Month: June 2003

Ropes & Gray has published this article on the 11-K 906 Certification issue discussed here in previous posts.

AccountingWeb.com has this article (provided by CCH, Inc) regarding the tax implications of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (“JAGTRRA”): “Industry Sector Implications of Tax Cuts.”

In addition, today’s edition of the Wall Street Journal reports on important implications of JAGTRRA on margin accounts. The article discusses how investors who own margin accounts may be in for a surprise when they discover that the dividends they receive in these accounts may not be eligible for the new lower tax on dividends and refers us to the very helpful site for the Securities Industry Association (Wall Street’s trade group), SIA.com, which has a brochure explaining the implications of JAGTRRA. You can access the brochure here. Two more articles today in the Journal discuss JAGTRRA as well: “Tax Plan Puts Crimp in Short Selling” by Allison Bisbey Colter, and “New Law Leaves Recapture Tax Rate Unchanged” by Roy A. Smith.

Thanks Benefitslink for this article by Watson Wyatt at WatsonWyatt.com: “Ratification of U.S.-U.K. Tax Treaty Is Good News for Expatriate Employees.” As discussed here in previous posts, there is a growing movement of outsourcing to other countries, so that companies will have to grapple more and more with the tax treatment of pension benefits for expatriate employees. The article discusses how the United States has agreed under this treaty with the U.K. not to tax U.S. citizen employees working in the United Kingdom on their current benefit accruals or contributions to U.K. pension schemes. Apparently, according to the article, this is the first time the United States has agreed not to tax its citizens on foreign pension income.

McDermott, Will & Emery has posted an excellent article on the new proposed COBRA regulations.

Today’s edition of the Wall Street Journal has a very good article about a shareholder proposal for Siebel Systems, Inc., submitted by TIAA-CREF, that advocates stock options issued to Siebel senior executives be tied to the company’s performance. The article describes the battle that has been waged by TIAA-CREF over the proposal which will be voted on today. Another article at CBSMarketWatch.com reports that representatives of the American Federation of State, County and Municipal Employees union pension plan are picketing outside the shareholder meeting site today to register their complaints against Siebel’s stock option compensation for executives.

Thanks CorpLawBlog for providing us with these comments (via the Los Angeles Daily Journal) by former SEC Chairman Harvey Pitt that Sarbanes-Oxley has “critical deficiencies,” “redundancies” and “inconsistencies” and “may not be comprehensible.” Read more about it here.

Today’s Federal Register is here and contains temporary regulations providing an automatic extension of time to file certain information returns and exempt organization returns. The temporary reg.’s eliminate the signature and explanation requirements for certain types of automatic extensions.

Another day of chaos in France over pensions as reported by AFP for Yahoo! News at Yahoo.com. Baby boomer demographics is the root cause reports this article by Reuters via Yahoo! News at Yahoo.com.

More on today’s news later . . .

The first of two NASA rovers, Spirit, began its 311 million mile journey to Mars yesterday as reported here for Comcast News at Comcast.net. Opportunity, another NASA rover, should follow it into space later this month, but no earlier than June 25th. Spirit should arrive on Mars in January of next year. The article reports that Spirit and Opportunity will join two other NASA spacecraft, both orbiters, already at Mars, and that additional spacecraft from Britain, Europe and Japan are on their way to the planet as well. Firouz Naderi, manager of NASA’s Jet Propulsion Lab’s Mars exploration program, calls this “an unprecedented assault on one planet.”

Benefitslink points us to this article by John Carroll for Managed Care Magazine at ManagedCareMag.com: “AWP Reimbursement Ruling May Be More Than Meets [the] Eye.” The article discusses how managed care will be affected by the U.S. Supreme Court case of Kentucky Association of Health Plans v. Miller (discussed here) which held that a state’s “any willing provider law” was not preempted by ERISA. The article cites predictions that the fallout of this ruling will be, for states that have “any willing provider” laws, different levels of co-pay and different levels of care that patients can choose from (since HMO’s can no longer restrict which providers will be part of the network) as well as different levels of pay to providers based on performance.

Watson Wyatt has posted an article with some interesting thoughts on the stock option accounting problem: “New Study on Disclosure of Stock Option Expense: Substance Matters More Than Form.” The article suggests that FASB’s proposals to expense stock options may not have the downward effect on stock prices that has been widely predicted. The article also suggests that companies look at alternatives to stock options, such as restricted stock, performance-based shares and management stock purchase plans (MSPP). Another article by Watson Wyatt looks at nonqualified plans and discusses the provisions governing these types of plans that were part of the Senate version of the Jobs and Growth Tax Relief Reconciliation Act before the provisions were dropped from the bill. The article suggests that the provisions have support from both the House and the Senate and may make it into legislation by the end of the year.