Tax Break

Essential reading: Pension managers become opportunistic amid volatility, and more

 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

* Ad attacks Romney on taxes, secret video. John McKinnon – The Wall Street Journal. The ad says that according to the just-released 2011 Romney tax return, the candidate and his wife “paid just 14.1 percent in taxes last year.” And it says that “he keeps millions in Bermuda and the Cayman Islands” and won’t release his tax returns before 2010. Link

* Republicans champion ‘voluntary taxes.’ Bruce Bartlett – The New York Times. The Republican-controlled House of Representatives took a break last week from doing nothing to pass a bill to facilitate voluntary taxation. Almost simultaneously, Mitt Romney released his final tax return for 2011, showing that he voluntarily overpaid his taxes by taking less of a deduction for his charitable contributions than he was permitted. Link  

Essential reading: Pension crisis looms despite cuts, and more

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 

Essential reading: GOP retreat on taxes likely if Obama wins, and more

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.

Essential reading: Next school crisis for Chicago is its dwindling pension, and more

Chicago teachers ended their strike and went back to the classroom September 19. REUTERS/John Gress

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

 * Next school crisis for Chicago: Pension fund is running dry. Mary Williams Walsh – The New York Times. One of the most vexing problems for Chicago and its teachers went virtually unmentioned during the strike: The pension fund is about to hit a wall. The Chicago Teachers’ Pension Fund has about $10 billion in assets, but is paying out more than $1 billion in benefits a year — much more than it has been taking in. Link  

* US tax net closes on Americans living in Britain. Vanessa Houlder – The Financial Times. The US tax net is closing on hundreds of Americans living in Britain who have failed to file returns, as further details emerge about the planned transfer of their banking details to the Internal Revenue Service. Banks will have to identify all their US customers by 2015, according to a consultation paper spelling out the implementation of a pioneering agreement on tackling tax evasion that the US and UK governments signed last week. Link  

Essential reading: L.A. pension proposal would hike retirement age, cut benefits, and more

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

 * L.A. pension proposal would hike retirement age, cut benefits. David Zahniser and Kate Linthicum – The Los Angeles Times. Setting the stage for a legal battle with employee unions, the Los Angeles City Council is weighing a new plan to reel in pension costs by hiking the retirement age and cutting benefits for thousands of future civilian employees. The proposal, unveiled the same day that the council backed a three-year business tax break worth roughly $50 million, would set the retirement age at 65 and establish new financial penalties for those who retire earlier. Link  

* IASB warns of reduction in bank lending. Adam Jones – The Financial Times. Banks could be deterred from lending under a new approach to bad loan provisioning being developed in the US, according to the head of the body that sets rival international accounting rules. In another sign of how attempts to create global accounting rules have unraveled, Hans Hoogervorst, International Accounting Standards Board chairman, criticized a more conservative attitude to bank accounting that has gained favor in the US. Link  

* Much of Romney’s view on taxes conflicts with longtime GOP stand. Annie Lowrey and Michael Cooper – The New York Times. On Monday, Mitt Romney waded into an ideological clash pitting two strands of conservative thinking against each other: the longstanding goal of reducing the tax burden on the poor with tax credits versus the growing anxiety that the nation’s “takers” are now overtaking its “makers.” Link

Essential reading: No sales-tax effect on Amazon in Texas, and more

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

* The sales-tax effect on Amazon: Nada. Greg Bensinger – The Wall Street Journal. A new survey by Wells Fargo analyst Matt Nemer showed that consumers in Texas, the second most populous state in the nation, essentially haven’t changed their buying habits since the online sales tax went into effect in July. Link  

* Credit Suisse to reveal more data, staff names in U.S. tax probe. Katherina Bart – Reuters. Credit Suisse said it would transfer more information on its money management arm for wealthy Americans to U.S. officials, including more names of its own employees, as part of an effort to settle a tax evasion probe. For the first time, Credit Suisse employees will be told before their names are disclosed to U.S. officials, a bank spokesman said, after previous transfers of information by banks drew criticism. Link  

* Lawyers focus on new tax crackdown. Vanessa Houlder – The Financial Times. London lawyers are set to be targeted by tax inspectors in an intensive crackdown on evasion that is expected to yield 3 million pounds ($4.88 million). HM Revenue & Customs will announce on Tuesday that the London legal profession is one of five high-risk sectors around the country to be scrutinized by specialist taskforces. Inspectors will visit premises to examine records and carry out other investigations. Link


Some important tax and accounting events in the week ahead:

 Wednesday, Sept. 19

* Center for Audit Quality forum on investor confidence. 8:30 a.m. EDT, Willard InterContinental hotel. Washington.

* Columbia University School of Law panel on how to improve the tax code and what tax policies might boost economic growth. 6:15 p.m. EDT, Jerome Green Hall, Columbia Law School. New York.

Thursday, Sept. 20

*U.S. Senate Committee on Finance and the House Ways and Means Committee joint meeting on tax reform and the tax treatment of capital gains. 10 a.m. EDT, Capitol Visitor Center. Washington.

Essential reading: Financially troubled parts of Europe consider taxing church properties, and more

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

 * Financially troubled parts of Europe consider taxing Catholic Church properties. Ariana Eunjung Cha – The Washington Post. Cash-strapped officials in Europe are looking for a way to ease their financial burden by upending centuries of tradition and seeking to tap one of the last untouched sources of wealth: the Catholic Church. Thousands of public officials who have seen the financial crisis hit their budgets are chipping away at the various tax breaks and privileges the church has enjoyed for centuries. Link  

* An expiring tax credit threatens the wind power industry. Kate Galbraith – The New York Times. Wind power companies are closely watching developments in Washington, where a tax credit benefiting wind farms is due to expire at the end of this year. The implications of that could be especially significant in Texas, the top wind power state, which contains about a fifth of the nation’s turbines and is building expensive transmission lines to support more growth. Link  

* House-Senate hearing planned on capital gains taxes. John McKinnon – The Wall Street Journal. The House Ways and Means and the Senate Finance committees, one run by Republicans and the other by Democrats, will sit down for a rare joint hearing next Thursday, this time on the topic of capital gains taxes. It’s the third in a series of joint hearings that the two committees have held during the current Congress on the broad topic of overhauling the bulky U.S. tax code. Link  

Essential reading: California workers to shoulder more pension costs, and more

California Governor Jerry Brown announces the Public Employee Pension Reform Act of 2012, August 28, 2012. REUTERS/Mario Anzuoni

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

 * California workers to shoulder more pension costs. Vauhini Vara – The Wall Street Journal. California will begin overhauling pensions for government workers in January, after Gov. Jerry Brown signed a law Wednesday to boost current employees’ contributions and cut benefits for future workers. The new law mandates that, beginning in January, people who start working for California and many of its cities will face higher retirement ages and smaller pensions when they retire. Link  

* Obama ad hits Romney on tax cuts. David Jackson – USA Today. President Obama’s latest television ad attacks Mitt Romney over his proposed $5 trillion tax cut, saying it will wind up actually raising taxes on the middle class. The ad also makes reference to Romney’s refusal to release more than two years of tax returns. Link