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The Daily

NEWS HIGHLIGHTS FOR MONDAY - 3.28.16

By:
Maya Lindsay
Published Date:
Mar 28, 2016

Accounting and Financial News Stories

Popular IRS Charitable Tax Break Can Be Valuable—for Those Who Know How to Use It
Wall Street Journal
A popular tax break that died at the end of 2014 has returned from the dead. That’s welcome news for many older people thinking about making gifts to their favorite charities directly from their individual retirement accounts. It’s joyous news for many charities, too. But, as with too many of our nation’s tax laws, this seemingly simple break can be tricky, as readers have pointed out with several excellent questions.

America Is A Tax Haven, And It's Not Ben Carson's Fault
Forbes
The Huffington Post has commented that one of Ben Carson’s craziest ideas is coming true. The candidate told CNBC last October that he wanted to slash U.S. tax rates so dramatically that America “become[s] a tax haven for people because it also becomes an opportunity haven for people.” Some said that it was hard to take Dr. Carson’s plan to turn the U.S. into a tax haven too seriously. But maybe they were wrong. Over the last eight years, America has flexed its muscles at tax havens everywhere. Today, the IRS and Justice Department are feared worldwide. The U.S. has crushed Swiss banks and rooted out U.S. account holders across the globe.

Plenty of Work Ahead for Lessees Adjusting to New Leasing Standard
Accounting Today
The new lease accounting standard is likely to have a much greater impact on lessees than lessors. The Financial Accounting Standards Board released the long-awaited standard last month (see FASB Releases Lease Accounting Standard). The Equipment Leasing and Finance Association, a trade group that gave input to FASB on developing the new standard, is creating materials to help its members adjust to the new standard, which will take effect for public companies for fiscal years beginning after Dec. 15, 2018 and for other organizations for fiscal years beginning after Dec. 15, 2019. “We’re really trying to make sure that leasing companies get up to speed on the new rules,” said ELFA president and CEO Ralph Petta.

New York State Budget Set to Omit Tighter Rules on Ethics
Wall Street Journal
In January, about a month after both of New York’s onetime legislative leaders were convicted of abusing their public offices for private gain, Gov. Andrew Cuomo unfurled a slate of proposals aimed at restoring the “public trust.” “These ethics reforms are important,” he told a crowd of hundreds during his State of the State address. “Especially considering the context of the past year.” Two months later, New York’s budget agreement, due Friday, is set to include not a single one of them. The primary purpose of the budget, of course, is to be a state spending plan.

IRS Struggles with Overlapping Tax Tipster Programs
Accounting Today
The Internal Revenue Service is having trouble coordinating various overlapping programs that deal with referrals on tax evasion, in part because the referrals have to be submitted on paper forms, manually screened and then mailed to various departments within the IRS. A new report from the Government Accountability Office examined the coordination between the IRS’s different referral programs and the IRS Whistleblower Office, which pays out rewards to tipsters.

The New Regulatory Hurdle for IRAs
Wall Street Journal
A rush of savings from company 401(k) plans to IRAs may slow just as baby boomers are retiring, as a result of the Labor Department’s anticipated move to toughen standards for advice on retirement accounts. The proposed regulation, which may be finalized by early April, extends a revamped version of the “fiduciary” standard that governs corporate retirement plans to individual retirement accounts.

Fear Amid the Market Rally: Investors Raise Bets on Volatility
Wall Street Journal
Some investors are so worried stocks will tumble that they are willing to lose money to protect themselves. Investors poured a record sum over the past month into exchange-traded funds whose value increases along with Wall Street’s so-called fear gauge, the CBOE Volatility Index. Many of those wagers are being made via leveraged products that effectively double the stakes—a strategy that analysts say could protect against a large decline in U.S. stock indexes but is more likely a recipe for losing money.

Banks Stumble in Fee Fall
Wall Street Journal
The volatility that racked markets earlier this year is weighing on the performance of investment banks this quarter. Global investment-banking revenue—fees paid for advice on mergers and acquisitions, debt and equity underwriting and syndicated loans—stands at $12.8 billion this year, according to Dealogic. That is down 36% from the first quarter of 2015 and marks the lowest quarterly total since the first quarter of 2009 at the height of the financial crisis. Markets across the globe tumbled to start the year as investors fled risky assets, such as equity and high-yield bonds. The lack of demand caused the issuance of junk bonds and equity, particularly initial public offerings, to dry up.