Weinberg & Company

              Certified Public Accountants

SIMPLY STATED

MAY 2017

ACCOUNTING

Dodd-Frank: The rollback begins

The House Financial Services Committee passed the Financial CHOICE Act of 2017, sending it to the full House for approval. (Financial Choice Act – Executive Summary pdf)

The legislation would relieve financial institutions of several regulations by including: a repeal of the Volcker Rule; a restructure of the Consumer Financial Protection Bureau; an end of “too big to fail” and bank bailouts; making several financial regulatory agencies subject to annual appropriations by Congress; requiring congressional approval of major financial regulations; and force government agencies to do more extensive analysis (i.e. cost-benefit analysis) before finalizing new financial rules.

It would also demand accountability from Wall Street through enhanced penalties for fraud and deception and it would incorporate more than two dozen Committee or House-passed capital formation bills, including: H.R. 1090 – Retail Investor Protection Act; H.R. 4168 – Small Business Capital Formation Enhancement Act; H.R. 4498 – Helping Angels Lead Our Startups Act and H.R. 5019 – Fair Access to Investment Research Act.

“Our plan replaces Dodd-Frank’s growth-strangling regulations on small banks and credit unions with reforms that expand access to capital so small businesses on Main Street can grow and create jobs,” said Committee Chairman and author of the bill, Rep. Jeb Hensarling.

SEC: Relief is on the way

Jay Clayton has been confirmed by the U.S. Senate (61-37 vote) to run the Securities and Exchange Commission replacing Mary Jo White. Clayton, 50, a partner at the law firm of Sullivan & Cromwell, has steadfastly advocated for the gutting of the 2010 Dodd-Frank Act and though disclosing few details, has said he wants to make it more appealing for companies to sell shares to the public.

Responding to some Senators during his confirmation hearing who alleged that his career representing banks and hedge funds could lead to conflicts of interest, Clayton pledged to be tough on corporate misdeeds.

Several executive orders signed by President Trump to ease financial regulations have had little traction because of vacancies at the SEC – the five-person commission currently has just three members – one of whom can easily block a vote by just not showing up, according to the agency’s quorum requirements.

Regulations review ordered at Treasury

President Trump signed an executive order directing the Treasury Department to review “significant” regulations that were issued after January 1, 2016 to determine if the regulations cost too much, are too complex, or exceed the IRS’ statutory authority. (Presidential Executive Order on Identifying and Reducing Tax Regulatory Burdens). The President described the order, which requires the Treasury Department to report back within 60 days, as beginning “the process of tax simplification.”

Tax Exempt not Speech Exempt

Fulfilling a campaign promise to conservative Christian voters, President Trump signed an executive order reducing restrictions of political activity by houses of worship.

Under the order, the Treasury Department is directed not to take any adverse action against any religious institution or individual who engages in political speech, and effectively directs the IRS to stop enforcement of the Johnson Amendment – a provision of the tax code, enacted in 1952, that prohibits religious organizations from endorsing political candidates for which it could lose its tax exempt status.

Beyond political speech, the order could have far reaching effect on such contentious issues as whether religiously affiliated health-care and social-services agencies must allow adoptions by same sex couples, or provide access to abortions. The President said that Attorney General Jeff Sessions will now set new guidelines for how federal agencies must accommodate religious beliefs.

MONEY TALKS 

How ’bout a free toaster?

Goldman Sachs Group wants to do more business with ordinary consumers. That’s right, the adviser to the richest people and corporations in the world will be marketing its high-interest bearing deposit products to regular Joes, according to Goldman’s Chief Strategy Officer Stephen Scherr. “The ambition we have is for the retail deposit platform to grow so that it becomes a real, sizable channel,” he said.

Goldman’s current online deposits from individuals are $12 billion, a fraction of the $124 billion on the bank’s balance sheet, reports Reuters. Goldman’s business diversification strategy includes moving into traditional lending and utilizing retail deposits to boost profits.

While the average national savings account pays a .06% interest rate, Goldman is offering new customers 1.05% on their digital savings accounts. An attractive rate – no word if that includes a free toaster.

Over-charged?

Tesla, the Silicon Valley electric-car maker co-founded by entrepreneur Elon Musk, reported $7 billion in revenue in 2016 and surprised investors by reporting a Q3 profit of $21.9 million. The company has yet to post a yearly profit. But earnings, or the lack thereof, doesn’t seem to matter when momentum is pushing you forward and the road you’re traveling is Wall Street.

