Lawmakers propose Olympic tax break
The Winter Olympics officially begin on February 7, and three House Republicans have revived the idea of exempting from taxes all prize money won by US athletes, Pete Kasperowicz of The Hillreported today.
The Tax Exemptions for American Medalists (TEAM) Act, H.R. 3987 – proposed on Tuesday by Representative Blake Farenthold (R-TX) and cosponsored by representatives Walter Jones (R-NC) and Pete Sessions (R-TX) – would allow US athletes to return from the Winter Olympics in Sochi, Russia, without having to pay taxes on the thousands of dollars they'd earn from winning the gold, silver, or bronze medal, according to the article.
“The United States Olympic Committee awards US athletes $25,000 for winning gold, $15,000 for silver, and $10,000 for bronze, amounts that the committee has not increased for several years,” Kasperowicz wrote. “These amounts, plus the value of the medals themselves, are taxable winnings under current law.”
The bill, which if approved would take effect this year, states: “Gross income shall not include the value of any medal awarded in, or any prize money received from the United States Olympic Committee on account of competition in the Olympic Games.”
Big Four’s Chinese affiliates may mull workarounds
Kathy Chu and Michael Rapoport of the Wall Street Journalwrote that a US Securities and Exchange Commission (SEC) administrative law judge’s recent ruling against the Big Four accounting firms’ China affiliates is sparking a debate about whether some of their business could move to Hong Kong.
The ruling barred the Chinese affiliates of PricewaterhouseCoopers, Deloitte Touche Tohmatsu, KPMG, and Ernst & Young from auditing US-listed companies for six months because they wouldn’t give the SEC documents about some of their Chinese audit clients to help the commission investigate the companies for possible accounting fraud, the article stated.
The uncertainty the ruling has created has led some experts to float the idea of shifting Chinese audit work to the same firms’ Hong Kong offices. Chu and Rapoport noted that the Hong Kong and Chinese affiliates of each of the Big Four are separate, freestanding firms that are part of the same global network.
“The Big Four’s Hong Kong affiliates aren’t affected by the ruling, and if they were to temporarily take over some of the Chinese affiliates’ work, it might minimize the disruptions the suspension would cause for the Chinese firms’ clients, some observers believe,” they wrote.
Democrats say struggling post office branches could dabble in banking
Congressional Democrats are backing an idea of allowing local post offices to fill gaps in the banking industry, Bernie Becker of The Hillreported.
“The idea gained steam after the Postal Service’s inspector general said in a report last week that the USPS could likely add billions of dollars a year to its coffers by offering prepaid cards or loans to the 68 millions adults who currently get little or no services from banks,” Becker wrote.
“If the Postal Service partnered with banks to offer more services, those customers would then have an alternative to the often hefty fees charged by payday lenders and other banking alternatives, the inspector general said.”
Representative Elijah Cummings (D-MD) had released legislation to give the USPS more authority to open new revenue streams, such as check cashing, even before the inspector general’s recommendations.
GOP lawmakers argued that local post offices shouldn’t be given more leeway to compete with private-sector companies because of a host of inherent advantages it would have – including generally being exempt from a host of taxes, according to the article.
Koskinen sits for first congressional hearing, with tough questions guaranteed on IRS, Obamacare – Tax reform cheerleading groups are not giving up an overhaul
Tax reform dead? Don’t tell these corporate groups
An article highlighted in today’s Morning Tax tipsheet was written by Kelsey Snell of Politico: “The list reads like a jumble of positive affirmations: LIFT, BUILD, ACT, RATE. Behind them are some of America’s largest companies, including Boeing, Verizon, General Electric, and Microsoft, all lobbying for lower tax rates.
“The primary success of the groups may be driving home the idea that corporate tax reform should cut tax rates, allow companies to bring home foreign earnings at a discount rate, and do it all without raising any new revenue,” she added.
However, Snell noted that critics argue these coalitions and the companies that back them “spend millions cultivating a fear that Congress could rewrite the tax code to eliminate valuable breaks or hike rates to pay for greater spending. The time-consuming, expensive process of fighting back has taken more than three years, and there’s still no legislation to show for it.”
IRS expects more than 11 million PPACA contacts
A report released earlier this week from the Treasury Inspector General for Tax Administration (TIGTA) concluded that the Patient Protection and Affordable Care Act (PPACA) will put a strain on the IRS, as the tax-collection agency expects to get 11.4 million PPACA-related contacts from individuals during the fiscal year that ends on September 30, LifeHealthPro.com reported.
The IRS believes it will need the equivalent of 754 full-time employees just to handle the PPACA-related individual customer service contacts, and 195 full-time equivalents to handle other PPACA-related work, such as reviewing PPACA-related items on tax returns.