Obama Proposes Tax Revamp [WSJ]
The Obama administration will propose lowering the top income-tax rate for corporations to 28% from 35% but would raise overall tax revenue by eliminating dozens of popular deductions in an effort to restructure the corporate tax code. The proposal, which will be announced Wednesday, would lower the "effective" tax rate on manufacturers to "no more than 25%," according to a senior administration official, down from the current average rate of about 32%. It raises taxes on oil and gas companies that would lose many large deductions and subsidies. The plan would require U.S. companies operating overseas to pay—for the first time—a minimum tax rate on their foreign earnings. Setting the stage for a debate with Congress and business groups over revamping the corporate tax code, the White House also will recommend simplified filing for small businesses, lowering their tax rates but potentially ending some of their breaks. Under the plan, American businesses would pay more in aggregate, though some companies would pay more and some less than they do now, depending on the breaks they receive.
Parmalat Lawsuits Against Grant Thornton Revived by Court [BBW]
Parmalat SpA’s two lawsuits against accounting firm Grant Thornton LLP were revived for a second time by a U.S. appeals court decision reversing a trial court’s order dismissing the cases. The U.S. Court of Appeals in New York said U.S. District Judge Lewis Kaplan should have abstained from ruling on the cases because of bankruptcy-related proceedings and because he lacked jurisdiction. The appeals court today said the cases should be sent to federal court in Illinois so they can be referred an Illinois state court.
Reports: Romney is beefing up tax proposals
Mitt Romney, who has faced some criticism from the right that his tax and economic plan isn't sufficiently bold, is preparing to roll out a new set of ideas, according to media reports. The former Massachusetts governor, now in a fight for the GOP presidential nomination, said Tuesday that he would use a Friday speech to the Detroit Economic Club to outline his plan for a "flatter, fairer and simpler" tax code. The speech will also go into plans to rein in spending, including on entitlements. Some conservative analysts have pressed Romney in recent months to expand on his 59-point economic plan, which The Wall Street Journal's editorial page has dubbed timid. One of those commentators, Lawrence Kudlow of CNBC, stated today that he would offer more details of the plan on Wednesday. "I can say that the new plan will be across-the-board with supply-side incentives from rate reduction, and that it will help small-business owners as well as everyone else," Kudlow wrote.
Witness says IRS didn't oppose Stanford loans
"The IRS always treated those as loans to Mr. Stanford," said Larry Campagna, who represented Stanford in personal and business tax disputes with the IRS in 1998 and again in 2003. The IRS did change its position, however, about the correct way to characterize payments from Stanford to his Houston-based Stanford Financial Group, the parent company of Stanford's scores of business operations. He was sole owner of Stanford Financial and its subsidiaries. Although the tax agency ruled that those should be listed as loans on 1998 tax returns, it said the payments should be recorded on 2001 and 2002 returns as dividend payments to Stanford, Campagna said. Defense attorney Robert Scardino asked Campagna if anything about the returns prompted the IRS to ask criminal investigators to initiate a fraud probe. "No," Campagna said before he was dismissed from the witness stand.
Spencer stepping down as BKD chief
Neal Spencer has been on the job for 16 months but is ready for more family time and "pursue other roles" at the firm.
IRS tries to dun a Staten Island nun!
Sister Janet Dunn, a kindergarten teacher at St. Ann's R.C. Church School in Dongan Hills, who suddenly found herself hounded last year for non-payment of taxes. As a member of the Presentation Sisters, Sister Janet says she is exempt from paying taxes, but she had a hard time convincing the IRS of that. By the sound of things, one would think the government was dealing with some infamous tax cheats like Al Capone, Leona Helmsley, Wesley Snipes, Willie Nelson, or that guy who won the first "Survivor" challenge — Richard Hatch. We're talking about a Staten Island nun — who has taken a vow of poverty!
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