Tax Break

Essential reading: How far can Obama push on key issues including tax increases, and more

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

 * Question for the victor: How far do you push? Peter Baker – The New York Times. What faces President Barack Obama in this next stage of his journey are not overinflated expectations of partisan, racial and global healing, but granular negotiations over spending cuts and tax increases plus a looming showdown with Iran. Link

* Obama’s re-election and a path to a tax code revamp. Kim Dixon – Reuters. It will be President Barack Obama’s choice, those in both political parties agree, to make a bold proposal and use his bully pulpit to push through fundamental tax reform. Link  

* What Obama’s win may mean for personal tax planning. Nanette Brynes – Reuters. Uncertainty about who will occupy the White House is over now that U.S. President Barack Obama has been re-elected, but uncertainty about taxes is still with us. There is no need to feel paralyzed though. Tax advisers say it is possible now to suggest tax planning moves that could be a smart way for individuals to play a second Obama presidency, though a lot of variables remain. Link  

* France announces cut in payroll taxes for businesses. David Jolly – The New York Times. Responding to calls to make French industry more competitive by reducing labor costs, the Socialist government of President François Hollande said Tuesday that it would cut payroll taxes for businesses. Link 

 * Eyeing tax relief for Hurricane Sandy victims. Arden Dale – The Wall Street Journal. Experts say there are tax surprises in store for some Hurricane Sandy victims. To begin with, many people assume they can deduct the full value of destroyed property such as a home. Link

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

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

Essential reading: UK Revenue officials face grilling over multinationals’ taxes, and more

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

 * HMRC to face MPs over multinationals’ tax. Vanessa Houlder – The Financial Times. Top UK Revenue officials who will appear before MPs on Monday are likely to come under renewed pressure over the tax affairs of some of the highest profile multinationals operating in Britain. Starbucks, Google, Amazon, Facebook and eBay have been the focus of intense scrutiny after it emerged that they paid corporate tax of a few million pounds. Link  

* Some taxes are sure to go up. John McKinnon – The Wall Street Journal. Taxes on investment income are going up no matter who wins Tuesday’s elections, at least for higher-income households. The tax breaks for capital gains, dividends and other types of investment income are an appealing place to look for revenue. Link 

 * Middle class faces quick impact from fiscal cliff in form of alternative minimum tax. Lori Montgomery – The Washington Post. The best hope for a deal to avoid the “fiscal cliff” may lie with the alternative minimum tax, an obscure provision of the tax code that is about to become alarmingly relevant to millions of middle-class taxpayers. Link


Some important tax and accounting events in the week ahead:

Monday, Nov. 5

U.S. Government Accounting Standards Board Chairman Robert H. Attmore addresses the New York State Society of CPAs Public Schools Committee Annual Conference. Albany Marriott. Albany, New York.

Monday, Nov. 5 – Tuesday, Nov. 6

American Institute of Certified Public Accountants real estate conference. Bellagio Hotel. Las Vegas.

Tuesday, Nov. 6

Election Day in the United States.

Tuesday, Nov. 6 – Thursday, Nov.8

U.S. Internal Revenue Service and Treasury Department officials speak at the Practicing Law Institute’s seminar on tax strategies for corporate acquisitions, reorganizations and other structural changes. Sofitel Chicago Water Tower. Chicago.

Essential reading: Tax reform tops agenda – and helps explain campaign spending explosion, and more

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

 * Tax reform tops agenda – and helps explain campaign spending explosion. Tom Hamburger – The Washington Post. It is no accident that much of the record spending in this year’s election, now funding an avalanche of last-minute ads across the country, comes from groups with a strong interest in shaping federal tax rules. Tax reform is likely to be at the top of the agenda for the next Congress. Link

* For business, vote holds high stakes. Damian Paletta and Brody Mullins – The Wall Street Journal. The outcome of Tuesday’s presidential election carries enormous weight for executives of American businesses, big and small, influencing everything from the taxes they are required to pay to the attitudes of regulators who scrutinize them. Taxes are high on the business worry list. Link  

* Private equity firms try to repair image. Brody Mullins – The Wall Street Journal. The private-equity industry, bruised by relentless Democratic attacks on Mitt Romney and his stewardship of Bain Capital, has mounted a campaign to repair its reputation. Private-equity managers pay a tax rate of 15 percent on much of their income because it comes as “carried interest,” a form of capital gains, rather than salaried income, which at the highest rate would be taxed at 35 percent. Link  

Essential reading: Looming capital gains tax hike motivates owners to sell, and more

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

* Looming tax hike motivates owners to sell. John McKinnon – The Wall Street Journal. A looming increase in the capital-gains tax rate next year is fueling sales of some privately-held businesses. Many business owners—mostly founders who could gain a lot from a sale—are looking to close deals before next year, when the maximum tax on investment income is scheduled to rise from 15 percent currently to at least 23.8 percent on most capital gains, at least for higher-income households. Many sellers intend to convert their equity into retirement funds or just start anew. Link

