WASHINGTON (Reuters) – Non-U.S. pension funds and mutual funds were spared the full brunt of new U.S. information-reporting rules on overseas accounts meant to catch Americans who dodge U.S. taxes by keeping their assets offshore.
Chiefly targeting banks, the Foreign Account Tax Compliance Act (FATCA) rules, published by the U.S. Treasury on Thursday, require foreign financial institutions with $50,000 of any American taxpayer’s assets to report the holdings to the U.S. Internal Revenue Service.
* Tax bite to climb from boom years. Josh Barnanel – The Wall Street Journal. While property values are slowly rising in New York, a quirk in the tax law will drive up property taxes by considerably more, including higher taxes on 69 homes damaged in superstorm Sandy, according to new city data. Link
* Rep. Levin: Curb some tax breaks, keep others. John McKinnon – The Wall Street Journal. President Barack Obama’s proposed limit on tax deductions is the most likely model for raising revenues as part of a balanced approach to reducing deficits and averting the latest fiscal crisis, Rep. Sander Levin, the top Democrat on the House Ways and Means Committee, said Tuesday. Link
WASHINGTON, Jan 15 (Reuters) – Online retailer Amazon Inc
is fighting the U.S. Internal Revenue Service over a
$234 million international tax bill, a dispute similar to others
in which the agency has struggled to collect corporate taxes.
The case, filed on Dec. 28 in U.S. Tax Court in Washington,
has implications for other technology companies with software
assets that may prove difficult to value for tax purposes.
* Retail sales to hold clues to taxing times. Spencer Jakab – The Wall Street Journal. Back during the housing boom, local tax officials were at a loss to explain why sales-tax revenue was outstripping income-tax withholding. We know how that ended, as people ran out of equity to extract from their homes to spend on flat-screen TVs and the like. Link
* IMF: U.S. has done enough budget cutting for 2013. Ian Talley – The Wall Street Journal. As far as the International Monetary Fund is concerned, Washington’s 11th hour tax deal appears to be enough fiscal consolidation for this year. Link
WASHINGTON (Reuters) – Amazon.com Inc. is challenging a $234 million U.S. tax bill, contesting Internal Revenue Service tax calculations for cash transfers between the parent company and its European subsidiaries, according to a court filing.
The case centers on the pricing of payments among company units, an issue on which the government has lost some multi-million dollar cases against big companies.
* Retailers fear payroll tax will cut consumer spending. Serena Ng – The Wall Street Journal. The tax increase’s effect for companies is that the hit is likely to cement a frugal attitude that led consumers to cut back on eating out and shift to less-expensive store brands. Link
* Companies pay less tax on global profits. Martin Sandbu and Vanessa Houlder – The Financial Times. UHY Hacker Young, an accountancy group, says the total global taxes paid by the average FTSE100 company fell to 24.5 percent of its global profits in 2012, compared with 35.8 percent in 2009. It attributes the fall to companies’ “greater profits overseas, allowing them to take advantage of lower prevailing tax rates in those jurisdictions”. Link
* States to seniors: Good times may be ending. Anne Tergesen – The Wall Street Journal. Some states are starting to have second thoughts about the tax breaks they give older people. For decades, state governments have been generous with those breaks, perhaps because older Americans tend to show up at the polls to vote. Link
* What business wants: Smaller deficits and lower tax rates, of course. Suzy Khimm – The Washington Post. The U.S. Chamber of Commerce has long stressed that the deficit is principally a problem of spending and entitlements — essentially, the same argument that the GOP is pushing. What’s less clear is whether the chamber would be open to more tax revenue to do the job. Link
* Public goals, private interests in debt campaign. Nicholas Confessore – The New York Times. Many members of the ‘Fix the Debt’ campaign are juggling their private interests with their public goals: they are also lobbyists, board members or executives for corporations that have worked aggressively to shape the contours of federal spending and taxes, including many of the tax breaks that would be at the heart of any broad overhaul. Link
* As tax hikes loomed, some CEOs sold stock. Scott Thrum – The Wall Street Journal. As Congress mulled higher tax rates last month, dozens of corporate executives sold big chunks of stock, saving themselves millions of dollars in taxes. A Wall Street Journal review of securities filings found that 58 executives sold stock valued at $10 million or more in December as talks intensified over raising tax rates. Link
WASHINGTON, Jan 9 (Reuters) – U.S. tax breaks need to be
pared back to spare taxpayers costs and complexity, according to
an Internal Revenue Service watchdog report released on
Wednesday even as political chances for a tax code overhaul may
Congress should consider rebuilding the tax code from
scratch and permit tax breaks only if the costs and complexities
are justified, the Taxpayer Advocate Service, an oversight arm
of the IRS, wrote in its annual report to Congress.
Welcome to the top tax and accounting headlines from Reuters and other sources.
* After Sandy, tax cuts fade from Christie plan. Heather Haddon – The Wall Street Journal. In his annual address to the state on Tuesday, New Jersey Gov. Chris Christie laid out what he said would be a difficult road ahead as the state recovers from Sandy—a somber departure from last year, when he extolled the state’s economic health and centered his agenda around an aggressive income-tax cut. Link
* Despite promise, federal tax-refund debit cards a no go. Ann Carrns – The New York Times. Giving consumers who lack accounts at a bank or credit union the option of getting tax refunds on multiuse, prepaid debit cards may help bring them into the financial mainstream, a report from the Urban Institute finds. But the accounts must be low-cost, easy to use and available early in the tax season to encourage their use. Link