Tax Break

Essential reading: Romney now says health mandate by Obama is a tax, and more

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

* Romney now says health mandate by Obama is a tax. Jeremy Peters – The New York Times. Mitt Romney declared on Wednesday that President Barack Obama’s healthcare mandate was in fact a tax, shifting his campaign’s characterization of the law and aligning himself with the conservative voices in his party. Two days earlier, his chief spokesman and senior strategist had said that Romney did not believe the mandate should be called a tax. Link

* Christie makes new appeal for a 10 percent income tax cut. Kate Zernike – The New York Times. New Jersey Gov. Chris Christie called a special session of the Legislature on Monday to argue his case again for a 10 percent income tax cut, saying “the New Jersey comeback” depends on it. But as with most things the governor does, Democrats viewed his half-hour speech less in terms of what he actually said and more for what it said about his national ambitions, and what some believe are his hopes to be the Republican vice-presidential nominee. Link

* France set to raise taxes on firms, rich. William Horobin and Gabriele Parussini – The Wall Street Journal. The government of Socialist President François Hollande announced plans to hit companies and the rich with higher taxes this year, as the country battles against weak economic growth to stay on track with deficit-reduction goals. The government said it would seek Parliament approval for 7.2 billion euros ($9.08 billion) in extra taxes this year. The plan, which had been outlined by cabinet members in recent days, calls for higher taxes on dividends and oil companies, while 2.3 billion euros of the tax increases would come from wealth taxes, the government said. Link

* The most sensible tax of all. Yoram Bauman and Shi-Ling Hsu – The New York Times opinion. On Sunday, the best climate policy in the world got even better: British Columbia’s carbon tax — a tax on the carbon content of all fossil fuels burned in the province — increased from $25 to $30 per metric ton of carbon dioxide, making it more expensive to pollute. This was good news not only for the environment but for nearly everyone who pays taxes in British Columbia, because the carbon tax is used to reduce taxes for individuals and businesses. Thanks to this tax swap, British Columbia has lowered its corporate income tax rate to 10 percent from 12 percent. Link

* Bullet train could shoot down Brown’s tax initiative. George Skelton – The Los Angeles Times opinion. The bullet train won’t be on the November ballot, but it will be on many Californians’ minds as they decide the fate of Gov. Jerry Brown’s tax proposal. That’s what I keep hearing from e-mailers such as Fred: “Many voters will not support Jerry’s tax plan so long as his budget includes monies for high speed rail.” Link

Essential reading: Romney campaign and GOP at odds on healthcare tax, and more

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

* Romney campaign and GOP at odds on healthcare tax. Michael Shear – The New York Times. Mitt Romney’s presidential campaign threw cold water on a central Republican attack line on Monday, saying that President Obama’s healthcare mandate should be thought of as a penalty and not a tax. That message, delivered first by a top aide to Mr. Romney on television and later by the campaign, contradicts top Republican Party officials and leaders in Congress, who have spent the last several days eagerly accusing the president of levying a new tax. Link

* IRS may botch complaints of tax-exempt abuse-watchdog. Patrick Temple-West – Reuters. The Internal Revenue Service is missing opportunities to catch possible abuse by tax-exempt groups, the agency’s watchdog said on Monday amid concern that some groups are spending heavily on the political campaign for the November 6 elections. Allegations of abuse may be mishandled or lost, said the report by the Treasury Inspector General for Tax Administration. Lax IRS enforcement may cost the government millions of dollars in uncollected taxes, the report said. Link

* Christie’s call for tax cut is unheeded. Heather Haddon – The Wall Street Journal. Gov. Chris Christie forced lawmakers back to the statehouse Monday and made another pitch for a tax cut, a significant piece of his agenda that Democrats took a firm stand against. Christie, a Republican, convened the special session of the Legislature just three days after signing a $32 billion budget and helping shepherd passage of a landmark overhaul of the teacher tenure system. Link

Essential reading: Jumping off the fiscal cliff, and more

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

* Analysis: Jumping off the fiscal cliff. Kim Dixon and Richard Cowan – Reuters. Members of Congress from both parties are increasingly mulling the unthinkable: going home in December without acting to avoid the $4 trillion in tax hikes and deep spending cuts known as the fiscal cliff. Neither Democrats nor Republicans claim this is their preferred option, as it could rattle global financial markets badly and anger their constituents. But as they circle each other in an ever-more partisan atmosphere they see little prospect for a settlement acceptable to both parties in the lame duck session of Congress after the Nov. 6 election. Link

