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December 6, 2022

Accounting News Roundup: Big Tax Break or Big Spending?; Ernst & Young Partner Promotions in DC; Friend-on-Friend Fraud | 07.21.11

As debt talks intensify, Obama opens door to short-term deal to buy more time [WaPo]
The contentious budget talks that have dominated Washington for months intensified Wednesday, prompting President Obama to say he would accept a short-term hike in the debt ceiling if it gave lawmakers time to finalize a comprehensive deal. Obama had pledged to veto any short-term measure, but White House spokesman Jay Carney said Wednesday that the president could accept an extension of “a few days” if it allowed a long-term deficit-reduction and debt-ceiling deal to work its way throug>My Big Tax Break Looks Like Your Big Spending [Bloomberg]
There is plenty of spending to cut. For instance, we’ve got one government program that hands people money to buy houses that, in most cases, they would buy anyway. They get even more money if they buy a more expensive house. Over the next five years, that program alone will cost almost $500 billion. Another federal agency will spend more than $400 billion to reward people for making money by investing and earning capital gains and dividends rather than by going to work and taking their income in wages. I like investors and I participate in the market, but is this really the sort of activity that requires a $400 billion subsidy?

Fed planning for potential default [Reuters]
The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government’s $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday. Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central bank has for the past few months been working closely with Treasury, ironing out what to do if the world’s biggest economy runs out of cash on August 2.

Cisco’s 6,500 Job Cuts Could Hurt Push for Offshore Tax Holiday [Bloomberg]
Cisco Systems Inc. (CSCO)’s plan to eliminate about 6,500 jobs worldwide is complicating the corporate lobbying campaign for a tax holiday that would allow multinational companies to return $1 trillion in offshore profits to the U.S. at a low tax rate. The San Jose, California-based company, the world’s largest networking-equipment maker, has been among the most vocal supporters of a repatriation holiday being considered in the U.S. Congress. Cisco chief executive John Chambers has said he wants to return as much as $30 billion in overseas profits to the U.S. The company could increase its headcount by 10 percent, depending on details of a repatriation bill, he said before the job-elimination announcement.

Federal auditors scold IRS for slow notification of security breaches [WaPo]
In a recent report, the Treasury Department Inspector General for Tax Administration reprimanded the Internal Revenue Service for failing to notify taxpayers in a timely way — if at all —when the tax agency inadvertently exposed their personal information. IRS records showed 4,081 inadvertent disclosures of taxpayers’ personal information in fiscal 2009 and fiscal 2010. The IRS sent letters to taxpayers whose privacy was violated 86 days after the fact in 20 percent of the cases auditors examined in a sample of incidents from July 2010 to February 2011.

3 Groups Denied Break By I.R.S. Are Named [NYT]
Three nonprofit advocacy groups that were denied tax exemption by the Internal Revenue Service were all units of Emerge America, an organization devoted to cultivating female political leaders for local, state and federal government. The I.R.S. denied tax exemption to the groups — Emerge Nevada, Emerge Maine and Emerge Massachusetts — because, the agency wrote in denial letters, they were set up specifically to cultivate Democratic candidates. Their Web sites ask for evidence that participants in their training programs are Democrats.

Twitter Poised to Close a Two-Stage $800M Funding, With Half Used to Cash Out Investors and Employees [All Things D]
In a move reminiscent of one done by Facebook in 2009, Twitter is close to completing an $800 million funding deal that will include a second part in which around $400 million of the total will be used to cash out current investors and also employees. According to several sources close to the situation, the complex transaction could be completed within two weeks. Along with basic funding needs, this is largely being done this way to give those with stakes in the San Francisco microblogging company an ability to monetize their privately held common stock and also to do this selling in a more organized — and legal — manner.

Ernst & Young’s Greater Washington Office Announces Leadership Promotions [E&Y]
Four new partners in the DC office. If your office has announced promotions, we want to know.

PwC US Appoints Robert W. McCutcheon as New Industrial Products Leader [PwC]
RWM is the Pittsburgh OMP and will continue in that role but now is also responsible for leading the group that services several industries including “aerospace & defense, chemicals, engineering & construction, industrial manufacturing, metals, transportation & logistics, and forest, paper and packaging.”

Friend-on-friend swindles increase as economy flounders: Prosecutors [NYP]
Don’t forget family members.

