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President Joe Biden used his State of the Union address to try to sell Americans on his economic agenda and called for renewed bipartisanship, with a mantra of "Let's finish the job." In a 72-minute speech in the House chamber before a joint session of Congress on Tuesday, he deployed the line at least 10 times, as he called for action in a range of areas, including taxes on the wealthy, and on corporations. Mr. Biden renewed his call to levy a tax on billionaires and corporate stock buybacks to reduce the federal deficit. “The tax system is not fair; it’s not fair,” Biden said. “The idea that in 2020, 55 of the largest corporations in America, of Fortune 500, made $40bn in profits and paid $0 in federal taxes? $0? Folks, it’s simply not fair.” He pushed for quadrupling the 1% tax on stock buybacks that took effect in January, arguing that the change would encourage companies to invest in their growth instead of boosting shareholders. He also said "We’re not going to be moved into being threatened to default on the debt," accusing Republicans of threatening to take the economy hostage if he doesn’t agree to reduce government spending. He went on to allege that some Republicans want Medicare and Social Security to sunset every five years - a claim that was met with outrage by some, including Rep. Marjorie Taylor Greene (R-GA) who shouted "Liar." In closing, Mr. Biden said the U.S. is "at an inflection point," adding that it must choose to be a nation "that embraces, light over darkness, hope over fear, unity over division. Stability over chaos." 

 

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The IRS has asked millions of taxpayers to hold off on filing their returns until it issues guidance on whether several state refund and rebate payments issued last year count as taxable income. Last year, 19 states offered diverse programs that offered inflation relief payments or refunds for taxpayers. The IRS issued the guidance Friday due to the agency’s uncertainty about the taxability of the payments. “We are working with state tax officials as quickly as possible to provide additional information and clarity for taxpayers,” the IRS said in its statement. For residents from states such as California and Illinois, the agency is recommending that they hold off on filing their tax returns until they receive further instruction from the IRS. Such states issued rebates and refunds in 2022, akin to the federal stimulus payments issued during the COVID pandemic. Whether the state payments are taxable for federal purposes depends on the stated purpose and federal tax law. The Virginia tax authorities said that the up-to-$500 one-time 2022 Virginia rebate will be treated like a state tax refund, so it will be taxable for taxpayers who itemize deductions, but not for taxpayers who take the standard deduction. In California, state tax authorities have said that the payments aren’t taxable for state-income-tax purposes but may be for federal purposes. Despite the IRS statement, H&R Block and Intuit's TurboTax have continued to file returns for clients. “Many taxpayers who file early in the season are very anxious for their refunds. Waiting another week to file would mean waiting another week for their refund,” said Kathy Pickering, chief tax officer at H&R Block.  

 

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What You Need to Know for Tax Season 2023.

The 2023 tax season means big changes and updates, once again. Many of the tax law changes last tax season were designed to be temporary, due to the pandemic and have already expired. Want to make sure you have it all straight? Canopy has put together the ultimate cheat sheet to guide you through the changes.

Download the free guide now.

 

The Governmental Accounting Standards Board (GASB) has released more implementation guidance to clarify earlier advice on how to account for subscription-based technology arrangements for state and local governments. The exposure draft deals with the specific issue of whether a cloud computing arrangement meets the definition of a subscription-based information technology arrangement as defined in its 2020 standard, GASB Statement No. 96. The additional guidance in the exposure draft includes an extra question and answer on cloud computing arrangements, and if it's approved as additional guidance, it will be added to the previously exposed questions and answers in the final Implementation Guidance Update for 2023. Stakeholders are asked to review the proposal and provide input to the GASB by March 10th.

 

Accounting Today

CPA Practice Advisor

Anchin has announced the appointment of partner Deborah L de Vries as co-leader of it Law Firm Group. Ms. de Vries, who also leads the company's compensation and benefits group, is a testament to the group's commitment to helping its members learn and grow," said Chris Noble, partner and leader of the professional services group.

