Essential reading: Washington State tax law ruled void, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Law on tax changes is struck down in Washington State. Kirk Johnson – The New York Times. A voter-approved referendum restricting the Legislature’s ability to raise taxes is unconstitutional, Washington State’s highest court ruled on Thursday. Link
* Britons shun companies over tax avoidance. Vanessa Houlder – The Financial Times. A third of Britons are boycotting companies that do not pay their “fair share” of tax in the UK, according to a survey by a charity that described the findings as “a wake-up call to all business”. Link
Essential reading: Obama sees leverage in tax fight, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* White House counts on G.O.P. to bend on cuts’ effects are felt. Michael Shear – The New York Times. White House strategists say they believe that a constant drip of bad news will emerge in Congressional districts across the country in the weeks ahead, putting Republicans on the defensive for their refusal to raise taxes. Link
* Dividend recaps set to dwindle in 2013: Moody’s. Maxwell Murphy – The Wall Street Journal. Moody’s Investors Service expects fewer dividend recapitalizations this year compared to 2012, when companies rushed to distribute cash to shareholders ahead of expected tax hikes. Link
Justice Department says wins $1 billion Dow tax shelter case
WASHINGTON (Reuters) – The U.S. Justice Department said on Wednesday it has won a $1 billion tax shelter case against Dow Chemical Co (DOW.N: Quote, Profile, Research, Stock Buzz) that involved a Swiss partnership, Wall Street financial giant Goldman Sachs (GS.N: Quote, Profile, Research, Stock Buzz) and international law firm King & Spalding.
The U.S. District Court for the Middle District of Louisiana rejected two tax shelter transactions entered into by the Dow Chemical Co “that purported to create approximately $1 billion in phony tax deductions,” Justice said in a statement.
U.S. Justice Dept says wins $1 bln Dow tax shelter case
WASHINGTON, Feb 27 (Reuters) – The U.S. Justice Department
said on Wednesday it has won a $1 billion tax shelter case
against Dow Chemical Co that involved a Swiss
partnership, Wall Street financial giant Goldman Sachs
and international law firm King & Spalding.
The U.S. District Court for the Middle District of Louisiana
rejected two tax shelter transactions entered into by the Dow
Chemical Co “that purported to create approximately $1 billion
in phony tax deductions,” Justice said in a statement.
U.S. Treasury closer to inking foreign tax info-sharing deals
WASHINGTON, Feb 27 (Reuters) – U.S. tax authorities and
foreign governments are on track to conclude dozens of
agreements in coming months on the sharing of financial data
about citizens, with deadlines nearing for implementation of a
sweeping U.S. anti-tax-evasion law, tax experts said.
The U.S. Treasury on Monday initialed an intergovernmental
agreement (IGA) with Germany, for instance. The deal still needs
final approval by both countries’ tax officials, but shows
progress being made in implementing the Foreign Account Tax
Compliance Act (FATCA).
Essential reading: EU financial transactions tax to go global, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* A new European tax on financial transactions is set to go global. Howard Schneider – The Washington Post. The levy is due to take effect next year and will be a significant money-raiser for the 11 nations that have signed on, bringing in an estimated $45 billion annually. Link
* Institutions to stay alert to signs of tax fraud. Ben DiPietro – The Wall Street Journal. The Financial Crimes Enforcement Network issued an advisory Tuesday reminding financial institutions to look for red flags that may indicate instances of identity theft and tax fraud. Link
Essential reading: Republicans rally against taxes, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Budget impasse signals a shift in GOP’s focus. Jonathan Weisman and Ashley Parker – The New York Times. Republicans, who last month let taxes rise on incomes over $400,000 to avert broader tax increases and the “fiscal cliff,” are now ready to stand their ground, regardless of the military cuts. Link
* Consumers beat expectations despite higher payroll tax. Tim Mullaney – USA Today. When the payroll tax climbed by nearly a third Jan. 1, Upstate New York car dealer Bill Fox thought he would lose business as workers in a cash-strapped area faced skinnier paychecks. It hasn’t worked out that way. Link
IRS review delays tax refunds for some budget shoppers
WASHINGTON (Reuters) – Federal tax refunds are arriving later than expected for some lower-income Americans due in part to closer scrutiny of earned income tax credit claims by the U.S. Internal Revenue Service, the IRS said on Friday.
IRS employees have been carefully reviewing returns with claims for the EITC, a frequent fraud target. Fewer than 5 percent of filings claiming the EITC have been delayed, IRS spokesman Terry Lemons told Reuters.
Essential reading: Payroll tax’s return hits retailers, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Payroll tax whacks spending. Shelly Banjo and Annie Gasparro – The Wall Street Journal. Wal-Mart Stores Inc. on Thursday joined a parade of retailers, restaurants and consumer-goods companies worried about the economic impact of the recently restored federal payroll tax that has left Americans with less money to spend. Link
* Obama defends ending corporate jet tax break. David Jackson – USA Today. President Obama has long called for ending tax breaks on corporate jets, and found himself defending that position in an interview Wednesday with a television station from Wichita, Kansas – an area where private planes are built. Link
Supreme Court weighs UK-related foreign tax credit dispute
WASHINGTON (Reuters) – The Supreme Court on Wednesday heard arguments in a dispute between U.S. utility PPL Corp and the Internal Revenue Service that could influence U.S. multinational corporations’ scope for claiming credits to offset overseas tax payments.
In a rare instance of the high court tackling a tax case, Pennsylvania-based PPL argued it is entitled to claim $39 million in U.S. foreign tax credits against a 1997 British windfall tax.
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