Tax Break

Essential reading: Tax-exempt bonds get scrutiny, and more

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

* A stealth tax subsidy for business faces new scrutiny. Mary Williams Walsh and Louise Story – The New York Times. This valuable tax break — the ability to finance a variety of business projects cheaply with bonds that are tax exempt — has not only endured, it has grown, in what amounts to a stealth subsidy for private enterprise. Link  

* Some bonus cash for business-tax overhaul. John McKinnon – The Wall Street Journal. This year, the Joint Committee on Taxation enormously increased its estimate of how much revenue would be generated by tightening the tax rules for U.S. multinationals’ overseas earnings. Link  

* Obama tries to sway rank-and-file Republicans. Peter Nicholas – The Wall Street Journal. President Barack Obama, unable to reach a deal on fiscal issues with Republican leaders, has begun courting more junior GOP lawmakers in hopes of creating a coalition to push through a budget deal that includes tax revenue increases. Link

* NY seeks to crack down on tax break double-dippers. The Wall Street Journal. The state is cracking down on fraudulent claims for school property tax rebates under a $3 billion-a-year program that’s meant to be used for people’s primary residences but has been used for weekend and vacation homes. Link  

Essential reading: Wegelin withers under U.S. tax scrutiny, and more

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

 * Wegelin’s fall to tax-haven poster child. Reed Alberotti – The Wall Street Journal. In the span of just one year, Wegelin & Co. went from being one of the most prestigious banks in Switzerland to the verge of being sentenced on U.S. criminal charges and becoming essentially defunct. Link    

* Republicans cling to one thing they agree on: Spending cuts. Richard Stevenson – The New York Times. Aware that conservatives could never accept a second round of tax increases this year, Republicans judged that the better course was to take on the economic and political risks associated with the automatic spending cuts. Link     

* Wealthier households carry the spending load. Brenda Cronin – The Wall Street Journal. The consumer sector is increasingly split in two: Wealthier households are spending more. Poorer ones, hammered by higher taxes and rising gas prices, are holding back. Link 

Calendar

Some important tax and accounting events in the week ahead:

 Sunday, March 3 – Wednesday, March 6

* National Association of State Boards of Accountancy annual conferences. Tucson, Arizona.

 Monday, March 4

* Tax Policy Center program on tax reform and the revenue challenges states face, including federal sequestration. Noon – 1:30 p.m. ET, 2100 M Street NW. Washington, D.C.

 Tuesday, March 5

* U.S. Senate Budget Committee hearing on reducing the deficit by eliminating individual and corporate tax breaks. 10:30 a.m. ET, 608 Dirksen Senate Office Building. Washington.

Essential reading: Washington State tax law ruled void, and more

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

 * Law on tax changes is struck down in Washington State. Kirk Johnson – The New York Times. A voter-approved referendum restricting the Legislature’s ability to raise taxes is unconstitutional, Washington State’s highest court ruled on Thursday. Link

* Britons shun companies over tax avoidance. Vanessa Houlder – The Financial Times. A third of Britons are boycotting companies that do not pay their “fair share” of tax in the UK, according to a survey by a charity that described the findings as “a wake-up call to all business”. Link  

* Maine Sen. Collins backs tax breaks for offshore wind production. The Associated Press. U.S. Sen. Susan Collins of Maine is co-sponsoring a bill to boost offshore wind energy generation with tax credits. Link  

Essential reading: Obama sees leverage in tax fight, and more

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

 * White House counts on G.O.P. to bend on cuts’ effects are felt. Michael Shear – The New York Times. White House strategists say they believe that a constant drip of bad news will emerge in Congressional districts across the country in the weeks ahead, putting Republicans on the defensive for their refusal to raise taxes. Link 

* Dividend recaps set to dwindle in 2013: Moody’s. Maxwell Murphy – The Wall Street Journal. Moody’s Investors Service expects fewer dividend recapitalizations this year compared to 2012, when companies rushed to distribute cash to shareholders ahead of expected tax hikes. Link

 * Poll: Most don’t believe in being a tax cheat. Stephen Ohlemacher – The Washington Post. With tax season in full swing, a newly released poll says an overwhelming majority of adults don’t believe it is ever okay to cheat on their income taxes, with most citing personal integrity as a reason to be truthful. Link

