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Bramwell’s Lunch Beat: Tax Break Inaction Could Delay 2015 Filing Season

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Oct 8th 2014
Staff Writer and Editor AccountingWEB
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PricewaterhouseCoopers revenue grows 6.1%
Michael Rapoport of the Wall Street Journalreported that PricewaterhouseCoopers (PwC) announced on Tuesday that its global revenue rose 6.1 percent in its latest fiscal year.

PwC’s revenue for the year ended June 30 was $34 billion, up 6.1 percent when foreign-exchange rates are held constant and up 5.8 percent based on each year’s average exchange rates. The results marked an improvement from the 4 percent year-over-year growth that PwC posted last year. Revenue from North America rose 6.5 percent.

“I think they’re strong results in a very competitive marketplace,” said Dennis Nally, PwC’s global chairman, in an interview. But, he added, “it’s still a very challenging economic environment out there” as the firm’s clients are still dealing with sluggish growth in a lot of places, according to the article.

PwC’s results were led by a 10 percent increase in its consulting segment revenue to $10 billion, while its auditing segment posted 2.7 percent growth to revenue of $15.1 billion, Rapoport wrote.

PwC expects the percentage of its revenue it gets from emerging markets to double from the current 20 percent over the next five years, Nally said.

IRS warns of tax-filing season delays if Congress stalls
Richard Rubin of Bloombergreported on Tuesday that the IRS may delay the 2015 tax-filing season if Congress can’t decide by December on reviving dozens of tax breaks, including those for multinational corporations’ overseas financing operations.

The delays may slow tax refunds next year, IRS Commissioner John Koskinen wrote in a letter to Senate Finance Committee Chairman Ron Wyden (D-OR). The tax-filing season is slated to open in January, a task that would be difficult if the tax laws for 2014 aren’t set until December.

“The IRS is currently facing a great deal of uncertainty related to the expired provisions, which raises serious operational and compliance risks,” Koskinen wrote in the letter, dated Oct 6.

Congress has been deadlocked over how to address the dozens of tax breaks that lapsed at the end of 2013, Rubin wrote, including those for business research and development, teachers’ out-of-pocket expenses, and wind energy production, as well as individuals’ ability to deduct state sales tax payments.

Senate Democrats and many Republicans want to revive and extend almost all of the breaks through 2015. An attempt to do that stalled earlier this year in a fight over which amendments would receive votes on the Senate floor. House Republicans have taken a different approach – making some of the tax breaks permanent while not acting on others, according to the article.

Paul Ryan says he doesn’t care if he gets audited for bashing the IRS
Rep. Paul Ryan (R-WI) says he doesn’t care if he gets audited for bashing the IRS. But he does want to make big changes at the agency – and to the tax code – he said in his first re-election ad of 2014, Robert Schroeder of MarketWatchwrote on Tuesday.

Ryan recently said he’d wait until after the midterm elections to campaign for the chairmanship of the House Ways and Means Committee, but the ad partly sounds like an audition to lead the tax-writing panel, Schroeder wrote.

In the 30-second spot, Ryan slams the IRS for failing to keep employee emails – a reference to lost emails related to the agency’s Tea Party targeting scandal – and also said he wants to eliminate loopholes in the tax code, lower tax rates, and create jobs.

“I may get audited for approving this message,” Ryan said. “But it would be worth it.”

Ryan is facing competition for the Ways and Means gavel from Rep. Kevin Brady (R-TX), who said last month he’d seek the chairmanship, according to the article.

Warren Buffett says time is right to revamp corporate tax rules
In an interview for Politico’s “Lessons from Leaders” series, billionaire investor Warren Buffett said the White House action to limit companies shifting their tax address outside the United States provides a good “time out” to work on revamping corporate tax rules, Kelsey Snell of Politicowrote on Tuesday.

“It’s good to have a time out while we work out a logical corporate tax code,” Buffet told Politico editor-in-chief John Harris on Monday, according to the article.

The long-time backer of Democrats, including President Obama, was responding to a question about recent US Treasury Department rules to curb so-called tax inversions. Buffett’s Berkshire Hathaway provided financing for Miami-based Burger King’s bid to merge with the Canadian coffee-and-doughnut chain Tim Hortons. The burger chain plans to use the deal to move its tax base to Canada and take advantage of the country’s relatively low 15 percent corporate tax rate, Snell wrote.

Buffett said Sens. Ron Wyden (D-OR) and Orrin Hatch (R-UT), the top tax writers in the Senate, can move ahead on reform. But he warned that if a rewrite avoids adding to the deficit, some companies will wind up paying more, and opposition with be fierce.

“They’ll be there on K Street like Occupy Wall Street,” Buffett said, according to the article.

Lew calls on Congress to end inversions
Treasury Secretary Jack Lew said on Tuesday that US companies won't stop making offshore deals to dodge paying taxes unless Congress intervenes, Kevin Cirilli of The Hillreported.

“I certainly hope the action we took administratively will slow the trend. I have no guarantee. What it does is take down the economic value [of inversions], but it doesn't eliminate it. It would take a change of law to eliminate the benefit,” Lew said at a Washington forum hosted by the Petersen Institute, according to the article.

