NEWS HIGHLIGHTS FOR TUESDAY - 9.13.16

By:
Maya Lindsay
Published Date:
Sep 12, 2016

Accounting and Financial News Stories

New Report Details CPA Profession’s Progress in Enhancing Audit Quality
Yahoo Finance
The American Institute of CPAs (AICPA) has issued a report detailing the past year’s activities and accomplishments as part of its Enhancing Audit Quality (EAQ) initiative. The publication outlines the CPA profession’s work to enhance the quality of private company audits in the areas of Pre-licensure, Standards and Ethics, CPA Learning and Support, Peer Review, Practice Monitoring of the Future, and Enforcement.

US Credit Card Debt to Top $1 Trillion in 2016
24/7 Wall St.
Americans added $34.4 billion to their credit card debt in the second quarter of 2016, nearly half the total added in all of 2015. Debt holders also paid down just $27.5 billion, the smallest amount since 2008. The data were released Monday by personal finance firm WalletHub. Researchers now project that the total U.S. credit card balance at the end of this year will top $1 trillion, a new record.

IRS Offers More Flexibility in Pension Plan Payments
Accounting Today
The Internal Revenue Service has issued final regulations allowing pension recipients to split their benefits between both monthly annuity payments and a lump sum. The final regulations change the rules for the minimum present value requirements for defined benefit plan distributions to enable plans to simplify the treatment of certain optional forms of benefit that are paid partly in the form of an annuity and partly in a single sum or some other more accelerated form.

Mortgages, Taxes and Unicorn Swaps
Bloomberg View
One of the most powerful trends in modern finance is toward abstraction and away from the annoying random facts of physical reality. You can't go a week without reading about how the blockchain will revolutionize private stock markets, or syndicated loan settlements, or tuna, replacing current laborious manual procedures with instant electronic synchronization. It's not just a blockchain thing; index funds allow you to own "the stock market" while abstracting away from the particulars of any individual company. Nor is it even really a modern thing.

The Estate Tax Debate We Shouldn't Be Having
Bloomberg View
Greg Mankiw, the Harvard professor and former adviser to President George W. Bush, has called for abandoning the estate tax. His argument, supported by anecdotal evidence and some wonky explanations, isn't terribly persuasive. But he did remind us that Democratic presidential candidate Hillary Clinton wants to "increase the tax by reducing the threshold to $3.5 million and raising the rate to 45 percent," while Republican nominee Donald Trump wants to eliminate it.

Federal Tax Receipts Hit Record High $2.9 Trillion - And Counting
Forbes
Federal tax receipts for the first 11 months of fiscal year 2016 totaled $2.909 trillion, according to the Congressional Budget Office (CBO). The CBO estimates that the government took in $26 billion – or about 1% – more than they did during the same period last year, marking a record high. The fiscal year isn’t quite over: the United States federal government’s fiscal year begins on October 1 each year and ends on 30 September the following year.

Businesses Focus On Cybersecurity Since 9/11
CPA Practice Advisor
After the terrorist attacks of Sept. 11, 2001, some estimates pinned the economic impact at more than $500 billion. But according to studies by the Department of Homeland Security, the Center for Risk and Economic Analysis of Terrorism Events and the International Monetary Fund, the total effect was more fleeting. "Generally speaking, experts have not found terrorism to have large and long-lasting effects on things like economic growth or the economic well-being of a country or a region in a country," said James Piazza, a professor of political science at Penn State.

Apple’s Ireland Bill Puts U.S. Treasury in Tax-Credit Bind
Bloomberg
When Apple Inc. was ordered by European regulators to pay $14.5 billion plus interest in back taxes to Ireland, the giant technology company seemed to be facing an expensive headache. Turns out it’s a headache for the U.S. Treasury Department as well. Under current U.S. tax rules, specialists say Apple would probably be able to claim a foreign tax credit for the repayment, allowing it to lower its tax bill in America, where the 35 percent corporate income-tax rate is one of the world’s highest.

Who pays U.S. taxes on inheritances?
Washington Center for Equitable Growth
Greg Mankiw, a Harvard University economist and Chairman of the Council of Economic Advisers for President George W. Bush, argues in a piece for The Upshot of the New York Times that the U.S. estate tax is a suboptimal way to tax wealth. Mankiw’s concern is that the tax violates “horizontal equity” by placing a similar tax burden on people who behave in very different ways. He presents an example of two couples, both of whom sell a family business for the same amount, but one couple spends all their proceeds and the other saves most of it to give to their children.

There were five phantom donations in the files of Donald Trump’s foundation. Here’s what we know.
The Washington Post
Donald Trump's charity is not like other charities. For one thing — as The Washington Post explained Sunday — the money in the Donald J. Trump Foundation does not come from Trump himself. Tax records show that Trump hasn't donated any money to his foundation since 2008. Instead, he has retooled his personal charity so that it gives away other people's money — although Trump has kept his name on the foundation, and atop its checks.

US Economy Still Sluggish and the Election Isn’t Helping, Say Top CEOs
The Fiscal Times
Amid uncertainty about the outcome of the November election and the fate of major trade and tax reform issues, the nation’s top business leaders are projecting relatively lackluster growth in the economy for the rest of the year, with low expectations for sales, hiring and capital investment. The Business Roundtable CEO Economic Outlook Index — a composite of CEO projections for business activity and expansion that was released on Monday – registered 69.6 in the third quarter, a decline of 3.9 points from the previous quarter.

Tax-Exempt Organizations Update: Selected Developments From Washington
Lexology
Although comprehensive tax reform in 2016 is unlikely in the midst of an election year, so far in 2016, parties on all sides have proposed specific changes to the rules applicable to exempt organizations. Lawmakers in Congress have introduced bills that would expand IRA rollovers, simplify the net investment income tax, and eliminate reporting of donors.  Both President Obama and House Republicans have released their proposals for future tax reform.

US Tax Reform: Treasury Secretary Jacob Lew Says Now's The Time To Bring Tax Dollars Home And Repair Infrastructure
International Business Times
U.S. Treasury Secretary Jacob Lew is calling on Congress to act on corporate tax reform, saying recent actions by the European Commission create an opportunity to bring tax dollars home to fund infrastructure repair and investment. In an op-ed piece to be published Tuesday in the Wall Street Journal, Lew said the EC’s decision imposing a $14.5 billion retroactive tax bill on Apple points up the need for action on U.S. business tax reform to discourage tax avoidance.

How to Become a C.E.O.? The Quickest Path Is a Winding One
New York Times
How does a person get to be the boss? What does it take for an ambitious young person starting a career to reach upper rungs of the corporate world — the C.E.O.’s office, or other jobs that come with words like “chief” or “vice president” on the office door? The answer has always included hard work, brains, leadership ability and luck. But in the 21st century, another, less understood attribute seems to be particularly important.

Discover Business Releases the 2017 Best Value Online Accounting Degrees
PRWeb
DiscoverBusiness.us today released its Best Value Online Accounting Degree rankings, designed to help prospective students better evaluate important program factors like quality, cost, and salary outcomes. The 2017 edition compares accredited four year accounting degrees on these factors. “Prospective students today are looking for a high-quality online program, while at the same time they are also more mindful of the program cost,” said Kristen Morris, editor at DiscoverBusiness.us.

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