* Get ready for the new investment tax. Laura Saunders – The Wall Street Journal. When the court affirmed the law on Thursday, investors — and tax advisers — started scrambling. The new tax, which Congress passed in 2010, affects the net investment income of most joint filers with adjusted gross income of more than $250,000 ($200,000 for single filers). Starting on Jan. 1, 2013, the tax rates on long-term capital gains and dividends for these earners will jump from their current historic low of 15 percent to 18.8 percent, assuming Congress extends the current law. Link

* GOP’s new health-law front. Louise Randofsky – The Wall Street Journal. Republicans are planning to use the main component of the Supreme Court decision upholding President Barack Obama’s healthcare law as a weapon to try to repeal it. Republicans are preparing a fresh assault on the law, including a move by the Republican-controlled House to vote to repeal the entire overhaul July 11. Link

Essential reading: Supreme Court ruling casts tax shadow over US healthcare law, and more

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

* Supreme Court ruling casts tax shadow over US healthcare law. Kim Dixon and Kevin Drawbaugh – Reuters. Republicans seized on a momentous U.S. Supreme Court ruling on Thursday to accuse President Barack Obama of hiding a tax increase in his healthcare law, an argument likely to intensify a congressional tax policy war already under way. The court ruled the 2010 law was valid because Congress has the power to impose taxes. The Obama administration played down the tax factor, but Republican opponents pounced on the decision, seeking to elicit political points from a legal issue. Link

* US IRS steps up scrutiny of tax-exempt political groups. Patrick Temple-West and Alina Selyukh – Reuters. The U.S. Internal Revenue Service is signaling that it will increase its scrutiny of tax-exempt political organizations, which are becoming a force in elections by raising tens of millions of dollars from undisclosed donors. The IRS has been corresponding with such groups and is preparing questions to ask them as part of effort to determine whether their fundraising or advertising work runs afoul of tax law. IRS spokesman Terry Lemons said on Thursday the scrutiny will affect a range of tax-exempt groups. Link

* Rotation not enough to improve audits-experts. Dena Aubin – Reuters. Making U.S. companies switch or rotate auditors every few years would not end audit failures, and regulators should consider additional measures to protect investors, former securities regulators and legal experts said on Thursday. The auditing profession has become a comfortable oligopoly and its basic product has become suspect, said Harold Williams, former chairman of the U.S. Securities and Exchange Commission, at a forum in San Francisco. Link

Calendar

With a national holiday in the middle of the week and both the U.S. Senate and House of Representatives on break, the coming week will be quiet in tax and accounting circles.

Tuesday, July 3
•    The U.S. Taxpayer Advocacy Panel will hold a pair of open teleconference meetings. The first, on return processing delays, will start at 9:30 a.m. EDT. The second, on toll-free filing will be at 11 a.m. EDT.

 

Essential reading: Camp vows Republicans will resist tax revenue increases, and more

House Ways and Means Committee chairman Dave Camp (R-MI) REUTERS/ Gary Cameron

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

* Camp: Republicans will resist tax revenue increases. James Willhite – The Wall Street Journal. House Ways & Means Chairman Dave Camp said Republicans won’t increase tax revenues to cope with deficits even though “revenue percentage of GDP is at a historic low.” When pressed on whether the Republicans in the House would tolerate offsetting a fourth of spending cuts with revenue increases, Camp said that such a proposal would likely not pass. A simpler tax code with a lower rate and fewer deductions is the goal, Camp said. Link

* Congress inaction risks 2013 tax delay: IRS watchdog. Patrick Temple-West – Reuters. Tax refunds in 2013 could be delayed if the U.S. Congress fails to address major fiscal policy questions soon, said the IRS in-house champion for taxpayers’ rights on Wednesday. National Taxpayer Advocate Nina Olson said in a report that “the 2013 filing season is already at risk” due to inaction by Congress on tax laws that have expired or will soon expire. Link

* U.S. anti-tax pledge creator says oath is strong. Kim Dixon – Reuters. Grover Norquist, the man dubbed by many the most powerful Republican in Washington, said on Wednesday that his anti-tax oath is alive and well despite opposition from senior figures in the party. Norquist, whose 1986 “taxpayer protection pledge” has been signed by the vast majority of elected Republicans, said the numbers prove his case that the oath is still in vogue. More Republicans today have signed the pledge than during the last election cycle, he said. Link

Essential reading: H&R Block digital tax business grows, profit falls, and more

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

*H&R Block digital tax business grows, profit falls. Reuters. H&R Block Inc posted a lower fourth-quarter profit on charges related to job cuts earlier this year, but the top U.S. tax preparer said it gained market share in the highly competitive tax filing business. The company cut jobs, shut stores and overhauled its management in April, to focus on the fast-growing digital tax preparation segment after several years of losing customers to do-it-yourself tax filing services like Intuit Inc’s TurboTax software. Link

