Become more informed in minutes....

A group of Senate Democrats and independents have introduced the Billionaires Income Tax Act, a bill aimed at curbing tax breaks for billionaires. The legislation, introduced by Senate Finance Committee Chairman Ron Wyden (D-OR), would amend the Tax Code to eliminate tax loopholes that allow billionaires to defer tax indefinitely through planning strategies such as ''buy, borrow, die,'' and modify over 30 tax provisions so billionaires are required to pay taxes annually, and for other purposes. The bill would apply to approximately 700 taxpayers and raise hundreds of billions of dollars, which could be used to support programs like Social Security and Medicare. Provisions of the bill include taxation of gains and losses from assets like stocks, as well as a deferral charge on gains from nontradeable assets such as real estate. 

 

Accounting Today

Multinational enterprises (MNEs) should re-evaluate the recognition and measurement of transfer pricing-related tax positions due to recent IRS litigation wins and an increased likelihood of transfer pricing penalties, say Steven C. Wrappe and April D. Little of Grant Thornton. Two recent changes in the U.S. transfer pricing enforcement environment could change how entities evaluate their transfer pricing-related tax positions. First, the IRS has achieved a dramatic increase in transfer pricing litigation success. Second, the agency has been messaging that it intends to assert transfer pricing penalties in more cases, including in situations where transfer pricing documentation exists, if that documentation is found to be insufficient.

 

Bloomberg Tax

The Guide to Updates for Tax Season 2024

With the new 2024 tax season right around the corner, are you confident that you have the tools and the information necessary to jump into the season armed with the knowledge you need? This webinar on December 7th includes 1 free CPE credit and is designed for  you to quickly grasp what you need to know to help your clients and prepare you for tax season and beyond.

Register Now!

 

The company formerly known as AuditClub has rebranded to CPAClub, and now offers tax and advisory solutions to CPA firms. CPAClub, led by former audit partners, provides outsourced audit and assurance services for CPA firms that lack in-house talent. In response to high demand, CPAClub has expanded its services to include tax and advisory professionals. Along with the expansion, CPAClub has also introduced CPAClub+, an upgraded membership tier with additional privileges and support. “The enthusiastic response to our flexible accounting and assurance solutions from over 120 CPA firms and companies of all sizes confirmed that our innovative membership model fulfilled a critical need and continues to do so,” said Chris Vanover, president of CPAClub. “Many members have also requested tax and advisory talent solutions, so the current expansion to include these is a natural next step.”

 

Accounting Today

CPA Practice Advisor

Chicago-based accounting firm NDH Advisors has acquired Leawood, KS-based tax and accounting firm Stratus Group. The terms of the deal were not disclosed. NDH Advisors, which received financial backing from private-equity firm Unity Partners in May, is looking to expand through organic growth and strategic acquisitions. Stratus Group is the first acquisition for the Chicago firm.

 

CPA Practice Advisor

U.S. consumer spending rose moderately in October, while the annual increase in inflation was the smallest since April 2021. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2% last month after an unrevised 0.7% gain in September, according to the Commerce Department. Spending on international travel, hospital and nursing home services, accommodations and gasoline helped to drive the month’s increase, although consumers pulled back on durable goods purchases. Personal income increased by 0.2%. Commerce also said that inflation, as measured by the personal consumption expenditures (PCE) price index - the Federal Reserve's favored inflation gauge - was unchanged in October after rising 0.4% in September. In the 12 months through October, the PCE price index increased 3.0%. That was the smallest year-on-year gain since March 2021 and followed a 3.4% advance in September. Excluding the volatile food and energy components, the PCE price index gained 0.2% last month, after rising 0.3% in September. Monthly inflation readings of 0.2% on a sustainable basis are needed to bring inflation back to the U.S. central bank's 2% target, according to economists. The so-called core PCE price index advanced 3.5% on a year-on-year basis in October, the smallest rise since April 2021, after increasing 3.7% in September.

 

CNN

CNBC

Market Watch

Reuters

Pending home sales fell in October to the lowest since at least 2001, the National Association of Realtors (NAR) reported on Thursday, with potential buyers stymied by high mortgage rates and weakened affordability. Contracts to buy existing homes fell 1.5% in October to 71.4 from a revised 72.5 the month prior, according to the National Association of Realtors' Pending Home Sales Index.  The median estimate in a Bloomberg survey of economists called for a 2% decrease. On an annual basis, it dropped 8.5%. Contracts on existing homes fell by the most in the West and South on a monthly basis. Contracts signed rose by 2.7% in the Northeast, the only region to experience a month-over-month increase. “During October, mortgage rates were at their highest, and contract signings for existing homes were at their lowest in more than 20 years,” explained NAR chief economist Lawrence Yun. “Recent weeks’ successive declines in mortgage rates will help qualify more home buyers, but limited housing inventory is significantly preventing housing demand from fully being satisfied".

 

CNN

Bloomberg

CNBC

Reuters

Initial jobless claims rose 7,000 to 218,000 in the seven days to November 25th, the Labor Department said Thursday, just below the 11,000 increase expected among economists polled by the Wall Street Journal. The four-week moving average was 220,000, while continuing claims, reported with a one-week lag, came in at 1.93m, up 86,000 from the prior week, and representing their highest level since November 2021. On an unadjusted basis, continuing claims dropped sharply, falling nearly 98,0000 and suggesting seasonal factors may be impacting the data. Unadjusted initial claims also fell, led by declines in California, Texas and Oregon.

