Unstructured Finance

Essential reading: REIT status questioned by IRS, and more

Welcome to the top tax and accounting headlines.

* IRS puts brakes on corporate push to capture real-estate tax break. A.D. Pruitt and Amol Sharma – The Wall Street Journal. The Internal Revenue Service is stepping up its scrutiny of companies that are looking to avoid some corporate taxes by converting their operations into real-estate investment trusts. Link  

* Obama urged to back plan to list owners of shell firms. Ravi Somaiya – The New York Times. Anticorruption activists have urged President Obama to back a plan to publicly register the owners of shell companies in the United States and around the world, a move they say is essential to thwart corrupt government officials, tax evaders and money launderers who rely on an opaque financial system. Link 

* Groups propose to simplify accounting for small firms. Floyd Norris – The New York Times. Making accounting easier for small companies — and saving them the need to report some losses that big companies can face — has become a new preoccupation of the accounting profession. Link  

* How to avoid 3.8 percent tax on S-Corporation income. Arden Dale – The Wall Street Journal. For those who own S corporations, the Internal Revenue Service imposes the tax when it thinks the owners are playing more passive roles, a determination based partly on how much time they spend on the job. Active owners don’t have to pay the tax. Link

* The best place to hold REITs and MLPs: An IRS or a taxable account? Gregory Zuckerman – The Wall Street Journal. Advisers say there’s no prohibition against holding MLPs or traded REITs in a rollover individual retirement account or other tax-advantaged account, nor is there a penalty or tax on proceeds when these equities are sold. Link  

Essential reading: Despite tax rules, companies stick with U.S., and more

Welcome to the top tax and accounting headlines.

 * Despite tax rules, companies stick with U.S. Victor Fleischer – The New York Times. The tactics that multinational companies like Apple, Microsoft and Hewlett-Packard use to avoid paying corporate income taxes might make one wonder why they incorporate in the United States in the first place. Link  

* Ray Lane signs deal to pay $100 million tax bill. Shira Ovide and Yuliya Chernova – The Wall Street Journal. Ray Lane, the prominent technology investor and former chairman of Hewlett-Packard Co., is facing a tax bill of up to $100 million stemming from his investments during the dotcom-boom era. Link  

* Blasted by Congress, IRS apologizes for lavish events. Gregory Korte – USA Today. The tax official responsible for a lavish, $4.1 million conference in Anaheim apologized to Congress for spending at the conference — and for his performance as Mr. Spock in a Star Trek parody video. Link  


Some important tax and accounting events in the week ahead:

Monday, June 10 – Wednesday, June 12

Federation of Tax Administrators annual meeting. Hyatt Regency. Albuquerque, New Mexico.

 Tuesday, June 11

U.S. Internal Revenue Service and Treasury Department officials join panel on recent changes to corporate taxation regulations covering corporate sales or distribution of stock in another corporation. Noon – 1:45 p.m. ET, D.C. Bar Conference Center. Washington

 Tuesday, June 11 – Thursday, June 13

IRS and Treasury Department officials, among others, speak to the Practising Law Institute’s seminar on tax planning for domestic and foreign partnerships and other alliances. San Francisco.

Essential reading: IRS staff say Washington officials helped direct the probe of tea-party groups, and more

Welcome to the top tax and accounting headlines.

* IRS staff cite Washington link. John McKinnon and Dionne Searcey – The Wall Street Journal. Two Internal Revenue Service employees in the agency’s Cincinnati office told congressional investigators that IRS officials in Washington helped direct the probe of tea-party groups that began in 2010. Link

* Corporate taxes don’t cause recessions. But do they hurt growth? Dylan Matthews – The Washington Post. It’s hard to look at the body of research on this topic and not notice that there’s something of a consensus around the idea that increases in the corporate tax rate hurt growth and cuts to it help growth. Link

* Rep. Gutierrez pays Chicago lobbyist with tax dollars. Paul Singer – USA Today. Over the past 10 years, Rep. Luis Gutierrez has paid a Chicago lobbyist more than $500,000 in taxpayer funds to work side-by-side with his congressional staff. Link

Essential reading: Calculating Apple’s true U.S. tax rate, and more

Welcome to the top tax and accounting headlines.

