Bramwell’s Lunch Beat: GOP and Democrats Still Divided Over Dodd-Frankby
IRS launches International Data Exchange Service
The IRS on Monday launched the International Data Exchange Service (IDES), a web application that will be used by financial institutions and host country tax authorities to securely send their information reports on financial accounts held by US taxpayers to the IRS under the Foreign Account Tax Compliance Act (FATCA) or pursuant to the terms of an intergovernmental agreement (IGA). The IRS will also use IDES to provide similar information to the host country tax authority on accounts in US financial institutions held by the jurisdiction’s residents. More than 145,000 financial institutions have registered through the IRS FATCA Registration System. The United States has more than 110 IGAs, either signed or agreed in substance.
Congress again clashes over financial regulation
Four-and-a-half years after Democrats in Congress enacted the Dodd-Frank law to stiffen regulation of Wall Street, the two parties are again clashing over government regulation of financial markets, wrote Michael R. Crittenden of the Wall Street Journal. Republicans want to roll back or overhaul large portions of the law. But Democrats worried about GOP attempts to chip away at Wall Street regulations are increasingly objecting to even minor changes in an effort to put down markers ahead of more bruising battles to come. The two parties are expected to again skirmish over the issue this week as the House takes up tweaks to the law that Democrats blocked last week. One provision in particular that Democrats didn’t like: a delay until 2019 of a portion of the so-called Volcker rule prohibiting banks from making risky bets with their own money in securities called collateralized loan obligations.
Bid to lower corporate tax rate stirs backlash from business
The latest plan in Congress to cut business tax rates faces a major obstacle: US businesses, wrote Richard Rubin of Bloomberg. While many Republicans and Democrats agree that the 35 percent corporate tax rate should be reduced, the complication is that millions of US businesses – from the largest hedge funds to neighborhood restaurants – don’t pay taxes through the corporate system. Instead, income and tax breaks appear on the individual returns of those businesses’ owners, in effect intertwining the corporate and individual parts of the tax code. Businesses not subject to corporate taxes are warning lawmakers that they may lose valued tax breaks without getting any benefit from a corporate rate cut. The politicians say they’re listening and trying to come up with a solution.
Rep. Van Hollen, in opening budget salvo, calls for paycheck tax break
With less than a month before the White House sends its budget proposal to Congress, a senior House Democrat on Monday introduced an “action plan” foreshadowing the upcoming battle over the tax code and whom it benefits, wrote Kristina Peterson of the Wall Street Journal. The proposal from Rep. Chris Van Hollen (D-MD) is aimed at encouraging companies to boost salaries at a time of stagnant wage growth and enabling workers to keep a bigger chunk of their paycheck. Van Hollen would offset the cost of his proposal by curbing tax breaks on investment gains and implementing a new fee on financial market transactions. The centerpiece of Van Hollen’s proposal is a new $1,000 tax break for workers earning under $100,000 per year, or $2,000 for working couples making up to $200,000, with an additional bonus for those who direct part of those extra funds toward their savings.
The risks of the new dynamic scoring rule
On its face, there is nothing particularly mischievous about the budget accounting rule that the House adopted last week. It simply calls for the two nonpartisan bodies that keep score on fiscal matters, the Congressional Budget Office and the Joint Committee on Taxation, to “incorporate the macroeconomic effects” of “major” tax or mandatory spending legislation when they develop official cost estimates, wrote the Washington Post editorial board. But there would be reason to worry about “dynamic scoring” if it were to become the dominant method, the editorial continues. “The US economy is so complex, and the assumptions that must be built into any model of its workings so inherently subject to educated guesswork, that it’s not clear that dynamic scoring actually would add precision to imprecise budget estimates. Conversely, to the extent analysts try to be cautious in their assumptions, the more they would simply replicate existing procedures.”
Elizabeth Warren wins on Antonio Weiss nomination
Antonio Weiss, the Wall Street banker who President Obama had picked to be the third-ranking official at the Treasury Department, has asked that the president not resend his nomination to the Senate following a major backlash from progressive Democrats who questioned his ties to the financial industry, wrote Ben White of Politico. The Lazard banker will still join the administration in the position of counselor to Treasury Secretary Jack Lew, which does not require Senate confirmation. Sen. Elizabeth Warren (D-MA), who came out strongly against the nomination, along with some others progressive Democrats, said that Weiss did not have enough regulatory experience and would be too deferential to the finance industry.
