NEWS HIGHLIGHTS FOR TUESDAY - 7.26.16

By:
Maya Lindsay
Published Date:
Jul 26, 2016
Accounting and Finance News Stories

IRS Steps into Fray on Political Activities
The National Law Review
The Internal Revenue Service (IRS) recently issued two private letter rulings (PLRs) that may be interesting for tax-exempt organizations that engage in political activity. In the first ruling, the IRS held that a company could not deduct payments made to charity under a PAC matching contribution program as an “ordinary and necessary business expense.”
 
Accounting Today
Finance professionals around the world felt more upbeat about the economy in the second quarter of the year, according to a survey by the Association of Chartered Certified Accountants and the Institute of Management Accountants. The ACCA and IMA’s Q2 Global Economic Conditions Survey, released last week, found that business confidence increased in the second quarter after reaching a four-year low during the first quarter.
 
Wall Street Journal
U.S. corporations are spending more for sound advice. Finance chiefs at companies including Baxter International Inc., Northern Trust Corp. and Alaska Air Group Inc. are turning to outside consultants as they grapple with increasingly complex challenges ranging from shareholder activism to merger integration. The U.S. consulting market, the world’s largest, grew by $3.9 billion, or 7.7%, in 2015 to $54.7 billion, according to Source Global Research.
 
New York Times
Could the Glass-Steagall Act — the Depression-era legislation that forced the separation of investment banking from commercial banking, among other things — be coming back? In an extremely odd political dovetail, both the Democratic and the Republican platforms include planks that call for the restoration of the landmark 1933 law. Glass-Steagall aimed to protect the common folk who deposited money in their banks for safekeeping, and ordered that those banks decouple themselves from the business of placing the type of speculative stock market bets that caused the great crash of 1929.
 
Lexology
The IRS just published long-awaited temporary regulations under section 1.50-1T governing the section 50(d)(5) income inclusion rules. These rules apply to lessees of investment credit property when the lessor elects to treat the lessee as having acquired the property for its fair market value and pass through the investment tax credit available under section 46 (which includes the section 48 energy credit (“ITC”)).
 
New York Times
Two years ago, the Federal Reserve faced a predicament: One of its New York employees had leaked confidential government information to a banker at Goldman Sachs. Both men ultimately pleaded guilty to stealing government property. Goldman, for its part, paid a $50 million penalty to New York State regulators because its “management failed to effectively supervise” the banker.
 
TechCrunch
Ever since it moved into the mainstream Bitcoin has had a bit of an identity crisis. Mainly because no one is really sure whether it should be considered money or property. The IRS says it’s property for tax purposes, the Commodity Futures Trading Commission says it’s a commodity, and most Bitcoin advocates like to say it’s the world’s most advanced currency.
 
Journal of Accountancy
U.S. banks' reserving practices will be affected by FASB's new standard on accounting for credit losses, but the effective date gives banks adequate time for a manageable implementation, according to a Fitch Ratings analysis. FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, in June.
 
Law360
A D.C. federal judge tossed a suit from three taxpayers seeking to upend the Internal Revenue Services’ offshore income disclosure programs Monday, ruling that the suit illegally sought to affect the agency’s ability to collect taxes. U.S. District Judge Colleen Kollar-Kotelly ruled that the consolidated October suit from Eva Maze, Suzanne Batra and Margot Lichtenstein would violate the Anti-Injunction Act, which prohibits federal courts from taking actions that would restrict the collection of taxes.
 
Wall Street Journal
When Katherine Moody noticed in April that the terms of her student loan changed, she typed up a brief note and filed it through the Consumer Financial Protection Bureau’s online complaint portal. A day later, a representative from Navient Solutions Inc. called and restored the previous terms, scrapping the surprise conditions that would have added about $7,000 to overall payments, Ms. Moody said. “In dealing with bureaucracy, I have low expectations,” said the 35-year-old librarian at a Wisconsin college.
 
Forbes
In New York City where over 55 percent of households do not have an automobile, car-sharing is a useful option for getting around town. However, the car-sharing industry in major U.S. cities is suffering under a heavy tax burden. According to DePaul University data reported by the Wall Street Journal, the tax rate for a 1-hour car-share rental in New York City comes to 19.9 percent.
 
Bloomberg
Ten miles south of downtown Atlanta, in an anonymous business center overlooking the airport, sits the headquarters of what, on paper, is a hedge-fund powerhouse. The numbers coming out of the part-time office at One Hartsfield Centre are remarkable: annual returns of 13 percent, 24 percent, even 91 percent since 2013. Clients aren’t quite sure how it’s done. And Joseph A. Meyer Jr., the man behind the obscure hedge fund, Arjun LP, is keeping his cards close.

Click here to see more of the latest news from the NYSSCPA.