*Hatch, Rangel beat back challenges. Andrew Grossman and Naftali Bendavid – The Wall Street Journal. Two longtime congressional incumbents beat back strong challenges to their careers in primary elections on Tuesday. In New York, Charles Rangel, the 82-year-old Democrat who once led the powerful House Ways and Means Committee, won his primary race and is on track to claim a 22nd two-year term. In Utah, Republican Sen. Orrin Hatch easily defeated a primary challenger who ran aggressively to his right. Link 

* IRS offers reprieve to expat tax filers. Lynnley Browning – Reuters. Many Americans living abroad will get a small reprieve from U.S. Internal Revenue Service rules on reporting foreign assets, the agency announced on Tuesday. The IRS said it would allow some U.S. citizens, including dual citizens, who have not filed income tax returns or not disclosed their foreign bank accounts, to come forward without facing onerous penalties or the threat of prosecution. Link

Essential reading: Treasury resists Northern Ireland corportion tax cuts plan, and more

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

* Treasury resists Northern Ireland corporation tax cuts plan. Jamie Smyth – The Financial Times. A plan to devolve the power to reduce corporation tax to the Northern Ireland assembly is being resisted by the Treasury, denting hopes that lower taxes can be introduced to boost an economy hit by three decades of violence. Ministers from the UK and Northern Ireland government held a third meeting on Monday to discuss the proposal, which would enable Northern Ireland to cut its corporation tax rate to 12.5 per cent to match that of the Irish Republic. Link

* New rules may make public pensions appear weaker. Lisa Lambert and Nanette Byrnes – Reuters. New accounting rules approved on Monday are likely to show public pension funds are in a weaker financial position than previously thought and intensify disputes over how public retirement systems are funded. State and local governments will have to post their net pension liability – the difference between the projected benefit payments and the assets set aside to cover those payments – up front on financial statements, under the changes. Link

* N.J. budget vote sets up showdown with Christie. Heather Haddon – The Wall Street Journal. New Jersey Democrats pushed through a $31.7 billion budget in a party-line vote Monday, setting the stage for a possible veto by Republican Governor Chris Christie later this week. The bill substitutes a property-tax credit for Christie’s proposal to cut income taxes by 10 percent, with a delay until revenue figures can be further studied later this year. Link

Essential reading: State, local fiscal burdens drag on economic recovery, and more

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

* State, local fiscal burdens drag on economic recovery. Connor Dougherty – The Wall Street Journal. State and local government tax collections have improved from the recession years, they only recently regained their pre-downturn peak. Meantime, local governments, which unlike states rely on property taxes, continue to suffer from the big drop in real estate prices. Given political pressure to reduce the federal budget deficit, cities and states are likely to get less help from Washington. If that happens they would have to make up the gap with tax hikes of their own or else live more frugally—what they’re doing now. Link

* Public pensions to give ‘clearer picture’ of finances. Lisa Lambert – Reuters. Public retirement systems will have to make major changes in how they disclose their pension assets and liabilities, under new rules that the board in charge of accounting standards for U.S. state and local governments is set to approve on Monday. The Governmental Accounting Standards Board will vote on the changes at an afternoon meeting. The reforms were proposed nearly a year ago to give more detail on how pensions affect governments’ finances. Link

* IRS whistleblower tax take plunges, senator frets. Patrick Temple-West – Reuters. A report from the U.S. Internal Revenue Service’s troubled whistleblower program said tax collections from tipsters fell sharply last year, prompting a U.S. lawmaker on Friday to say he may delay two Treasury Department nominees until the program improves. In fiscal 2011, the IRS collected only $48 million through the program, down from $464 million in fiscal 2010, the agency reported to Congress on June 15. Link

Calendar

Long-tailed mayflies fly over the surface of the Tisza river southeast of Budapest, June 20, 2012. REUTERS/Laszlo BaloghSome important tax and accounting events in the week ahead:

Monday, June 25
• Deloitte Tax LLP webcast on the effects new tax legislation, standard-setting developments and regulatory matters could have on financial accounting and income tax reporting.

Wednesday, June 27
• Financial Accounting Standards Board (FASB) meeting on repurchase agreements and defining a nonpublic entity. Norwalk, Connecticut.

Wednesday, June 27 – Saturday, June 30

• Internal Revenue Service Chief Counsel William Wilkins speaks at the Tax Executive Institute regional meeting. Hilton Head, South Carolina.