Tax Break

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

 * Middle class tax hikes loom in Obama proposal despite pledge to avoid them. The Washington Post. President Barack Obama proposed a 2014 budget that, if adopted, would break his promise to avoid any tax increases for middle- and low-income people. Link

 * Fund managers warn on taxes in Obama budget. Stephen Foley and Dan McCrum – The Financial Times. President Barack Obama surprised Wall Street by backing a plan that would force investors to pay tax on unrealized derivatives gains, opening up a new front in his attempt to raise revenues through a reform of the tax code. Link

* Hollande creates a prosecutor for fraud and vows to end tax havens. Steven Erlanger and David Jolly – The New York Times. French President François Hollande on Wednesday announced the creation of a position of special prosecutor to pursue cases of corruption and tax fraud, and vowed to eradicate tax havens “in Europe and the world.” Link 

* Split court leaves Brazil foreign-unit tax debt in doubt. Anthony Boadle and Jeb Blount – Reuters. Brazil’s Supreme Court on Wednesday declared a partial end to double taxation of foreign units of Brazilian companies in a split decision that global miner Vale called a “victory” in its $15 billion tax dispute with the Brazilian government. Link

* Accounting class action suits plunged in 2012. James Willhite – The Wall Street Journal. The number of securities class action suits involving accounting allegations fell sharply last year, as the financial crisis receded further into the past and filings against Chinese issuers listed on U.S. exchanges through reverse mergers declined. Link 

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

* Luxembourg agrees to automatic information exchange to help fight tax evasion. The Washington Post. The initiative, which is to start in 2015, follows international pressure on Luxembourg to end its policy of banking secrecy that critics say has helped people hide money from tax authorities. Link

* FBI probes trading as KPMG quits Herbalife, Skechers audits. Martinne Geller and Emily Fitter – Reuters. In a blow to one of the world’s largest accounting firms, KPMG said it resigned as auditor of two U.S. corporations amid an FBI investigation into insider trading allegations involving leaked information and a former senior partner. Link

* Golf pal chats led to probes. Hannah Karp and Jean Eaglesham – The Wall Street Journal. Scott London’s path from KPMG LLP partner to subject of insider-trading investigations began with a casual conversation in 2010 with “someone I’d known from the golf club, ” he said in an interview. Then the FBI called. Link

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

 * Sen. Max Baucus moves to reshape tax code. Lori Montgomery – The Washington Post. Last month, Senator Max Baucus summoned members of the Senate Finance Committee to a closed-door meeting to discuss the first full-scale rewrite of the 5,600-page U.S. tax code in more than 25 years. After two years of watching President Obama and congressional leaders take on tax policy and other areas of the committee’s vast jurisdiction, the panel’s chairman is reclaiming his turf. Link 

* KPMG fires L.A. partner over alleged insider-trading tips. Michael Rapoport – The Wall Street Journal. KPMG LLP has fired a senior partner in its Los Angeles office, saying the unidentified partner had provided inside information about its clients to someone who had used that information in stock trading. The firm has also resigned as the outside auditor of two of its clients because of the actions of the partner, who it described as the partner in charge of its audit practice in its Los Angeles business unit. Link

* Louisiana Governor Bobby Jindal delays controversial tax plan. Reuters. Jindal said he would park his plan to get rid of the state income and corporate taxes and replace the lost revenue with higher and broader sales taxes, deferring to the Legislature on the issue. Link 

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

 * No big deal? Small business groups shrug off delays to Obamacare’s health care exchanges. J.D. Harrison – The Washington Post. The Obama administration has delayed part of the health care law designed to give small business owners and employees more flexibility when purchasing insurance, which could temporarily undermine lawmakers’ intent to drive down the cost of health coverage. Link  

* Why we support a revenue-neutral carbon tax. George Shultz and Gary Becker – The Wall Street Journal. Coupled with the elimination of costly energy subsidies, it would encourage competition. Link 

* Tax lobby builds ties to chairman of U.S. Senate Finance Committee. Eric Lipton – The New York Times. Restaurant chains like McDonald’s want to keep their lucrative tax credit for hiring veterans. Altria, the tobacco giant, wants to cut the corporate tax rate. And Sapphire Energy, a small alternative energy company, is determined to protect a tax incentive it believes could turn algae into a popular motor fuel. To make their case as Congress prepares to debate a rewrite of the nation’s tax code, these businesses have at least one strategy in common: they have retained firms that employ lobbyists who are former aides to Max Baucus, the chairman of the Senate Finance Committee. Link

Some important tax and accounting events in the week ahead:

Tuesday, April 2

Internal Revenue Service hearing on the 3.8 percent investment income tax associated with the Health Care and Education Reconciliation Act of 2010, sometimes called “Obamacare.” 10 a.m. ET. IRS building. Washington.

