Professor Elam

Here is the latest on tax revenues for the Federal Govt as the FEDS spend more money than ever.

Lately in class I have offered the opinion that
CPAs will come closer and closer to  govt employess, why?

CPAs prepare audited statements, pro formas for bank loans and tax returns. In all three instances the govt can make the case it is the ultimate risk taker. It has taken over failed business, insures banks, and now is 18% down on tax revenue.  the inevitable reaction, now that cpas do not regulate themsevles but answer to the pcaob, will be to demand 'accountability from cpas to government. Alerady the Feds aredemanding that tax preparers answer questionaires looking for more requirements for preparer registration.

You heard it here first. The new requirement will simply be for tax preparers to become tax collectors. I suspect the govt will take the position that if the return had been properly done, a tax audit would not be necessary. THere will be in their view, only one correct answer.

Inquiring minds note Federal Tax Revenues Plummet Most Since 1932.
The
recession is starving the government of tax revenue, just as the
president and Congress are piling a major expansion of health care and
other programs on the nation's plate and struggling to find money to
pay the tab.

The numbers could hardly be more stark: Tax
receipts are on pace to drop 18 percent this year, the biggest
single-year decline since the Great Depression, while the federal
deficit balloons to a record $1.8 trillion.

Other figures in an
Associated Press analysis underscore the recession's impact: Individual
income tax receipts are down 22 percent from a year ago. Corporate
income taxes are down 57 percent. Social Security tax receipts could
drop for only the second time since 1940, and Medicare taxes are on
pace to drop for only the third time ever.

The last time the government's revenues were this bleak, the year was 1932 in the midst of the Depression.

In
May the government's best estimate was that Social Security would start
to pay out more money than it receives in taxes in 2016, and that the
fund would be depleted in 2037 unless changes are enacted.

Some experts think the sour economy has made those numbers outdated.

"You
could easily move that number up three or four years, then you're
talking about 2013, and that's not very far off," said Kent Smetters,
associate professor of insurance and risk management at the University
of Pennsylvania.