Bramwell’s Lunch Beat: GOP Wants to Scrap FATCA

Lease accounting overhaul likely to be scaled back
In a joint meeting on January 23, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) moved ahead with plans that could limit the scope of their project to overhaul lease accounting rules and allow them to refocus their efforts on bringing more than $1 trillion in off-balance sheet leases onto corporate books, Emily Chasan of the Wall Street Journal reported yesterday.

The two standard-setting organizations “discussed scaling back their efforts to simultaneously revamp so-called ‘lessor’ accounting for companies that lease assets, such as airplanes or photocopiers, to other firms,” she wrote.

[Click here for AccountingWEB’s coverage of the FASB/IASB lease accounting proposal.]

Republican Party to vote for repeal of US anti-tax dodging law
The Republican Party is expected to approve a resolution during the Republican National Committee (RNC) winter meetings on January 24 that calls for a repeal of the Foreign Account Tax Compliance Act (FATCA) – a law designed to crack down on offshore tax dodging, Reuters reported.

Approved in 2010 after a tax-avoidance scandal involving a Swiss bank, FATCA requires most foreign banks and investment funds to report to the IRS information about US customers’ accounts worth $50,000 or more, the article stated.

“Criticized by banks, libertarians, and some Americans living abroad as a costly and unneeded government overreach, FATCA is on the books, but its effective date has been delayed repeatedly, with enforcement now set to start on July 1,” Patrick Temple-West wrote.

[Click here for AccountingWEB’s coverage of FATCA.]

China warns US of consequences after SEC bans accounting firms
China warned the United States of “consequences” after the US Securities and Exchange Commission (SEC) barred Chinese affiliates of the Big Four accounting firms for six months from conducting audits of US-listed Chinese companies, Bloomberg reported.

The ruling was made after the accounting firms’ units in China failed to comply with SEC orders for documents needed for a series of accounting fraud probes. The decision “ignored” the efforts and progress China made on cross-border regulatory cooperation, the China Securities Regulatory Commission (CSRC) said, according to the article.

The CSRC wrote on its microblog: “We hope the SEC will take into consideration the big picture of China-US regulatory cooperation, make the right judgment to resolve the situation properly. The SEC should bear all responsibility to possible consequences arising from the decision.”

Warner eyed for Finance post
According to a January 24 article by The Hill, Senator Mark Warner (D-VA) is seen as a frontrunner for a prestigious seat on the powerful Senate Finance Committee, according to lobbyists and congressional aides.

Committee Chairman Max Baucus (D-MT) is slated to leave the panel as early as next month in order to become the next US ambassador to China. Senator Ron Wyden (D-OR) is expected to replace Baucus as chairman, but the Democratic opening on the panel – the majority has twelve seats – has not yet been decided, the article stated.

“Warner, first elected in 2008, is making a major push for the seat, according to sources following the issue,” Erik Wasson and Vicki Needham wrote. “They said he has been keenly interested in overhauling the tax code and curbing entitlement spending and is greatly interested in joining the panel.”

How to boost your 401(k) savings simply by changing funds
Although the US Department of Labor now requires employers to tell you how much your 401(k) is costing you, not everything is disclosed – or understood by employees, Forbes contributor John Wasik wrote on January 24.

For Wasik’s article, Greg Carpenter, a fiduciary for Employee Fiduciary LLC in Mobile, Alabama, shared several pieces of advice employees can use when talking to their employer about hidden 401(k) expenses.

Yacht owners seek to salvage deduction for second homes
Kent Webb, a seventy-three-year-old physician from North Carolina, plans to write off part of the interest he pays to finance what he considers his second home – a luxury fishing boat named the Moonlighter.

The second-home mortgage deduction, which also benefits owners of cabins and recreational vehicles, is the boating industry’s biggest tax break and applies to vessels ranging from tiny sailboats to multimillion-dollar yachts.

But congressional Democrats want to eliminate the deduction – calling such tax breaks loopholes for the wealthy – as part of proposed tax code revisions this year, John McCormick of Bloomberg wrote on January 23.

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