Obama Says U.S. Should Take Advantage of Cheap Fuel with Oil Tax

WASHINGTON, D.C. (FEBRUARY 8, 2016)
BY ALEX WAYNE AND JUSTIN SINK

BLOOMBERG

(Bloomberg) President Barack Obama defended his proposal to levy a new $10-per-barrel tax on oil, arguing that low gasoline prices afford the U.S. an opportunity to finance dramatic improvements in its transportation system.

“Right now, gas is $1.80 and gas prices are expected to be low for the forseeable future,” Obama told reporters at the White House last Friday. It’s “important to use this period when gas prices are low to accelerate the transition to a clean-energy economy,” he said.

The proposed fee drew swift objections on Thursday from oil-industry groups and congressional Republicans. The idea is part of a broader Obama administration plan to shift the nation away from transportation systems reliant on internal-combustion engines and fossil fuels. The plan envisions investing $20 billion to reduce traffic congestion and improve commuting, $10 billion for state and local transportation and climate programs, and $2 billion for research on clean vehicles and aircraft.

“We’ll have a much stronger economy, stronger infrastructure, we’ll be creating the jobs of the future,” Obama said.

It isn’t clear how the tax would be structured or who would pay it. White House officials said it wouldn’t be assessed at the wellhead. Exported oil wouldn’t be subject to the tax, though Obama misspoke during his remarks and said it would. Jeff Zients, director of the National Economic Council, told reporters on Thursday that the White House expects oil companies would pass on some costs of the tax to their customers.

House Majority Whip Steve Scalise, a Louisiana Republican, called the proposal “dead on arrival.”

Republicans “always say” that, Obama said.

He said he plans a larger speech on the oil tax “and the direction we need to go on this.”

Scandal-Plagued Soccer Body Seeks Forensic Accountants

FEBRUARY 3, 2016
BY TARIQ PANJA

BLOOMBERG

(Bloomberg) South America’s regional soccer body Conmebol, which has lost its last three presidents under the cloud of a global corruption scandal, is inviting forensic accountants to investigate its business affairs since 2011.

A sprawling U.S. Department of Justice investigation alleges money laundering and racketeering stretching back almost 20 years. Conmebol will hire a company to look back only for five years for a “technical reason,” said a spokeswoman for Paraguay-based Conmebol.

The group also announced in a statement it had hired the accounting firm Deloitte LLP to work with its newest president Alejandro Dominguez. The 44-year-old Paraguayan has promised to usher in an era of transparency and good governance at the organization, which has long struggled with both.
Conmebol boasts two of the World Cup’s most successful nations, Brazil and Argentina, and its quadrennial

Copa America is soccer’s oldest regional tournament. That contest is also central to the criminal investigations: The U.S. alleges three sports marketing companies paid $100 million in bribes for the rights to four editions of the competition.

The group has been based in Paraguay since 1990. Its former president Nicolas Leoz, who’s fighting extradition to the U.S., managed to convince the country’s parliament in 1997 to grant Conmebol a type of diplomatic immunity that’s usually reserved for foreign embassies. That was overturned following May’s first wave of arrests, and as recently as last month police acting on a U.S. request raided the organization’s offices.

On Monday, Dominguez removed a plaque from a wall in front of Conmebol’s headquarters that marked its territorial sovereignty. “Unfortunately this Paraguayan law was misused in the past,” he said in a statement. “Today we reaffirm our total and absolute rejection of corruption practices and we’re removing this plaque that signifies impunity.”

Dominguez traveled for meetings with officials at the Vatican on Wednesday.

Taxpayers Worried about Identity Theft and Tax Fraud

COSTA MESA, CALIF. (FEBRUARY 2, 2016)

Taxpayers are increasingly aware of identity theft-related tax fraud this year and are concerned about becoming victims, according to a new survey.

The credit-reporting company Experian recently polled consumers across the country about their tax-filing habits, identity theft and what they are doing to protect themselves this tax season as part of an annual survey.

The number of survey respondents familiar with identity theft and tax fraud has risen nearly 20 percent in the past two years, to 76 percent, compared with only 57 percent in 2014 and 63 percent in 2015. In addition, 42 percent of respondents said they are now concerned that someone could access their personal data through their tax return, compared to only 35 percent in 2014 and 38 percent in 2015.

While 28 percent of respondents have been a victim or know someone who has been a victim of tax fraud, only 6 percent said they file their taxes on a computer with up-to-date antivirus software.
Those who have been affected by tax fraud most commonly file a police report (59 percent) and place a fraud alert on their credit reports (58 percent).

Despite the number of people affected by tax fraud, almost half of respondents (45 percent) aren’t aware of the IRS-issued Identify Protection PIN, or IP PIN, a unique number assigned to eligible taxpayers that helps prevent the misuse of their Social Security number and protects against thieves attempting to file fraudulent federal income tax returns. Furthermore, only 30 percent of actual victims surveyed requested the IRS-issued IP PIN last year.

Even though the concern over tax fraud has grown significantly, a majority of survey respondents aren’t planning to take the IRS recommended steps to protect themselves. Only 12 percent are planning to check their credit report, an important first step in monitoring for fraudulent activity that could indicate identity theft.

“Tax season is a busy time of year for identity thieves,” said Experian vice president of consumer protection Michael Bruemmer in a statement. “Those filing taxes, especially electronically, should educate themselves on what precautions need to be taken, and what assistance is available to them if they become a victim of identity theft.”

Half of the respondents file their taxes themselves, electronically. Eighteen percent scan and save their tax documents electronically, up from 14 percent in 2015. More than three-quarters have used electronic fund transfers for tax refunds.

