Bramwell’s Lunch Beat: A Bipartisan Pitch for a Gas Tax Hike

Lynn Calhoun named CFO at BDO USA LLP
Chicago-based accounting firm BDO USA LLP on Wednesday announced that Lynn Calhoun will be its next CFO, effective July 1.

Calhoun, a partner who was previously BDO’s director of finance, succeeds Howard Allenberg as CFO. Allenberg is stepping down from full-time duties, but will continue to assist CEO Wayne Berson and the national leadership team on special projects.

“As a member of the national finance team, Lynn has already been a valuable contributor to the firm’s financial strategy, and those contributions will grow further as he assumes his duties as CFO,” Berson said in a written statement. “Lynn is well-deserving of this leadership role.”

Calhoun joined BDO in 1999 and has 30 years of experience in a variety of financial and leadership positions. Prior to joining BDO, he spent four years with Deloitte and Touche before assuming roles as CFO and president for a privately held business from 1987 to 1999.

Calhoun’s experience includes expertise in a variety of industries, including manufacturing, distribution, construction, and professional services. He also has extensive experience in initial public offerings, mergers and acquisitions, international joint venture operations and letters of credit, corporate financing and leasing, and business-to-business sales.

Corker, Murphy tee up bipartisan proposal to increase gas tax
Scott Wong and Burgess Everett of Politico wrote on Wednesday that senators Bob Corker (R-TN) and Chris Murphy (D-CT) said that the way to fix the depleted Highway Trust Fund is staring Congress right in the face: a tax hike.

The two senators pitched a bold plan that would hike gasoline and diesel taxes by 6 cents in each of the next two years, for a total increase of 12 cents. That would raise roughly $164 billion over the next decade, filling the highway fund’s revenue shortfall. The plan also would tie the gas tax to inflation, using the Consumer Price Index, to keep the fund in the black.

The taxes now stand at 18.4 cents a gallon for gasoline and 24.4 cents per gallon for diesel. Congress hasn’t raised the gas tax since 1993, Wong and Everett noted.

Offsets make up a critical component of the plan, which would come in the form of permanently extending some of the provisions in the “tax extenders” bill, the senators said. One provision the senators are eyeing allows small businesses to claim a tax deduction on capital expenditures.

However, Wong and Everett wrote that the plan will be a monstrously tough sell, especially for many of Corker’s GOP colleagues who see anything resembling a tax hike as toxic. Some even question whether the federal government should pay for transportation projects at all. And Corker didn’t pitch the plan during a Wednesday lunch with Senate GOP colleagues, senators said.

Sources: Lois Lerner’s emails likely gone forever
Rachael Bade of Politico reported on Wednesday that, according to multiple sources, ex-IRS official Lois Lerner’s crashed hard drive has been recycled, making it likely the lost emails of the lightening rod in the IRS targeting controversy will never be found.

Bade noted that the revelation is significant because some lawmakers and observers thought there was a way that tech experts could revive Lerner’s emails after they were washed away in a computer crash. House Oversight and Government Reform Committee Chairman Darrell Issa (R-CA), for example, subpoenaed her damaged hard drive earlier this week, when he asked for “all hard drives, external drives, thumb drives, and computers” and “all electronic communication devices the IRS issued to Lois G. Lerner.”

The IRS told congressional investigators on Friday that the emails of Lerner, the former head of the tax-exempt division that was found to have singled out conservative groups for additional scrutiny, were lost from 2009 to 2011 in a computer hard drive crash in early summer 2011.

The time frame is significant, Bade wrote, because the Tea Party targeting began in spring 2010, and Republicans think if there was a smoking gun connecting the Obama administration to the IRS treatment of conservative groups, it could be found during that period.

“We believe the standard IRS protocol was followed in 2011 for disposing of the broken hard drive. A bad hard drive, like other broken information technology equipment, is sent to a recycler as part of our regular process,” an IRS spokesman said in response to a query from Politico, according to the article.

White House hits back in IRS-Lois Lerner flap
Bade and Kim Dixon of Politico also reported on Wednesday that the Obama administration struck back against Republican charges of an IRS cover-up by revealing that it found no direct emails between Lerner and White House officials in a search conducted for lawmakers.

