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ANR: IRS Digging Up Viacom Chairman’s Past; Bob Evans’ Accounting Error; Paul Ryan Likes the ‘Concept’ of an Online Sales Tax | 05.02.13

Posted on by Caleb Newquist

Billionaire Redstone Challenges IRS on Tax for 1972 Gift [Bloomberg]
The IRS told [Viacom Chairman Sumner] Redstone earlier this year that he owes $1.1 million in taxes and penalties, plus interest, because of the gift. The case involves stock in the family’s National Amusements Inc. received by Redstone’s son, Brent, and his daughter, Shari, after the settlement of an intrafamily lawsuit. “This is unheard of,” said Richard Behrendt, a former IRS estate and gift tax auditor who is now director of estate planning at Robert W. Baird & Co. Inc. in Milwaukee. “I can’t remember ever hearing of anybody going back 41 years to raise an issue. It’s really unprecedented in my experience.”

Oil and soda taxes advance in California Legislature [LAT]
Two controversial tax measures advanced Wednesday in the California Legislature — a penny-per-ounce levy on soda and a charge on oil pumped from the ground in the state. The Senate Health Committee members approved a bill by state Sen. Bill Monning (D-Carmel) that would charge the tax on sweetened beverages, including sodas, in hopes of reducing obesity among young people. The $1.7 billion that would be raised would go to a Children’s Health Promotion Fund to support a statewide program to prevent obesity in children. Monning said the tax in SB 622 would also reduce consumption of high-calorie drinks by children. […] The 9.5% oil extraction tax would raise $2 billion annually for public education and state parks and was approved by the Democrats on the Senate Governance and Finance Committee, which sent it to the Appropriations Committee.

Overview Of The New 3.8% Investment Income Tax, Part 3: Gains From The Sale Of Property [Forbes, Part 1, Part 2]
News you can use.

FASB proposal would guard private companies’ proprietary information [JofA]
Stakeholders have expressed concerns to FASB that certain disclosure requirements for nonpublic employee benefit plans would reveal sensitive proprietary information of private companies. FASB is addressing that concern by proposing an indefinite deferral of the effective date for certain disclosures about investments held by a nonpublic employee benefit plan in the plan sponsor’s own equity securities.

Accounting error plunges Bob Evans Farms to $55.2 million 3Q loss [CD]

The Columbus-based company said it has subtracted a substantial amount from the book value of its former Mimi’s Cafe business, which it sold this year for $50 million in cash and debt. In its fiscal third quarter, Bob Evans reported a noncash impairment charge of $22.7 million for the Mimi’s assets, which the company wanted to sell. Now, Bob Evans says the charge was $68.4 million.
 
Former accountant sues Black Elk, alleging fraud [HBJ]
An accountant who worked at Black Elk Energy Offshore Operations LLC in Houston is suing the company, alleging he was fired after saying he would alert auditors to more than $360,000 in fraudulent charges on the company’s credit cards, including more than $25,000 at “gentlemen’s clubs.”
 
Ryan backs 'concept' of online sales tax [The Hill]
Rep. Paul Ryan (R-Wis.) supports the principle that online retailers should have to pay state sales taxes. "I think the concept is right," Ryan, the chairman of the House Budget Committee, said at a town hall meeting earlier this week, according to the Wisconsin Reporter news site. In an emailed statement to The Hill, Ryan clarified that he does not support the Senate's legislation on the issue.
"It's got to be done the right way. I think the legitimate concern is can it be used to do other forms of taxation or retroactive taxation? You have got to make sure it doesn't do that. I don't think the Senate bill is written in a tight enough way to do that," Ryan said.
 
Chris Kelly, Half of Rap Duo Kris Kross, Dies at 34 [WSJ]
RIP Mac Daddy.
 
Giant Rubber Duck Sails Into Hong Kong [WSJ]
Just because.
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Yahoo Ousts Bartz as CEO [WSJ]
Independent directors did a study of Yahoo’s assets and performance in the past two weeks and concluded the company wasn’t performing as well as it could, said a person familiar with the matter. The review came after nearly a year of board discussions about Yahoo’s flagging performance, and the independent directors ultimately decided a change at the top was the only way to turn things around, according to two people familiar with the matter. One of these people said Yahoo is open to selling itself to the right bidder. The board named Chief Financial Officer Tim Morsehile it searches for a replacement for Ms. Bartz.

BofA Shakes Up Senior Ranks [WSJ]
The bank installed David Darnell and Thomas Montag as co-chief operating officers. It also ousted wealth-management head Sallie Krawcheck and consumer banking head Joe Price, and removed Barbara Desoer, who has been running the bank’s mortgage business, from Mr. Moynihan’s list of direct reports.

Carlyle files for $100m initial public offering [FT]
Carlyle Group has formally fired the starting gun on its plans to go public, with the private equity group filing registration documents for an initial public offering as early as the first half of 2012. The move follows the listing of competitor Apollo Global on the New York Stock Exchange in March, and will test the willingness of investors to back a sector that has a poor stock market record.