Of the 56 percent of respondents who prepare their own taxes, most prepare their taxes on their home network. Seventy-six percent of them said they file their taxes inside their own home, on a secure network, while 14 percent file their taxes while at work via a secure network, and 7 percent file their taxes outside their home over a free Wi-Fi network (not recommended as free Wi-Fi networks often have security vulnerabilities).

Most of the survey respondents (80 percent) expect to receive a tax refund and plan to use it to increase their personal savings or pay down credit card debt. Forty-one percent said the tax refund would go into a savings fund or investment, 35 percent said they would use the money to pay off or pay down their credit card debt, and 19 percent said they would use it to pay off or pay down personal loans.

IRS Will Work on Corporate Tax Agreements with India

WASHINGTON, D.C. (FEBRUARY 1, 2016)

Starting February 16, the Internal Revenue Service will begin accepting requests for bilateral advance pricing agreements between the U.S. and India for the taxation of multinational companies.

The IRS said Monday that the Advance Pricing and Mutual Agreement office, a representative office of the U.S. competent authority, will start accepting such requests in two weeks.

This announcement represents a major step forward in strengthening ties between the U.S. and India governments on the taxation of multinationals. Bilateral advanced pricing agreements, or APAs, provide greater predictability in taxation, easing the uncertainty of doing business in each country.

“We appreciate the efforts of the Indian Competent Authority and his team, as well as the IRS team, for working to reach common understandings and procedures for resolving differences fairly,” said IRS Commissioner John Koskinen in a statement. “Multinational firms operating in both the U.S. and India are the beneficiaries of this effort.”

An APA is an agreement between the IRS and a taxpayer covering issues arising under section 482 of the Code or other issues for whose resolution transfer pricing principles are relevant.  A bilateral APA is an APA in which the issues and methods covered by the agreement are premised on an underlying competent authority resolution reached between the U.S. competent authority and a foreign competent authority.

In January 2015, the U.S. and Indian competent authorities jointly announced that they had reached agreement on a framework for resolving longstanding competent authority cases involving Indian-resident affiliates performing information technology-enabled services or software development services.  In light of this agreement, APMA began accepting requests in March 2015 for pre-filing conferences (PFCs) for bilateral APAs between the United States and India.

As a result of the competent authorities’ progress in concluding cases since that time, the U.S. competent authority and the Indian competent authority are now ready to accept requests for bilateral APAs covering information technology-enabled services, software development services, or other issues for whose resolution transfer pricing principles are relevant.

The IRS’s APA program increases the efficiency of tax administration by encouraging taxpayers to come forward and present all the facts necessary for a proper evaluation of their proposed covered issues and to work towards a resolution of such issues in a spirit of openness and cooperation. The voluntary and prospective nature of the APA process lessens the burden of compliance by giving taxpayers greater certainty regarding covered issues and promotes the principled resolution of these issues by allowing for their discussion and resolution in advance.

All requests for bilateral APAs covering Indian transactions, whatever the issue, must be submitted to APMA in accordance with Rev. Proc. 2015-41, 2015-35 IRB 263.

Taxpayers with questions about this announcement should contact John Hughes, Senior International Advisor, Treaty and Transfer Pricing Operations, 202-515-4307.

IRS Marks EITC Awareness Day

WASHINGTON, D.C. (JANUARY 29, 2016)

The Internal Revenue Service joined partners across the country in promoting the Earned Income Tax Credit on EITC Awareness Day on Friday.

January 29 marked the 10th anniversary of the EITC Awareness Day campaign, a nationwide effort to alert millions of low and moderate-income workers who may be missing out on this significant tax credit.

The IRS pointed out that millions of taxpayers who earned $53,267 or less last year may qualify for EITC for the first time in 2016. Local officials and community organizations nationwide are holding events on EITC Awareness Day highlighting this key benefit.

 “One-third of the population eligible for EITC changes each year as their personal circumstances change,” said IRS Commissioner John Koskinen in a statement. “We want workers who may qualify for EITC for the first time to have all the information they need to get the EITC and get it right. This is an important credit for hard-working Americans, and one of the government’s best tools to fight poverty.”

Last year, more than 27.5 million eligible workers and families received almost $66.7 billion in EITC; with an average EITC amount of more than $2,400.

The IRS is encouraging taxpayers to use the EITC Assistant, an interactive tool on IRS.gov/eitc, to find out if they are eligible for the credit. The IRS website also provides helpful information on the health care law and how it may affect tax returns at IRS.gov/aca.

Workers, self-employed people and farmers who earned $53,267 or less last year could receive larger refunds if they qualify for the EITC. Eligible families with three or more qualifying children could get a maximum credit of up to $6,242. EITC for people without children could mean up to $503 added to their tax refund. Unlike most deductions and credits, the EITC is refundable. In other words, those eligible may get a refund from the IRS even if they owe no tax.

Workers who are potentially eligible to claim the credit should visit IRS.gov/eitc to learn if they qualify and how to claim the credit. The IRS recommends that all workers who earned around $54,000 or less use the EITC Assistant to determine their filing status, if they have a qualifying child or children, if they qualify to receive the EITC and estimate the amount of the EITC they could get. If an individual doesn’t qualify for EITC, the Assistant explains why. A summary of the results can be printed and kept with the worker’s tax papers.

The IRS is also reminding taxpayers about the availability of myRA, a new, free, retirement savings account from the Treasury Department. Taxpayers who have a myRA account may use Free File to deposit their tax refund or a portion of their refund into their myRA account. They need to use Form 8888 or follow their software product’s instructions.

CPA, Taxes, Bookkeeping, Payroll, Accounting Services, Insurance

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