 

PR Newswire

U.S. imports rose in December as demand for consumer goods and autos picked up, partially offsetting a weakening in global trade late last year and widening the U.S. trade deficit by 10.5%. The trade deficit in goods and services was a seasonally adjusted $67.4bn in December, the Commerce Department said Tuesday, up from a revised $61bn November. The U.S. trade deficit for all of 2022 rose 12.2% to $948.1bn, the widest gap on record, as the U.S. continued to depend heavily on imports from other countries to meet domestic demand. Exports also rose last year as global demand for U.S.-made products picked up. Trade trends reflect a normalization of commerce as the impact of the pandemic fades, said Gregory Daco, chief economist at EY. “Both supply and demand are rebalancing after a massive shock,” he said. Global demand for U.S. exports has eased, he said, adding imports are likely to come “under increased pressure in an environment where consumer spending and business investment growth are moderating,” he added.

 

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The Teacher Retirement System of Texas (TRS) has divested part of its massive pension fund from 10 financial firms that the state comptroller singled out for “boycotting” the oil and gas industry. Financial firms in recent years have increased their commitments to environmental, social and governance (ESG) strategies that attempt to account for the negative societal costs of investing in companies that worsen climate change, use exploitative labor practices or engage in corporate corruption. However, in 2021 Texas prohibited state funds from contracting with or investing in companies that divest from oil, natural gas and coal companies. TRS executive director Brian Guthrie has reported that the fund is now in compliance with state law, by selling its shares in BlackRock, BNP Paribas, Credit Suisse, UBS, Danske Bank, Jupiter Fund Management, Nordea, Schroders, Svenska Handelsbanken, and Swedbank. Almost 2m Texas educators and retirees participate in the teacher’s pension fund, the sixth-largest such pension fund in the U.S., worth about $173bn.

 

The Texas Tribune

Ishan Wahi, a former product manager at cryptocurrency exchange Coinbase, has pleaded guilty to two counts of conspiracy to commit wire fraud in connection with a scheme to commit insider trading in cryptocurrency assets by using confidential Coinbase information about which crypto assets were scheduled to be listed on the firm’s exchanges.  U.S. Attorney Damian Williams said: “Ishan Wahi – a former Coinbase product manager – admitted in court today that he tipped others regarding Coinbase’s planned token listings so that they could trade in crypto assets for a profit.  Wahi is the first insider to admit guilt in an insider trading case involving the cryptocurrency markets.  Whether it occurs in the equity markets or the crypto markets, stealing confidential business information for your own personal profit or the profit of others is a serious federal crime.  The Southern District of New York has decades of experience pursuing insider trading cases, and we will continue to use our expertise to prosecute this crime no matter what form it takes and where it occurs.” A Coinbase spokeswoman said the company “takes allegations of improper use of company information with the utmost seriousness.”

 

New York Times

Wall Street Journal

The federal Conservatives are calling on Canada's auditor general to probe the government's use of consulting firm McKinsey for outside advice, a company the Tories say deserves close scrutiny because of its past ties to China and the opioid crisis. McKinsey has received more than C$100m ($74.43m) in government contracts over the last seven years, much more than the firm received when former prime minister Stephen Harper was in office. Procurement Minister Helena Jaczek has said the government is doing a "full review" of the McKinsey contracts to ensure they align with all Treasury Board policies and directives. While parliamentarians can request an investigation, Auditor General Karen Hogan will ultimately decide whether to probe the contracts.

 

CBC News

Gambling on this weekend’s Super Bowl is expected to reach record-breaking levels, with more than 50m Americans projected to bet $16bn on the championship game between the Kansas City Chiefs and the Philadelphia Eagles. Super Bowl LVII is also the first National Football League Championship to be played in a state with legalized sports betting, at Arizona's State Farm Stadium. About 30m Americans plan to make Super Bowl sports wagers online, on both legal and illegal sites, as well as in legal sportsbooks and with illegal bookies, according to the survey released by the American Gaming Association. The gaming association’s estimate of $16bn in legal and illegal bets is more than double last year’s estimate of $7.6bn. The estimates are based on a survey of nearly 2,200 adults. 

 

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