 * Calculating Apple’s true U.S. tax rate. Victor Fleischer – The New York Times. One lesson from the Senate hearing about Apple’s offshore tax planning is that figuring out what a multinational company actually pays in taxes is harder than it should be. Link    

* Conservatives’ top five grievances against the IRS. Juliet Eilperin – The Washington Post. The House Ways and Means Committee hearing Tuesday has offered leaders of conservative groups a chance to detail their biggest grievances against the Internal Revenue Service. Link   

* Scandals prompt doubts about honesty. Patrick O’Connor and Rebecca Ballhaus – The Wall Street Journal. Recent controversies surrounding the Internal Revenue Service and other government agencies have sown doubts about the honesty of the Obama administration, but most people don’t hold the president personally responsible for the agency actions, a new Wall Street Journal/NBC News poll finds. Link    

Essential reading: IRS scandal prompts hope for tax reform, and more

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

* Some Republicans see IRS troubles as means to a big goal: tax overhaul. Jonathan Weisman – The New York Times. For Congressman Dave Camp, spotlighting the tax-collecting agency — and stoking voter antipathy for it — are ways to build momentum for his plan to rewrite and simplify the entire tax code, a goal he has set for the end of the year. Link 

 * New business group ACT pushes tax overhaul. John McKinnon – The Wall Street Journal. A group of 42 U.S. companies is announcing a potentially powerful new coalition on Tuesday to push for a comprehensive tax overhaul. The group – representing a broad cross-section of both multinational and domestic-focused big businesses – could give a boost to the slow-moving effort on Capitol Hill. Link    

 * Tax havens lose their veneer. Christopher Matthews – The Wall Street Journal. European countries seem to have decided that is no longer cool to be a tax haven. Link    

Essential reading: Republican donors drew IRS scrutiny, and more

Welcome to the top tax and accounting headlines.

 * Donors to Republican group drew IRS scrutiny. John McKinnon – The Wall Street Journal. At the same time the Internal Revenue Service was targeting tea-party groups, the tax agency took the unusual step of trying to impose gift taxes on donors to a prominent conservative advocacy group formed in 2007 to build support for President George W. Bush’s Iraq troop surge. Link    

 * IRS training videos spoof ‘Star Trek,’ Gilligan’s Island’ and ‘Cupid Shuffle.’ Ed O’Keefe – The Washington Post. The Internal Revenue Service is acknowledging that the agency spent tens of millions of dollars in recent years on conferences for thousands of its employees. Link    

* Don’t expect special prosecutor for IRS, Plouffe says. David Jackson – USA Today. David Plouffe, a long-time adviser to President Obama, rejecting the idea of a special prosecutor for the Internal Revenue Service citing ongoing reviews by the Justice Department, Treasury Department, and various congressional committees into the IRS targeting of conservative groups over their tax-exempt status. Link   


Important tax and accounting events in the week to come:

Monday, June 3

Acting IRS Commissioner Danny Werfel and Treasury Inspector General for Tax Administration J. Russell George testify before a U.S. House of Representatives Appropriations subcommittee. 3 p.m. ET, Rayburn House Office Building. Washington, D.C.

 Monday, June 3 – Tuesday, June 4

Treasury and tax officials from around the world discuss transfer pricing, profit shifting, cross-border compliance and other issues at the Organisation for Economic Co-operation and Development’s international tax conference. Four Seasons Hotel. Washington, D.C.

Tuesday, June 4

* Financial Accounting Standards Board advisory council meeting on FASB’s future agenda and other topics. 8:30 a.m. – 3 p.m. ET, FASB offices. Norwalk, Connecticut.

Essential reading: EU’s trading tax takes slow road, and more


A banner featuring a Euro coin at the European Commission headquarters building in Brussels. REUTERS/Yves Herman

Welcome to the top tax and accounting headlines.

 * EU’s trading tax takes slow road. Tom Fairless – The Wall Street Journal. Deep disagreements among 11 European Union states that have pledged to introduce a tax on financial transactions mean the proposal faces delays and could be significantly scaled back, EU diplomats involved in the discussions said on Thursday. Link    

 * North Carolina’s far-reaching Senate tax plan closes loopholes, adds sales tax. Dan Kane and John Frank – The News and Observer. Senate leaders on Thursday rolled out the most comprehensive proposal to overhaul the state’s tax code, eliminating dozens of loopholes, but also shutting down popular tax breaks on food, mortgage interest payments and prescription drugs that would bring in more than $1 billion in revenue to help reduce income tax rates and the overall sales tax rate. Link    

Essential reading: Evidence that tax breaks favor the rich, and more

Welcome to the top tax and accounting headlines.

* Richest 20 percent get half the overall savings from U.S. tax breaks, CBO says. Lori Montgomery – The Washington Post. The 10 largest breaks in the U.S. tax code will save taxpayers more than $900 billion this year, with just over half the benefits flowing to the richest 20 percent of households, congressional budget analysts said Wednesday. Link 

* Swiss bow to pressure for more bank data. Laura Saunders and John Letzing – The Wall Street Journal. The U.S. government won a victory against tax cheats with offshore bank accounts after Swiss officials agreed Wednesday to let banks release information on the overall holdings of their American clients. Link    

* To tax or not? The NFL’s relationship with the IRS. Brent Schrotenboer – USA Today. Now some think it’s time to add another expense to the NFL — federal income taxes. For decades, the NFL and other big-time sports leagues such as the PGA Tour and NHL haven’t been required to pay any. Link