Tax Break

Essential reading: top U.S. House tax writer has lymphoma

July 26 (Reuters) – Good morning and welcome to the top tax and accounting headlines from Reuters and other sources.

* Chairman of key U.S. congressional committee has lymphoma – Reuters. U.S. Rep. Dave Camp, a Michigan Republican who chairs the powerful House Ways and Means committee, said on Saturday he will undergo treatment for non-Hodgkins lymphoma, a cancer that starts in parts of the body’s immune system. “After a recent routine yearly physical, it was discovered that I have a very early, highly treatable and curable type of non-Hodgkins lymphoma – large B-cell lymphoma,” Camp said in a statement. He said he and his doctors expect “a full recovery and cure.” http://link.reuters.com/tax69s

* Sarasin to shut out non-compliant clients by year-end – Reuters. Swiss private bank Sarasin plans to shut out clients who don’t pay taxes on assets held in Swiss accounts as it seeks to eliminate the risks that could be triggered by holding money that is not tax-compliant. The bank said on Monday that it would stop dealing with clients whose tax compliance could not be verified. http://link.reuters.com/sax69s

* A tax break’s cost, benefits are weighed – The Wall Street Journal. A New Jersey tax credit gives companies an average of more than $167,000 for every job they create or save from leaving, a program that has become the state’s fastest-growing business subsidy, according to a Wall Street Journal analysis.
Considered one of the most generous tax-incentive programs in the nation, New Jersey’s Urban Transit Hub Tax Credit has made awards of nearly $1 billion to 18 companies and developers since 2010, generating or retaining almost 6,000 jobs, according to the state Economic Development Authority, the program’s administrator. http://link.reuters.com/rax69s

Olympic medals: gold to the IRS too?

When the lucky (and good) Americans who medal at the London Games bow their head to receive the gold, silver or bronze, one can only hope the tax man is the last person on their mind.

They’d be unwise to forget him altogether, however. As with so much in life, Olympic glory comes at a price, and by price, we mean tax.

It’s not the hardware itself that’s likely to trigger a tax bill (though it could). It’s the cash that goes along with it.

Calendar

Some important tax and accounting dates in the weeks ahead: Tuesday, July 31- Thursday, August 2

* IRS hearing on proposed regulations that implement fees associated with the Patient Protection and Affordable Care Act on some insurance policies and self-insured health plans. 10 a.m. EDT, IRS Auditorium. Washington.

* U.S. Internal Revenue Service workshops on tax topics. Las Vegas.

* National Association for Business Economics seminar on transfer pricing, the differences between international accounting standards and U.S. generally accepted accounting principles, and more. Speakers will include Joe Andrus, head of the transfer pricing unit at the Organization for Economic Co-operation and Development, and Michael McDonald of the U.S. Treasury Department. Arlington, Virginia.

Wednesday, August 1

* Senate Finance Committee hearing on tax reform and the taxation of business entities. 10:30 a.m. EDT, Dirksen Senate Office Building. Washington.

Essential reading: Tax haven clampdown yields cash but secrecy still thrives, and more

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

* Tax haven clampdown yields cash but secrecy still thrives. Chris Vellacott and Sinead Cruise – Reuters.
A global campaign to tax trillions of dollars hidden in offshore tax havens has made revolutionary progress, an official leading the drive said, rejecting suggestions that the super rich are running rings around Western authorities. Leaders of the G20 group of leading Western and developing nations launched the campaign three years ago, aiming to claw back billions in lost tax revenue at a time when many governments are trying to cut huge budget deficits. Link

* Senate passes middle-class tax cut bill in symbolic move. Richard Cowan and Kim Dixon – Reuters. President Barack Obama’s fellow Democrats in the Senate on Wednesday won passage of a bill to renew tax cuts for tens of millions of Americans, while letting some rates rise for the wealthiest, in a largely symbolic vote. The legislation, certain to be rejected by the Republican-controlled House of Representatives, lets Democrats claim in advance of the November 6 elections that they passed tax cuts for most Americans, only to be stymied by Republicans. Link

* Pricewaterhouse had brief window into Peregrine’s books. Sarah Lynch – Reuters. PricewaterhouseCoopers, one of the world’s largest accounting firms, reviewed the accounts of failed futures brokerage Peregrine Financial Group while the alleged fraud at the brokerage was occurring, a top regulator told lawmakers on Wednesday. Gary Gensler, chairman of the Commodity Futures Trading Commission, revealed that PwC was retained in 2000 after Peregrine settled an enforcement action from the CFTC. Link

