Tax Break

Some important tax and accounting dates in the week ahead:

Tuesday, Oct. 2

* Douglas Holtz-Eakin, former director of the Congressional Budget Office; Diane Lim Rogers, former chief economist of the House of Representatives Budget Committee; and others speak at the Tax Policy Institute’s discussion, “Danger Ahead? Taxes and the Fiscal Cliff.” 1200EDT, Urban Institute. Washington.

* American Bar Association teleconference on the tax and accounting treatment of stock options, the possible impact of international reporting standards on equity awards, and other topics. 1300EDT.

Wednesday, Oct. 3

* The first of three debates between President Barack Obama and Republican challenger Mitt Romney focuses on domestic policy, including economic issues. 2100EDT. Denver, Colorado.

 Wednesday, Oct. 3 – Thursday Oct. 4

* Tax Executives Institute conference on tax topics affecting the financial services industry. New York.

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

* Payroll tax cut is unlikely to survive into next year. Annie Lowrey – The New York Times. The 160 million American wage earners will probably see their tax bills jump after Jan. 1 when the temporary payroll tax holiday ends. Its expiration means less income in families’ pocketbooks — the tax increase would be about $95 billion in 2013 alone — at a time when the economy is little better than it was when the White House reached a deal on the tax break last year. Link

* Pressed to explain Mitt Romney’s tax plan, Paul Ryan ducks. Suzy Khimm – The Washington Post. Fox News’ Chris Wallace tried to get Republican vice presidential candidate Paul Ryan to explain how the Mitt Romney tax plan achieved its goal and pointed out that the plan was “not revenue neutral unless you take away the deductions,” but the Wisconsin Republican deflected the question. Link

* Facing ‘fiscal cliff’ Obama would quickly fill Treasury job. Damian Paletta – The Wall Street Journal. If re-elected, President Barack Obama is expected to move quickly in November to nominate a new Treasury secretary, and that person could play a key role negotiating with Congress about the looming “fiscal cliff” of tax increases and spending cuts, people familiar with the planning said. The two people most frequently mentioned by current and former administration officials as likely successors to Treasury Secretary Timothy Geithner are White House Chief of Staff Jacob Lew and Clinton administration Chief of Staff Erskine Bowles. Link

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

 * Obama fills in blanks of Romney’s plans, and GOP sees falsehoods. Michael Cooper – The New York Times. The President Barack Obama campaign is taking advantage of the many unknown details of Mitt Romney’s policy proposals by filling in the blanks in the least flattering light, often relying on the findings of research organizations. The Obama campaign is running an ad based on an analysis of Romney’s vague proposals by the Tax Policy Center, a nonpartisan group, which found that it was impossible for his plan to achieve all of its stated goals. Link  

* Ayrault says wealthy ready to pay 75% tax. Hugh Carnegy – The Financial Times. Jean-Marc Ayrault, France’s prime minister, defended the imposition of a 75 percent marginal income tax rate on the eve of its introduction by his socialist government, insisting that many high earners were ready to pay the levy. The budget is set to be the toughest France has faced for 30 years, requiring 30 billion euros ($38.58 billion)in savings. Link 

* Swiss-German tax deal may face referendum hurdle. Nel Maclucas – The Wall Street Journal. Resolution of a long-running tax dispute between Switzerland and Germany may face a further hurdle in the form of a national referendum on the deal, initiated by a populist group opposed to the watering down of the Alpine country’s banking-secrecy laws. While the tax deal with Germany has been passed by the Swiss parliament, it could still founder on growing opposition from German opposition politicians. Link

Reuters tax reporter Lynnley Browning explains for Reuters TV in the clip below how Presidential candidate Mitt Romney’s offshore income jumped in 2011, also the subject of her recent story.

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

* US tax policies delay $2 billion Chinese loans. Henry Sender – The Financial Times. A loan worth nearly $2 billion from China Development Bank to help fund an ambitious San Francisco housing project is being delayed as a result of Chinese concerns about the effect of tax policies in the US, a person familiar with the situation said. The measures include the controversial Foreign Accounts Tax Compliance Act (FATCA), which comes into effect in 2014 and could force foreign banks to pay a 30 percent withholding tax on the interest income on any loans made to US entities or persons. Link  

* Romney tempers tax plans. Sara Murray – The Wall Street Journal. Republican presidential candidate Mitt Romney, seeking to emphasize his deficit-cutting ambitions, is warning Americans that his tax-cut plan might not decrease their tax bills as much as they expect. The campaign is still exploring options to broaden the taxable-income base, which would mean limiting or cutting deductions and credits for certain taxpayers. Link 

 * How to make Mitt Romney’s tax plan add up…sort of. Suzy Khimm – The Washington Post. Mitt Romney’s tax plan is “mathematically impossible,” according to analysts at the Tax Policy Center, who calculated that Romney would have to raise taxes on lower- and middle-income Americans by $86 billion for the numbers to add up. Curtis Dubay of the Heritage Foundation says they’re wrong. Link  

U.S. companies that face a higher probability of being audited by the tax-collecting Internal Revenue Service voluntarily pay more taxes, a new study has found.

