Tax Break

Some events in the week ahead:

Monday, February 6

Comment letters due on the Financial Accounting Standards Board’s proposed accounting standards updating the cumulative translation adjustment following the sale of a nonprofit or foreign business.

Tuesday, Feburary 7

The U.S. Congress Joint Economic Committee (JEC) will hold a hearing on extending the two-percentage-point payroll tax cut and continuing emergency federal unemployment insurance benefits through the end of 2012, including examining the economic impact of extending these policies versus allowing them to lapse.

Witnesses:

Dr. Mark M. Zandi, Chief Economist, Moody’s Analytics Mr. James Sherk, Senior Policy Analyst, The Heritage Foundation Ms. Judith M. Conti, Federal Advocacy Coordinator, National Employment Law Project

Wednesday, February 8

House Ways and Means Committee Chair Dave Camp, R-Mich., will hold a hearing on the interaction between accounting rules and tax policy and how public companies evaluate tax policy options in light of financial accounting considerations. Also whether tax legislation works as intended when Congress fails to account for the effects of financial accounting on corporate behavior. Written comments can be submitted here. The D.C. Bar Taxation Section State and Local Taxes Committee will sponsor a luncheon program on topics including mandatory unitary combined reporting, market-based sourcing and sales tax base expansion.

Thursday, February 9

The Governmental Accounting Standards Board to hold its regular teleconference.

Taxpayer Advocacy Panel

The TAP, a body established by the U. S. Department of the Treasury, to help taxpayers improve IRS customer service and responsiveness to taxpayer needs, will be sponsoring several open teleconferences this week.

Some events in the week ahead:

Tuesday, January 31

1. Senate Finance Committee Chairman Max Baucus to convene a hearing to discuss the 50-plus tax provisions that expire annually or biannually, termed “tax extenders.” The Joint Committee on Taxation has estimated that a one-year extension of all would cost $37 billion over the next decade. Witnesses will be:

Dr. Rosanne Altshuler, Professor and Chair of the Economics Department, Rutgers University Dr. Jason J. Fichtner, Senior Research Fellow, Mercatus Center, George Mason University Calvin H. Johnson, Andrews & Kurth Centennial Professor of Law, The University of Texas School of Law Caroline L. Harris, Chief Tax Counsel and Director of Tax Policy, U.S Chamber of Commerce

2. The Financial Accounting Standards Board to hold an open meeting with its investors’ technical advisory committee in Norwalk, Connecticut.

3. The Congressional Budget Office to release its annual budget and economic outlook, with director Douglas Elmendorf to testify on it before the House Budget Committee on Feb. 1 and before the Senate Budget Committee on Feb. 2.

Some notable events in tax and accounting during the week ahead:

Tuesday

Republican president candidate Mitt Romney to release his tax returns, which he has said will show a tax rate of around 15 percent, likely kept low by the tax treatment afforded private equity compensation like that he earned at Bain Capital before entering politics. The Government Accounting Standards Board to meet in Norwalk, Connecticut. President Barack Obama will give his State of the Union speech to Congress and is expected to repeat calls for higher taxes on the wealthy and tax breaks to bring American manufacturing jobs home.

Wednesday

Financial Accounting Standards Board open board meeting in Norwalk, Connecticut.

Thursday

The Senate Permanent Subcommittee on Investigations will hold a hearing on the IRS permitting mutual funds to directly invest in commodities despite statutory restrictions.

Thursday and Friday

Companies are going to have to contribute some serious money to shore up their lilting pension plans this year, but there’s a silver lining: higher earnings.

In a Dec. 7 analysis, UBS analysts spell out how contributing to the company plan could handsomely help the bottom line.

It has a lot to do with the peculiarities of pension accounting.

As UBS accounting expert Janet Pegg wrote in the report,  companies that sponsor pension plans mostly don’t use current market results when determining how much their plans cost them in a certain year.  Instead they use an “expected long-term rate of return”  to calculate how their investments did.