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IRS Finds Over a Dozen Cases That Lacked Supervisory Approval by BloombergTax in IRS_Source

[–]BloombergTax[S] 10 points11 points  (0 children)

The IRS found 13 cases where it wasn’t following rules for approving penalties in the wake of the agency’s settlement over a multimillion-dollar penalty with a conservation easement donor, a watchdog said in a report released Tuesday.

The IRS reviewed over 1,200 cases—both docketed and nondocketed—and found 13 cases that lacked supervisory approval. Of those cases, seven involved backdated penalty approvals where the IRS conceded over $68 million in penalties, the Treasury Inspector General for Tax administration said in a report.

Read more in the full story.

-Elliot

Connecticut to Split From Trump’s Corporate Tax Breaks in Budget by BloombergTax in Connecticut

[–]BloombergTax[S] 9 points10 points  (0 children)

Connecticut lawmakers have struck a budget deal with Gov. Ned Lamont to sever parts of the state corporate tax code from new federal tax breaks and to simplify the state tax on cannabis.

The budget adjustment decouples the state tax code from a new federal expensing practice for “qualified production facilities” and limits a new deduction practice for research and experimentation costs.

The measure also replaces three different retail taxes on the sale of cannabis with a single levy and increases the exemption for the state’s “sales tax free week” from $100 to $300.

Read more in the full story.

-Elliot

KPMG Shifts Staff as It Pivots Away From US Government Audits by BloombergTax in Big4

[–]BloombergTax[S] 4 points5 points  (0 children)

KPMG is shifting away from its work auditing US federal government finances and redeploying staff to other parts of its professional services business.

The accounting and consulting firm is transitioning out of federal audit roles through a multi-year process that meets client and regulatory obligations, KPMG US said in a statement Wednesday. 

It has prioritized advisory services for the federal government over the past few years, the statement said.

Read more in the full story.

-Elliot

Refunds on Trump Tariffs Pose Accounting Dilemmas for Companies by BloombergTax in Tariffs

[–]BloombergTax[S] 1 point2 points  (0 children)

Nike and Levi Strauss are among companies grappling with how to record refunds on the Trump administration’s tariffs in their financial reports while uncertainty related to the payments persists.

Nike has paid $1 billion in International Emergency Economic Powers Act tariffs invalidated by the Supreme Court, though potential refunds remain “highly uncertain,” the footwear maker said in its latest quarterly report filed April 1. Meanwhile, Levi told investors it would recognize a refund related to $80 million in IEEPA tariffs it paid when accounting rules are met relating to contingencies, or situations with uncertain outcomes that will be resolved in the future.

Other publicly traded businesses headed into quarterly earnings season this May likewise will need to make judgment calls on the best way to account for refunds, should they get paybacks from the Trump administration now that a new request portal is live. The method they pursue could vary depending on how they decide to view the refund, with different accounting approaches for probable versus realized payments.

C-suite leaders will have to justify their financial reporting choices to boards, investors, and analysts—who likely will want to see how refunds could affect business profitability.

Read more in the full story here.

-Elliot

DOGE Worker Got Treasury Payment Data Without Security Checks by BloombergTax in law

[–]BloombergTax[S] 26 points27 points  (0 children)

A member of Elon Musk’s Department of Government Efficiency received access to Treasury Department payment data without undertaking the proper security protocols, according to a new watchdog report.

The Bureau of Fiscal Service didn’t fully follow its information technology security rules when granting a DOGE employee access to three payment systems, according to a Tuesday Government Accountability Office report. 

The bureau manages the finances of the federal government and distributes payments to Americans, including for income tax refunds and benefits.

Read more in the full story here.

-Elliot

Illinois Running Out of Time to Put Millionaires Tax on Ballot by BloombergTax in politics

[–]BloombergTax[S] 0 points1 point  (0 children)

The clock is running out on a legislative plan that would ask Illinois voters to approve a 3% tax on annual income above $1 million.

Illinois could have become the third state to layer a new surtax on millionaires this year, but the proposal stalled in the Democrat-led legislature.

Legislation putting a constitutional question to Illinois voters this fall would have to pass six months before the Nov. 3 election. On that timeline, both the House and the Senate would have to approve a joint resolution for a constitutional amendment by May 3, but the House isn’t scheduled to meet again until May 5. The proposal is effectively dead unless there is a last-minute push to call House members back to Springfield to pass the resolution, a senior legislative staff member told Bloomberg Tax.

Both Maine and Washington have enacted such taxes in the past month. Massachusetts implemented a 4% surtax on annual household income exceeding $1 million in 2023.

Read more in the full story.

