Bramwell’s Lunch Beat: House OKs Bill to Make R&D Tax Credit Permanentby
[Note: “Lunch Beat” will be taking a brief hiatus while I enjoy an extended Memorial Day holiday weekend. “Lunch Beat” will return the middle of next week.]
SEC proposes rules to gather more data on mutual funds, advisors
The US Securities and Exchange Commission (SEC) proposed new rules on Wednesday that would require mutual funds and other asset managers to report much more detailed data about their holdings, wrote Sarah N. Lynch of Reuters. The plan would require mutual funds to file monthly reports detailing their position-level holdings, as well as data about their repurchase agreements, securities lending activities, counterparty exposures, risks they face from interest-rate spikes, and the terms of their derivatives contracts. A second portion of the plan would require investment advisors to provide additional disclosures on the registration forms they file with the SEC. Some of this new data would involve information about accounts that companies manage for individual clients, as opposed to pooled investment vehicles.
House backs permanent research tax credit over Obama objections
The House of Representatives voted 274-145 on Wednesday to revive the tax credit for corporate research and make it a permanent feature of US law, despite a veto threat from the White House, wrote Richard Rubin of Bloomberg. The break would cost the US government – and save companies – $181.6 billion over the next decade. Like other attempts to extend lapsed tax breaks, the House’s action on the research credit puts the bill in limbo in the Senate. Many Democrats want to extend the credit, though only if the cost is offset by tax increases or spending cuts. President Obama has threatened to veto the measure, and the House’s vote margin is short of the two-thirds needed to override a veto. The research credit is one of dozens of tax incentives known as “extenders” because they routinely lapse and then are extended. In recent years, including 2014, Congress waited almost a year after the breaks elapsed before reinstating them retroactively.
Carried interest tax change off table until 2017, Ryan says
Richard Rubin also wrote for Bloomberg that any major changes to private equity’s most favored tax break won’t happen until 2017, according to House Ways and Means Committee Chairman Paul Ryan (R-WI). During an American Institute of CPAs conference on Tuesday, Ryan said he’s excluding the taxation of carried interest from this year’s bipartisan attempt to revamp business taxes, sparing fund managers from any change. “That is on the individual side of the code, so it’s not something that we’re looking at right now,” Ryan said. “That’s what we see as a 2017 conversation.” President Obama wants to tax the carried interest of private-equity managers, venture capitalists, some hedge fund executives, and real estate managers as ordinary income instead of capital gains.
Paying with credit card? Not anymore at this major CPA firm
As of July 1, accounting firm CliftonLarsonAllen (CLA) will no longer accept credit cards as payment for its services, wrote Sal Christ of Albuquerque Business First. According to Georgie Ortiz, managing principal for CLA's New Mexico office, the decision was motivated by a desire to protect client information given the increasing number of data breaches at major companies, such as Target. In lieu of credit card payments, the firm will accept checks and automated clearinghouse payments, an electronic payment service that's responsible for transactions such as direct deposit, payroll, and vendor deposits. As technology changes, the firm will likely revisit its technology policy and whether to start accepting credit cards as payment, Ortiz said. Letters of notification will go out to clients starting next week.
Grassley presses IRS over tax cheat employees
Bernie Becker of The Hill wrote that Sen. Chuck Grassley (R-IA) wants to know why the IRS hasn't been firing more employees found to have broken tax law on purpose. The Treasury Inspector General for Tax Administration reported recently that three in five IRS employees who willfully violated the law over a decade kept their jobs. Under current law, those employees are supposed to be let go, unless the IRS commissioner decides otherwise. In a letter to IRS Commissioner John Koskinen on Wednesday, Grassley said the public is astonished that so many IRS staffers who are tax cheats remained employed. “Willful violation of tax law is a serious offense and the presumption is an employee guilty of the offense shall be terminated,” Grassley wrote. In his letter, Grassley asked the IRS to lay out how they decide not to fire an employee who skirted tax laws.
Hawkins to retire as director of IRS Office of Professional Responsibility
IRS Office of Professional Responsibility Director Karen Hawkins announced recently that she will resign effective July 11, marking an end to her six-year tenure in that role, wrote William R. Davis of Tax Analysts. In a written statement, she identified goals of her tenure as enhancing “the credibility, visibility, and stature of the Office of Professional Responsibility and Circular 230 at all levels of professional practice.” Hawkins admitted that while the vision of bringing oversight to the unregulated return preparer industry has yet to be achieved, the goals of enhancing the Office of Professional Responsibility have been surpassed. “There can be no doubt that recognition of the office and the regulations governing practice before the IRS has increased exponentially in the past six years,” she said.
IRS technical guidance roundup (week of May 18)
The IRS issued the following technical guidance this week:
Revenue Ruling 2015-13 clarifies the effect of Emancipation Day and Patriots’ Day on the filing deadline for individuals filing their returns for tax year 2015.
Revenue Ruling 2015-14 provides various prescribed rates for June 2015 for federal income tax purposes, including the applicable federal interest rates, the adjusted applicable federal interest rates, the adjusted federal long-term rate, and the adjusted federal long-term tax-exempt rate.
Recent AccountingWEB Articles That You Can’t Afford to Miss:
Three Key Reasons Why There Is Still Value Pricing Hesitation
Longtime value pricing proponent Ron Baker discusses why there is still resistance to the practice among accountants.
AICPA Unveils 6-Point Plan to Improve Audit Quality
The action plan, released on May 14, focuses on private company financial statement audits, employee benefit plans, and US governmental entities.
How to Successfully Navigate the Stages of Technology Company Funding
Companies need to demonstrate to investors, in a quantifiable way, how they will effectively capture market share.
Clarified Auditing Standards: Materiality in Planning and Performing an Audit – Part 1
A look at the definitions of materiality, performance materiality, and tolerable misstatement under AU-C Section 320.