Essential reading: A tax deduction in lunching with Buffett, and more
Welcome to the top tax and accounting headlines from Reuters and other sources.
* Lunch with Warren Buffett: One giant tax deduction. Laura Saunders – The Wall Street Journal. An anonymous donor on June 8 paid $3.46 million to Glide, an antipoverty group in San Francisco, for the privilege of having lunch with Warren Buffett. Is the donation tax-deductible? Experts say most of it probably is, meaning taxpayers in effect will pick up about $1.2 million of the tab. Link
* Israeli tax preparers snared. Laura Saunders – The Wall Street Journal. In a sign the U.S. government is moving beyond Switzerland in its pursuit of secret offshore accounts, the Justice Department and Internal Revenue Service announced the indictment of three Israeli-American tax preparers, who are charged with helping U.S. taxpayers hide millions of dollars in two Israeli banks. The U.S. since 2009 has been cracking down on U.S. taxpayers hiding assets abroad. Swiss banking giant UBS turned over the names of more than 4,000 customers and paid a $780 million fine. Now the U.S. government is casting a wider net. Link
* Eaton, IRS tangle over cross-border pricing pacts. Patrick Temple-West – Reuters. Eaton Corp is challenging the Internal Revenue Service in U.S. Tax Court, arguing that the agency broke agreements dealing with how the company moves assets and money across international borders, a volatile issue in the tax world. Eaton is contesting a $75 million tax bill that the IRS imposed on the company in a case that could have broad impact on other companies’ “transfer pricing” practices, the industry term for shifting assets across borders to reduce taxes. Link
* Japan’s parties reach deal to boost taxes. Yuka Hayashi – The Wall Street Journal. Japan is moving to insulate itself from a Europe-style sovereign-debt crisis, as legislators work this week to pass a bill that would double the national sales tax in hopes of draining the world’s largest pool of government borrowing. On Friday, the leaders of Japan’s largest political parties agreed to the bill, which Prime Minister Yoshihiko Noda had said he hoped to put to a vote in the lower house by June 21. Link
* Romney: No need to detail how I’ll pay for massive tax cuts. Just trust me. Greg Sargent – The Washington Post opinion. Republican presidential hopeful Mitt Romney seemed to confirm that he will not be detailing how he would pay for his proposed tax cuts for the duration of the campaign, he said in an interview on CBS on Sunday. Romney made big news when he was overheard at a private fundraiser revealing to donors a few of the specific ways he’d pay for his massive tax cuts. Since then, details have been in short supply. And today, Romney seemed to confirm that he sees no need to reveal those details until he becomes president. Link
* Phony Bush Nostalgia – Beware liberals bestowing praise 20 years later. The Wall Street Journal editorial. Republican President George Bush in 1990 repudiated his most memorable campaign pledge: “Read my lips: No new taxes.” Democrats ran Congress during the Bush 41 Presidency, and Senate Majority Leader George Mitchell refused any budget deal unless Bush broke his pledge. Bush agreed, trading what was claimed to be $1 of tax increases for $2 of spending cuts. In practice the taxes were real but spending increased. The $137 billion tax increase hit as the economy was weakening and contributed to what was already a recession. Link