PwC and Deloitte in top 2015 graduate employers
PwC and Deloitte have been named among the top UK recruiters of graduates in 2015, with 1,570 and 1,100 vacancies, respectively, according to new research by High Flyers, wrote Ellie Clayton of economia. High Flyers, which also compiles The Times Top 100 Graduate Employers, asks 18,000 students to select the 100 best graduate employers, which are then surveyed for the number of vacancies and starting salaries. All Big Four firms and Grant Thornton were included in the rankings. KPMG anticipates 1,000 vacancies this year, followed by EY (800) and Grant Thornton (300).
140 current female KPMG US employees join lawsuit against firm
More than 140 current KPMG US fee-earning female staff have opted into a lawsuit against the firm, wrote Kevin Reed of Accountancy Age. Lawyers contacted 9,000 current and former fee-earning female staff from KPMG in the United States in October 2014 to join the class-action lawsuit. Donna Kassman, a former KPMG manager who spent 17 years in the firm’s New York office before resigning, claims that she and other women had suffered gender discrimination. Nearly 900 women have opted into the case, 142 of whom are from existing staff. In a statement, KPMG said it is “deeply committed to the career advancement of women and confronting the challenges women too often face in the workplace, and we take very seriously any concern about discrimination or unfair treatment.”
AICPA provides feedback on tax reform proposals
In a letter sent to new House Ways and Means Committee Chairman Paul Ryan (R-WI), Troy Lewis, chair of the American Institute of CPAs (AICPA) Tax Executive Committee, commented on various tax reform proposals embodied in the Tax Reform Act of 2014, wrote Alistair M. Nevius of the Journal of Accountancy. “The AICPA supports comprehensive tax reform,” Lewis wrote in the letter. He also noted the AICPA evaluated the proposals in the Tax Reform Act of 2014 using the AICPA’s 10 principles of good tax policy, and he strongly encouraged Congress “to consider using these principles to guide comprehensive tax reform.” The letter emphasized five principles in particular: equity and fairness; certainty; simplicity; economic growth and efficiency; and transparency and visibility.
IMA announces new honor society for accounting students
The Institute of Management Accountants (IMA) on Jan. 9 launched the new IMA Accounting Honor Society (IAHS), designed to support and acknowledge high-performing accounting students attending accredited colleges or universities around the globe. IAHS is open to junior and senior students majoring or minoring in accounting, finance, or IT with a 3.0 or higher grade-point average overall and in accounting. In addition, students must be nominated by a professor or provide proof of meeting eligibility requirements in order to be accepted into IAHS. IMA will begin accepting applications in March 2015. Click here for more information.
Gross Mendelsohn merges with Virginia firm Vogel, Dean & Lill
Baltimore-based CPA and consulting firm Gross Mendelsohn has merged with Fairfax, Virginia-based CPA firm Vogel, Dean & Lill PLLC. The merger took effect on Jan. 1. The merger expands Gross Mendelsohn’s presence in northern Virginia. Vogel, Dean & Lill Partners Mark Vogel and Taylor Dean joined Gross Mendelsohn along with seven employees. Vogel, Dean & Lill is known for its litigation support, business valuation, and government contracting expertise. This merger, the second in two years for Gross Mendelsohn, brings the firm’s total personnel count to about 120. Two years ago, the firm acquired Cox Ferber & Associates, which added one partner and six employees to the firm’s Baltimore office.
NOI Strategies to join CohnReznick in February
Top 10 US accounting firm CohnReznick LLP on Monday announced that it has signed a letter of intent to acquire NOI Strategies, a top global real estate consulting boutique. The deal is expected to close on Feb. 1. The NOI team will join the advisory services arm of CohnReznick and will operate as NOI Strategies, a division of CohnReznick. NOI is a global services company that provides expert strategy, operations, technology, and outsourcing services to many of the world’s leading commercial real-estate owners, operators, and investors. NOI CEO Tama Huang will become a principal with CohnReznick and will continue to lead the NOI division.