Wednesday, April 3

Speakers from the IRS and Department of Justice speak to the D.C. Bar session on litigating tax issues in bankruptcy proceedings. 12 noon – 1:30 p.m, D.C. Bar Conference Center. Washington.

Thursday, April 4

* Part two of six of the D.C. Bar state and local taxes series. 12 noon – 2 p.m. ET, D.C. Bar Conference Center. Washington.

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

* Cash-hungry states eye sports betting, to leagues dismay. Joe Drape – The New York Times. Nevada took in more than $3.4 billion in bets on sports last year, generating $15 million to $20 million in tax revenue. Link     

* A new variation of a costly tax-time offer. Ann Carrins – The New York Times. Some tax preparation firms, like Liberty Tax Service and Jackson Hewitt, continue to make the refund anticipation loans using nonbank partners. Link    

* IRS videos come under fire. Lynnley Browning – The New York Times. An Internal Revenue Service training and leadership video based on “Gilligan’s Island,” the campy 1960’s television show, has emerged. Link    

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

 * How the maker of TurboTax fought free, simple filing. Liz Day – ProPublica. Intuit has spent about $11.5 million on federal lobbying in the past five years. Although the lobbying spans a range of issues, Intuit’s disclosures pointedly note that the company “opposes IRS government tax preparation.” Link 

 * Post analysis of Dow 30 firms shows declining tax burden as a share of profits. Jia Lynn Yang – The Washington Post. Most of the 30 companies listed on the country’s most famous stock index, the Dow Jones industrial average, have seen a dramatically smaller percentage of their profits go to U.S. coffers over time. Link    

 * On the second day, Supreme Court considers DOMA. Robert Barnes – The Washington Post. When Thea Spyer died in 2009, she left her estate to Edith Windsor. Because their marriage was not recognized, Windsor paid a tax bill of more than $360,000. She has sued for a refund. Link    

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

* Intangibles targeted in tax audits. Emily Chasan – The Wall Street Journal. Intangible assets such as intellectual property, technology processes and copyrights have grown over the past decade to account for a greater portion of corporate profits, and tax regulators are taking notice. Link    

 * Tax panel: Democrats’ budget needs to cut more tax breaks. Siobhan Hughes – The Wall Street Journal. A congressional tax report found that President Barack Obama’s strategy for raising taxes won’t fly on its own since it couldn’t raise the $975 billion called for under the Senate Democratic budget. Link    

* Experts foresee no tax overhaul in United States. Conrad de Aenlle – The New York Times. while few dispute that tax reform is a good idea, it is an idea that policy specialists doubt will be acted upon soon. Link

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

* Trading clamps spur lobby effort. Jenny Strasburg and Scott Patterson – The Wall Street Journal. High-speed trading firms and exchanges are being forced into the lobbying game by taxes on trades in Europe, proposals for similar levies in the U.S. and beefed-up regulatory scrutiny. Link    

* U.S. seeks answers in Liechtenstein on tax cheats. Dylan Griffiths – Bloomberg. The U.S. has asked Liechtenstein to hand over data on foundations that may have been used to hide untaxed American money from the Internal Revenue Service, a step that may threaten Swiss banks. Link

* Email tax may slice spam and scams out of inboxes. George Skelton – The Los Angeles Times. An email tax — as part of a broader Internet tax — could raise money to help keep the Postal Service afloat, California Gordon Wozniak said of his proposal. Link    

Some important events in the week ahead:

Monday, March 25 – Tuesday, March 26

* American Institute of Certified Public Accountants’ workshop on fair value measurement of assets. New York.

 Wednesday, March 27

* Oral arguments in United States v. Windsor on the constitutionality of the Defense of Marriage Act under the equal protection clause of the Fifth Amendment. 10 a.m. ET, U.S. Supreme Court. Washington.

* John Sweeney, an IRS chief counsel, speaks to the American Bar Association webinar and teleconference on FATCA and intergovernmental agreements. 1 – 2:30 p.m. ET.