Analysis: Insider trading probe impact on KPMG expected to be short-lived
(Reuters) – KPMG will suffer some financial and reputational damage from insider trading charges filed against a former senior audit partner, but significant legal liability for the firm was unlikely, said audit industry experts on Thursday.
The global accounting giant fired Scott London, a long-time Los Angeles audit partner, after learning he shared privileged information on audit clients with a golf partner, Bryan Shaw.
Insider trading probe impact on KPMG expected to be short-lived
April 11 (Reuters) – KPMG will suffer some financial and
reputational damage from insider trading charges filed against a
former senior audit partner, but significant legal liability for
the firm was unlikely, said audit industry experts on Thursday.
The global accounting giant fired Scott London, a long-time
Los Angeles audit partner, after learning he shared privileged
information on audit clients with a golf partner, Bryan Shaw.
Essential reading: Middle class tax hikes loom in Obama proposal despite pledge, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Middle class tax hikes loom in Obama proposal despite pledge to avoid them. The Washington Post. President Barack Obama proposed a 2014 budget that, if adopted, would break his promise to avoid any tax increases for middle- and low-income people. Link
* Fund managers warn on taxes in Obama budget. Stephen Foley and Dan McCrum – The Financial Times. President Barack Obama surprised Wall Street by backing a plan that would force investors to pay tax on unrealized derivatives gains, opening up a new front in his attempt to raise revenues through a reform of the tax code. Link
Essential reading: Luxembourg backs info exchange in fight against tax evasion, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Luxembourg agrees to automatic information exchange to help fight tax evasion. The Washington Post. The initiative, which is to start in 2015, follows international pressure on Luxembourg to end its policy of banking secrecy that critics say has helped people hide money from tax authorities. Link
* FBI probes trading as KPMG quits Herbalife, Skechers audits. Martinne Geller and Emily Fitter – Reuters. In a blow to one of the world’s largest accounting firms, KPMG said it resigned as auditor of two U.S. corporations amid an FBI investigation into insider trading allegations involving leaked information and a former senior partner. Link
Hearing to expose IRS informant program to scrutiny
(Reuters) – Seven years after Congress passed a new whistleblower law for the Internal Revenue Service, the tax-collecting agency stands accused of not doing enough, or of not acting swiftly enough, to reward informants who expose tax improprieties.
On Wednesday, under growing pressure from the senator who spearheaded the 2006 legislation, the IRS holds a hearing on proposals it has crafted only now for implementing elements of the law.
Essential reading: Senator Baucus takes on tax code, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Sen. Max Baucus moves to reshape tax code. Lori Montgomery – The Washington Post. Last month, Senator Max Baucus summoned members of the Senate Finance Committee to a closed-door meeting to discuss the first full-scale rewrite of the 5,600-page U.S. tax code in more than 25 years. After two years of watching President Obama and congressional leaders take on tax policy and other areas of the committee’s vast jurisdiction, the panel’s chairman is reclaiming his turf. Link
* KPMG fires L.A. partner over alleged insider-trading tips. Michael Rapoport – The Wall Street Journal. KPMG LLP has fired a senior partner in its Los Angeles office, saying the unidentified partner had provided inside information about its clients to someone who had used that information in stock trading. The firm has also resigned as the outside auditor of two of its clients because of the actions of the partner, who it described as the partner in charge of its audit practice in its Los Angeles business unit. Link
Calendar
Some important tax and accounting events in the week ahead:
Tuesday, April 2
Internal Revenue Service hearing on the 3.8 percent investment income tax associated with the Health Care and Education Reconciliation Act of 2010, sometimes called “Obamacare.” 10 a.m. ET. IRS building. Washington.
Wednesday, April 3
Speakers from the IRS and Department of Justice speak to the D.C. Bar session on litigating tax issues in bankruptcy proceedings. 12 noon – 1:30 p.m, D.C. Bar Conference Center. Washington.
New York high court upholds state’s ‘Amazon tax’
March 28 (Reuters) – Amazon and other out-of-state online
retailers must collect state tax on New York State customers,
the state’s highest court ruled on Thursday, a decision at odds
with other courts that could set the stage for a showdown in the
U.S. Supreme Court.
The case, combining two brought by Amazon.com Inc
and Overstock.com Inc, was decided by the New York
State Court of Appeals by a vote of 4-1.
Louisiana’s Jindal details plan to end state’s income tax
(Reuters) – In a year in which sweeping tax reforms are on the table in several states, Louisiana’s Bobby Jindal on Thursday became the first U.S. governor to offer a detailed plan to eliminate his state’s income tax, a goal embraced by some conservatives.
Seen as a potential candidate for national office, the second-term Republican proposed eliminating Louisiana’s personal income tax and its corporate franchise tax, which together generated $2.9 billion in tax receipts last year.
Road funds on empty; more U.S. states weigh gasoline tax hikes
March 14 (Reuters) – Tight state budgets and jammed roadways
this year are prompting some U.S. state governments to make one
of the most politically unpopular moves imaginable: raising
gasoline taxes.
Because they hit everyone, gas taxes are widely disliked and
rarely increased. But after decades of underinvestment in roads,
bridges and public transport, states face heavy infrastructure
costs and lack the money to handle them.
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