The Obama administration announced new rules last month aimed at reducing the economic benefits of tax deals. The new rules seek to make it more difficult for US companies to move their addresses overseas, or “inverting,” in order to dodge American taxes.

“If we can do business tax reform, we would take away some of the pressures that drive companies to invert,” Lew said, according to the article.

Lois Lerner tried to barge into her neighbor’s house to avoid interview
Gabrielle Levy of United Press Internationalwrote that conservative media lit up on Tuesday with a video of Lois Lerner, the ex-IRS official at the center of the agency’s Tea Party targeting scandal, trying to evade a blogger's camera as she walked her dog.

In the video published on Tuesday by Jason Mattera, publisher of the Daily Surge, Lerner begs a neighbor in Bethesda, Maryland, to let her in to avoid Mattera's questions, Levy wrote.

“A chance to apologize Ms. Lerner?” Mattera asks as Lerner rushes up the front walk of the neighbor's house, with her two dogs. The neighbor explains she's just had surgery and refuses to let her in, shutting the door.

“Could you call the police?” Lerner asks the woman. “Please let me in. These guys are with the press, and they're not leaving me alone. I only need to come in for a second. Can I go in the garage?”

Eventually, Lerner rushes off and up another driveway, when the video ends.

SASB announces partnership program for software providers
The Sustainability Accounting Standards Board (SASB), a 501(c)3 not-for-profit organization that develops sustainability accounting standards for publicly listed US corporations, on Tuesday launched the Enterprise Resource Platform (ERP) Partnership Program for software providers.

PE International and CSRware are the initial founding partners in the program.

Through the partnership, SASB ERP partners will be able to track their performance on SASB metrics, access SASB disclosure guidance, and note analysis alongside data. Auditors will be able to view data and assess its accuracy, in addition to evaluating internal controls.

“To facilitate corporate use of SASB standards in SEC filings in compliance with Regulation S-K, we need world-class standards, as well as world-class technical resources for companies,” SASB CEO and Founder Jean Rogers, PhD, said in a written statement. “The SASB ERP partnership is the first in a suite of tools designed to help companies integrate SASB standards into their existing disclosure processes.”

To request information on joining the ERP, email [email protected].

IMA accepting entries for annual Carl Menconi Ethics Case Writing Competition
The Institute of Management Accountants (IMA) is accepting entries for the 2015 Carl Menconi Ethics Case Writing Competition through Jan. 26, 2015. Full submission details are available here.

The competition, sponsored jointly by the IMA Committee on Ethics and IMA’s professor-in-residence, Raef Lawson, PhD, CMA, CPA, works to develop and distribute teaching cases focused on business ethics, with a specific application to management accounting and finance issues. It’s open to accounting and finance academics, as well as practitioners, and joint submissions are encouraged.

Winners of the competition will be featured in IMA’s flagship publication, Strategic Finance, and the case author or team will be recognized at IMA’s 96th Annual Conference & Exposition held in Los Angeles in June 2015. Winners will also receive one free annual conference registration and a $500 cash prize.

Submissions must focus on business ethics, with specific application to management accounting and finance issues, and reference IMA’s Statement of Ethical Professional Practice.

For questions or additional information, email Luda Volkov, IMA research and academic communities coordinator, at [email protected].

Quick Links:

  • Some Big 4 alumni just can’t quit their old firms (Going Concern)
  • Which accounting firm fired an employee for his dispute with Comcast? (Going Concern)
  • Analyst predicted a year ago Tesco’s dodgy accounting would hurt it (Business Insider)
  • Accountant Becky Spezzano, CPA, joins Gross Mendelsohn (Gross Mendelsohn)
  • Weising earns 40 Under 40 honors (Walthall CPAs)
  • REDW adds four to talented staff (REDW)
  • Mexico tax probe may target evasion, deal near with firm (Reuters)
  • After huge tax incentive package, Boeing still ships jobs out of Washington (Washington Post)
  • How a soda tax fight in San Francisco explains California politics (Washington Post)
  • Berkeley officials outspent but optimistic in battle over soda tax (New York Times)
  • Music industry pushes for New York tax credits like film industry’s (New York Times)
  • New York City is ordered to give comptroller’s office access to tax records (Wall Street Journal)
  • Producer of anti-Obamacare movie ‘Sick and Sicker’ hit with IRS audit (Washington Times)
  • No, a carbon tax cannot create jobs, jobs, jobs (Forbes)
  • Guest post: Roadways and taxes (Forbes)
  • Halbig: How we know the ACA authorizes tax credits only in exchanges ‘established by the state’ (Forbes)
  • The yoga tax: It doesn’t make sense (Townhall)
  • What does yesterday’s Supreme Court same-sex marriage appeal denial mean for same-sex couple tax filers? (Tax Foundation)
  • US saving and investment: Forty years of decline (Tax Foundation)
  • Will the EU Commission crack down on Irish tax deals? (Tax Analysts)
  • How asset building tax subsidies miss their targets (TaxVox)
  • Gambling pays out a $38 billion bonus to tax collectors (Don’t Mess With Taxes)
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