* Tax deadline extended for Sandy victims. Siobhan Hughes – The Wall Street Journal. The Internal Revenue Service said it would give people affected by superstorm Sandy one more week to file tax returns and make payments that otherwise would have been due Wednesday. The government said taxpayers and tax preparers affected by Sandy would have until Nov. 7 to submit forms and payments. Link

* Gay couples may want to file to protective tax refund claims. Ann Carrins – The New York Times. The recent decision by a federal appeals court regarding the Defense of Marriage Act suggests gay couples may want to file something known as a protective refund claim with the Internal Revenue Service in the event the Supreme Court overturns the law, according to accounting experts. If the high court invalidates DOMA, legally married same-sex couples will be able to file claims for refunds of federal tax overpayments. Link  

Essential reading: Google and Starbucks face tax questions in the UK, and more

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

 * Google and Starbucks face tax questions. Jim Pickard and Vanessa Houlder – The Financial Times. Google and Starbucks will be subjected to United Kingdom parliamentary scrutiny over their tax affairs for the first time next Monday with the public accounts committee set to demand that the two US corporate giants give evidence. Members of the influential committee agreed on Monday evening to call in the two companies to give evidence at a session into Revenue & Customs where inspectors will be asked about their contributions to the exchequer. Link 

* Some investors likely to face new tax bite. A.D. Pruitt – The Wall Street Journal. The presidential election could determine whether the wealthiest Americans will see their income taxes rise or fall. But there is one tax increase that is likely to occur no matter who wins office: an investment surtax that begins on New Year’s Day and will hit thousands of real-estate investors. Link  

* Switzerland: Are its days as a tax haven for foreigners numbered? Helena Bachmann – Time Magazine. Many Swiss are increasingly critical of the preferential tax treatment their government extends to wealthy foreigners. Unlike Swiss citizens, who pay taxes not only on their income but also on their assets, wealthy foreigners can negotiate lump-sum taxation, a figure based on five times the rental value of their Swiss property. Link  

Essential reading: Fiscal cliff forces all sides to jockey, and more

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

* Fiscal cliff forces all sides to jockey. Damian Paletta – The Wall Street Journal. Lawmakers, CEOs, business groups and charities are scrambling to shape the debate over tax and spending policy after the November elections, staking out negotiating positions for what could be a fast-paced brawl. The jockeying is intensifying as Election Day approaches, despite a halt in talks between party leaders about how to avoid a total of $500 billion in annual tax increases and federal spending cuts set to begin in January. Link

* Political pastors offer up Biblical bait to IRS during election season. Greg Bluestein and Katie Leslie – The Atlanta Journal Constitution. A nearly 60-year-old tax law prohibits preaching politics from the pulpit, but with just days before the presidential election, dozens of Georgia’s religious leaders are embracing a movement to challenge the rule. Pastors across metro Atlanta have openly flouted the law in recent weeks, attacking the Internal Revenue Service’s stance as an intrusion of their sacred free speech rights. Link

* Supreme Court takes PPL appeal in tax credit case. Jonathan Stempel and Patrick Temple-West – Reuters. The Supreme Court said on Monday it will take the rare step of considering a tax case, one with hundreds of millions of dollars at stake and broad implications for companies with businesses abroad and for the Internal Revenue Service. Link

Essential reading: Washington Post reports Obama administration looking at new tax cut, and more

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

* Obama administration looking at new tax cut-Washington Post. Mark Felsenthal – Reuters. The Obama administration is considering a possible tax cut that would increase workers’ take-home salaries and replace the payroll tax reduction set to expire at the end of the year, The Washington Post reported on Friday. The White House said no new tax policy suggestion had been formulated. Link

* Stock pickers game the fiscal cliff. Jonathan Cheng – The Wall Street Journal. A number of companies are seeking to get ahead of the tax increases by paying out big special dividends before Dec. 31. In the past two weeks, at least four Standard & Poor’s 500 companies have announced special payouts. Link

* Greek editor is arrested after publishing a list of Swiss bank accounts. Liz Alderman – The New York Times. The Greek police arrested and then quickly released the owner and editor of a respected investigative magazine on Sunday morning hours after he published a list of more than 2,000 Greeks who were said to have accounts at a bank in Switzerland, throwing new controversy into a scandal over whether the government is actively pursuing suspected tax cheats. Link

Essential reading: Treasury says firm with ties to President discussed tax break, and more

U.S. Treasury Secretary Timothy Geithner outside the Treasury Department in Washington.

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

* Treasury says firm discussed tax break. Eric Lichtblau and Eric Lipton – The New York Times. The Treasury Department said Thursday that a communications firm with close ties to President Obama talked to the administration about allowing tax breaks for its corporate clients on more than $1 trillion in offshore revenues. The firm, SKDKnickerbocker, has insisted that it never spoke with senior Treasury Department officials about the offshore tax issue and that it does not lobby policy makers on issues affecting its corporate clients. Link

* Election proving a cliff-hanger for the dollar. Nicholas Hastings – The Wall Street Journal. The currency market’s focus on the election will be even more intense as it comes as the economy continues to struggle out of recession, after a couple of previous false starts, and as a way to prevent the reversal of previous tax cuts due to take place on January 2, 2013 – the so-called fiscal cliff – has yet to be found. Link