Treasury’s Lew warns that US default could happen quickly
US Treasury Secretary Jack Lew warned on February 3 that the Obama administration could start defaulting on the government's obligations “very soon” after it runs out of room to borrow money under a legal cap on public debt, Reutersreported.
The United States is due to reinstate a debt limit at the end of this week, and Lew said the administration can use accounting measures to stay under the new cap until the end of February.
“Once the measures are exhausted, however, Lew said the government would burn through its remaining cash more quickly than it would at other times of the year because the Treasury will be issuing tax refunds,” the article stated.
Once it loses the ability to borrow, the US Treasury Department would pay its bills by relying on incoming revenue and any cash left in public coffers.
IRS commissioner to taxpayers: Put the phone down
As you know, January 31 was the first day of the 2014 tax-filing season. Inevitably, some taxpayers will have questions about their returns and will turn to the IRS for help. But new IRS Commissioner John Koskinen reiterated on Friday that taxpayers should head to the IRS’s website for assistance rather than call the agency for answers to their questions, Bernie Becker of The Hillwrote.
“The agency, which has seen its budget cut significantly in recent years, only answered around six in ten customer service phone calls in 2013,” the article stated. “With little extra funding in sight, Koskinen said the best the agency could hope for would be to answer 70 percent. Even with that sort of improvement, the commissioner added, millions of phone calls will go unanswered.”
“Unfortunately, there will frequently be extensive wait times – much longer than we would like,” Koskinen told reporters on Friday, as reported by Becker.
Obama: Not ‘even a smidgen of corruption’ behind IRS targeting
In case you missed it yesterday during Fox’s pre-Super Bowl coverage, President Obama said in an interview with Fox News’ Bill O’Reilly that there was no corruption behind the IRS’s targeting of conservative groups last year.
“There were some boneheaded decisions,” the president told O’Reilly. “Not even mass corruption. Not even a smidgen of corruption.”
Obama said people are questioning whether the IRS actions were politically motivated attempts to help the Democrats because Fox News is promoting the idea.
“These kind of things keep on surfacing because you and your TV station will promote them,” he said to O’Reilly.
Click here to see a two-minute video of the exchange between President Obama and O’Reilly, along with an article by Erik Wasson of The Hill.
[Click here to see AccountingWEB’s coverage of the Tea Party scandal.]
SEC judge who took on the ‘Big Four’ known for bold moves
Cameron Elliot, the administrative law judge for the US Securities and Exchange Commission (SEC) who recently delivered a stunning rebuke to the global “Big Four” accounting firms, has a reputation for not shying away from big cases, according to an article by Sarah N. Lynch of Reuters.
As a federal prosecutor, Elliot was known for being deliberate, unflappable, and for going after powerful interests, including violent gang members and the activist group Greenpeace.
Of the three judges who sit on the SEC bench, Elliot has the shortest tenure, having joined in April 2011, the article stated. He served as a submarine officer in the US Navy and Naval Reserve and holds a physics degree from Yale and a law degree from Harvard, according to his SEC biography.
“Defense attorneys say Elliot is viewed as being sympathetic to the agency's enforcement division,” Lynch wrote. “He has issued more than fifty ‘initial decisions’ at the SEC, and while the SEC has not always gotten everything it wanted, he has yet to rule against the agency. At the same time, however, none of his initial decisions have been overturned on appeal, suggesting they have legal muster to withstand challenges.”
FATCA fuels IRS amnesty, but advocate calls it harsh
Implementation of the Foreign Account Tax Compliance Act (FATCA) means even more account data for the IRS, creating a new wave of IRS disclosures, Forbes contributor Robert Wood wrote on February 2.
“It’s no secret that the IRS has pushed hard on offshore accounts and income, raking in billions in taxes, penalties, and interest. And while prosecutions have been few, their threat is enough to make most people quake. For many, the risks of quietly amending tax returns and filing FBARs is just too great,” according to Wood. “It is now clear that FATCA is a bigger success than anyone could have imagined. The IRS is getting quicker, better, and more complete information than it did in the past, and the sources are many. And FATCA will expand it like a fire hose.”
But he added that in her recent report to Congress, National Taxpayer Advocate Nina Olson said the IRS Offshore Voluntary Disclosure Program isn’t a very good deal for many.
Accounting firm expands, makes room for chickens
Last September, Laura Harper took her fifteen-year-old accounting firm, Netaganza, moved it into a bigger space and opened The Urban Chicken NC, the News & Observer in Raleigh, North Carolina, reported.
“The store’s inventory includes chicks chirping in their heated brooder, and related knickknacks. The store also sells feed for chickens, goats, llamas, horses, and other animals, along with custom coops, nesting items, heated bowls, and even chicken diapers,” the article stated.
“The store also houses two employees, who tend to the store’s customers while providing accounting services for about thirty small businesses. Another part-time employee helps with heavy lifting, and Snowflake, a white Sultan chicken, lives in the store, parading long feathers that cover her feet and a soft bunch that crowns her head.”