Tax Break

Essential reading: State tax votes could pose risks to close-end funds, and more

November 6, 2012

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

 * State tax votes could pose risks to close-end funds. Daisy Maxey – The Wall Street Journal. Investors in several closed-end funds that focus on individual states’ municipal securities have something riding on the ballot Tuesday. If approved, ballot measures to restrain taxes in Arizona, Florida and Michigan could cause funds to decline in price or become riskier investments. Link

* Roth IRA conversions popular ahead of tax rise. Arden Dale – The Wall Street Journal. With looming increases in federal income tax rates next year, some investors are stepping up efforts to convert their traditional individual retirement accounts to Roth IRAs. The wealthy see a chance to save on taxes – their own and heirs’ – by moving money from traditional IRAs to Roth accounts in 2012. Link  

* MF Global customers sue PricewaterhouseCoopers in amended lawsuit. Nate Raymond – Reuters. Former customers of MF Global Holdings Ltd’s broker-dealer have added accounting firm PricewaterhouseCoopers LLP as a defendant in a lawsuit stemming from the collapse of the brokerage. In an amended complaint filed in U.S. District Court in Manhattan on Monday, the customers of MF Global Inc accused PwC of failing to adequately audit MF Global’s internal controls over customer funds. Link

* Hacking of tax records has put states on guard. Robbie Brown – The New York Times. The theft of tax information from a South Carolina computer system appears to have been the largest cyberattack ever on a state government and has put other states on high alert, computer security experts say. The state announced late last month that an international hacker had stolen 3.6 million Social Security numbers. Now tax departments across the country are inspecting their own security systems. Link

* Osborne to act on corporate tax avoidance. Vanessa Houlder – The Financial Times. The UK’s George Osborne signaled a crackdown on multinationals that use aggressive tactics to cut their tax bills on Monday, in a sign of the pressure on politicians to tackle corporate tax avoidance. The chancellor’s intervention at the G20 meeting of world leaders came as senior officials at HM Revenue & Customs faced a grilling from MPs over what they described as “a failure to get to grips” with tax avoidance. Link  

* The Romney turnaround. The Wall Street Journal editorial. in February 2012 Mitt Romney came out for a 20% tax cut that would lower rates across all brackets as a trade for fewer loopholes and subsidies that most benefit the powerful. This would reduce the tax code’s dead weight on investment and job creation. Link  

* Republicans censor what they can’t refute. Bruce Bartlett – The Wall Street Journal opinion. Right-wing think tanks were quick to jump on the Congressional Research Service report. In brief blog posts on Sept. 17, both the Heritage Foundation and the Tax Foundation simply dismissed its conclusions without offering any remotely convincing evidence of error. Link

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