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California Gov. Gavin Newsom has signed a law that will double taxes on guns and ammunition. The projected $159m in additional annual tax revenue will be used to enhance security at public schools and fund violence prevention programs. California becomes the only state with its own tax on guns and ammunition. Mr. Newsom, known for his support of gun restrictions, is leading a national campaign to amend the U.S. Constitution for stricter gun control measures. The law also now includes a ban on carrying guns in public places and requires microstamping technology on semiautomatic pistols. More than two dozen "sensitive places" that are off limits to firearms, including child care centers and schools. The California Rifle and Pistol Association plans to challenge the tax in court. 

 

Los Angeles Times

NPR

U.S. News

Massachusetts lawmakers have introduced a tax relief package worth $561m, aiming to reduce the tax burden on individuals and businesses. The proposal includes various tax credits and measures, such as eliminating estate tax for estates under $2m and increasing the child and dependent tax credit. The increased child tax credit is expected to benefit 565,000 families, making it the most generous universal credit in the country. Other provisions include raising the rental deduction cap, reducing the tax rate on short-term capital gains, and allowing local property tax exemptions for affordable housing. The bill is set to be voted on this week and, if approved, will be signed by Gov. Maura Healey.

 

Bloomberg Tax

U.S. News

TIGTA has found that the IRS is not effectively reviewing audit logs for suspicious activity. The report revealed that the IRS failed to provide seven out of 13 requested audit log summary reports, and did not provide evidence of written responses to the Department of Justice. TIGTA also criticized the IRS for discrepancies in the audit log summary reports it did produce. The report highlighted the IRS's failure to adequately separate duties, as system administrators with administrator privileges are reviewing their own audit logs. TIGTA recommended that the IRS improve its audit log reviews, update the system security plan, and coordinate with system owners to address identified weaknesses. The IRS agreed with some recommendations and stated that it has processes in place for others.

 

Accounting Today

Taxpayers can use the special per diem rates released by the IRS for 2023-24 to substantiate their expenses for lodging, meals, and incidental expenses when traveling away from home. The rates, effective from October 1st, include the special transportation industry rate, the rate for the incidental expenses-only deduction, and the rates and list of high-cost localities for the high-low substantiation method. For taxpayers in the transportation industry, the special meal and incidental expenses rates are $69 for any location in the continental United States and $74 for any locality outside the continental U.S. The per diem rates for travel to high-cost localities are $309, with $74 allocated for meals, and $214 for travel to other localities within the continental U.S. The per diem rates for the incidental expenses-only substantiation method are $74 for high-cost localities and $64 for other localities within the continental U.S. The IRS provides a list of high-cost localities with federal per diem rates of $261 or more.

 

CPA Practice Advisor

How to Fix Email at Your Firm

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AICPA and the Chartered Institute of Management Accountants (CIMA) have launched Career Launchpad, an AI-guided program for accounting and finance students. The program provides access to real-world career stories, expert advice, and information on various subjects. Led by AI-powered avatar Andi, the program covers different careers in accounting and finance and offers simulated interviews with real-time feedback. Mike Decker, VP of CPA examination and pipeline at AICPA and CIMA, said the program showcases the innovative areas of accounting and finance jobs. The first five modules are free for student members, and module six is available for $19.95.

 

INSIDE Public Accounting

Accounting Today

CPA Practice Advisor

New home sales dropped in August from the month before, according to the Commerce Department, as mortgage rates topped 7% and rose to the highest levels in more than 20 years. Sales of newly constructed homes dropped 8.7% in August to a seasonally adjusted annual rate of 675,000 from a revised rate of 739,000 in July. On an annual basis, sales were up 5.8%. The median price of a new construction home was $430,300 in August, 2% down on a monthly basis. “Very stretched affordability means demand will be unable to recover in the near term, causing new home sales to fall back from 675,000 annualized in August to 600,000 annualized by the end of the year,” predicted Imogen Pattison, assistant economist at Capital Economics. A separate report, the S&P CoreLogic Case-Shiller National Home Price Index, gained 1% from a year earlier in July, after holding steady the prior month. On a month-over-month basis, the index increased a seasonally adjusted 0.6% in July. The 10-city index rose 0.9% over the year ended in July, following a 0.5% decrease in June. The 20-city index rose 0.1%. Chicago had the fastest annual home-price growth in the country, at 4.4%, followed by Cleveland, at 4%. The weakest market was Las Vegas, where prices fell 7.2% on an annual basis.