As debt talks intensify, Obama opens door to short-term deal to buy more time [WaPo]
The contentious budget talks that have dominated Washington for months intensified Wednesday, prompting President Obama to say he would accept a short-term hike in the debt ceiling if it gave lawmakers time to finalize a comprehensive deal. Obama had pledged to veto any short-term measure, but White House spokesman Jay Carney said Wednesday that the president could accept an extension of “a few days” if it allowed a long-term deficit-reduction and debt-ceiling deal to work its way through Congress.

My Big Tax Break Looks Like Your Big Spending [Bloomberg]
There is plenty of spending to cut. For instance, we’ve got one government program that hands people money to buy houses that, in most cases, they would buy anyway. They get even more money if they buy a more expensive house. Over the next five years, that program alone will cost almost $500 billion. Another federal agency will spend more than $400 billion to reward people for making money by investing and earning capital gains and dividends rather than by going to work and taking their income in wages. I like investors and I participate in the market, but is this really the sort of activity that requires a $400 billion subsidy?

Fed planning for potential default [Reuters]
The Federal Reserve is actively preparing for the possibility that the United States could default as a deadline for raising the government’s $14.3 trillion borrowing limit looms, a top Fed policymaker said on Wednesday. Charles Plosser, president of the Philadelphia Federal Reserve Bank, said the U.S. central bank has for the past few months been working closely with Treasury, ironing out what to do if the world’s biggest economy runs out of cash on August 2.

Cisco’s 6,500 Job Cuts Could Hurt Push for Offshore Tax Holiday [Bloomberg]
Cisco Systems Inc. (CSCO)’s plan to eliminate about 6,500 jobs worldwide is complicating the corporate lobbying campaign for a tax holiday that would allow multinational companies to return $1 trillion in offshore profits to the U.S. at a low tax rate. The San Jose, California-based company, the world’s largest networking-equipment maker, has been among the most vocal supporters of a repatriation holiday being considered in the U.S. Congress. Cisco chief executive John Chambers has said he wants to return as much as $30 billion in overseas profits to the U.S. The company could increase its headcount by 10 percent, depending on details of a repatriation bill, he said before the job-elimination announcement.

Federal auditors scold IRS for slow notification of security breaches [WaPo]
In a recent report, the Treasury Department Inspector General for Tax Administration reprimanded the Internal Revenue Service for failing to notify taxpayers in a timely way — if at all —when the tax agency inadvertently exposed their personal information. IRS records showed 4,081 inadvertent disclosures of taxpayers’ personal information in fiscal 2009 and fiscal 2010. The IRS sent letters to taxpayers whose privacy was violated 86 days after the fact in 20 percent of the cases auditors examined in a sample of incidents from July 2010 to February 2011.

3 Groups Denied Break By I.R.S. Are Named [NYT]
Three nonprofit advocacy groups that were denied tax exemption by the Internal Revenue Service were all units of Emerge America, an organization devoted to cultivating female political leaders for local, state and federal government. The I.R.S. denied tax exemption to the groups — Emerge Nevada, Emerge Maine and Emerge Massachusetts — because, the agency wrote in denial letters, they were set up specifically to cultivate Democratic candidates. Their Web sites ask for evidence that participants in their training programs are Democrats.

Twitter Poised to Close a Two-Stage $800M Funding, With Half Used to Cash Out Investors and Employees [All Things D]
In a move reminiscent of one done by Facebook in 2009, Twitter is close to completing an $800 million funding deal that will include a second part in which around $400 million of the total will be used to cash out current investors and also employees. According to several sources close to the situation, the complex transaction could be completed within two weeks. Along with basic funding needs, this is largely being done this way to give those with stakes in the San Francisco microblogging company an ability to monetize their privately held common stock and also to do this selling in a more organized — and legal — manner.

Ernst & Young’s Greater Washington Office Announces Leadership Promotions [E&Y]
Four new partners in the DC office. If your office has announced promotions, we want to know.

PwC US Appoints Robert W. McCutcheon as New Industrial Products Leader [PwC]
RWM is the Pittsburgh OMP and will continue in that role but now is also responsible for leading the group that services several industries including “aerospace & defense, chemicals, engineering & construction, industrial manufacturing, metals, transportation & logistics, and forest, paper and packaging.”

Friend-on-friend swindles increase as economy flounders: Prosecutors [NYP]
Don’t forget family members.

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