How Democrats prevailed over Obama on the âCadillac tax'
Sarah Ferris of The Hill wrote that as recently as three weeks ago, one of President Obama's top advisors warned Democratic leaders to leave the âCadillac taxâ alone. But House Minority Leader Nancy Pelosi (D-CA) and her Senate counterpart, Sen. Harry Reid (D-NV), forged ahead with secret budget talks with GOP leaders in which they sought to delay or even repeal the tax before it took effect in 2018. The Senate took a symbolic vote to repeal the Obamacare tax by an overwhelming 90-10 margin. That vote marked a turning point in the Obama administration's losing fight to preserve the tax. The White House's defeat was sealed on Dec. 18, when Obama signed into law a $1.8 trillion funding package that delays the tax for two years. It also delays a much-maligned tax on medical device manufacturers and a separate health insurer âpremiumsâ tax. Altogether, the changes take a $35 billion bite out of Obamacare.
IRS scores year-end funding boost
The spending bill President Obama signed into law on Dec. 18 provides an increase in funding to the IRS, a rare win for an agency that has been on the outs with congressional Republicans, wrote Naomi Jagoda of The Hill. The $1.1 trillion omnibus provides an additional $290 million for the IRS, an increase of 3 percent over the last fiscal year. Lawmakers specified that the additional funding is to be used for âtaxpayer services to ensure that the agency responds to taxpayer questions in a timely manner, and to improve fraud detection and prevention and cybersecurity,â according to a summary from Republicans on the House Appropriations Committee. The base funding level for the IRS was kept at about $10.9 billion. In fiscal 2015, Republicans hit the IRS with a $346 million budget cut, pushing the agency's overall funding lower than it had been in fiscal 2008. In fiscal 2014, the IRS received $526 million less than it had the year before.
Tim Cook calls notion of Apple avoiding US taxes âpolitical crap'
Apple Inc. Chief Executive Tim Cook dismissed as âtotal political crapâ the notion that the tech giant was avoiding taxes, Reuters reported. Cook's remarks, made on CBS's 60 Minutes, come amid a debate in the United States over corporations avoiding taxes through techniques like so-called inversion deals. Apple saves billions of dollars in taxes through subsidiaries in Ireland, where it declares much of its overseas profit. âApple pays every tax dollar we owe,â Cook said. He added that bringing profits back to the United States would cost him 40 percent. âI don't think that's a reasonable thing to do,â Cook said. Apple holds $181.1 billion in offshore profits, more than any other US company, and would owe an estimated $59.2 billion in taxes if it tried to bring the money back to the United States, a recent study based on US Securities and Exchange Commission filings showed.
Toshiba sees record $4.5 billion loss, plans more job cuts
Toshiba Corp. forecast a record 550 billion yen ($4.5 billion) loss and will cut more jobs and restructure businesses that include chips, televisions, personal computers, and home appliances following a long-running accounting scandal, wrote Pavel Alpeyev and Grace Huang of Bloomberg. The projected net loss for this fiscal year includes 260 billion yen in taxes because of a reversal of deferred income tax assets, the company said in a statement on Monday. The forecast doesn't include possible impairment of goodwill and fixed assets at the company's nuclear power systems business because Toshiba is still checking that. Toshiba also plans to cut 6,800 jobs in its segment that makes TVs, PCs, and appliances. âI will do my utmost in leading the implementation of the recovery plan for a rebirth of Toshiba and recovery of everyone's trust,â said President Masashi Muromachi.
IRS technical guidance roundup (week of Dec. 14)
The IRS issued the following technical guidance last week:
Notice 2015-84 contains the 2015 cumulative list of changes in plan qualification requirements. The list is used by plan sponsors and practitioners submitting determination letter applications for plans during the period beginning Feb. 1, 2016, and ending Jan. 31, 2017.
Notice 2015-85 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under Section 417(e)(3), and the 24-month average segment rates under Section 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under Section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under Section 431(c)(6)(E)(ii)(I). The rates in this notice reflect the application of Section 430(h)(2)(C)(iv), which was added by the Moving Ahead for Progress in the 21st Century Act, Public Law 112-141 (MAP-21), and amended by Section 2003 of the Highway and Transportation Funding Act of 2014, Public Law 113-159 (HATFA).
Notice 2015-87 provides further guidance on the application of various provisions of the Affordable Care Act to employer-provided health coverage.
Notice 2016-01 provides the optional 2016 standard mileage rates for taxpayers to use in computing the deductible costs of operating an automobile for business, charitable, medical, or moving expense purposes. This notice also provides the amount taxpayers must use in calculating reductions to basis for depreciation taken under the business standard mileage rate and the maximum standard automobile cost that may be used in computing the allowance under a fixed- and variable-rate plan.
Revenue Ruling 2016-01 provides various prescribed rates 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. These rates are determined as prescribed by Â§ 1274.
Revenue Procedure 2016-11 sets forth inflation-adjusted items for 2015 for certain civil penalties under the Internal Revenue Code (Â§Â§ 6651, 6652(c), 6695, 6698, 6699, 6721, and 6722) for returns and statements required to be filed after Dec. 31, 2015. In addition, this revenue procedure corrects Section 3.48(3), Failure to File Correct Information Returns, of Rev. Proc. 2015-53.
- Tax extenders on the road to tax reform (The Hill)
- Hospitality and gambling interests delay closing of billion-dollar tax loophole (New York Times)
- Sanders defends proposed tax increases (Politico)
- At the Democratic debate, only Clinton promises no middle class tax increases (Washington Post)
- Will scammers hide behind new law for private tax collectors? (Washington Post)
- As pot-growing expands, power demands tax US electricity grids (Bloomberg)
About Jason Bramwell
Jason Bramwell is a staff writer and editor for AccountingWEB. He has nearly 20 years of experience in print and online media as a journalist and editor.