Welcome to the top tax and accounting headlines from Reuters and other sources.
* How to really simplify the tax code. Bruce Bartlett – The New York Times. Politicians hide behind grandiose plans for wiping the tax slate clean because they know that support for every specific tax expenditure is very high. In practice, saying that one would eliminate all tax expenditures is meaningless, nothing more than a gesture that avoids confrontation with the constituencies supporting tax expenditures. Perhaps the worst offender, in this regard, is Paul D. Ryan. Ryan steadfastly refuses to name a single loophole that he would eliminate. Link
* White House highlights tax fairness ahead of Obama speech. Alister Bull – Reuters. Taxes for America’s highest earners have fallen sharply since 1995, according to a White House report on Tuesday, released ahead of a speech by President Barack Obama on fairness in the tax code that is a key part of his campaign for reelection. The White House estimated the 400 highest income households in the country, who all earned over $110 million, paid an average of 18.1 percent of their income in federal taxes in 2007, well down for 29.9 percent those households paid in 1995.Obama travels to Florida later on Tuesday where he will urge support for the Buffett Rule. Link
* Osborne ‘shocked’ by rich tax dodgers. Hannah Kuchler – The Financial Times. George Osborne, the British chancellor, has said he was “shocked” to discover that some of the richest people in Britain have used avoidance schemes to pay “virtually no” income tax. HM Revenue and Customs (HMRC) found that some of the highest earners paid an income tax rate of only 10 percent by using legal loopholes. The report found that Britain’s top 20 biggest tax avoiders had used three main loopholes to legally reduce their bills by a total of 145 million pounds ($229.96 million) in one year. The loopholes included offsetting the cost of business mortgages or borrowing on buy-to-let properties, receiving tax relief on donations to charity and writing off business losses in one of their companies against their income tax bill. Link
* The IRS lost my tax return. Maryam Ansari – Findlaw.com via Reuters. The IRS can lose your tax return. That’s what the First Circuit Court of Appeals essentially said in a recent case. If you’re running a small business, you might want to take heed. It’s important to keep track of all your tax documents, in case the IRS or the U.S. Postal Service loses your return. The court was very clear in saying that if the medical center could prove that the claim was put in the mail, then they would give them some leniency. But they couldn’t prove it. They had no receipts from the post office, no recollection of putting the documents in the mail and no certified receipt or registered receipt. Link