 

Barron's

Bloomberg

Market Watch

Goldman Sachs has lost over 100 AI staffers to rivals such as Morgan Stanley and Citigroup in the past year, making it the bank with the highest net outflow of AI talent among its biggest competitors. The data compiled by consultancy Evident shines a light on the fiercely competitive landscape for AI talent, with employees in these roles being among the highest paid at any company. While the departures represent a small fraction of the thousands of AI staff employed at banks, it highlights the challenge of attracting and retaining top talent. The report also states that Goldman Sachs has been making investments and hiring to attract AI talent, but the net outflow continues. Other banks, such as JPMorgan Chase and Citigroup, have also experienced both gains and losses in AI talent. The research emphasizes the importance of nurturing and retaining AI-talented individuals in addition to hiring them.

 

Bloomberg

Many older Americans are missing out on valuable tax breaks offered by the IRS, leaving behind savings that could make a difference for their financial well-being. The tax code is complicated, and rules on tax exemptions are constantly changing, making it hard for the average taxpayer to know about the array of tax breaks available to them. Since 2017, there have been five big tax-law changes, bringing new tax breaks and muddling the tax-filing process. Four often-overlooked tax deductions for seniors include an extra standard deduction, IRA contributions by a spouse, qualified charitable distributions, and the Medicare premium deduction. These deductions can offer potentially lucrative savings for retirees. It's important for retirees to be aware of these tax breaks and take advantage of them to maximize their savings. As Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals, said: "The reason this is happening is because the tax code is complicated . . . This makes it hard for the average taxpayer to know about the array of tax breaks available to them."

 

Wall Street Journal

DK Butterfly, the bankruptcy estate of Bed Bath & Beyond, has filed the largest ever lawsuit with the Federal Maritime Commission, seeking around $300m from Mediterranean Shipping Co. (MSC) for allegedly overcharging for its cargo services during the pandemic. A 36-page filing describes MSC's performance in 2021 as "abysmal", and sets out how the retailer had to pay high freight rates in the spot market to get its good shipped. “MSC’s behavior has caused significant harm” and lost profits due to cargo that wasn’t imported as well as the shipping surcharges, the complaint said. The complaint asks the FMC to determine damages. In response, MSC said it is studying the complaint but believes that the claims are meritless and that it will dispute them through legal channels. 

 

Wall Street Journal

Digital bank robberies and cyber hacks pose a significant risk for countries launching digital versions of their currencies, according to a report by the Bank for International Settlements (BIS). The report highlights the challenges faced by central banks in providing digital cash, including technological know-how and the environmental impact of their energy needs. The worst-case scenario would be a cyber hack resulting in money being stolen from a central bank's digital vault. The BIS report emphasizes that cyber security is a key risk for central bank digital currencies (CBDCs) and could have far-reaching implications for current central bank operations. The report also mentions that the number of banks working on CBDCs has tripled in the last three years, with nearly a dozen already launched. The use of new technologies like distributed ledger technology (DLT) in CBDCs presents unique cyber risks due to the lack of a widely accepted cyber security framework. The report concludes that issuing a CBDC will have major implications for central banks' business models and risk profiles.

 

Reuters

Identity-verification company Okta has reported a data breach impacting all of its customer support system users, except for government customers. The breach resulted in the theft of customer data, including full names and email addresses. Okta's Chief Security Officer, David Bradbury, warned of an increased risk of phishing and social engineering attacks and advised all customers to use multi-factor authentication.

 

Wall Street Journal

PwC affiliates in Hong Kong and China have been fined $7m by the PCAOB. The U.S. accounting watchdog found that more than 1,000 audit staff cheated on internal training exams between 2018 and 2020. Without admitting the allegations, PwC’s Hong Kong firm has agreed to pay a $4m settlement, while PwC China is to pay $3m. PwC said it was “highly regrettable” that staff had shared test answers. The PCAOB has ordered the firm to strengthen its policies to ensure staff act with integrity in internal training.

 

Compliance Week

Financial Times

Reuters

America's mental health crisis drove suicides to a record-high number last year. Nearly 50,000 people in the U.S. lost their lives to suicide in 2022, according to a provisional tally from the National Center for Health Statistics. The suicide rate of 14.3 deaths per 100,000 people reached its highest level since 1941. The record reflects broad struggles to help people in mental distress following a pandemic that killed more than one million in the U.S., upended the economy and left many isolated and afraid. "There was a rupture in our economic health and social fabric. We're still experiencing the aftereffects of that," said Jeffrey Leichter, a psychologist. Men 75 and older had the highest suicide rate last year at nearly 44 per 100,000 people, double that for people 15-24. Suicide rates for children 10-14 and people 15-24 declined by 18% and 9%, respectively, last year from 2021. Mental health care is harder to find than before the pandemic. About half of people in the U.S. live in an area without a mental health professional, federal data show. "People are feeling worse," said Dr. Nikole Benders-Hadi, a psychiatrist. Help is available: Reach the 988 Suicide & Crisis Lifeline by dialing or texting 988.

 

Wall Street Journal