Here are some highlights from the November 1970 issue. Click here to view an interactive timeline of tax and other events from the past 50 years.
Lump-sum distributions from qualified retirement plans
Before the enactment of the Tax Reform Act, lump sum distributions from qualified "corporate" pension, profit-sharing, stock bonus, and annuity plans were entitled to capital gain treatment under Sec. 402(a)(2) if made on account of the employee's separation from service or on account of his death (after such separation). . . . The Tax Reform Act has restricted the availability of capital gain treatment for such lump sum distributions. The other tax advantages have not been disturbed.
— Stuart R. Josephs, CPA, "TRA Provisions Affecting Restricted and Deferred Compensation," p. 679. Josephs was a principal with Arthur Young & Co. in Milwaukee.
Statements on Responsibilities in Tax Practice
The tax division of the American Institute of Certified Public Accountants recently issued three new Statements on Responsibilities in Tax Practice. The Statements are titled: "Knowledge of Error — Return Preparation"; "Knowledge of Error — Administrative Proceedings"; and "Advice to Clients." . . . The Statements recommend standards of responsibility for the CPA in relation to his client, the public, the government and his profession.
— Herbert Finkston, CPA, "Professions at Work: New Statements on Responsibilities in Tax Practice," p. 704. Finkston was assistant director of the AICPA Tax Division.
Probably the biggest obstacle standing in the way of taxpayers who would like to use the Lifo method of valuing inventories for tax purposes is the requirement that the same method be used for financial statement purposes. In 1969 the IRS relaxed this requirement, ruling that an affiliated group could report all inventories on a Fifo basis for financial statement purposes, even though a subsidiary used Lifo for income tax purposes. Rev. Rul. 69-17. . . . This ruling has been revoked by Rev. Rul. 70-457. . . . One would have to gather that the IRS was besieged with ruling requests covering circumstances radically different from those anticipated in the original ruling and, therefore, decided to revoke it.
— Nick DeLeoleos, CPA, "Tax Clinic: Lifo Conformity — and Consequences of Rev. Rul. 70-457," p. 712. DeLeoleos was with Arthur Andersen & Co. in Chicago.