Bramwell's Lunch Beat: Ex-Accounting Executive Avoids Jail in Madoff Caseby
Ex-accounting executive avoids prison in Madoff fraud case
A former associate of Bernard Madoff avoided prison on Thursday for his role in perpetuating the fraudster's massive Ponzi scheme because of his extensive cooperation with prosecutors, wrote Joseph Ax of Reuters. Paul Konigsberg, 79, a lawyer and accounting firm executive, pleaded guilty in June 2014 to charges of conspiracy and falsifying books and records. His cooperation deal was seen as a signal at the time that prosecutors were still pursuing a criminal case against Madoff's son, Andrew, who died of cancer three months later. US District Judge Laura Taylor Swain in New York, citing an otherwise admirable life, said Konigsberg had been punished enough by the loss of his reputation. Prosecutors said Konigsberg was unaware of the scheme but helped by conspiring with Madoff employees to create some of the fraudulent customer statements.
Tax writers make plans for expired breaks
Both the House Ways and Means Committee and the Senate Finance Committee are preparing to deal with the string of tax breaks that expired at the end of 2014, wrote Bernie Becker of The Hill. House Ways and Means Committee Chairman Paul Ryan (R-WI) said on Thursday that he wants his committee to act on the so-called tax extenders in September, once lawmakers return to Washington from their August recess. Ryan and other GOP lawmakers want to make permanent some of the incentives, which were extended for 2014 in December before expiring again weeks later. The Senate Finance Committee could act even sooner. Senators and lobbyists have said the committee could consider a measure as soon as next week, though the panel's chairman, Sen. Orrin Hatch (R-UT), declined to confirm a mark-up.
Two more Swiss banks settle with US Justice Department
The US Justice Department on Thursday announced penalties against two Switzerland-based banks as part of separate settlements involving the banks and their roles in helping US citizens to avoid paying taxes, wrote Ben DiPietro of Risk & Compliance Journal. Banque Pasche SA agreed to pay $7.2 million and Arvest Privatbank AG agreed to pay $1 million to resolve their cases under the Justice Department's Swiss Bank Program. The program allows Swiss banks not already under criminal investigation to resolve potential criminal liabilities in the United States by entering into nonprosecution agreements. The Justice Department said both banks provided âdetailed informationâ about foreign customer accounts and how the banks helped them conceal assets to avoid paying US taxes. There have been 17 such agreements since the start of the year.
New Mexico auditor investigates state tax officials
State Auditor Tim Keller on Thursday forwarded allegations of wrongdoing by top officials in the New Mexico Taxation and Revenue Department to state prosecutors, saying the case warrants further investigation, the Associated Press reported. Officials at the agency fired back, accusing Keller of playing politics and trying to grab headlines with false claims. Keller announced that a preliminary investigation by an independent forensic accounting firm raised questions about potential criminal and ethical violations. Keller didn't release many details, but he said his office looked into whether officials used their positions to pressure employees to obtain differential treatment for a certain taxpayer. Other questions included whether these actions were taken to protect a high-level official from individual liability stemming from previous work for the taxpayer and whether the state lost revenue as a result.
Grant Thornton: US business leaders' optimism on the rise
Optimism for the nation's economic outlook among US business leaders increased in the second quarter of 2015, according to the latest data from the Grant Thornton International Business Report, a survey of more than 2,500 business leaders in 36 countries. In the second quarter, optimism for the economic outlook among US business leaders rose 11 percentage points to net 54 percent. Eurozone confidence spiked to net 54 percent, a significant increase from net 34 percent last quarter. Confidence in the European Union (EU) increased to net 58 percent, a 20 percentage-point increase from last quarter, and well above pre-crisis highs. Although optimism is up in the EU, confidence among Greek business leaders dropped significantly. There, optimism plummeted to net -38 percent, down 44 percentage points from last quarter.
IRS technical guidance roundup (week of July 6)
The IRS issued the following technical guidance this week:
Notice 2015-47: The Listing Notice applies to a type of structured financial transaction in which a taxpayer attempts to defer and treat ordinary income and short-term capital gain as long-term capital gain. The contract is denominated as an option contract that references a basket of actively traded personal property (i.e., securities). The contract allows the taxpayer to trade the securities referenced in the contract while the contract purportedly remains open, and the taxpayer does so. Consequently, option treatment is not warranted, and the income deferral and conversion to long-term capital gain is improper. The transaction described in the Listing Notice is similar to a transaction described in a companion Transaction of Interest Notice (NOT-110323-15); each of the notices makes it clear that if a transaction is identified by both notices, it is treated as a listed transaction.
Notice 2015-48: The Transaction of Interest Notice applies to a type of structured financial transaction in which a taxpayer attempts to defer and treat ordinary income and short-term capital gain as long-term capital gain. The transaction may be denominated as an option, notional principal contract, or forward contract. The contract may reference assets that are not actively traded, such as interests in hedge funds, and the taxpayer has the right to change the assets in the referenced basket. The taxpayer's ability to control the assets in the basket raises the issue of whether the form of the transaction should be respected, and, thus, whether the income deferral and conversion to long-term capital gain is improper. The transaction described in the notice is similar to a transaction described in a companion draft Listing Notice (NOT-109093-14); each of the notices makes it clear that if a transaction is identified by both notices, it is treated as a listed transaction.
Notice 2015-49 informs taxpayers that the Treasury Department and the IRS intend to amend the required minimum distribution regulations under Â§ 401(a)(9) of the Internal Revenue Code to address the use of lump-sum payments to replace annuity payments being paid by a qualified defined benefit pension plan. The regulations, as amended, will provide that qualified defined benefit plans generally are not permitted to replace any joint and survivor, single life, or other annuity currently being paid with a lump-sum payment or other accelerated form of distribution. The Treasury Department and the IRS intend that these amendments to the regulations will apply as of July 9, 2015, except with respect to certain accelerations of annuity payments described in the notice.