standards on an interim basis, but many of those standards remain on the books to this day.

In May, the PCAOB said that review and possible replacement of the interim standards is now a “midterm” project (defined as a project “where the staff is actively engaged, but board action is not anticipated in the next 12 months”).

“I look forward to these critical auditing standard updates,” Gensler said during a virtual event hosted by the Center for Audit Quality. “And while they have their work cut out, I believe Chair Erica Williams and the board can live up to Congress’s original vision with respect to standard setting. I’m hopeful we can make some progress before Sarbanes-Oxley turns 21.”

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IAASB issues new FAQs for reporting going concern matters

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Post date 04/08/2022
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The International Auditing and Assurance Standards Board (IAASB) has issued a nonauthoritative publication to address some common questions related to reporting going concern matters in the auditor’s report. Specifically, the publication focuses on the use of and interrelationship of the Material Uncertainty Related to Going Concern (MURGC) and Key Audit Matters (KAM) sections, and the Emphasis of Matter (EOM) paragraphs in an auditor’s report prepared in accordance with the International Standards on Auditing (ISAs). The publication was developed by the IAASB’s Going Concern Task Force. Some of the frequently asked questions include:

Do material uncertainty related to going concern, key audit matters, and the emphasis of matter apply to all audits?
What are the implications for the auditor’s opinion and the auditor’s report of material uncertainty related to going concern, key audit matters, and emphasis of matter?
When no material uncertainty related to going concern exists, can going concern matters be communicated as a key audit matter in the auditor’s report? Or can they be reported as an emphasis of matter?

This publication does not amend or override the ISAs, the texts of which alone are authoritative, and reading the publication is not a substitute for reading the ISAs, the IAASB said.