Essential reading: EU financial transactions tax to go global, and more

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

* A new European tax on financial transactions is set to go global. Howard Schneider – The Washington Post. The levy is due to take effect next year and will be a significant money-raiser for the 11 nations that have signed on, bringing in an estimated $45 billion annually. Link 

* Institutions to stay alert to signs of tax fraud. Ben DiPietro – The Wall Street Journal. The Financial Crimes Enforcement Network issued an advisory Tuesday reminding financial institutions to look for red flags that may indicate instances of identity theft and tax fraud. Link    

  * Newtown fund receives IRS nonprofit status, is ready to write checks. Matthew Sturdevant – The Hartford Courant. The Newtown Memorial Fund Inc. describes itself as a sustainable fund to provide for the immediate and ongoing needs of people affected by the Dec. 14 shooting at Sandy Hook Elementary School. The group has raised more than $1 million. Link    

Essential reading: Treasury nominee gets tax questions, and more

U.S. President Barack Obama walks with Jacob Lew in 2012. REUTERS/Jonathan Ernst

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

* Treasury pick tries to cast his history as right for the job. Jessica Silver-Greenberg – The New York Times. Jacob Lew had a $56,000 investment in the Citigroup fund, leading to questions from Republican senators about whether the investment had been put there to dodge taxes. Link 

* Republican Senator open to tax hike for entitlement-cut deal. Janet Hook – The Wall Street Journal. Senator Lindsey Graham of South Carolina Monday diverged from the Republican party line by saying he would be willing to raise $600 billion in new tax revenue if Democrats would accept major entitlement reforms in a big deficit-reduction package. Link 

* New 1099 forms pressure taxpayers to be honest. This year the form 1099b includes new details that affect tax returns and will force some taxpayers, and their tax advisers, to be more accurate. Link    

Essential reading: Republicans rally against taxes, and more

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

* Budget impasse signals a shift in GOP’s focus. Jonathan Weisman and Ashley Parker – The New York Times. Republicans, who last month let taxes rise on incomes over $400,000 to avert broader tax increases and the “fiscal cliff,” are now ready to stand their ground, regardless of the military cuts. Link

* Consumers beat expectations despite higher payroll tax. Tim Mullaney – USA Today. When the payroll tax climbed by nearly a third Jan. 1, Upstate New York car dealer Bill Fox thought he would lose business as workers in a cash-strapped area faced skinnier paychecks. It hasn’t worked out that way. Link 

* Laws give break for land preservation. But hurry. Rachel Emma Silverman – The Wall Street Journal. The new tax legislation signed at the beginning of the year renewed generous federal tax breaks for landowners who permanently preserve scenic, environmentally sensitive or historical properties. Link    

Calendar

Some important tax and accounting events in the week ahead:

Tuesday, Feb. 26

* Board meeting of the Financial Accounting Foundation, overseer of the Financial Accounting Standards Board and the Governmental Accounting Standards Board. 12:30 p.m. ET. Norwalk, Connecticut.

 * The second meeting hosted by the Hamilton Project of the Brookings Institution on the topic of “15 ways to rethink the federal budget.” Includes a session on innovative approaches to tax reform. 9:30 a.m. to 2:30 p.m. ET, Capitol Hilton Hotel. Washington.

Wednesday, Feb. 27 – Friday, March 1

* International Fiscal Association meetings covering FATCA and financial transactions taxes, cross-border transactions and other topics. Waldorf Astoria Hotel. New York.

Essential reading: Payroll tax’s return hits retailers, and more

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

* Payroll tax whacks spending. Shelly Banjo and Annie Gasparro – The Wall Street Journal. Wal-Mart Stores Inc. on Thursday joined a parade of retailers, restaurants and consumer-goods companies worried about the economic impact of the recently restored federal payroll tax that has left Americans with less money to spend. Link 

* Obama defends ending corporate jet tax break. David Jackson – USA Today. President Obama has long called for ending tax breaks on corporate jets, and found himself defending that position in an interview Wednesday with a television station from Wichita, Kansas – an area where private planes are built. Link

* Why the debate over tax revenue isn’t over. Sean Sullivan – The Washington Post. A poll showed Americans split down the middle on the question of where taxes fit into the question of deficit reduction, with 48 percent saying a mixture of tax increases and spending cuts, while 49 percent said only spending cuts should be used. Link