The stockholders in this case filed a lawsuit against Beazer and some of its officers for "issuing false and misleading statements regarding the company's business prospects and not disclosing facts the defendants knew related to alleged improper lending practices in its mortgage origination business" (Burney, 2009, p. 1). This case was settled with Beazer's insurance company paying $30.5 million. In this case, the restatement of past financial statements wreaked havoc on Beazer Homes USA. It began with an internal investigation, which led to an investigation by the SEC and ended with several lawsuits and large quantities of money being spent to settle
Pregent engaged in a scheme to defraud TechFab’s creditors, bankruptcy trustee and the bankruptcy court by transferring certain TechFab assets, including equipment and ongoing business, to a newly formed company. Pregent arranged for that new company to pay compensation for TechFab’s assets directly to himself, then filed a Chapter 7 bankruptcy for TechFab to discharge its debts all while concealing the pre-bankruptcy transfer of assets and the agreement to pay compensation for those assets to Pregent. Furthermore, Pregent failed to disclose the transfers and compensation agreement in TechFab’s bankruptcy pleadings and during his testimony before a meeting of
During an investigation there were many questionable accounting transactions that were brought up, such as large executive bonuses as well as many loans for large amounts of money that were later forgiven without repayment. Kozlowski and Swartz were sentenced to 8 – 25 years in prison ("Investopedia", 2014). Then a lawsuit against Tyco cost the company $2.92 billion in repayment to its investors ("Investopedia", 2014). The biggest issue here was allowing for a CEO and CFO to have too much access to funds. A protocol should be in place that when a sale of stocks is made and no one authorized it then a full audit should take place from a third party or if a loan is going to be made then more then just the CEO and CFO’s approval needs to be given.
November 13, 2011 TAX FILE MEMORANDUM FROM Annon SUBJECT MegaCorp, Inc. and Business Expense Today I spoke with our client, Peaceful MegaCorp, Inc. regarding their recent audit notice from the IRS. They want to know if the IRS is correct when they told MegaCorp, Inc. that they couldn't characterize the $5 million payment to Ideas, Inc. as necessary business expense. Instead, they need to characterize it as a capital expenditure, so they won't be able to deduct this payment. FACTS MegaCorp, Inc. purchased a company called Little, Inc. including all their assets and liabilities. Prior to the purchase, Little was involved in a patent infringement with Ideas, Inc. MegaCorp, Inc. agreed to pay $5 million in damages, and deduct it as necessary business expense.
In December 2014, attorneys for Ventura filed a separate lawsuit against HarperCollins, the parent company of the publisher, for failing to check the accuracy of the story it used in publicity. The suit alleges that the false account used in publicity had "increased sales" and generated "millions of dollars for HarperCollins." Other controversies Kyle's family claimed he donated his book proceeds to Veterans' Charity, but reports surfaced that he had kept most of the profit for himself. National Review rebutted the claim that all proceeds of his book went to veterans' charities. According to reports, around 2 percent went to the charities, while Kyle's family took $3
While under the investigation the IRS has led Congress to believe that after lawmakers question the IRS over the undue scrutiny the agency put on conservative groups that filed for tax-exempt status during the 2012 elections, they'll want to take action -- to hold people accountable and eventually consider legislation to amend any systemic problems that led to this kind of political discrimination. The story offered perspective and no worldviews. Members of Congress are already questioning the IRS about the scandal behind closed doors, but the public line of questioning starts Wednesday, when Attorney General Eric Holder testifies before the House Judiciary Committee. Yes, there were some assumptions that the IRS was dealing under the table but the story did not go that far in-depth. The President stated in his speech that” IG is conducting a full investigation of the problem and that he cannot say what the
However, if the expenses incurred while working on this case were not deducted previously, then they would be non-taxable. 1(c) What is my determination regarding reducing the taxable amount of income for both the $300,000 and the $25,000? As the full amount of the $300,000 was received after the closure of the case in a lump sum, then there is little to do in minimizing the taxes other than taking full advantage of the deductions allowed for businesses. 2(b) Mrs. Smith, your first question is regarding what the different tax consequences would be on paying down the current mortgage and assuming a new mortgage for Federal income tax purposes. For the sales of the current home, the IRS states that married taxpayers can exclude up to $500,000 of gain upon the sale of the residence.
Known in this case as Johnson Services which has accumulated significant losses. Issues: 1. Outstanding purchase of stock (a) Mr. Jones would like to know if he should purchase the stock of Smithton outright, leaving Smithton intact. He also wants to know if he issues debt in his Johnson Services to pay for the Smith Company would that raise debt to equity issues (b) Mr. Jones also wanted to know should he convert Smithton to an S Corporation and change the fiscal year to a calendar year. (c) Mr. Jones also asked what are the potential tax ramifications that exist for
Question: : (TCO D) Tender Foot Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 40% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $500,000. What is the required journal entry as a result of this litigation?
Professor Darlene Green-Connor ACC 403 November 27, 2012 Sarbanes-Oxley Act The Sarbanes-Oxley Act was put in place by Congress in 2002 in response to the financial fraud committed by multiple corporations. The main objective of the Act was to restore faith in investors whom experienced financial losses due to the financial fraud committed by the corporations. The Sarbanes-Oxley Act, also known as SOX, contains many laws and regulations that must be followed by small and large companies. Some of the results of the SOX are: external auditors gained more independence in reviewing corporate financial statements for accuracy, the board of directors’ oversight role was increased, upper management is required to certify the accuracy of financial