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lunch beat

Bramwell's Lunch Beat: Audit Disclosures, IRS Spinoff Guidance, Tax Bills

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Sep 16th 2015
Staff Writer and Editor AccountingWEB
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Push to boost audit committee disclosures encounters skeptics
Emily Chasan of CFO Journal wrote that the US Securities and Exchange Commission's (SEC) plan to take a fresh look at required audit committee disclosures is drawing skeptics. In July, the SEC requested comments from the public by Sept. 8 on whether audit committees were disclosing enough to investors about their audit firm tenures, or details of the audit committee's processes. Under the Sarbanes-Oxley Act of 2002, audit committees are required to play a larger role in oversight of auditors. But the law didn't require companies to say much about the audit committee's responsibilities. Industry groups, including the National Association of Corporate Directors, argued that audit committee disclosures should be voluntary, rather than mandatory, and that investors appear satisfied with current audit committee disclosures.

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IRS raises red flag on real-estate spinoffs
In new guidance, the IRS signaled its discomfort with a range of corporate spinoffs, specifically calling out deals in which companies split their real estate and other physical assets from their mainstream operations, wrote Liz Hoffman of the Wall Street Journal. The agency said it was concerned that some of these transactions may violate rules meant to ensure that companies don't disguise dividends and other taxable transactions as spinoffs to avoid paying taxes. These spinoffs “involve significant concerns,” the IRS said, adding it will largely stop giving preapproval for such deals while it examines the issue more closely. The posture has caught up Yahoo Inc., which had planned to spin off its stake in Alibaba Group Holding Ltd. Yahoo sought a ruling from the IRS that its spinoff would be tax-free. The IRS declined Sept. 2 to grant Yahoo's request, meaning that if the company goes forward with the deal, it risks an IRS challenge.

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Senate panel puts off tax fraud bill
The Senate Finance Committee put off considering a measure aimed at battling tax fraud on Wednesday, less than two hours before the markup was scheduled to begin, wrote Bernie Becker of The Hill. A spokesman for Finance Committee Chairman Orrin Hatch (R-UT) said the committee was taking a second look at some of the proposals, following concerns raised by other tax writers. “Chairman Hatch will reconvene the markup at a later date, once the bill is finalized,” said spokesman Aaron Fobes. Most of the provisions in the bill, from Hatch and the committee's top Democrat, Sen. Ron Wyden (D-OR), are largely uncontroversial. But some Republicans have balked in the past at one of the proposals, which would give the IRS more latitude to regulate paid tax preparers. The American Institute of CPAs also took issue with that particular provision this week.

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House panel to consider tax, Obamacare bills
Bernie Becker also wrote for The Hill that the House Ways and Means Committee will consider a string of tax and Obamacare-related measures on Thursday, including a bill that would permanently give businesses a massive tax cut on their investments. In addition to the business-expensing measure, the tax-writing committee will also take up four other bills that would permanently install tax provisions set to expire at the end of this year. Known as bonus depreciation, the business-expensing measure generally allows companies to write off half of certain purchases immediately. Supporters, including business groups, GOP lawmakers, and some Democrats, say giving companies more reasons to expand can only help the economy. The House passed a permanent extension of the incentive last year, at a cost of $287 billion over a decade.

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Quick Links

  • Finance and accounting – next target for the robot revolution? (Diginomica)
  • When accounting meets big data (Diginomica)
  • Is your accounting and finance function as efficient as your peers? (FEI Daily)
  • Accounting firms merge, create Crow Shields Bailey PC (AL.com)
  • Make these mutual-fund tax moves now to avoid an April surprise (MarketWatch)
  • Expatriates choosing to leave the US rather than pay taxes (CNBC)
  • Tax exemptions protect religious freedom. We should keep them. (Washington Post)
  • Bush's tax plan critics should take a closer look (Washington Post)
  • Conservative anti-tax group launches ad blitz against Trump (NBC News)
  • Grover Norquist: Don't raise taxes (USA Today)
  • Silliest tax proposal of the year – really (Tax Analysts)
  • Litigating FATCA: Rand Paul and financial privacy (Tax Analysts)
  • Colorado marijuana tax holiday has retailers hoping for big returns (Denver Post)
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