NEWS HIGHLIGHTS FOR WEDNESDAY - 8.3.16

By:
Maya Lindsay
Published Date:
Aug 3, 2016

Accounting and Financial News Stories

 

IRS Acquiescence Gives Unmarried Couples a Double Deduction

Accounting Today

A year ago, a divided Ninth Circuit reversed the Tax Court in Voss v. Commissioner, allowing two unmarried co-owners of real property to each claim a home mortgage interest deduction. Now, the IRS has acquiesced in the decision, giving a bonus to unmarried individuals who buy property together. Bruce Voss and Charles Sophy, unmarried co-owners of the property, each claimed a home mortgage interest deduction under Tax Code section 163(h)(3).

 

‘The Accountant’ Trailer Cooks the Books for a No. 1 Spot on Twitter

Wall Street Journal

The numbers added up in all the right ways for Ben Affleck this past week. The second trailer released for “The Accountant,” which stars the Oscar winner as a math genius CPA who moonlights as a book-cooker for a criminal clientele, was a hit on Twitter, according to data analytics firm ListenFirst Media. As Christian Wolff, Affleck is untouchable when it comes to his work, but he still could use a little help in the whole relating-to-people department.

 

IRS Announces Fines Paid to FINRA Are Not Deductible

The National Law Review

Fines pertaining to violations of federal securities laws and certain FINRA rules may not be deducted. The Internal Revenue Service (IRS) in low-level advice recently announced its position that certain fines paid to the Financial Industry Regulatory Authority (FINRA) are not deductible under Section 162(f) as fines paid to an entity “serving as an agency or instrumentality of the government.”

 

U.S. Aims to Clamp Down on Tactic to Avoid Estate Tax

Wall Street Journal

The U.S. government on Tuesday proposed making it harder for wealthy business owners to transfer assets to heirs without paying estate and gift taxes. The Treasury Department and Internal Revenue Service plan would place new limits on a common technique used to transfer interests in illiquid businesses. “By taking advantage of these tactics, certain taxpayers or their estates owning closely held businesses or other entities can end up paying less than they should in estate or gift taxes,” Mark Mazur, the assistant secretary for tax policy, said in a written statement.

 

Robotic Process Automation — Changing the Finance Landscape

CFO

As the role of the CFO evolves to focus on operational competitiveness, finance and accounting is no longer considered a back-office-only function; it also delivers end-to-end commercial value streams, e.g., quote to cash. As such, there is an increasing demand to eliminate organizational silos and drive process transformation across the value chain. In a recent survey conducted by the Genpact Research Institute and analyst firm HfS Research on finance in the digital age, about a third of the finance leaders said that robotic process automation (RPA) tools and applications are having an impact on their operations today.

 

Regulators Ask Big Banks to Give More Details About Trading Activity

Wall Street Journal

Regulators are asking big banks to provide investors with more-detailed disclosures about their trading businesses, a push that could peel back the curtain on a huge and volatile source of Wall Street revenue, according to people familiar with the matter. Communications between Securities and Exchange Commission officials and executives from some of the largest U.S. banks have been informal and preliminary, the people said.

 

Paychex Sees Slowdown in Small Business Job Growth, but Rise in Wages

Accounting Today

The pace of small business job growth slackened slightly in July, according to the latest figures from payroll giant Paychex, although wages were up. After reaching a high point in June, the Paychex | IHS Small Business Jobs Index, which Paychex compiles with the research firm IHS, dipped 0.12 percent in July to 100.68. However, that figure was still 0.04 percent higher than in July of last year. “We saw a little bit of a decrease from June,” Paychex president and CEO Martin Mucci told Accounting Today.

 

Sweet Relief for Employers Acting in a Responsible Manner

Lexology

On July 29, 2016, the IRS issued proposed regulations that provide some further guidance for anxious employers that are required to file information returns, Forms 1094/1095. Under tax code section 6055, which was added by the ACA, employers are required to file information returns and provide taxpayer identification numbers (TINs) for each individual covered by the employer’s plan. After submitting forms 1094/1095 for 2015, many employers received notices from the IRS that their information returns contained missing or incorrect TINs. The electronic filing system used by the IRS is very unforgiving.

 

Freddie Mac Profit Declines on Rates

Wall Street Journal

Mortgage-finance company Freddie Mac said its quarterly profit declined, hurt by lower interest rates and losses from derivatives, and it will send a $933 million dividend payment to the Treasury. Freddie reported a second-quarter profit of $993 million, compared with a prior-year profit of $4.17 billion and a first-quarter loss of $354 million.  The latest quarter included a $400 million hit tied to a decline in interest rates and a $100 million gain from credit spreads. Losses from derivatives, which Freddie uses to hedge interest-rate risk, were $2.06 billion in the quarter, compared with a gain of $3.14 billion in the same quarter last year.

 

EU and OECD Transfer Pricing Documentation Procedures after Brexit

Accounting Today

Transfer pricing documentation rules have come to the fore with the United Kingdom’s Brexit. The European Union and the Organization for Economic Cooperation and Development appear to apply similar transfer pricing documentation rules to multinational companies, but differences nevertheless abound. Some multinational enterprises may view these differences as nuances, but they can be significant.

 

Bitcoin Sinks After Exchange Reports Hack

Wall Street Journal

The price of the virtual currency bitcoin fell sharply Tuesday after Hong Kong-based digital-currency exchange Bitfinex said it was hacked, resulting in the possible theft of $65 million worth of bitcoin. News of the Bitfinex hack hit the price of bitcoin hard in heavy trading. It fell to $540 by late in the day, down about 12% from its level near $613 early Tuesday, according to CoinDesk.

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