Net Worth Method of Proof – Internal Revenue Service Documentation

The below information is the Internal Revenue Service explanation of the Net Worth Method of Proof, with details on how the calculations are done. This page on the IRS website is the source of the information. 9.5.9.5  (11-05-2004) Net Worth Method of Proof An investigation utilizing the net worth method …

Truth About MLM: Almost Everyone Will Lose Money

Last week the Salt Lake Tribune published a fantastic article about the reality in multi-level marketing, entitled Utah Juice Companies Offer Few Prospects. MLMs like Mary Kay, Amway, MonaVie, and Herbalife have been claiming that the great recession has increased the number of distributors because people are looking for ways …

When Employees Steal, the SEC May Punish the Company and the CEO

Guest Post by Keith Paul Bishop Editor’s Note: This article was originally published on Keith Bishop’s blog, California Corporate & Securities Law on November 23, 2011. It offers us a different view from that of Tracy Coenen regarding the SEC’s action against Michael Koss and Koss Corp. for the embezzlement …

IFRS and Fraud: More Challenges, More Risks

Written by Tracy Coenen, CPA, CFF AICPA Corporate Finance Insider Newsletter Reasonable accountants can disagree about whether a move to International Financial Reporting Standards (IFRS) will improve financial reporting. One key concern is that principles-based financial statements are much more susceptible to fraud. Rather than relying on strict rules, management’s …

$849 Billion in Fraudulent Securities Bought By the Fed: What Are They Going To Do About It?

Guest post by Charles Seavey The Federal Reserve owns $849 billion in mortgage-backed securities. Total reserves are $2,872 billion, so mortgage-backed securities comprise 30% of reserves. (No wonder the dollar can’t bounce, even with Europe falling apart.) See: http://www.federalreserve.gov/releases/h41/Current/ To give a sense of the scale of this unprecedented investment …

J2 Global Communications Trying to Hide Accounting Errors

J2 Global Communications (NasdaqGS: JCOM ), better known as eFax, is under fire. Yesterday, Sam Antar tore into the company for an accounting gimmick that the company (and its auditors) had to know was wrong. The issue involves revenue and deferred revenue. In the 10-Q for the first quarter of …

Fortune Hi Tech Marketing Settlement with Texas Attorney General

I’ve written previously about Fortune Hi Tech Marketing (FHTM), a multi-level marketing company that is all about recruiting more people into your pyramid, rather than actually selling products. Fortune Hi-Tech Marketing has previously been the target of legal action by the Attorney General of North Dakota, and has been a …