FL Certified Audit Program May Expand - There's legislation in Florida (S.B. 1022) that aims at expanding a program the state has had for some years to supplement the number of sales tax audits it does.  Under this initiative, a taxpayer may request an audit of its state and local Florida sales and use tax liability by one of a number of private accounting firms specially certified by the state.  The accountants are paid by the taxpayer; the state has no part in the compensation for the audit.  As for the audit itself, it may not be cheap, but it may be less intrusive for the business than an audit by the state would be, and the auditors are far likelier to look for refund opportunities.  Moreover, if the taxpayer requests such an audit before the state notifies it of a coming state audit, all penalties found to be due on underpayments will be waived, along with a large part of the interest.  The current legislation would broaden this incentive, so that - it is assumed - more audits of this sort would be done.  Florida has lost a lot of its own state auditors over the last few years, and budget problems have prevented their replacement.  Although we believe that similar tax-certification audits are regularly performed in some foreign jurisdictions -- Mexico, for instance -- we hadn't heard of its being done in the U.S. or Canada.  Are there other states or provinces with programs like Florida's?

IRS Holds Litigation Costs Deductible - In a private letter ruling the federal Internal Revenue Service has held that costs of litigation, including settlement payments, arising out of the merger of two companies, were deductible as ordinary and necessary business expenses by the acquiring company in the merger, and did not have to be capitalized.  The transaction here, characterized by IRS as a business reorganization, involved the acquisition by one publicly traded C corporation of all of the stock of another such company.  After the deal was agreed to by both parties, shareholders of the acquiring company sued, alleging that that company had made misrepresentations about the acquired company that affected the stock price of the acquiring company following the merger.  The suit was settled, and the acquiring company asked IRS for advice.  The Service first noted that expenses incurred in acquiring a capital asset, including intangibles such as an ownership interest in a corporation, are commonly required to be capitalized.  However, it continued, the expenses here, the occasion of which arose after the actual acquisition deal, were not expenses of that nature.  Following prior court cases, IRS looked to "the origin of the claim" involved in the litigation, and found it to be in the acquiring company's ordinary and necessary business activities rather than in the capital transaction.  IRS Private Letter Ruling no. 201412002, released March 21, 2014

ON to Spend Much More on Transportation - The press reports that the premier of Ontario announced during a speech April 14, 2014, that the province will be spending some $29 billion over the next decade on transportation projects, about half of it in the Toronto/Hamilton area and half in the rest of Ontario.  Although details are somewhat sparse, the plan involves dedicating 7.5 cents per gallon of the Ontario motor fuel tax and all of the provincial sales tax on gasoline and diesel fuel to this program.  Canadian jurisdictions do not generally dedicate highway user taxes for transportation, so this new program is not only a large one, but appears somewhat unusual. 

ATA's NAFC Meeting Coming Up in June - Registration is now open for the joint meeting of two ATA councils, the National Accounting & Finance Council and the Information Technology & Logistics Council, to be held this year June 16 to 18 at the Lincolnshire Marriott Resort in the northern suburbs of Chicago.  The NAFC is ATA's individual membership organization for accountants, insurers, finance and tax experts serving the trucking industry, both in-house with motor carriers and with third-party suppliers.  The NAFC sessions at the meeting will include updates on independent contractor issues, accounting developments, captive insurance companies, and state tax developments (the last presented by this writer).  Attendees can also go to any of the ITLC sessions as well.  For more information, or to register for the meeting, go here:

http://www.trucking.org/event.aspx?uid=686121da-766a-4a17-9176-6dda78377f66.