Essential reading: Democrats aren’t all on same page on Bush-era tax cuts, and more

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

* Democrats aren’t all on same page before vote on Bush-era tax cuts. Jonathan Weisman – The New York Times. On the eve of the first showdown vote on expiring Bush-era tax cuts, it’s the Democrats who appear to be splintering. The Senate will vote Wednesday on whether to proceed to a tax bill that would extend current tax rates and other tax breaks for the middle class and working poor, while allowing income tax, capital gains and dividend rates to rise on earnings over $250,000. The measure will almost certainly fall to a Republican filibuster. Democratic leaders are hoping to get the support of 50 of the 53 Democrats and Democratic-leaning independents in the Senate. Link

* White House tries to prod Congress with new tax report. Jared Favole – The Wall Street Journal. The White House is trying to ratchet up pressure on congressional Republicans, saying a new report shows middle-class families would see their tax bills increase by an average of $1,600 if Congress doesn’t extend tax cuts set to expire at year’s end. “Congress faces a choice,” says a new report released by the White House National Economic Council, which details the costs and benefits of different proposals from President Barack Obama and congressional Republicans over how to handle the Bush-era tax cuts that will expire at the end of the year. Link

* Obama attacks Romney on tax cuts for wealthier Americans. Amy Gardner – The Washington Post. At appearances in Portland Tuesday and in Oakland, Calif., late the night before, Obama issued blistering attacks against Republican Mitt Romney’s plan to cut taxes for the wealthiest Americans. The message has become a cornerstone of the president’s strategy. Link

* U.S. Treasury to release foreign tax pact rules within days. Reuters.
The U.S. Treasury Department will release before the end of July new compliance rules for foreign governments eager to cooperate with looming U.S. tax laws and spare their domestic banks from U.S. fines, a Treasury official said on Tuesday. The expected rules are part of Treasury’s implementation of the Foreign Account Tax Compliance Act, or FATCA, a 2010 anti-tax evasion law. Link

* Little headway in U.S. Congress for online sales tax. Reuters.
U.S. lawmakers debated, but found little agreement on Tuesday on a proposal to impose a national standard for letting state governments impose sales tax on online retail sales. Legislation along these lines has languished for years in the Senate and the House of Representatives, for reasons that were clearly on display at a House committee hearing. Link

Essential reading: Firms pass up tax breaks, loopholes impact U.S. deficit, and more

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

* Firms pass up tax breaks, citing hassles, complexity. John McKinnon – The Wall Street Journal. Many companies are saying “no, thanks” to tax breaks and are likely paying more taxes than legally required. Corporate breaks that Washington hopes will boost the economy often prove ineffective. Firms are leaving tens of billions of dollars on the table every year. Out of 1.78 million corporate tax returns in the United States, only about 20,000 claimed any of the three dozen main business tax credits in the code, according to Internal Revenue Service estimates. Link 

* Tax loopholes block effort to close gaping U.S. deficit. Jonathan Weisman – The New York Times. Senator Mike Crapo made sure that a $3 billion loophole — protecting “black liquor,” an alcoholic sludge used as fuel in timber mills and factories — remained open in the negotiations over the highway bill that President Obama signed this month. Many budget experts criticize the loophole as a tax dodge because it allows the sludge to qualify for an energy subsidy created to wean the country off imported oil for vehicles, which black liquor does not do. Link

* Cost difference: GOP and Democrats tax plans not so far apart. John McKinnon – The Wall Street Journal. Democrats sought to highlight the lower cost of their bill to extend Bush-era tax cuts, compared to the GOP version, in an analysis they released Friday night. Senate Democrats touted their $250 billion plan as $155 billion cheaper than a competing Republican version that costs about $405 billion. The real difference between the competing plans, of course, is the GOP extension of tax breaks for families making more than $250,000 next year. That costs about $49 billion, according to the latest estimate from congressional experts. Link

Calendar

Some important tax and accounting events in the week ahead:

Monday, July 23 – Wednesday, July 25  * American Institute of Certified Public Accountants conference on gift and estate taxation, the generation-skipping transfer tax, income tax considerations related to trusts, estates, and large IRAs, and more. Las Vegas.

Monday, July 23 – Tuesday, July 24  * Practicing Law Institute seminar on foreign tax credits, tax treaties, international tax reform, the Foreign Account Tax Compliance Act, and passive foreign investment companies. New York and webcast.

Tuesday, July 24  * U.S. House of Representatives Judiciary Committee hearing on the Marketplace Fairness Act, which would permit states to require online retailers to charge sales tax. 10:00 a.m. EDT, Rayburn House Office Building. Washington.

