Bramwell's Lunch Beat: CFTC Audits, Tax Data Breach, ‘Smooth’ Opening Dayby
KPMG withdraws audit opinions on CFTC over accounting error
Sarah N. Lynch and Lisa Lambert of Reuters wrote that the US regulator that polices the complex derivatives markets is struggling to keep its own books in order and has made a material error that its auditor found so significant that it withdrew nearly a decade of its financial opinions. The US Commodity Futures Trading Commission (CFTC) understated liabilities by $194 million in fiscal 2014 and $212 million the following year, the agency's auditor KPMG estimated in documents seen by Reuters. At issue is how the agency accounted for costs associated with leasing office space. In its annual financial statements, the regulator was only accounting for a year's worth of rent â and not the full cost of the lease over time. CFTC's management said it is investigating whether accounting rules were broken. It added that it did not concur with KPMG's findings and is still awaiting results of an official government audit.
Tax-preparation firm discloses data breach
Criminals may have stolen personal and tax-return information from about 450 customers of TaxAct, the third-largest provider of software to individuals who prepare their own tax returns, according to the company, wrote Laura Saunders of the Wall Street Journal. TaxAct also has frozen the accounts of another 9,000 customers because of suspicious activity, a company spokeswoman said. The spokeswoman said the company has âno evidence that any TaxAct system has been compromised.â Instead, she said, the company believes thieves obtained customer names and passwords elsewhere, perhaps from other data breaches. The unauthorized access occurred between Nov. 10 and Dec. 4, 2015. The firm said it has offered credit monitoring and restoration services to these customers. Victims also can request a special identity-protection number from the IRS, which ensures no one else can file a return in their name.
Tyco reaches deal with IRS in tax dispute
Tyco International PLC disclosed on Tuesday that it has reached a potential settlement in a long-running tax dispute with the IRS that would result in payments of up to $525 million, wrote Chelsey Dulaney of the Wall Street Journal. The settlement, which still must be finalized, relates to tax-sharing agreements set up by Tyco in 2007 when it spun off TE Connectivity Ltd. and Covidien PLC. The agreements split responsibility for income tax liabilities between the companies. The IRS has raised issues about Tyco's treatment of certain intercompany debt deals from 1997 to 2000. In 2013, the IRS said Tyco's former US subsidiaries owed about $1 billion in additional taxes and penalties. Tyco expects to make the payment in the next six months.
IRS, tax preparers report âsmooth opening' on first day of tax season
The IRS said it had a âsmooth openingâ to the 2016 tax season on Tuesday, and by mid-day, the agency reported receipt of several thousand tax returns and no real filing issues, wrote Kelly Phillips Erb of Forbes. âMy colleagues seemed to echo that sentiment, with most reporting a fairly easy day,â she wrote. âOne of my fellow tax professionals reported reaching the IRS three times by phone yesterday with average wait times of about 10 minutes each â a far cry from the hour-plus wait times last year.â In 2015, the IRS received 150,927,000 individual income tax returns and expects to receive a similar number this year. The IRS also expects to issue tax refunds to more than 70 percent of taxpayers, as the agency did last year. In 2015, the IRS issued 109 million refunds, with an average refund of $2,797.
[Tax professionals: Did you have to call the IRS yesterday? If so, how were wait times for you? How was service? Did both seem to improve over last year? Leave us a comment below about your experience.]
- Budget deficit set to rise thanks to year-end tax deal (Washington Post)
- Tax season kicks off with IRS phone scam warning (CBS News)
- Are you prepared for new Obamacare tax forms? (USA Today)
- Blowing up tax code dangerous (Boston Herald)
- Bernie Sanders is proposing really big tax increases (TaxVox)
- Good government developments in the tax world (Tax Analysts)
- Taxpayers call themselves businesses as Kansas tax plan flounders (Bloomberg)
- Study: State sales tax on groceries a lose, lose, lose proposition (NBC News)
- South Carolina to delay state tax refunds in effort to fight fraud (Charleston Post and Courier)