Essential reading: Rewriting the tax code, a large tax bill for Facebook’s Saverin, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Top Republicans boost pressure for U.S. tax rewrite. Kim Dixon – Reuters. A top Republican lawmaker on Thursday stepped up pressure to force action next year on a rewrite of the U.S. tax code, which both major political parties agree has become overly complicated and inefficient. The chairman of the tax-writing panel in the U.S. House of Representatives said rank-and-file Republicans favor forcing a vote this year on a plan to overhaul the tax system in 2013. Link
* Facebook’s Saverin fires back at tax-dodge critics. Kevin Drawbaugh – Reuters. Facebook co-founder Eduardo Saverin, under fire over the tax consequences of renouncing his U.S. citizenship, said on Thursday he is obligated to and will pay “hundreds of millions of dollars in taxes to the United States government.” The social media entrepreneur and investor said in a statement, emailed to Reuters by a spokesman, that his decision to move to Singapore was “based solely on my interest in working and living” there. Saverin said he has been there since 2009. Link
* BNY Mellon, IRS spar over $900 million tax benefit. Bank of New York Mellon Corp (BK.N) faced off against the U.S. government on Thursday in closing arguments over a $900 million tax benefit that the Internal Revenue Service called “tax abuse.” The case is the first to go to trial since the IRS accused some banks of generating artificial foreign tax credits through loans with London-based Barclays Plc. Link
* At big U.S. companies, 60 percent of cash sits offshore: J.P. Morgan. Emily Chasan – The Wall Street Journal. Large U.S. companies are holding at least 60 percent of their cash overseas with some keeping nearly all of their cash balances offshore, according to a study from J.P.Morgan accounting analysts published Wednesday. Apple had the highest offshore corporate cash balance, with $74 billion held overseas. If companies choose to repatriate earnings from overseas, they would have to pay taxes on foreign earnings they repatriate. Link
* Coalition issues guidelines for public pensions. Lisa Lambert – Reuters. A coalition of bond lawyers, analysts, auditors, state treasurers, pension administrators, securities professionals, bond dealers and issuers released on Thursday a framework for describing financial strains on state and local governments caused by pension funding obligations. Nearly two years ago New Jersey became the first state charged with securities fraud by the U.S. government. Without admitting or denying any wrongdoing, the state settled allegations that it had lied about the magnitude of its pension shortfall. Link
* Romney muses on moving to low-tax Florida. Michael Barbaro – The New York Times. Republican presidential candidate Mitt Romney on Thursday said he and his wife have considered moving to Florida. He emphasized that Florida has unmistakable attractions. “It has the right tax rates, among others,” he said, speaking in Jacksonville. Link