October 4, 2022

Accounting News Roundup: E.U. Investigating Fancy International Tax Planning; Bain Sues EY; Section 179 Getting Kicked Around | 06.11.14

Bank of America Mortgage Settlement Is Said to Be Deadlocked [DealBook]
The DoJ was not amused by BoA's most recent offer: "The talks stalled on Monday after the bank’s latest offer — more than $12 billion to resolve state and federal investigations into its sale of mortgage investments that later imploded — fell far short of prosecutors’ demands, according to people briefed on the matter. The Justice Department, which had imposed a Monday evening deadline for the bank to deliver its near-final offer, has sought a settlement worth roughly $17 billion, which would be the largest payout by any bank to date."

Tax Breaks for Companies Like Apple Investigated by E.U. [NYT]
Fun killer! "The European Union’s top antitrust official opened an investigation on Wednesday into the way countries including Ireland provide tax arrangements that enable big multinational corporations like Apple to reduce their tax bills worldwide. The inquiry by Joaquín Almunia, the European Union’s competition commissioner, if it leads to changes, could undermine tax strategies pursued by many American technology companies that have their international headquarters in Ireland and in other countries in the bloc."

Bain Sues Ernst & Young for $60 Million [CNS]
Lilliput Kidswear, a children's clothing retailer in India, didn't turn out to be what Bain had hoped. The firm says EY helped dupe them: "Acting as seller's agent, EY solicited Bain to invest in Lilliput and gave Bain Lilliput's financial statements, which EY had audited and certified as presenting a true and fair view of the company. Those audited financial statements represented a thriving business with robustly growing revenues and earnings. In reality, Lilliput had deliberately falsified its financial statements to conceal its true poor performance. EY knew about the key aspects of the fraud, yet assured Bain about Lilliput's financial statements. In reliance on the false financial statements and EY's false audit opinions, Bain invested in Lilliput. For more than a year, EY continued to certify Lilliput's financial statements and provide those certifications to Bain, even as Lilliput's fraud grew with EY's active assistance. After a whistleblower alerted Bain to the fraud, Bain stopped a planned initial public offering of Lilliput's stock and confirmed that Lilliput's financial statements were fraudulent. As a result of the fraud, Bain's approximately $60 million investment was rendered worthless."

W.H. threatens veto of GOP tax cut extensions [The Hill]
Section 179 is a little bogged down: "
The House is expected to vote this week to extend incentives that would allow small businesses to more quickly write off investments and to help S corporations, a type of small business. In a statement, the White House said it supported extending the provision for small business investments, known as Section 179. But the administration said it could not get on board with extending the $73 billion tax break without an offset."
 
When doing a like-kind exchange, keep the kids away [Tax Update]
Your son is not a qualified intermediary.

Accountant held women as sex slaves, investigators say [GS]
Timothy Deegan is in a lot of trouble: "Deegan, [investigators] allege, kept three women trapped in virtual slavery for months, prostituting them, videotaping sex acts that he would then put online, and giving them drugs in exchange for sex and keeping his house clean. Deegan, 53, the owner of Deegan Professional Tax Service, was arrested Friday on three counts of human trafficking and booked into the Alachua County jail, where he remained Tuesday on $300,000 bond."

Prescott Valley man arrested after trying to shoot moon with handgun [AZFamily]
Arizona. The new Florida.

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