Tax ‘extenders’ bill will await November elections: Senator Reid
“I guess the answer is yes,” Senate Majority Leader Harry Reid (D-NV) told reporters yesterday when asked whether the Senate’s effort to extend for two years $85 billion in tax breaks for individuals and businesses had stalled in the chamber until after the November congressional elections, Reutersreported.
Reid complained that Republicans were blocking the legislation with a tactic known as the filibuster that can indefinitely delay Senate bills even if a majority supports them. Republicans have repeatedly complained that Reid was not letting them offer amendments to a range of legislation before the Senate, the article stated.
The legislation contains a mix of 50 temporary tax breaks, known in Congress as “tax extenders,” that expired at the end of 2013 and would be renewed through 2015.
Data ‘dance’ seen as challenge to world corporate tax crackdown
Cracking down on corporate tax avoidance sounds like a winner, and officials are working on it, but the practical challenges are formidable and they dominated discussion at an Organisation for Economic Co-operation and Development (OECD) conference on Tuesday, Kevin Drawbaugh and Patrick Temple-West of Reuterswrote.
The OECD, a Paris-based club of large economies, has an effort underway, known as the Base Erosion and Profit Sharing (BEPS) project, to tighten tax rules and treaties, and to increase government tax information sharing.
BEPS is still a work in progress – completion is not expected until 2015 – and it will have no force in law, with national government actions needed to make it real. Not only will timing the debuts of BEPS-related laws be tricky, but just getting corporate and government tax information systems in sync will be a challenge, Drawbaugh and Temple-West wrote.
“The rollout won't be 'ready, set, go,’” said Timothy Tuerff, managing partner at accounting firm Deloitte, according to the article. “Trying to make all those statistics dance and link up ... is an enormous reporting requirement,” he added, specifically regarding proposals to rein in “stateless income,” or corporate profits managed so that no country can tax them.
[For additional reading, check out this article in Forbes about the challenges developing countries will face enforcing global tax-evasion rules.]
ZKB CEO says bank expects talks with US on tax probe this year
Carolyn Bandel of Bloombergreported yesterday that Zuercher Kantonalbank (ZKB), one of about a dozen Swiss banks under investigation over whether they helped Americans evade taxes, expects to start talks with US prosecutors this year to resolve the allegations.
According to Bandel, ZBK CEO Martin Scholl said in an interview in Zurich on Tuesday that he is waiting to hear from US authorities after the US Justice Department last month extracted a guilty plea and an agreement to pay $2.6 billion from Credit Suisse Group AG, the first global bank in a decade to admit to criminal wrongdoing in the United States.
ZKB has received no word from the United States on when talks might begin, Scholl said, who added, “We expect it will be at some point this year,” according to the article.
The bank is the biggest of Switzerland’s publicly owned regional banks, with about 150 billion Swiss francs in assets at the end of 2013.
In December 2012, three current or former ZKB employees were indicted on charges of helping US clients hide more than $420 million from the IRS.
Walmart slashed tax bill by giving top execs big bonuses
Walmart continues to exploit tax breaks to rewards its executives, according to the Institute for Policy Studies, a DC-based think tank that has researched executive compensation, and Americans for Tax Fairness (ATF), a tax reform coalition. That finding was published in a report released today, Walmart’s Executive Bonuses Cost Taxpayers Millions, focusing on the retail giant’s tax strategy, Forbes tax contributor Kelly Philips Erb wrote today.
“Walmart executives are expected to tout the company’s achievements at the shareholder meeting [on June 6], including the news that the company has paid more than $500 million in bonuses to hourly associates,” she wrote. “However, the report notes that over the last six years, the company paid the equivalent of more than 50 percent of that amount to just eight executives. Those executives took home nearly $300 million in ‘performance pay’ which the company notes is tax deductible: of those eight, one executive, recently retired CEO Michael Duke, claimed $116 million in stock options and other performance-based pay.”
According to the article, the ATF noted that the pay structure for executives has allowed Walmart to save $104 million in federal tax. The reason can be traced to a 1993 change in the tax law which exempts stock options and performance pay from total income when figuring executive pay limitations.
Annie’s: PwC to resign as accounting firm
Big Four firm PwC is resigning as the independent accounting firm of Annie’s, the natural and organic foods company said today, the Associated Pressreported.
The audit committee of the company board has started the search process to find a new auditor. PwC will resign on August 11 or at the completion of the filing of its first-quarter financial results, whichever is soonest.
PwC found “an insufficient complement of finance and accounting resources,” the company said in a filing with the US Securities and Exchange Commission (SEC), according to the article.
Annie’s said that there was “material weakness in internal control over financial reporting” for the fiscal year that ended on March 31, 2014, but that did not result in any material misstatements in the company's financial statements between 2012 and 2014.
California sees record level of film tax credit applications
The California Film Commission on Tuesday said it received 497 applications on Monday for the state's film and TV tax credit program, 117 more than last year, Richard Verrier of the Los Angeles Timesreported.
However, due to limited funds, only 23 projects were initially selected for a tax credit, the commission said in a statement.
Verrier noted that the surge in applicants underscores the importance that tax breaks and rebates play in helping to finance movies and TV shows, and a growing dilemma for California: the widening gap between demand for tax credits and the supply of available funds.
California launched its film program in 2009 to better compete with states such as Louisiana, Georgia, and New York, as well as Canada and Britain. The program allows production companies to receive a state tax credit worth as much as 25 percent of specific production costs, such as expenses related to building sets and hiring crew members. The credit can be used to offset any sales or business-use tax the company has with the state.
The California State Assembly last week unanimously approved a bill to significantly expand funding for California’s program and allow more projects to qualify, including large-bucket features and new network dramas. However, the measure is likely to face tougher opposition in the state Senate.
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