NEWS HIGHLIGHTS FOR TUESDAY - 8.16.16

By:
Maya Lindsay
Published Date:
Aug 16, 2016

Accounting and Financial News Stories

The Corporate Income Tax is Most Harmful for Growth and Wages
Tax Foundation
One of the biggest debates in economics has been the question of who bears the real economic burden of corporate taxes: shareholders through lower returns, consumers through higher prices, or workers through lower wages. In an essay (here) in today’s Wall Street Journal, economist Kevin A. Hassett and Aparna Mathur review the growing empirical evidence showing that workers bear the true economic burden of the corporate income tax through reduced wages.

Calls Are Growing Louder to End Taxation on Olympic Medals
Fortune
It’s taxation for athletic representation. The calls for tax relief for U.S. Olympic medal earners became louder this week as more Americans realize how little most Olympic athletes earn and how much they’re forced to give back to their country. In July, the U.S. Senate passed South Dakota Sen. John Thune’s Appreciation for Olympians and Paralympians Act.

Transition to FASB’s New Revenue Standard Remains a Regulatory Priority
Thomson Reuters Tax & Accounting
More than two years after the FASB released its landmark revenue standard, and with nearly a year-and-a-half remaining before the standard must be applied to regulatory filings by U.S. public companies, revenue accounting continues to be the most frequent source of questions put to the SEC’s staff. At the same, the existing revenue guidance in U.S. GAAP remains a frequent source of questions by reviewers in the SEC’s Corporation Finance Division and the most common source of investigations by the agency’s Enforcement Division.

IRS Updates Foreign Account Tax Compliance Act FAQs: Foreign Account Tax Compliance Act
The National Law Review
On August 8, 2016, the IRS updated the “frequently asked questions” (FAQs) on the Foreign Account Tax Compliance Act, FATCA IDES Technical FAQs section at IRS.gov. IDES stands for the “International Data Exchange Services” system that allows the IRS to exchange taxpayer information with foreign tax authorities.

The IRS and Courts Weigh in on the Deductibility of Fines and Penalties
JD Supra Business Advisor
Taxpayers who make payments in conjunction with a forfeiture action should attempt to understand the characterization of a payment to see if the specific payment can avoid being treated as a fine or penalty. A taxpayer is generally not allowed to take a deduction for fines or similar penalties paid to a government for the violation of any law.

Estate Tax Strategy May Disappear
Financial Advisor
Business owners may have only a short time to take advantage of a tax strategy that is used to reduce estate and gift taxes for heirs. The U.S. Treasury Department has proposed eliminating the rule that allows business owners to discount the value of closely held businesses and minority shares in businesses for tax purposes when transferring the assets to family.

Wolters Kluwer Selected by IRS for Tax Filing
CPA Practice Advisor
Wolters Kluwer Tax and Accounting in the US has announced it has been selected by the Internal Revenue Service (IRS) to deliver comprehensive sales tax rate and taxability tables to help millions of taxpayers file returns for the next five years. This is the 12th consecutive year Wolters Kluwer Tax and Accounting has been chosen by the IRS to help millions across the country prepare their tax returns, and the first time it has been awarded a five-year contract.

Another Record High on Wall Street
New York Times
Stocks on Wall Street closed at a record high Monday. Energy companies rose as the price of oil continued its recent recovery. Makers of chemicals and mining companies made the biggest gains, and machinery companies and banks followed. Investors sold government bonds and utility and phone companies. Those stocks had climbed earlier in the year as investors sought safety.

How big businesses get tax breaks meant for little guy
CBS News
It's widely agreed that America's small businesses are worthy of support from the government. But in yet another perverse twist of the tax code, more than 100,000 "big" businesses reap billions in tax breaks designed to assist "small "companies, costing Uncle Sam hundreds of billions in tax revenue, according to the Center for American Progress. The liberal think tank noted that these businesses each have annual revenue of more than $10 million and pay no corporate taxes.

Hunting for Yield? They’re Handing It Out in the Money Market
Wall Street Journal
Something that has been hard to find recently is showing up in the money markets: yield. Rising rates paid by banks and other companies that issue commercial paper are luring new investors to the market, just as more-traditional buyers are scaling back in response to looming regulations. The newcomers include investors like Renuka Kumar, a senior portfolio manager who manages corporate cash at SVB Asset Management in San Francisco, an affiliate of Silicon Valley Bank.

For CFOs, Defaults Can Offer Valuable Lessons
Wall Street Journal
There’s a new bull market in corporate defaults, subjecting more CFOs to a trial by fire but also giving them a chance to shine. Through last week, 74 U.S. public and private companies had defaulted this year, according to S&P Global Ratings, surpassing the number in each of the past five years, and accounting for two-thirds of the global total.

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