“We conducted a search for responsive documents and were unable to identify any communications between Lois Lerner and persons within the [Executive Office of the President] during the requested period,” reads a Wednesday letter obtained by Politico from White House counsel W. Neil Eggleston and addressed to Senate Finance Committee Chairman Ron Wyden (D-OR) and House Ways and Means Committee Chairman Dave Camp (R-MI), according to the article.

The requested period refers to emails between January 1, 2009, and May 1, 2011 – which includes the roughly two years for which Lerner’s emails are lost due to a computer crash.

The White House defense comes days after the IRS targeting scandal re-emerged when the IRS acknowledged it lost the emails of as many as six employees involved in the matter, including those of Lerner and Nikole Flax, the chief of staff for the IRS’s then-acting commissioner Steven Miller.

The email news has reignited Republicans’ ire in their probes into wrongdoing related to the scrutiny the IRS gave Tea Party applicants seeking tax breaks, Bade and Dixon wrote. IRS Commissioner John Koskinen will be on the hot seat at a hearing called by Camp set for Friday.

House panel is subpoenaed as trading probe heats up
Prosecutors are gathering evidence for a grand jury probe into whether congressional staff helped tip Wall Street traders to a change in health care policy, an indication the long-running investigation has entered a more serious phase, Brody Mullins and Andrew Ackerman of the Wall Street Journal reported on Wednesday.

According to public documents, law-enforcement officials and the US Securities and Exchange Commission (SEC) are seeking records and other evidence from the House Ways and Means Committee and a top congressional health care aide, Brian Sutter, staff director of the committee’s health care subpanel.

The SEC sent subpoenas to the House committee and Sutter seeking documents and testimony in the matter, according to documents made public by Ways and Means Chairman Dave Camp and Sutter. The US Justice Department also subpoenaed Sutter to compel him to testify before a federal grand jury at the US District Court for the Southern District of New York, Mullins and Ackerman wrote.

The subpoenas are related to criminal and civil investigations examining whether anyone in the government illegally passed along nonpublic information about the health policy that ended up in the hands of traders, according to people briefed on the matter. The probe was sparked by a 2013 Wall Street Journal report that detailed how health insurance stocks jumped moments before the government announced news favorable to those companies relating to Medicare payments.

Medtronic deal gives investors a big tax hit
In a column for the Minneapolis Star Tribune on Wednesday, Lee Schafer noted that Medtronic executives haven’t mentioned that its $42.9 billion merger with Covidien and relocation to Ireland to save on corporate taxes is actually going to generate a ton of other taxes here. Why haven’t they mentioned that? Perhaps because the company’s not paying them. Its shareholders will be.

“Any seasoned investor knows that when a company in which he owns stock buys another, it’s not taxable. No shares are being sold. No gain to be calculated. No taxes,” Schafer wrote. “Not this time. When holders exchange their Medtronic stock for shares in an Ireland-based company the regulatory filings refer to as ‘New Medtronic,’ it’s treated like a sale – a sale that will generate a tax but no cash proceeds that could be used to pay it.

“If institutional investors cared more about these kinds of taxes, maybe Medtronic would, but they really don’t,” he continued. “The shareholder of a mutual fund with a lot of Medtronic stock may not even realize, when she gets her 1099 tax notice from the fund company, that her tax bill seems kind of big. Individuals who own the stock in a taxable account, on the other hand, will feel it. They will feel it like they would a kidney stone.”

Quick Links:

  • NYT taken to task for letting cowards almost ruin Phil Mickelson’s life (Going Concern)
  • KPMG leads the way in telling interns what not to wear (Going Concern)
  • Why KPMG won’t be suing Scott London (Attestation Update)
  • China’s wealth fund vows better investment management after audit (Bloomberg)
  • Record run trouncing Treasuries shows tax-free lure: Muni credit (Bloomberg)
  • Tax carbon, not red states (Bloomberg View)
  • IRS contempt of Congress (Wall Street Journal)
  • Tax credits can make Obamacare dirt-cheap (Slate)
  • If you see something, say something, but maybe only to the SEC (Forbes)
  • The ‘Double Irish with a Dutch sandwich’ corporate tax-dodge crisis (Huffington Post)
  • The coverup is usually worse than the crime (Tax Analysts)
  • Worker misclassification can be costly (Tax Analysts)
  • Tax policy is not the way to deal with an ass (Tax Analysts)
  • 20,000 Kansans still waiting for their state tax refunds (Don’t Mess With Taxes)

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