Essential reading: Ann Romney says no more tax returns, and more

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

* Ann Romney: No more tax returns. John McKinnon – The Wall Street Journal. Mitt Romney’s wife, Ann, said the Romney campaign won’t be releasing older tax returns in order to block further attacks from President Barack Obama. But Democrats – and some Republicans – are still calling for Romney to release more than two years of tax returns. Link

* Non-partisan report sees no harm in U.S. tax hikes for wealthy. Kim Dixon – Reuters. Letting tax rates for the wealthy rise will not put a short-term damper on the economic recovery, according to a report by the non-partisan research arm of the U.S. Congress. The study by the Congressional Research Service is likely to be used by Democrats in the looming battle over whether to extend tax cuts originally enacted during the administration of President George W. Bush when they expire at the end of the year. Link

* How the division on taxes adds up. Jonathan Weisman – The New York Times. Congress has reached a bitter stalemate over $28 billion. That is the difference in cost between extending all the Bush-era tax cuts set to expire on Jan. 1 for one year and allowing the tax cuts to expire on earnings over $250,000, which the Democrats want, according to a new analysis by Congress’s bipartisan Joint Committee on Taxation. It amounts to about 3 percent of the expected trillion-dollar budget deficit this year. Link

Essential reading: Boxed in on taxes, Romney says Obama dislikes success, and more

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

* Boxed in on taxes, Romney says Obama dislikes success. Sam Youngman and Steve Holland – Reuters. Mitt Romney accused President Barack Obama on Wednesday of demonizing business success, as the Republican tried to ignore questions about his personal finances that threaten to damage his presidential bid. Some senior Republicans worry that Romney is becoming boxed in by the Obama team, just at the time in the race when many Americans begin to tune in and form clearer opinions about candidates before the November 6 election. Link

* Defense firms open to higher taxes to avert cuts. Damian Paletta – The Wall Street Journal. Two top defense contractors told a House committee Wednesday that Congress should consider including increasing taxes as part of a package of changes to reduce the deficit, a sign that industry fear over the impact of spending cuts next year could challenge party orthodoxy. Top executives from Lockheed Martin, Pratt & Whitney, EADS North America, and Williams-Pyro told the House Armed Services Committee that the $50 billion in projected military spending cuts set to begin in January already has had a chilling impact on military planning, delaying projects and raised the possibility of layoffs before the end of 2012. Link

* U.S. utilities fear approach of fiscal cliff. James Politi – The Financial Times. The largest US utilities blitzed Capitol Hill this week to lobby for a deal to avert the effects of the “fiscal cliff” on their industry, warning that increases in tax rates on dividends could damage their normally steady shares and delay investments in the country’s electrical grid. The threat of tax increases on dividends has alarmed companies with steady cash flows that pay a lot out to shareholders. Link

Essential reading: Pressure on Romney ramps up from both sides, and more

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

* With or without tax return release, pressure on Romney ramps up from both sides. Felicia Sonmez and Philip Rucker – The Washington Post. The political pressure on Mitt Romney to release more of his personal income tax returns is causing some divisions inside the GOP presidential candidate’s camp, according to a Republican strategist close to the campaign. Although some advisers are arguing privately that Romney needs to release additional filings to curb the political fallout, others are resisting that suggestion, reflecting the candidate’s longtime reluctance to publicly disclose information about his personal finances. Link

* Romney explains Cayman Island investments. John McKinnon – The Wall Street Journal. Mitt Romney, in an interview with the National Review, improved greatly on his campaign’s halting explanation of why he has held investments in the Cayman Islands, a Caribbean tax haven. Romney suggested that his Cayman Islands investments are basically standard-issue private equity partnerships, not tax shelters. Cayman Islands is a favorite destination for private equity managers to locate new partnerships, mostly because foreign investors can participate while avoiding some U.S. tax entanglements. The same often goes for U.S. tax-exempt entities such as pension funds. Link

* Romney’s secrecy becomes focus of Obama’s attack strategy. Jeff Mason – Reuters. Mitt Romney has secrets. Lots of them, perhaps. That provocative claim is at the core of President Barack Obama’s latest attacks on his Republican rival, a strategy that is dominating the narrative of the presidential campaign and leading anxious Republicans to question Romney’s tactics. Unlike most politicians seeking national office, Romney initially declined to release any of his tax returns. In January, under pressure from his opponents in the Republican primaries, he released his 2010 return and an estimate for 2011. Link