WASHINGTON, Oct 11 (Reuters) – In a tax fight that could
jolt the real estate business, Howard Hughes Corp is
challenging the U.S. Internal Revenue Service over a $144.1
million tax bill stemming from land sales at Summerlin, an
enormous planned community in southern Nevada.
The dispute centers on an accounting practice – known as the
“completed contract method” – that the IRS has scrutinized for
years. A Tax Court trial is scheduled for Nov. 5 in Las Vegas.
(Reuters) – The Internal Revenue Service said on Wednesday that Steven Miller will become acting head of the tax agency after Doug Shulman, the present commissioner, steps down on November 9.
Shulman had been expected to resign at the end of his term in early November as head of the 104,000-employee agency that each year collects trillions of dollars in federal tax revenue and enforces the nation’s complex tax laws.
* Romney pledges to keep tax deductions for mortgages. Trip Gabriel and Helene Cooper – The New York Times. Continuing to embrace a more moderate political persona, Mitt Romney offered assurances on Tuesday that he would protect tax deductions for the middle class on home mortgages and charitable donations. Link
* Reagan tax model obsolete in fiscal cliff talks-Schumer. Kim Dixon – Reuters. A top Senate Democrat on Tuesday said new tax revenues should go to reducing the federal deficit, not cutting tax rates, dismissing as “obsolete” a Reagan-era model of tax reform. Senator Charles Schumer, hardening his party’s negotiating position ahead of talks on the so-called “fiscal cliff,” declared President Ronald Reagan’s 1986 tax reform an unaffordable model for overhauling the tax laws. Link
* Republicans shift tone on taxing the rich. Stephanie Kirchgaessner and James Politi – The Financial Times. Some Republicans are shifting their tone on the prospect of increasing taxes on wealthy Americans, in a move that could ease concerns about the US plunging off the “fiscal cliff” after the November election. A senior Republican aide in the House of Representatives told the Financial Times there was an internal debate within the party, with one side arguing that Republicans would be better off to “give in” to Democratic demands for an increase in taxes for individuals making more than $250,000 if Barack Obama were re-elected. Link
* Romney’s no-net-decrease tax stand may help him weather public’s dim view of Republican Party. The Associated Press. Mitt Romney is now distancing himself a bit from some Republican Party policies, most notably by emphasizing that he doesn’t want to cut taxes for high earners. That’s probably a smart move, say Republican activists in regions where it’s getting harder to sell the party’s brand. Link
Welcome to the top tax and accounting headlines from Reuters and other sources.
* In fog of numbers, little tax clarity from Obama-Romney. Kevin Drawbaugh and Kim Dixon – Reuters. For an event so freighted with expectations of tax insights, the Obama-Romney debate on Wednesday offered few clues on what the candidates’ tax plans could mean for average Americans. Republican nominee Mitt Romney stuck to his strategy of promising tax cuts. To pay for this, he pledged again to close yet-to-be-named tax loopholes. And he said new tax revenues would come from economic growth spurred by lower taxes. Link
* Caps on tax deductions find favor in both parties. John McKinnon – The Wall Street Journal. The idea of limiting personal income-tax deductions is gaining traction in both parties as a way to raise more federal revenue without raising tax rates or scrapping popular breaks. Republicans consider this a way to prevent rate cuts they seek from widening the budget deficit, while Democrats see the extra revenue as a means to shrink the deficit or fund programs. Link
* Fact or fiction in the U.S. presidential debate? Deborah Charles – Reuters. President Barack Obama and his Republican rival, Mitt Romney, faced off in their first of three debates before the Nov. 6 presidential election. Here is some fact-checking of claims made by the candidates. Link
* Romney floats tax deductions cap idea resembling one from Obama. Kevin Drawbaugh – Reuters. Mitt Romney’s talk of putting a cap on income tax deductions aligns him with others, including President Barack Obama, behind a tax code change that could gain traction in Washington. On Tuesday, the eve of his first debate with Obama, the Republican presidential challenger told Fox News TV in Denver that one option for changing the code could be to cap deductions, perhaps at $17,000 for a middle class family. Link
WASHINGTON (Reuters) – The Treasury Department is examining individual retirement accounts as vehicles for potential tax avoidance, a top tax official said in a letter to Democratic lawmakers released on Wednesday.
Democratic lawmakers have raised questions about the individual retirement account, or IRA, of Republican presidential nominee Mitt Romney and asked the agencies to look into potential tax skirting by IRA holders. Romney has disclosed that his IRA contained up to $101 million, despite annual limits of much smaller amounts.
* Gov. Jerry Brown vetoes labor-backed pension bills. California Gov. Jerry Brown wielded a heavy veto pen in the final days of bill-signing season, rejecting proposals that sought to undo past budget cuts and increase regulation. It was part of a broad effort to bolster the chances of Proposition 30, which seeks billions of dollars in new taxes to help balance the budget. Link
* Romney floats idea of itemized deduction cap. Damian Paletta – The Wall Street Journal. Republican presidential nominee Mitt Romney floated details of how he might restructure the U.S. tax code, suggesting he would support a cap on deductions, including those for mortgage interest and charitable donations. Romney offered an example of capping the total number of deductions available to a middle-class family at $17,000. He also said the cap on deductions for wealthier Americans could be less than that figure. Link
* $1.5 billion a year cost to fix pensions? Hal Dardick – The Chicago Tribune. Absent significant pension system reforms, it would cost the city an extra $1.5 billion a year beginning in 2016 to start the process of restoring financial health to its pension funds, aldermen were warned Monday. If those costs kicked in, services would be cut, taxes would soar or both. Link
* U.S. can’t catch a tax break. David Reilly – The Wall Street Journal. Corporate tax receipts remain well below peak, precrisis levels. That is in part due to companies continuing to hoard cash and profits overseas. And as the government on Monday turned the page to a new fiscal calendar, corporate taxes looked likely to miss expectations for the second year in a row. Link
WASHINGTON (Reuters) – A Kentucky businessman was arrested on Monday and charged with evading $53 million in taxes in a multi-faceted case stemming from an ongoing U.S. investigation of failed Park Avenue Bank.
Called “a vortex of fraud” by prosecutors, Wilbur Huff, 51, was arrested at his Kentucky home and charged in a 13-count indictment that also involved two others, said a statement from Preet Bharara, U.S. attorney for the southern district of New York.