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Lunch Beat

Bramwell's Lunch Beat: Leases Loom, Worst Tax Form, Cookie Tax Exemption

Feb 19th 2016
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FASB leasing standard set for February release
The Financial Accounting Standards Board (FASB) is to release its new leases accounting standards update on Feb. 25 as part of a major overhaul that will see lessees required to present right-of-use assets and lease liabilities on the balance sheet, according to Asset Finance International. The new guidance will be effective for public business entities for fiscal years beginning after Dec. 15, 2018, including interim periods within those fiscal years. Nonpublic business entities would apply the new guidance for fiscal years beginning after Dec. 15, 2019. The International Accounting Standards Board published the international version of the standard, IFRS 16 Leases, on Jan. 13, which is effective for annual reporting periods beginning on or after Jan. 1, 2019. Some business organizations, however, have written to the FASB over concerns that application of the lease accounting standard would be harmful for private companies.

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The worst tax form
Laura Saunders of the Wall Street Journal wrote that in the battle for worst tax form, a winner has emerged. That dubious distinction goes to Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, according to an informal survey of tax preparers. It is used by brokerage firms to report a taxpayer’s investment transactions to both the taxpayer and the IRS. The agency compares the broker’s filings to individual returns, looking for discrepancies that may signal unreported income. “Unquestionably, the 1099-B is my least-favorite form,” says Jeffrey Porter, a CPA who practices in Huntington, West Virginia. “They’re maddening when I’m trying to be efficient,” he adds, because they are often late, incomplete, or subject to revision. Brokers are supposed to send these forms to taxpayers by Feb. 15 and to the IRS by March 31 in most cases. But firms sometimes get extensions of the deadline or issue revisions to the forms.

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Tax Foundation hopes IRS will remove web feature
An official with the free-market Tax Foundation said he hopes the IRS will remove a web feature that could facilitate identity theft, wrote Naomi Jagoda of The Hill. “The ‘Get My Electronic Filing PlN’ page … which enables taxpayers to obtain an IRS-provider number to file their taxes online, requires such minimal information that any data thief worth his salt would already have,” Joseph Henchman, Tax Foundation vice president for legal and state projects, said in a letter on Thursday to IRS Commissioner John Koskinen. Henchman said that thieves could currently steal someone’s identity through the “Get My Electronic Filing PIN” page if they know someone’s Social Security number, address, and date of birth. He referenced a Tax Analysts article that pointed out that the page lacks necessary security features.

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Tax refunds aren’t for spending this year
Suzanne Woolley of Bloomberg wrote that Americans will get back some $330 billion in tax refunds this year, and more than half of that is earmarked for savings accounts or paying down debt. That’s the highest percentage since 2007. Some 66 percent of individual taxpayers will get a refund check in 2016. According to an annual survey released by the National Retail Federation on Thursday, about 50 percent of them will plow it into savings, while 35 percent will also use it to pay down debt. It’s perhaps a sign of self-discipline that Americans want to shore up their finances, but it’s also a bad sign for consumer sentiment and by extension the US economy, which relies on people spending as much of their money as possible. Fifty-seven percent of millennials between the ages of 18 and 24 plan to save their refunds, but that number ratchets down to 52 percent for taxpayers between the ages of 25 and 34.

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Idaho House OKs bill to let Girl Scouts keep sales tax on cookies
The Idaho House narrowly passed a bill on Wednesday that would allow Girl Scouts to keep the sales tax on the thousands of boxes of cookies sold each year, wrote Kathryn Haake of the Associated Press. House Bill 449 received a robust debate on the House floor, with many conservative legislators opposing the measure and questioning its fairness to other nonprofits. The bill would allow tax exemptions on food sales to both Boy Scouts and Girl Scouts. For Girl Scouts, the bill’s passage would mean the organization would keep about $200,000 in would-be sales tax each year. A similar measure passed the House in 2013, but it was killed by senators who argued there were too many tax-exempt groups. Idaho and Hawaii are the only two states that currently tax Girl Scout cookies.

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Quick Links:

  • Ted Cruz’s politically risky tax proposal (TIME)
  • 5 myths about taxes (US News and World Report)
  • The biggest loophole of all (The Economist)
  • Google isn’t paying the ‘Google tax’ (Bloomberg)
  • Google accounts show 11 billion euros moved via low-tax ‘Dutch sandwich’ in 2014 (Reuters)
  • Obama’s $10 oil tax will mean 137,000 fewer jobs (Daily Caller)
  • Obama’s oil barrel tax would be extremely regressive (Tax Analysts)
  • Revenue losses from profit shifting: The numbers tell a story (Tax Analysts)
  • The GOP proposed tax cuts would be unprecedented (TaxVox)
  • How the GOP candidates’ tax plans stack up against one another (TaxVox)

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