Tax Break

Tax clips from the web: A Superbowl winner, retail relief and offshore assets

New York Giants middle linebacker Chase Blackburn (L) intercepts a pass intended for New England Patriots tight end Rob Gronkowski during the third quarter in the NFL Super Bowl XLVI.

And the winning play goes to…

One of the more sensational plays on Superbowl Sunday last weekend took place in Las Vegas, where Jona Rechnitz was given 50 to 1 odds on the first scoring play in the game between the New York Giants and the New England Patriots being a safety. For those who missed it, a safety is something like a player throwing into or being tackled in his own end zone…Or something like that. Actually, Tax Break does not follow football really, so you can catch up on those details elsewhere. Anyway, the safety did occur, and Rechnitz won a cool $60,000 on the bet, Don’t Mess With Taxes writes.

Some of that win was shaved for taxes by the casino before it even paid out, and the rest is taxable on Rechnitz’s own tax return. That is – it would be. He told some tabloids that he will donate the money to charity, in which case he can deduct the whole kit and caboodle on his tax return.

Onto those who are preparing their taxes now…

This year promisesto bring at least the slightest recovery in consumer spending, which is happy news to retailers. More happy news emerged this week when the Retail Industry Leaders Association received word from the IRS that they need not change the way they had been calculating gross receipts and sales this year. The fear was that they might need to separately reports items on the receipts like sales tax, cash back and deposits and reconcile them with the total number. The IRS said it does “not intend reconciliation going forward,” so the waters seem to be relatively clear for now. Forbes’ Tax Girl writes about it here.

Keep my details private

Bankrate’s tax blog also points out a survey that found a majority of people are nervous about the E-Filing feature that the IRS is touting up and down its website this year. People worry that their financial and identifying information may not be totally secure if they file digitally.

Essential tax and accounting reading: Global accounting push, global tax battle and a vet tax credit

A military veterans hiring event in New York, January 19, 2012. REUTERS/Brendan McDermid

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

* Global accounting reform ups pressure on U.S. to sign up. Huw Jones – Reuters. Plans by the accounting body responsible for global standards to make itself more answerable to the public will put pressure on the United States to sign up or risk losing influence. The International Accounting Standards Board (IASB) has drawn up the standards, which are used by listed companies in over 100 countries, including the European Union. So far the United States has delayed its decision to sign up, under pressure from companies and Congress who say they do not want to cede regulatory sovereignty to a London-based body. But Thursday’s publication by the IASB’s Trustees and Monitoring Board of plans to make themselves more open and accountable in their second decade may push the United States to think again, given the far-reaching impact that accounting rules have on financial markets and investors. Link.

* Pessimism high, Republicans warn of possible expiration of payroll tax cuts. Jennifer Steinhauer – The New York Times. Congressional Republicans said Thursday that negotiations over extending a payroll tax cut were going so poorly that it was possible the tax break – along with added unemployment benefits – could expire at the end of the month. If the benefits are allowed to lapse, it will be a stunning coda to a battle that has lasted months on Capitol Hill over whether and how to extend a two-percentage-point tax break for nearly every working American and to provide additional unemployment benefits for millions more. A temporary agreement forged in December cost Republicans politically and left both parties locked in another round of fights over how to cover the costs. In addition, Republicans are seeking numerous policy changes connected to unemployment benefits – like a mandatory high school equivalency program and possible drug testing for beneficiaries – that Democrats have rejected out of hand. They would also reduce the benefits to 59 weeks, far less than the 79 weeks sought by President Obama. Link.

On Capitol Hill, companies want tax rate cut, but it’s unclear whose ox will be gored

Corporate America went to Capitol Hill on Wednesday for one of what will probably become dozens of tax reform hearings over the next few years.

Companies that you might call “winners” under the complex U.S. tax code – such as General Electric and some pharmaceutical companies which tend to pay a much lower rate than the standard 35 percent corporate tax rate – were not there.

Those you might call losers, brand name companies paying close to the top 35 percent — like FedEx and Time Warner — were. They all agree to cut the rate — no surprise there — but there was little consensus on what they would give up in return.

Levin and Conrad try to close $155 billion in tax “loopholes”

There’s been a lot of talk about tax loopholes in recent months. Now there’s a bill to go with it.

On Tuesday, two Democratic U.S. senators — Carl Levin and Kent Conrad — piled a laundry list of long-standing proposals into their “Cut Unjustified Tax Loopholes Act.”

The bill would add $155 billion to the country’s coffers over the next 10 years, according to estimates put together by the Joint Committee on Taxation and the Office of Management & Budget on earlier versions of these proposals. That’s more than enough to pay for a whole year of a payroll tax break.

Taxes not just certain, they’re right thing to do-survey

Internal Revenue Service office near Times Square in New York.

Most Americans believe strongly that it’s a civic duty to pay their “fair share” in taxes, that cheating on taxes is wrong and that cheaters should be held accountable, said a survey from the U.S. Internal Revenue Service’s Oversight Board released on Monday.

Created by Congress in 1998 to keep an eye on the IRS, the oversight board does its survey annually. This year’s is consistent with past results showing strong support for the tax obligations of citizenship and low tolerance for those who shirk it.

Despite chatter on the political fringes about taxes being a form of theft, 96 percent of those surveyed said they completely or mostly agreed that  ”it is every American’s civic duty to pay their fair share of taxes.”

Obama in bind over corporate tax reform-ex-Aide

Former White House Adviser Jared Bernstein

President Barack Obama spent a lot of time during his State of the Union speech last week talking about taxes – from Warren Buffett secretary’s high tax rate to a call to give tax breaks for manufacturers and promote ‘in-sourcing’ of U.S. jobs.

The president also said he’d be putting out more meat on several policy ideas he floated – including a minimum tax on foreign income and a pitch to give tax credits to companies that bring jobs back to the United States.

But whatever happened to a corporate tax overhaul plan Obama’s Treasury Secretary Timothy Geithner called imminent this time last year?