Business groups turn on Camp
The immediate blowback from industry groups to House Ways and Means Committee Chairman Dave Camp’s (R-MI) proposal illustrates how much harder tax reform becomes when details are put to paper, Bernie Becker and Peter Schroeder of The Hillwrote today.
“We could probably send out a press release every day on something in the tax reform bill that we are not necessarily enamored with,” said James Ballantine, chief lobbyist for the American Bankers Association, according to the article.
The banking industry doesn’t like Camp’s proposed tax on financial institutions that have more than $500 billion in assets. Bankers are also miffed that he left alone a tax break for credit unions, a provision banks say leaves them at a competitive disadvantage, the article stated.
“Other industries had their own axes to grind,” Becker and Schroeder wrote. “The oil-and-gas industry would lose several tax breaks it sees as crucial, and the nonprofit sector says it has concerns about changes to the charitable deduction.”
IRS hit from all political stripes on nonprofit rules
Three months after the Obama administration unveiled a controversial new rule for 501(c)(4) nonprofits, both liberal and conservatives groups are hoping a record amount of comments and a deluge of attention from Capitol Hill will persuade the IRS to at least scale back the proposals before finalizing the new rule, Lauren French of Politicowrote today.
“No one thinks the proposals are perfect. There is near unanimity among liberals and conservatives that the effort was a bit too broad,” said Stephen Spaulding, a staff counsel with the liberal advocacy group Common Cause, according to the article.
At issue is the vague tax law that currently governs these not-for-profits. As it stands now, the law on 501(c)(4)s says such groups need to “exclusively” focus on social welfare, while the IRS regulations say social welfare must be their “primary” focus, the article stated.
“The IRS and Treasury proposed a new standard, applying to groups regardless of political affiliation, classifying any communications within sixty days of a general election that clearly identifies a candidate or party or some get-out-the-vote efforts as political,” French wrote. “It would replace a vague ‘facts and circumstances’ test that currently applies.
“Also considered political would be events within thirty days of a primary election or sixty days of a general election at which any candidate appears – even if the event is bipartisan.”
The comment period for the draft proposal, which closed on February 27, garnered nearly 145,000 comments from trade groups, 501(c)(4)s and other not-for-profits, lawmakers, and a number of former Federal Election Commission and IRS bigwigs, according to the article.
Citigroup discloses money-laundering subpoenas
Citigroup and its Mexican subsidiary Banamex have received grand jury subpoenas from federal prosecutors over issues of compliance with anti-money-laundering and bank secrecy laws, the bank disclosed on Monday, according to the New York Times.
The disclosure in the bank’s annual securities filing comes after Citigroup said that Banamex had been defrauded of as much as $400 million, Michael Corkery wrote today.
“The purported fraud stems from a $585 million accounts receivable program Banamex had offered to an oil supply company, Oceanografia, in Mexico,” the article stated. “Invoices for work Oceanografia was supposed to have completed were falsified, according to Citigroup. A person briefed on the matter said it was suspected that a Banamex employee was involved in the fraud.”
Falling audit fees may increase restatements: Study
Audit fees have slid since the recession, and that trend may increase the possibility of misstatements going undetected, according to a study by researchers at Texas A&M University and the University of Nebraska-Lincoln, Saranya Kapur of the Wall Street Journal’s CFO Journalwrote on February 28.
Financial restatements are more likely among high-risk clients where risk appears not to be incorporated into audit fees, the study found. Since the financial crisis, fees have fallen approximately 10 percent for all companies between 2006 and 2010, and companies that don’t fully pay their auditor for risk have a 29 percent higher risk of restatement, the article stated.
Will Lerner testify this week?
An attorney for Lois Lerner said yesterday the former IRS official has not waived her right to refuse to testify before the House Oversight and Government Reform Committee on March 5, disputing an assertion that the panel’s chairman, Darrell Issa (R-CA), made on television earlier in the day, Russell Berman of The Hillwrote.
On Fox News Sunday, Issa said Lerner had agreed to answer the committee’s questions about the targeting of political groups by the IRS, after she invoked the Fifth Amendment during a hearing in 2013.
But William Taylor, Lerner’s attorney, said by e-mail on March 2 that Lerner had not changed her mind, the article stated.
“We have no agreement with the committee and she has not changed her intention to assert her rights not to testify,” Taylor said, according to the article.
Wyden seeks spring vote on expired tax breaks
On February 28, The Hill also published an article on Senate Finance Committee Chairman Ron Wyden (D-OR) eyeing a spring vote on a string of expired tax provisions.
“A spokeswoman for Wyden, Lindsey Held, said that Wyden was still discussing with Senator Orrin Hatch (R-UT), the top Republican on the Finance Committee, and other committee members how to best proceed on the more than fifty tax breaks that expired at the end of last year,” Bernie Becker reported.
The new chairman of the Finance Committee has long supported tax breaks for alternative energy and said that Congress should move on extenders given the long odds facing tax reform. Top Senate Democrats have also made the extenders a priority, the article stated.
“Still, it’s unsure how many of the tax breaks will survive, or how House Ways and Means Committee Chairman Dave Camp (R-MI) will handle extenders, given his focus on tax reform,” Becker wrote.
Rand Paul in crosshairs of tax evasion war
Rachael Bade of Politicowrote this yesterday: “When a bipartisan Senate panel last week lambasted Swiss bank Credit Suisse for helping rich Americans evade billions in taxes, some watching the high-profile hearing couldn’t help but notice an elephant in the room.
“That is, Senator Rand Paul.
“The connection? Paul for years has single-handedly blocked an obscure US-Swiss tax treaty that lawmakers, prosecutors, diplomats, and banks say makes the difference between US law enforcement rooting out the names of a few hundred fat-cat tax evaders – and many thousands more.
“Kentucky’s tea party darling says the treaty infringes on privacy rights. But his critics say Paul’s hold just hamstrings the Justice Department’s tax evasion work.”
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.