Archive for October, 2010

On September 15, 2010, the United States Securities and Exchange Commission issued a final rulemaking release that eliminates the requirement for newly public companies and non-accelerated filers (small public companies, which are companies with a total equities value of less than $75 Million) to include auditor attestation reports with respect to internal control over financial reporting in their annual reports.  These amendments provide newly public companies and smaller public companies relief from the significant burden and expense of auditor attestation on their internal control over financial reporting.     The rule does not eliminate the requirements of the officer attestation provisions applicable to those non-accelerated issuers.

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In April, we published “What Offshore Businesses & Tax Practitioners Need to Know About IRS Draft Schedule UTP,” a post on the Proposed Schedule UTP (Uncertain Tax Positions), which is a schedule certain foreign businesses would be required to file with their Form 1120 to disclose uncertain tax positions when the business assets are at least $10 million and the business issues or is included in audited financial statements. On September 24, 2010, the IRS finalized this schedule and also released Announcement 2010-75 explaining the form. The final schedule and instructions make some changes to the draft from April.  Here is an overview of the major changes:

1. There is a five year phase-in of the reporting requirement for the UTP if the Corporation’s assets are under $100 million.
2. There is no reporting of a maximum tax adjustment (the draft required this).
3. There is no reporting of the rationale and nature of uncertainty in the concise description of the position (also required in draft form).
4. There is no reporting of administrative practice tax positions.

Please consult an attorney for assistance in preparing this new form.

Businesses operating in regulated industries (that is, industries subject to rules and regulations promulgated by governmental agencies and departments) are challenged by the use of websites and other online tools which permit users and readers to interact by sharing and distributing information and content (collectively, “Social Media”).  While Social Media presents new professional opportunities for building interactive communities and social networks, it also exposes a Company to potential regulatory violations.  Recently, incidents in the pharmaceutical and financial services sectors arising from two companies’ impermissible use of Social Media exemplify the potential risks.  Together, these incidents illustrate the need for regulated companies to address Social Media use by implementing policies and procedures that are reasonably designed to prevent violations of the statutes under which they operate. 

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Check out the Wall Street Journal‘s article from yesterday on the widespread practice of “scraping” consumer data from websites and mining it for direct marketing purposes: ‘Scrapers’ Dig Deep for Data on Web. New legislation on Internet privacy may make such practices unlawful and punishable by civil fine imposed by the FTC.  Look for more here on this topic in coming months.