 

CNN

CNBC

Market Watch

Wall Street Journal

Consumers are growing more pessimistic about future prospects for the economy, according to the Conference Board's latest survey. Its Consumer Confidence Index has fallen for a second straight month to 103, from an upwardly-revised 108.7 a month earlier. Economists surveyed by the Wall Street Journal had forecast the index to register 105.5. Although current sentiment was largely unchanged, with the present situations index rising slightly, the expectations index declined to 73.7 from 83.3 in August. “Write-in responses showed that consumers continued to be preoccupied with rising prices in general, and for groceries and gasoline in particular", said Dana Peterson, chief economist at the Conference Board. “Consumers also expressed concerns about the political situation and higher interest rates. The decline in consumer confidence was evident across all age groups, and notably among consumers with household incomes of $50,000 or more."

 

CNN

Market Watch

US News and World Report

The US Federal Trade Commission (FTC) has filed a 172-page antitrust lawsuit in Seattle federal court against Amazon, saying the tech giant restricts retailers on its marketplace from discounting, stifling competition. “A single company, Amazon, has seized control over much of the online retail economy,” said the lawsuit, which was filed in the U.S. District Court for the Western District of Washington. “It exploits its monopolies in ways that enrich Amazon but harm its customers: both the tens of millions of American households who regularly shop on Amazon’s online superstore and the hundreds of thousands of businesses who rely on Amazon to reach them". The FTC asked the court to issue an injunction blocking Amazon from engaging in “unlawful conduct” and raised the possibility of altering the company’s structure, although it stopped short of detailing how the court could clip Amazon’s dominance, such as breaking apart elements of its business. Amazon general counsel David Zapolsky commented that the FTC "is wrong on the facts and the law", adding that if its suit succeeds the outcome "would be fewer products to choose from, higher prices, slower deliveries for consumers and reduced options for small businesses — the opposite of what antitrust law is designed to do".

 

CNN

NPR

New York Times

Wall Street Journal

A New York judge has ruled that former president Donald Trump persistently committed fraud by inflating the value of his assets and exaggerating his net worth on paperwork used in making deals and securing financing. Justice Arthur F. Engoron granted Attorney General Letitia James’ motion for summary judgment, finding Mr. Trump, his sons, and others “to be liable as a matter of law for persistent violations” of New York state law. He ordered that some of Mr. Trump’s business licenses be rescinded as punishment, making it difficult or impossible for them to do business in New York. The judge said he would continue to have an independent monitor oversee the Trump Organization’s operations, including a flagship commercial property at 40 Wall Street in Lower Manhattan. The judge rejected Mr. Trump's claim that a disclaimer on financial statements absolved him of wrongdoing. The ruling resolves the key claim in the lawsuit, but six others remain. “Today, a judge ruled in our favor and found that Donald Trump and the Trump Organization engaged in years of financial fraud,” Ms. James said in a statement Tuesday night. “We look forward to presenting the rest of our case at trial.” In response, Mr. Trump condemned the ruling, accusing the judge of “doing the bidding” of Ms. James, as the former president campaigns to return to the White House. The trial is set to begin on October 2nd, with the attorney general seeking $250m in penalties and a ban on Trump doing business in New York. 

 

CNN

Fox News

New York Times

Washington Examiner

Three-quarters of companies globally are not ready to have their environmental, social and governance (ESG) data audited externally months before new European Union, U.S. and global regulations kick in, according to a new report from KPMG. The EU rules will require disclosures be audited while countries adopting the International Sustainability Standards Board's reporting requirements can also demand external checking. However, of 750 companies surveyed by KPMG, only 25% feel they are sufficiently prepared. "Being ESG assurance ready means identifying the relevant regulatory framework and having the right metrics with robust systems, processes, controls and governance for collecting and managing the data," said Larry Bradley, KPMG's Global Head of Audit. Larger companies are better prepared for auditing than smaller firms, KPMG found; France, Japan and the U.S. came out on top, with Brazil and China ranked worst.

 

Reuters

Former IRS Commissioner Charles Rettig examines how an infusion of Congressional funding into the IRS is fueling a renewed compliance effort that targets high-wealth individuals and corporations. The IRS is using improved technology and artificial intelligence to detect tax evasion, identify emerging compliance threats, and improve case selection tools. Advanced data and analytic strategies have enhanced capabilities to identify areas of noncompliance. Mr. Rettig said the IRS has access to decades of important data that, coupled with improved funding and emerging technologies, should allow it to more efficiently and effectively build audit workplans as well as identify noncompliant taxpayers and anomalies in filed returns. He also said that the extra funding from Congress will also allow the IRS to recruit and retain experienced personnel to conduct meaningful examinations of complex returns.

 

Bloomberg Tax

Spanish prosecutors have charged musician Shakira with failing to pay €6.7bn ($7.1bn) in tax on her 2018 income - the second time the Colombian has faced a court case over her tax affairs. Shakira is already due to be tried in Barcelona on November 20th in a separate case that hinges on where she lived between 2012-14. In that case, prosecutors allege she failed to pay €14.5m in tax, after spending more than half of the period residing in Spain. The new case claims that she used an offshore company based in a tax haven to avoid paying the tax.

 

ABC News

Los Angeles Times