The finding proved especially true among companies with poor corporate governance, according to the study published in the September/October issue of the American Accounting Association’s Accounting Review.

 If that seems obvious, study co-author Jeffrey Hoopes, a doctoral candidate at the University of Michigan, said there was plenty of evidence that seemed to point in the other direction.

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

* Pension managers become opportunistic amid volatility-survey. Min Zeng – The Wall Street Journal. Greater volatility after the 2008 global financial crisis has conquered and divided the investing community. The latest report from a global survey of investors by asset management firm Principal Global Investors and U.K.-based consultancy CREATE-Research indicated that while retail investors have become more conservative, professional managers have responded with a more dynamic, opportunistic approach. Link  

* New York Attorney General rebuffs Congressional Republicans. Nicholas Confessore – The New York Times. Attorney General Eric T. Schneiderman of New York on Monday rebuffed demands from Congressional Republicans to refrain from requesting tax returns and other information from tax-exempt groups that have spent heavily on campaign ads. In a letter to Senator Orrin G. Hatch of Utah, the ranking member of the Senate Finance Committee, and Representative Dave Camp of Michigan, the chairman of the House Ways and Means Committee, Mr. Schneiderman asserted the right to request federal tax documents from such groups and subpoena them if necessary. Link

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

 * Pension crisis looms despite cuts. Michael Corkery – The Wall Street Journal. Almost every state in the U.S. has made cuts to its public-employee pensions, seeking to dig out from the economic downturn, but so far the measures have fallen well short of bridging a nearly $1 trillion funding gap. Since 2009, 45 states have rolled back pension benefits for teachers, police, firefighters and other public workers, including cuts by Michigan and California this month. Next week, Republican Ohio Gov. John Kasich is expected to sign legislation requiring, for example, that certain teachers work longer and pay more toward their pensions. Link 

* Romney, in interview, says his tax rate is “fair.” Reuters. U.S. Republican presidential candidate Mitt Romney said he thinks it is “fair” that he pays a lower tax rate on his investment income of $20 million last year than someone who made $50,000 annually. Romney released his 2011 return on Friday, which showed he paid an effective tax rate of 14.1 percent. Link  

* Next tax argument: Romney’s foreign investments. John McKinnon – The Wall Street Journal. President Barack Obama’s campaign officials on Friday sought to highlight the issue of the Romneys’ foreign investments. Over half the 2011 return’s 379 pages are devoted to about 50 separate filings of Form 8621, which indicate holdings in offshore investment firms. Link 

Members and supporters of the Tea Party Patriots rally on Capitol Hill in Washington, March 24, 2012. REUTERS/Jonathan Ernst

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

 * GOP retreat on taxes likely if Obama wins. Lori Montgomery and Paul Kane – The Washington Post. Senior Republicans say they will be forced to retreat on taxes if President Obama wins a second term in November, clearing the biggest obstacle to a deal with Democrats to defuse a year-end budget bomb that threatens to rock the U.S. economy. Republicans have long resisted tax increases of any kind. But taxes are a major battleground in the campaign between Obama and Republican Mitt Romney, Capitol Hill veterans say, and the victor will be able to claim a mandate for his policies. Link  

* Tax credit in doubt, wind power industry is withering. Diane Cardwell – The New York Times. On top of the business challenges, the industry is facing a big political problem in Washington: the Dec. 31 expiration of a federal tax credit that makes wind power more competitive with other sources of electricity. This year, the tax break has become a wedge issue in the presidential contest. Link

Some important tax and accounting events in the week ahead:

Monday, Sept. 24

* Financial Accounting Standards Board webcast on proposed changes to the 2013 taxonomy for the eXtensible Business Reporting Language (XBRL).

Friday, Sept. 28

* Public Company Accounting Oversight Board member Jay D. Hanson speaks to the University of Nebraska-Omaha’s 2012 speakers series. Omaha, Nebraska.

* Director of the PCAOB’s division of enforcement and investigations, Claudius Modesti, addresses the New York County Lawyers’ Association meeting “Lawyers and Accountants – An Interdisciplinary Dialogue: Issues and Understandings.” New York.