~ Ed. note: TPTB are insisting on a half day today and who are we to argue? Don't forget to vote in the bottom half of the sweet sixteen in GC March Madness as the polls close tonight. This week's Between the Spreadsheets will hit the wire your inboxes on Monday. Blow off the afternoon if you can.
China Audits Demand Hong Kong Rigor [WSJ]
An international tug of war over Chinese audit files has been dragged into a Hong Kong court this week. The outcome could be crucial for multinational companies with big China operations, and for Chinese companies listed overseas. U.S. authorities have been battling for access to files prepared by audit firms when they work in China on companies listed overseas. The big, international audit firms say it is against Chinese law to hand over the files. Chinese and U.S. regulators are at a stalemate over the issue. Now, a similar problem is before a Hong Kong court that began hearing a dispute between Ernst & Young and the city's Securities and Futures Commission on Wednesday.
Facebook's Mark Zuckerberg faces $1 billion tax bill
Zuckerberg's whopping tax hit stems from his move last May to increase his stake in Facebook. On the day of Facebook's initial public offering, Zuckerberg exercised a stock option and purchased 60 million Facebook shares at a "strike price" of 6 cents each. Even if those shares are never sold, the IRS treats them as ordinary income at the time the options are exercised. The rationale is that such options are a form of compensation, just like regular wages. For Zuckerberg, that means reporting income last year of nearly $2.3 billion from his stock options alone. Add together the top 2012 federal tax rate of 35% and the top California rate of 13.3% — the highest in the nation — and you get a total tax rate of 48.3%.
Is Republican Tax Policy Undermining Tax Reform? [Fiscal Times]
The proliferation of tax deductions and credits blurs the distinction between direct government spending and tax cuts. Politically, this is important because Republicans insist that there is a fundamental difference between keeping one’s own money via a tax cut and receiving a check from the Treasury. But in the case of refundable tax credits there is literally no distinction; they are exactly the same thing.
Xerox Names ADT’s Kathryn Mikells as Chief Financial Officer
Xerox Corp. (XRX), the printer and copier pioneer, hired Kathryn Mikells as its chief financial officer, choosing an executive with experience across diverse industries as it broadens its services. Mikells, 47, joins Xerox on May 2 from home-security provider ADT Corp., where she was also CFO, according to a statement yesterday. She has worked in the same post at Nalco Holding Co., a water-treatment and energy-technology company, and at former United Airlines parent UAL Corp.
FASB Extends Comment Period for Credit Loss Proposal [CW]
FASB said its stakeholders are asking for more time to comment on the proposal so they can consider it side-by-side with a different approach to credit losses proposed by the International Accounting Standards Board. The IASB just published its proposal on March 7, and FASB's comment period for its proposal originally ended April 30, producing less than 60 days of overlap in their exposure and comment periods. FASB also wants to give commenters time to study its “frequently asked questions” document, which the staff published recently in response to initial feedback to its proposal.
Deloitte Boss Blames Law For Tax Avoidance [SN]
Speaking on Jeff Randall Live, David Sproul admitted that the problem with the tax system is "mainly the law". He said: "There's clearly tax practices that take advantage of the rules that the Government has brought in. "The real question is the extent to which that is accepted. And I think there's no question that business recognises that what is acceptable has changed."
Grant Thornton Expands Corporate Advisory & Restructuring Capabilities [GT]
The two new dynamos, Kenneth Simon and Ryan Maupin, join GT from E&Y and KPMG respectively.
NYU Hosts Tax Dilemmas in Sitcoms [TaxProf]
The Simpsons had a tax dilemma?
This Space for Rent: An economics lesson for the guys at ProPublica [WSJ]
Rent-seeking behavior would be futile if government did not assert the power to grant the privileges sought. The TurboTax business wouldn't even exist if Congress had not seen fit to enact a tax code too complicated for most people to navigate. Of course many of those complications were established for high-minded reasons: to ensure that the rich pay their "fair share" and the poor are rewarded for taking low-wage jobs; to encourage homeownership, investment, contributions to charity and so forth. If Congress is a hero in this tale, it is a tragic one, for Intuit's influence was made possible by Congress's own actions.
Man Charged With Attempting to Sell 42,000 Pounds of Stolen Muenster Cheese at New Jersey Rest Stop [Gawker]
Just months after after a crooked Canadian cop was busted for cheese smuggling, an Illinois man was arrested for allegedly stealing 21 tons of Muenster from a Wisconsin cheese company. The man, Veniamin Balika, 34, then did the reasonable thing and attempted to sell the 42,000 pounds of cheese at a rest stop off the New Jersey turnpike. […] The cheese was reportedly stolen from Pasture Pride Cheese in Wisconsin. Balika's disguise and forged paperwork were so good that he fooled the company's owner, Kevin Everhart. "He came in with the proper paperwork," Everhart said. "He came in as if he was picking up a shipment."