Accounting News Roundup: Newt’s Tax Returns; Romney’s IRA; GOP’s Tax Policy | 01.20.12

Gingrich Tax Returns Show $3.1 Million Income, 32% Rate [BBW]
Former U.S. House Speaker Newt Gingrich reported an adjusted gross income of $3.1 million for 2010, according to tax returns for that year that the Republican presidential candidate released tonight. Gingrich, 68, and his wife, Callista, owed $994,708 to the federal government in 2010, for an effective tax rate of almost 32 percent. That’s more than twice the rate that fellow Republican presidential candidate Mitt Romney said he pays. President Barack Obama had an effective federal tax rate of about 26 percent in 2010, according to his returns.

Olympus keeps Tokyo listing but told to improve [Reuters]

Japan's Olympus Corp (7733.T), struggling to emerge from a $1.7 billion accounting scandal, will be allowed to stay listed on the Tokyo Stock Exchange but will be placed on a "security on alert" list for firms seen needing to urgently improve their internal management, the bourse said on Friday. Olympus will have to submit improvement reports for three years but moves off the bourse's supervisory watchlist, meaning it is in less immediate danger of being delisted, a step that would make it harder to raise capital.
 
Deloitte Appoints Jason W. Downing Managing Principal of North Texas, Arkansas and Oklahoma [Deloitte]
Replacing Blaine Nelson.
 

Romney surprisingly ill-prepared on tax issue [CNN]
TaxProf Paul Caron: "Mitt Romney's fumbling response to questions about his tax returns similarly threatens to destroy the central premise of his candidacy that his business acumen will help him lead the country out of its current economic troubles. For someone who has been running for president for six years, Romney is surprisingly ill-prepared to discuss his tax returns. […] Why is Romney so defensive about the tax issue? After all, this is the man who told his landscaping company in 2006 that he would have to fire them unless they stopped employing illegal immigrants in order to maintain his future political viability."

Romney's Unorthodox IRA [WSJ]
Like many Americans, Mitt Romney has an individual retirement account. Unlike most Americans, Mr. Romney has between $20.7 million and $101.6 million in it, a big chunk of his fortune. Experts on estate planning said it is highly unusual to accumulate such a considerable sum in an IRA, an investment vehicle restricted by annual contribution limits. It appears that Mr. Romney's grew so large mostly because it holds investments in Bain Capital, the private-equity firm he helped start. Under federal law, Mr. Romney isn't required to pay annual taxes on the account's investment gains, and the bulk of his contributions to the fund are likely to have been pretax dollars, IRA experts say. As such, the Romney IRA has enabled the current Republican front-runner to defer paying taxes on a sizable portion of his wealth—although he could face high tax bills when he eventually withdraws the money.

Tax Plans Duel for Primacy in GOP [WSJ]
South Carolina's roller-coaster primary could help influence more than the GOP presidential nominee—it could play a big role in determining the direction of Republican policy on taxes for 2012 and beyond. Just as much of the focus narrows to two candidates, Mitt Romney and Newt Gingrich, the race also offers voters sharply contrasting approaches to tax policy, one that is familiar to Republicans and more achievable, the other newer and farther-reaching.

 

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