Bramwell’s Lunch Beat: Tax Break for Middle Class at Heart of New Plan from Demsby
GOP courts Warren to repeal medical device tax
Republicans are looking to an unlikely ally in their bid to repeal a controversial piece of Obamacare: Sen. Elizabeth Warren (D-MA), wrote Kevin Cirilli of The Hill. Warren, who has emerged as a liberal hero, has shown support for efforts led by the GOP and business groups to scrap Obamacare's medical device tax, a 2.3 percent levy on medical devices and supplies projected to raise almost $30 billion over the next decade. Now, Republican aides and industry sources say they're urging Warren to sign onto Sen. Orrin Hatch's (R-UT) legislation to repeal the tax.
Democrats, in a stark shift in messaging, to make big tax-break pitch for middle class
Senior Democrats are drafting an “action plan” that calls for a massive transfer of wealth from the super-rich and Wall Street traders to the heart of the middle class, wrote Lori Montgomery and Paul Kane of the Washington Post. The centerpiece of the proposal, set to be unveiled on Monday by Rep. Chris Van Hollen (D-MD), is a “paycheck bonus credit” that would shave $2,000 a year off the tax bills of couples earning less than $200,000. Other provisions would nearly triple the tax credit for child care and reward people who save at least $500 a year. The windfall – about $1.2 trillion over a decade – would come directly from the pockets of Wall Street “high rollers” through a new fee on financial transactions, and from the top 1 percent of earners, who would lose billions of dollars in lucrative tax breaks.
PCAOB to seek comments on going concern
Public Company Accounting Oversight Board (PCAOB) staff expects to solicit comments soon in its effort to revise the existing standard for public companies on the auditor’s evaluation of going concern, wrote Ken Tysiac of the Journal of Accountancy. A staff consultation paper seeking public comment is expected to be issued in the first quarter of 2015, according to an updated agenda posted on Friday to the board’s website. The standard is being re-evaluated in the context of an accounting rule issued in August by the Financial Accounting Standards Board that defines management’s responsibility to evaluate whether there is substantial doubt about an organization’s ability to continue as a going concern and provide related footnote disclosures.
Tax coalition: Targeted measures aren’t reform
A corporate coalition seeking a broad revamp of the tax code is warning lawmakers to go big, or do nothing at all, wrote Bernie Becker of The Hill. The Reforming America’s Taxes Equitably (RATE) Coalition sent a letter to all members of Congress on Monday, insisting that 2015 could finally be the year for the overhaul of the tax code long sought by the business community. But RATE co-chairs Elaine Kamarck and James Pinkerton also urged Washington to stay away from one-off tax maneuvers – like allowing companies to bring offshore profits back to the United States at a reduced rate, potentially to pay for infrastructure improvements – that fall short of the broader revamp they’re seeking.
House members renew bill on Internet tax ban
A bipartisan group of House members on Friday renewed legislation to kill the expiration date on a law that bars states from taxing Internet access, wrote Mario Trujillo of The Hill. The noncontroversial proposal passed by voice vote last year but got tied up in the Senate. Both chambers settled on a yearlong extension of the law that was originally passed in 1998. “Year after year, Congress has chosen to temporarily extend the bipartisan ban on Internet access taxes. The time has come to make this ban permanent,” House Judiciary Chairman Bob Goodlatte (R-VA) said in a statement. A pair of high-ranking senators have vowed to move the legislation in the upper chamber this Congress: Sen. John Thune (R-SD), who leads the Senate Commerce Committee, and Sen. Ron Wyden (D-OR), the ranking Democrat on the Senate Finance Committee.
Art collectors gain tax benefits from private museums
Operated by a nonprofit charitable foundation created and controlled by newsprint magnate and avid art collector Peter M. Brant, the Brant Foundation Art Study Center is tax-exempt. Wealthy collectors have long saved millions of dollars in federal taxes by donating art and money to museums and foundations. But what distinguishes Brant’s center and a growing number of private tax-exempt exhibition spaces like it is that their founders can deduct the full market value of any art, cash, and stocks they donate, even when the museums are just a quick stroll from their living rooms, wrote Patricia Cohen of the New York Times. While these jewel-box museums can house extraordinary work and offer a small group of art lovers an unusual viewing experience, critics wonder whether taxpayers are helping subsidize wealthy collectors’ multimillion-dollar purchases with little public benefit in return.
IRS technical guidance roundup (week of Jan. 5)
The IRS issued the following technical guidance last week:
Notice 2015-02 provides guidance with respect to issues related to the retroactive increase in the monthly transit benefit exclusion under section 132(f)(2)(A) of the Internal Revenue Code from $130 per participating employee to $250 per participating employee for the period from Jan. 1, 2014, through Dec. 31, 2014. Due to the timing of the statutory change and in order to reduce administrative burden, the IRS is providing a special administrative procedure for employers that treated excess transit benefits as wages and that have not yet filed their fourth quarter Form 941 for 2014 to make necessary corrections on their fourth quarter Form 941.
Announcement 2015-03 provides guidance on the automatic approval of a change in funding method for a single-employer-defined benefit plan under certain circumstances in which the change in method results from a change in the plan’s enrolled actuary.
SEC eyes transfer agents in new front against US stock fraudsters
Sarah N. Lynch of Reuters wrote that the US Securities and Exchange Commission (SEC) is in the early stages of drafting new rules for transfer agents. Transfer agents are back-office businesses hired by companies to keep track of shareholder records and changes in ownership. To date, the industry has been lightly regulated, despite its critical role in keeping track of stocks as they change hands, and the issuance of shares. Some officials want to get the agents to scrutinize more closely attempts by corporate insiders or large shareholders to remove private stock ownership restrictions so that shares may be sold in public markets, and deny requests that may seem suspicious.
FRC delivers formal complaint against Deloitte
Britain’s Financial Reporting Council (FRC) has launched a formal disciplinary complaint against Big Four firm Deloitte, as well as partner John Clennett and Hugh Bevan, the formal financial director of Aero Inventory, wrote Oliver Griffin of economia. The FRC alleges that Deloitte’s conduct, as well as the conduct of Clennett, the firm’s audit engagement partner, and Bevan “fell significantly short” of expected standards. The FRC complaint said the three parties – all of whom are members of the Institute of Chartered Accountants in England and Wales (ICAEW) – had “failed to act in accordance with the fundamental principles” of the ICAEW’s guide to professional ethics and code of ethics, as part of working with “professional competence and due care.” An independent tribunal will now be appointed to hear the complaint, though a date has yet to be set.
Carige falls after Consob questions 2013 accounts in civil court
Banca Carige SpA, one of the two Italian lenders that came up short of capital in the European Central Bank’s review, fell the most in two months in Milan after the stock market regulator asked a court to nullify 2013 accounts, wrote Sonia Sirletti of Bloomberg. Carige dropped as much as 9.4 percent, the most since Oct. 30, 2014, and was down 7.8 percent to 6.4 in Milan on Monday morning. Italy’s market watchdog Consob said Carige failed to comply with international accounting standards after the regulator ordered the bank early last year to revise its 2012 and first-half 2013 accounts. Specifically, Consob questioned Carige’s methods for restating goodwill amounts and equity investments recognized on its 2012 balance sheet, the bank said in a statement.