Tax Break

U.S. Park Police Officer Calvin Covington with his horse Harper mails his family's income tax returns at a mobile post office near the Internal Revenue Service building in downtown Washington. REUTERS/Jonathan

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

* Romney’s remarks on limiting tax deductions draw fire. By Sam Youngman and Donna Smith – Reuters. After Mitt Romney was overheard telling supporters at a private fundraiser in Florida over the weekend that he might seek to limit tax deductions for mortgages and eliminate the Department of Housing and Urban Development (HUD), aides said on Monday that Romney was simply throwing out ideas, not outlining policy to help offset his proposal to slash all U.S. tax rates by 20 percent. Link  

* ‘Buffett Rule’ tax plan fails in a Senate test vote. Naftali Bendavid – The Wall Street Journal. The Senate on Monday blocked the so-called Buffett Rule, a measure designed to ensure that high earners pay at least 30 percent in federal income tax, on a near-party-line vote highlighting the split over a key element of President Barack Obama’s election-year message. Link

* NYC’s well-off households would lose under tax-cut repeal. Frank Bass – Bloomberg. Wealthy New York-area households that benefited from a decade-long break on federal individual income taxes stand to lose the most if the Bush-era tax cuts are repealed next year. Link  

U.S. President Barack Obama and Vice President Joe Biden in Washington February 21, 2012. REUTERS/Jason Reed

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

* Obamas and Bidens to release tax returns. Mark Landler and Jim Rutenberg – The New York Times. President Barack Obama and Vice President Joseph Biden plan to release their own income tax returns on Friday, along with a statement calling on Republican presidential contender Mitt Romney to do the same, according to an Obama campaign official. Link

* Swiss can’t offer more to Germany, US in tax row-fin min. Catherine Bosley – Reuters. Switzerland cannot make further concessions to Germany and the United States in a dispute over untaxed funds in secret bank accounts, Swiss Finance Minister Eveline Widmer-Schlumpf was quoted as saying in a newspaper interview on Friday. Widmer-Schlumpf also said France and Italy were likely to be watching these developments before themselves seeking agreements to claw back taxes. Link

U.S. Republican presidential candidate Mitt Romney. REUTERS/Laura Segall

Republican presidential candidate Mitt Romney’s release of his 2010 tax return offers a rare glimpse at two sophisticated tax transactions which the U.S. Internal Revenue Service requires that taxpayers disclose for investments driven by tax considerations.

Like thousands of other Americans’ returns, Romney’s included special attachments flagging “reportable transactions” to the IRS. Known as Form 8886s, the attachments showed that these foreign currency and contingent swap transactions were undertaken by one Bain Capital fund and three Goldman Sachs funds in which blind trusts for the assets of Romney and his wife Ann have invested several million dollars.

Under disclosure rules strengthened in 2002 to grapple with rising tax evasion by Americans, the IRS requires taxpayers to disclose transactions that it has banned or warned it may challenge as improper.

Politics!

Republican presidential hopeful Mitt Romney released his 2010 tax returns to the public, shedding some light on what puts him among America’s top income earners. This chart on CNNMoney has been making the rounds all week, showing tax breakdowns for Mitt Romney, Newt Gingrich and President Obama.

Anyone who was expecting Romney’s 2010 tax filing to expose the candidate for unscrupulous manipulations of the tax law was delivered a goose egg. The returns did show a tax rate of 13.9 percent for the multimillionaire, but due to the laws on taxation of investment income, this was exactly the amount that Mr. and Mrs. Romney were required to pay, Forbes’s Tax Girl blog writes.

Is something of a seismic shift happening in American rhetoric over taxes? Politico polled members of Congress this week and found that Democrats largely agree with the sentiment that tax increases are now needed to address an expanding gap between wealth levels in the U.S. This suggests the tax issue may have the potential to remake the campaigns for many Democrats, including the president.

Reuters Tax Columnist David Cay Johnston appeared on CNN earlier this week to discuss some of the interesting details in Mitt Romney’s tax returns.

For a direct link, click here.

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