Tesla has just surpassed Ford in market value. Started by Henry Ford over 100 years ago, Ford Motors brought in $151.8 billion in 2016 revenue and posted a profit of $4.6 billion. Ford’s market cap (as of May 15, 2017) is $43.52 billion, while Tesla’s market cap is $51.86 billion.

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Where to Retire?
Our tax professionals are often asked where are the best places to retire. Certainly, there are clear tax advantages that can be obtained by relocating to various parts the country. But ultimately, a happy retirement involves a lot more than a lower tax bill. We dusted off the following old entry to illustrate the point.

You can retire to Arizona where…  
1. You are willing to park 3 blocks away from your house because you found shade.
2. You can drive for 4 hours in one direction and never leave town.
3. You know that “dry heat” is comparable to what hits you in the face when you open your oven door.
4. The four seasons are: tolerable, hot, really hot, and ARE YOU KIDDING ME??

You can retire to California where…  
1. You make over $250,000 a year and you still can’t afford to buy a house.
2. The fastest part of your commute is going down your driveway.
3. You know how to eat an artichoke.
4. When someone asks you how far something is, you tell them how long it will take to get there rather than how many miles away it is.
5. The four seasons are: Fire, Flood, Mud, and Drought.

You can retire to New York City where…
1. You say “the city” and expect everyone to know you mean Manhattan.
2. You can get into a four-hour argument about how to get from Columbus Circle to Battery Park, but can’t find Wisconsin on a map.
3. You think Central Park is “nature.”
4. You’ve worn out a car horn. (If you have a car).
5. You think eye contact is an act of aggression.

You can retire to Minnesota where…  
1. You only have three spices: salt, pepper, and ketchup.
2. Halloween costumes have to fit over parkas.
3. You have seventeen recipes for casserole.
4. Sexy lingerie is anything flannel with less than eight buttons.
5. The four seasons are: almost winter, winter, still winter, and road repair.

You can retire to The Deep South where…  
1. You can rent a movie and buy bait in the same store.
2. “Y’all” is singular and “all y’all” is plural.
3. Everyone has 2 first names: Billy Bob, Jimmy Bob, Joe Bob, Betty Jean, Mary Beth, etc.
4. Everywhere is either: “in yonder,” “over yonder” or “out yonder”.

You can retire to Colorado where…  
1. You carry your $3,000 mountain bike atop your $500 car.
2. You tell your husband to pick up Granola on his way home, so he stops at the day care center.
3. A pass does not involve a football or dating.
4. The top of your head is bald, but you still have a pony tail.

You can retire to Nebraska where…
1. You’ve never met any celebrities, but the mayor knows your name.
2. Your idea of a traffic jam is three cars waiting to pass a tractor.
3. You have had to switch from “heat” to “A/C” on the same day.
4. You end sentences with a preposition: “Where’s my coat at?”

Finally, you can retire to Florida where…
1. You eat dinner at 3:15 in the afternoon.
2. All purchases include a coupon of some kind — even houses and cars.
3. Everyone can recommend an excellent cardiologist, dermatologist, proctologist or podiatrist.
4. Road construction never ends anywhere in the state.
5. Cars in front of you often appear to be driven by headless people.
WEINBERG & COMPANY

Simply the right choice

 

Weinberg & Company is a leading, international, full service, multi-office CPA firm serving clients throughout the United States and the Pacific Rim. Founded over two decades ago, the practice groups include: Assurance and Audit, Tax and Accounting, and Advisory Services. Weinberg has a depth of knowledge and experience to meet the needs of both public and privately held companies, high net worth individuals, entrepreneurs, family offices, and can provide customized business management services. www.weinbergla.com

1925 Century Park East, Suite 1120  

Los Angeles, CA 90067

(310) 601-2200

6100 Glades Road, Suite 205

Boca Raton, FL 33434

(561) 487-5765  

Room 2109, 21/F, Shui On Centre

6-8 Harbour Road, Wanchai, Hong Kong P.R.C.

DISCLAIMER:
Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
Quick Links

Corey Fischer
Firm Managing Partner

310-601-2200

CoreyF@weinbergla.com

Jeffrey B. Engler
Director of Tax,
Los Angeles 

310-601-2200
JeffreyE@weinbergla.com

Bruce Weinberg
Florida Managing Partner

561-487-5765

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