NEWS HIGHLIGHTS FOR TUESDAY - 8.23.16

By:
Maya Lindsay
Published Date:
Aug 23, 2016

Accounting and Financial News Stories

Court Denies U.S. Request to Reconsider Tossing Bank of America Fine
Wall Street Journal
An appellate court on Monday declined to reconsider its decision to throw out a mortgage-fraud case against Bank of America Corp., a blow to the Justice Department as it tried to rescue one of its highest-profile cases tied to the financial crisis. Judges for the Second U.S. Circuit Court of Appeals in New York said in a filing that they had considered the Justice Department’s request and would deny it.

IRS Proposes Restrictions to 2704(b) Valuation Discounts
Lexology
On August 2, 2016, the Internal Revenue Service (IRS) proposed regulations under Section 2704(b) of the Internal Revenue Code that would significantly restrict valuation discounts for interests in many family-controlled businesses for gift and estate tax purposes. If adopted in their current form, the proposed regulations would eliminate certain methods that taxpayers have traditionally relied upon to reduce the fair market value of their interests in family-controlled businesses for estate and gift tax purposes, such as minority or lack of control valuation discounts.

Does the S-Corp Premium Really Exist?
CPA Practice Advisor
For years it has been hotly debated by valuation professionals and the courts whether pass-through entities should be tax effected similar to a standard C-Corporation. Throughout this article, the terms S-Corporations and pass through entities will be used interchangeably. There are theories stating a company’s pass through status should be completely ignored and the company taxed as a C-Corporation and yet others say taxes should not be imputed.

Wells Fargo to Pay $4 Million to Settle Student-Loan Servicing Probe
Wall Street Journal
Wells Fargo Bank agreed to pay $4 million to resolve allegations by the Consumer Financial Protection Bureau that it used illegal payment-processing practices resulting in higher costs for some borrowers. The settlement includes a $410,000 refund to affected consumers and a $3.6 million civil penalty to the CFPB, which has recently stepped up its scrutiny of student-loan servicing companies.

Wall St. Wavers Ahead of Federal Reserve Meeting
New York Times
Stocks on Wall Street closed slightly lower in quiet trading on Monday after drifting most of the day between gains and losses. Energy companies fell with the price of oil, while biotechnology and drug companies rose after Pfizer announced it was buying a cancer drug maker. The Dow Jones industrial average lost 23.15 points, or 0.1 percent, to close at 18,529.42.

IRS Looks to Revise User Fees for Installment Agreements
AccountingWEB
A proposal issued by the IRS on Aug. 19 would change the user fees taxpayers must pay to enter into an installment agreement. If approved, the revised fee schedule would go into effect on Jan. 1, 2017. An installment agreement is an option for taxpayers who cannot pay their entire tax bills by the due date.

IRS Provides Tax Info for the Sharing Economy
Accounting Today
The Internal Revenue Service has created a new webpage with information to help people who participate in the so-called “sharing economy” get timely tax advice. The “sharing economy” includes websites and mobile apps such as Airbnb, Uber, Lyft, TaskRabbit and Handy where people can share their homes, hail rides in other people’s cars, offer to perform chores, or get hired to do repairs.

U.S. Government Bonds Rebound
Wall Street Journal
U.S. government bonds strengthened Monday as investors used Friday’s price dip as an opportunity to add to their holdings. The yield on the benchmark 10-year Treasury note dropped to 1.541%, near where it was Thursday, after ending the week at 1.580%. Yields fall when prices rise. “We got to a buy zone, so investors stepped in to buy,” said Scott Buchta, head of fixed-income strategy at Brean Capital.

IRS Proposes New Qualified Intermediary Agreement
Marcum
The IRS released Notice 2016-42, outlining the proposed new Qualified Intermediary (QI) agreement under FATCA rules, in July 2016. The draft agreement highlights significant updates to recent revenue procedures, including a revision to the QI compliance review and certification procedures, the authorization of primary withholding responsibilities of the QI, and the establishment of Qualified Derivatives Dealer (QDD) rules.

How Yield Chasers Could Be Pushing Down Volatility
Wall Street Journal
Why is insuring against swings in financial markets so extremely cheap? One possibility: Investors are desperate to sell insurance, because they just can’t get yield anywhere else. Despite a politically-charged calendar ahead, the implied volatility of options—a gauge of how expensive this insurance is—is now surprisingly low.

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