House approves clean debt hike
By a vote of 221 to 201, the House passed a debt-ceiling hike of undetermined size on Tuesday, largely on the backs of Democrats, Pete Kasperowicz of The Hillreported. Twenty-eight Republicans voted for the bill, including House Speaker John Boehner (R-OH), while 199 voted against it. Only two Democrats voted against the bill.
The bill suspends the debt ceiling until March 15, 2015, which will allow the government to continue borrowing above the current $17.2 trillion cap, the article stated. After the suspension ends, the new debt ceiling would equal the amount of debt the government has racked up by then.
The Senate, backed by the strength of Democratic support as well as the support of some Republicans, is expected to approve the bill today.
Lease accounting changes could jar bank covenants
The proposed changes to lease accounting standards by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) could impact lessees’ relationships with their banks, wrote David M. Katz of CFO.com.
“Bankers are warning that altering lease accounting could significantly change a borrower’s balance-sheet profile, possibly making it look more leveraged than it actually is,” the article stated. “The changes could also worsen the financial ratios that govern a loan’s covenants, to the point where the borrower is in violation of its agreement with the bank.”
Besides friction with their clients, bankers have other reasons to be touchy regarding changes to lease accounting rules that might make their clients look more indebted, according to the article.
“Changes to financial statements of banks and their borrower customers would be vast,” Dennis E. Dixon, president of International Bancshares Corp., wrote to FASB Chairman Russell Golden last October. “The final impact of these changes will probably result in a de facto increase in the regulatory capital requirements of financial institutions. This is especially troublesome because financial institutions are already subject to increased capital levels due to Dodd-Frank and the Basel III capital requirements.”
[Click here for AccountingWEB’s coverage of the lease accounting proposal.]
Panel votes to block IRS regulations
The House Ways and Means Committee, by a vote of twenty-three to thirteen, advanced a measure on Tuesday that would delay new rules for tax-exempt 501(c)(4) groups for one year, Bernie Becker of The Hillreported. Top GOP senators also introduced their own version of the legislation yesterday.
“Republicans have said the proposed rules are an affront to the First Amendment, and would merely institutionalize the targeting of Tea Party groups that the IRS apologized for in May 2013,” the article stated. “The Treasury Department and the IRS released the proposed rules – which have received tens of thousands of comments so far – in November.”
Under the proposed rules, 501(c)(4) groups would not be able to count activities for or against candidates as part of their social welfare mission, according to Becker. The rules also ask for guidance on how much social welfare work 501(c)(4)s should have to engage in.
House Ways and Means Chairman Dave Camp (R-MI) said Tuesday the current rules would count nonpartisan get-out-the-vote efforts as political activity for 501(c)(4)s, but not for unions and other groups with tax-exempt status.
Focus back on Camp as aides quietly say the chairman could introduce language by end of the quarter – Americans giving up citizenship in record numbers
Lauren French put together today’s Politico Morning Tax tipsheet. Click here to read it.
It’s tax-crunch time: How to keep your accounting in check
Jody Pader, CEO and president of New Vision CPA Group, wrote an article for Entrepreneur magazine on how small business owners can enable their accounting partners to serve them with the most accurate financial counsel.
Dumb Starbucks, now Dumb IRS
Comedian Nathan Fielder recently orchestrated an elaborate parody of Starbucks culture, “Dumb Starbucks,” a short-lived store in Los Angeles that had a Dumb Starbucks logo and Dumb Starbucks menu. Forbes contributor Robert Wood wondered if “Dumb IRS” is next. He said parodies can be “clever legal ploys, can be amusing, but can have a message, too.”
“Careful, though. Before anyone hangs out a ‘Dumb IRS’ sign, consider that the feds might consider it a crime. That’s especially so if someone could truly become confused and send in money, returns, or taxpayer data. After all, the feds take fake IRS stuff very, very seriously. And there’s a huge effort now to catch identity thieves. That accounts for some of the big uptick in criminal tax enforcement,” Wood wrote.
“Still, it might be nice to whip up a Tax Frappuccino, if the feds would allow it. If a ‘Dumb IRS’ could bring the agency into focus, what do most taxpayers really want?”
Canadian gold medalist trading skis for accounting ledgers
If you’ve been watching the Winter Olympics in Sochi as much as my family and I have, you’re probably familiar with Canadian Alex Bilodeau, the gold-medal winner in men’s freestyle skiing. Bilodeau won a gold medal in the same event during the Winter Olympics in Vancouver, British Columbia, in 2010, and much has been made about the close relationship he has with his older brother, Frederic, who has cerebral palsy.
Now, Bilodeau is hanging up his skis to complete his accounting degree studies at the John Molson School of Business at Concordia University in Montreal, Quebec, wrote Kay Bell in her Don’t Mess With Taxes blog. She even embedded a YouTube video that Bilodeau made in 2011 for prospective KPMG employees.