Tax Code Has Upside-Down Rewards for Good Behavior [Bloomberg]
If the committee wants to bring about constructive tax reform that is a bit less ambitious, however, here’s an idea: Change the tax breaks that are meant to encourage people to do good things — such as save for retirement, buy real estate, get health insurance or give to charity — into flat-rate credits that aren’t affected by the taxpayer’s income. After all, it makes no sense, in terms of economic efficiency or simple fairness, to have the size of such incentives depend on earnings.

Old Tax Relief Seen as Anchor in Obama Plan [NYT]
The centerpiece of the job creation package that President Obama plans to announce on Thursday — payroll tax relief for workers and perhaps their employers — is neither his first policy choice nor that of many economists. But it is the one that they figure has the best chance of getting Republicans’ support. Mr. Obama has signaled that he will propose to extend for another year a reduction of two percentage points in the 6.2 percent Social Security payroll tax that employees pay, which means about $1,000 more for the average household. And he is considering a proposal to expand the tax relief to employers’ share.

A Banker Explains Why Some Small Businesses Have Trouble Getting Credit [You’re the Boss/NYT]
In case you’ve been wondering.

Ex-Duane Reade CFO Tennant Sentenced to Probation in Securities-Fraud Case [Bloomberg]
“Please don’t send me to jail,” Tennant said today to U.S. District Judge Deborah Batts, who granted his request at a hearing in federal court in Manhattan. Tennant told Batts he had cooperated in the investigation and suffered from the “long, painful, humbling experience” of the prosecution.

Deloitte Names Elizabeth Krentzman Asset Management Services U.S. Mutual Fund Leader [Deloitte]
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ANR: China Stacking the Deck for Government-Designated Accounting Firms; Amazon Wants a Deal with Texas on Sales Taxes; PwC Buys PRTM | 06.24.11

China tells firms to favour govt-designated accounting firms [Reuters]
China has told companies to favour government-designated accounting firms as their auditors for sake of “fair and orderly competition” in the sector, according to a notice published by the Ministry of Finance on Friday. The notice came as a string of accounting problems and stock plunges has hit publicly traded Chinese firms in overseas markets and sparked deep concerns across auditing quality in China. According to Ministry of Finance notice, large and medium-sized companies should prefer accounting firms that are allowed to provide auditing for H-share listed companiesricans See Debt Threat, Reject Tax ‘Scare’ [Bloomberg]
Americans say that the $14.3 trillion U.S. debt threatens the economy and that entitlement programs may go broke even as they dismiss as “scare tactics” the arguments offered by Republicans and Democrats who are debating a solution. Their sentiments in a Bloomberg National Poll suggest that the public is open to the recommendations of the majority of President Barack Obama’s debt commission. Members of the group, which included current and former members of Congress and White House officials, called for revenue increases and spending cuts that would have shaved deficits by $3.8 trillion over the next decade.

Tax Dispute Stalls Debt Talks [WSJ]
House Majority Leader Eric Cantor (R., Va.) said he was backing out of the talks for now because the group had reached an impasse over the question of whether tax increases should be included in the deal. The only other Republican in the group, Sen. Jon Kyl (R., Ariz.), soon followed suit, agreeing that only the highest levels of leadership could break the logjam between Democrats’ demand that the budget deal include tax increases and Republicans’ adamant opposition to that demand.

Tax Break for Mortgage Debt Is Ready for the Wrecking Ball [Bloomberg]
Forty-nine percent of respondents in a Bloomberg National Poll said they were willing to abandon the mortgage tax break if it meant lower overall tax rates. Only 45 percent opposed the switch. That’s a sharp contrast with polling patterns of prior years, when the public showed 2-to-1 support for keeping the mortgage deduction. The Bloomberg poll of 1,000 adults conducted June 17-20 has a margin of error of plus or minus 3.1 percentage points.

Let’s Make a Deal, Amazon Tells Texas [NYT]
In the middle of a fight with Texas tax collectors over book sales in the state, Amazon offered Thursday to invest $300 million in five or six warehouse and distribution centers in the state, employing 6,000 people, if lawmakers would let the company operate for four-and-a-half years without collecting sales taxes.

The NBA Salary Cap Gives No-Tax Dallas and Miami an Unfair Advantage [TaxProf]
Relatively decent teams.

IRS Increases Mileage Rate to 55.5 Cents per Mile [AW]
Up from 51¢.

Factbox: Big Four audit firms on approach to risk in China [Reuters]
The string of accounting scandals in China is prompting the “Big Four” audit firms to be on alert, fearing a blow up at a Chinese company could cause big reputational risk. Reuters asked all four firms about their approach to working in China and whether the recent scandals have prompted them to review their procedures when taking on work for Chinese companies looking to list on exchanges.

PwC to Acquire PRTM [PwC]
“The PRTM team will provide our firm with significant capabilities in the areas of operational strategy, execution and business model innovation,” said Dana Mcilwain, PwC Vice Chairman and U.S. Advisory Leader. “We are especially pleased that the PRTM team of highly talented, globally-oriented professionals have chosen to continue their careers at PwC.”