Tax Break

Essential reading: H&R Block digital tax business grows, profit falls, and more

June 27, 2012

Welcome to the top tax and accounting headlines from Reuters and other sources.

*H&R Block digital tax business grows, profit falls. Reuters. H&R Block Inc posted a lower fourth-quarter profit on charges related to job cuts earlier this year, but the top U.S. tax preparer said it gained market share in the highly competitive tax filing business. The company cut jobs, shut stores and overhauled its management in April, to focus on the fast-growing digital tax preparation segment after several years of losing customers to do-it-yourself tax filing services like Intuit Inc’s TurboTax software. Link

*Hatch, Rangel beat back challenges. Andrew Grossman and Naftali Bendavid – The Wall Street Journal. Two longtime congressional incumbents beat back strong challenges to their careers in primary elections on Tuesday. In New York, Charles Rangel, the 82-year-old Democrat who once led the powerful House Ways and Means Committee, won his primary race and is on track to claim a 22nd two-year term. In Utah, Republican Sen. Orrin Hatch easily defeated a primary challenger who ran aggressively to his right. Link 

* IRS offers reprieve to expat tax filers. Lynnley Browning – Reuters. Many Americans living abroad will get a small reprieve from U.S. Internal Revenue Service rules on reporting foreign assets, the agency announced on Tuesday. The IRS said it would allow some U.S. citizens, including dual citizens, who have not filed income tax returns or not disclosed their foreign bank accounts, to come forward without facing onerous penalties or the threat of prosecution. Link

* Portman tax plan to cut interest, write-offs. Kim Dixon – Reuters. Senator Rob Portman, a potential vice presidential pick by presumptive Republican nominee Mitt Romney, said his plan to revamp corporate taxes includes limits on investment write-offs and interest deductibility. Portman said the Obama administration has failed to lead on overhauling corporate taxes in the United States, which has among the steepest corporate tax rates among its industrialized peers at 35 percent. Link

* Christie laments a tax cut loss. Heather Haddon – The Wall Street Journal. It was billed as the year of the tax cut in the Garden State. Instead, there may be no tax cut at all. Saying lawmakers didn’t provide guaranteed tax relief in their $31.7 billion budget, Republican Gov. Chris Christie on Tuesday ramped up attacks on Democrats, vowing to tour the state and highlight what he said was a broken promise. Mr. Christie proposed slashing income taxes by 10 percent across all brackets. Link 

* In Japan, sales tax increase advances in parliament despite ruling party rift. Chico Harlan – The Washington Post. With a parliamentary vote Tuesday to double the country’s sales tax, Japan took an important step toward stabilizing its finances and staving off a European-style debt crisis. But the lower house vote also exposed the tenuous position of the prime minister, Yoshihiko Noda, who had championed the controversial increase over objections from his own party. The higher tax rate is not yet law; the package of bills must still pass the weaker, opposition-controlled upper house in a vote expected next month. Passage is all but guaranteed, though, because Noda already has secured support for the legislation from Japan’s two main opposition parties, the Liberal Democratic Party and New Komeito. Link 

* Spain considers tax hikes to curb deficit, please EU. Paul Day and Julien Toyer – Reuters. Spain is considering raising consumer, energy and property taxes, the government said on Tuesday, as it struggles to reduce a public deficit that may already have exceeded one of its budgeted ceilings for the full year. Underlining the state of Spanish finances as it negotiates an international bailout for its banks, the central government deficit was 3.41 percent of gross domestic product from January to May, close to a end-year target of 3.5 percent, Treasury data showed. Link 

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