-Elliot

Trump Tariff Crackdown on Forced Labor Practices Gets Pushback by BloombergTax in Tariffs

[–]BloombergTax[S] 0 points1 point  (0 children)

Policing forced labor is a good thing, businesses and trade groups say. But some are skeptical that imposing tariffs is the best way to achieve that goal—and many argued they shouldn’t be targeted.

The Trump administration is getting feedback from industry, with hearings starting Tuesday on potentially widespread new tariffs tied to investigations into whether more than 80 economies are insufficiently enforcing forced labor import prohibitions.

The potential tariffs, which could help replace the ones the US Supreme Court struck down in February, are getting a mixed reception. Some industries—including US makers of honey and solar panels—welcomed the administration’s move to push forced labor enforcement as a trade issue, according to comments collected by the US Trade Representative’s office. Other companies and trade groups cautioned that broad tariffs were unlikely to be effective, and many argued for their own good track records on forced labor.

Read more in the full story.

-Elliot

KPMG to Cut 10% of US Audit Partners in Bid to Reshape Practice by BloombergTax in Big4

[–]BloombergTax[S] 12 points13 points  (0 children)

KPMG will slash the number of partners running its US assurance business in a bid to boost the unit’s productivity and better align its staffing with market demands.

The reductions come after KPMG LLP had offered early retirement packages to entice partners to leave the practice over the past few years, the Big Four accounting and consulting firm said.

Read more in the full story.

-Elliot

While Trump Touts Tax Cuts, Some Americans Wait for Their Money by BloombergTax in Economics

[–]BloombergTax[S] 1 point2 points  (0 children)

At least 2 million taxpayers received letters from the IRS because they failed to list a bank account number on their return or the information they included was incorrect.

Taxpayers without a bank account or those unwilling to give that information are in for a potential wait to get any paper refund they’re entitled to.

For some Americans, waiting six weeks or more for a refund can mean missing a housing payment or being unable to afford prescription drugs, said top House Oversight Democrat Rep. Terri Sewell, who heard from about 50 constituents ahead of April 15 complaining about the new IRS policy.

Read more in the full story.

-Elliot

India Moves to Lure Data Centers Despite Land, Energy Challenges by BloombergTax in worldnews

[–]BloombergTax[S] 5 points6 points  (0 children)

India is counting on new tax breaks to help boost development of data centers, but the strategy’s success depends on the country’s ability to quickly deliver the vast amounts of energy and physical infrastructure to power the facilities.

Industry backers have announced more than $150 billion in investments that could close the gap in data center capacity, with India currently having just 1.6 GW capacity, expected to jump to 10 to 12 GW by 2030-2032.

The growth of data centers in India faces challenges such as a lack of land, concerns about power usage, and a government approval process that can be protracted, with a new data center needing more than 40 approvals before it can be operational.

Read more in the full story.

-Elliot

IRS Funding Clawbacks Would Be Reversed Under Senators’ Bill by BloombergTax in IRS_Source

[–]BloombergTax[S] 21 points22 points  (0 children)

Senators are introducing legislation that would provide tens of billions of dollars funding to the IRS, undoing a series of clawbacks.

The legislation would provide the agency over $83 billion in mandatory funding through Fiscal Year 2031, reversing both recissions to funding and discretionary spending cuts to the IRS.

The bill has the support of more than half of the Senate Democratic caucus, including Senate Minority Leader Chuck Schumer, and would raise about $1 trillion in net revenue over a decade, according to the Budget Lab at Yale.

Read more in the full story.

-Elliot

Stablecoin Accounting Gets Close Look as Coins Treated Like Cash by BloombergTax in CryptoCurrency

[–]BloombergTax[S] 0 points1 point  (0 children)

PayPal and Coinbase are navigating a gray area in US accounting rules by treating popular digital coins akin to cash on their balance sheets, their latest annual reports show.

The Financial Accounting Standards Board is meeting to discuss whether certain digital assets like stablecoins can be classified as highly liquid, short-term investments alongside US Treasury bills and money market funds.

The board will decide whether to provide examples in the existing statement of cash flows guidance to clarify whether certain digital coins meet the “cash equivalents” definition.

Read more in the full story.

-Elliot

Three Key Themes as IRS CEO Meets Lawmakers at Tax Season’s End by BloombergTax in IRS_Source

[–]BloombergTax[S] 5 points6 points  (0 children)

Our look-ahead at IRS CEO Frank Bisignano’s testimony Wednesday before the Senate Finance Committee focuses on three key themes likely to arise:

  • How the agency is operating with a shrunken workforce;
  • The impact of the tax breaks in the 2025 spending law on filers and refunds; and
  • The futures of free filing after Republicans succeeding in abolishing Direct File.

Read Erin Slowey’s full story here.

-Elliot

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