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.
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).
* 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
* 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
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.
* 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
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.
* Rhetoric turns harsh as budget cuts loom. Janet Hook – The Wall Street Journal. Republicans didn’t question Mr. Obama’s assertion that the spending cuts would have a dire effect. They said the plan to avert them should include only spending cuts, not tax increases. Whit Ayres, a Republican pollster, said that the public is viewing the impasse with disgust, but that the president may bear more of the blame for failing to lead the way to a compromise. Link
* Tax executives: Congress won’t revamp business taxes in 2013. John McKinnon – The Wall Street Journal. The survey of 163 tax executives by law firm Miller & Chevalier and the National Foreign Trade Council shows that only a few think that a tax overhaul will be enacted in 2013. Last year, 31 percent of respondents believed Congress would pass a tax revamp in 2013. Link
WASHINGTON, Feb 19 (Reuters) – The Supreme Court on
Wednesday will hear arguments in a dispute between U.S. tax
authorities and PPL Corp over a British tax imposed on the power
utility after it bought one of many businesses privatized by
former British Prime Minister Margaret Thatcher.
In a case that tests what sort of foreign taxes can be
offset with foreign tax credits by U.S. corporations, the PPL
fight with the Internal Revenue Service potentially involves
tens of billions of dollars. It is being closely watched by U.S.
multinational companies and lawmakers, tax professionals said.
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Simpson and Bowles to offer up new deficit fix. Damian Paletta – The Wall Street Journal. Deficit hawks Alan Simpson and Erskine Bowles on Tuesday will propose a detailed plan for rewriting the tax code and implementing deep new spending cuts, hoping to offer a path to compromise for Democrats and Republicans, according to an outline of the plan. Link