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House Speaker Nancy Pelosi (D-CA) has defended a proposal to increase the amount of information financial institutions report to the IRS about bank accounts, indicating the proposal would be a part of Democrats' social-spending package. The Biden administration has proposed requiring banks to report aggregate inflows and outflows of bank accounts in annual forms to the IRS, in instances where accounts have flows exceeding $600. The White House says the proposal would strengthen the IRS' ability to crack down on wealthy tax cheats, raising around $460m over 10 years. "Yes there are concerns that some people have, but if people are breaking the law and not paying their taxes, one way to track them is through the banking measure," Ms. Pelosi said during a press conference. Democratic lawmakers have a tentative deal to raise that threshold to $10,000, and to exempt regular wage payments. Ms. Pelosi noted in her comments that the $600 threshold is not set in stone.  "That's a negotiation that will go on as to what the amount is," she said.

 

The Hill

Fox News

The IRS has closed the audit of $29.5m in tax-exempt refunding bonds for an Arizona law enforcement center without changing their tax-advantaged status. The audit closure, which was official as of September 8th, reversed a preliminary determination made by the IRS in March, that 2017 tax-exempt refunding bonds for the Santa Cruz County Jail District detention center in Nogales, Arizona, should be treated as retroactively taxable. At that time, the IRS said in a letter that the bonds met the private business use and private payment tests contained in Sections 141(b)(1) and 141(b)(2) of the Internal Revenue Code stemming from the portion of the facility that is under contract to house federal prisoners. Under those Code provisions, a bond issue meets the private business use test if more than 10% of the proceeds of the issue will be used for any private business use. For bond purposes, the Federal government — which through various law enforcement agencies often contracts with local jails to house federal prisoners — is considered to be a private entity.

 

The Bond Buyer

Global confidence among accountants in the economic recovery from the COVID-19 pandemic declined in the third quarter of the year, especially in North America. A new survey released Tuesday by the Association of Chartered Certified Accountants and the Institute of Management Accountants found that global confidence fell by nine points in the third quarter, with the biggest drop occurring in North America, which plummeted 41 points, followed by Western Europe, falling 24 points. Confidence increased in Asia Pacific by 11 points and South Asia by 20 points. 

 

Accounting Today

The House of Representatives yesterday voted 219-206 to approve a short-term increase in the federal debt ceiling, heading off fiscal calamity and putting a temporary end to negotiations between the Democrats and Republicans. The bill increases the borrowing limit by $480bn, an amount the Treasury Department estimates should keep debt payments flowing until December 3rd. The White House has said that President Joe Biden will sign the measure into law.

 

NBC News

NPR

Wall Street Journal

Persistent supply chain disruptions and inflation pressures are constraining the global economy's recovery from the COVID-19 pandemic, the International Monetary Fund (IMF) said on Tuesday as it cut growth outlooks for the United States and other major industrial powers. In its World Economic Outlook, the IMF trimmed its 2021 global growth forecast to 5.9% from the 6.0% forecast it made in July. It left a 2022 global growth forecast unchanged at 4.9%. The growth outlook for the U.S. was trimmed 0.1 percentage point to 6% this year, while the projection for China also was reduced by 0.1 percentage point to 8%. Several other major economies saw their outlook cut, including Germany, whose economy now is projected to grow 3.1% this year, down 0.5 percentage point from its July forecast. Japan’s outlook was lowered by 0.4 percentage point to 2.4%. IMF economists say that inflation outlook is “highly uncertain” due to the unprecedented nature of the current recovery. Despite the upward revision in its price projections, the forecast for inflation to return to pre-pandemic levels is based on an ample labor supply in advanced economies that should weigh on wages. 

 

Politico

Reuters

Wall Street Journal

U.S. consumers’ expectations for inflation continued to rise in September amid elevated price pressures, according to a Federal Reserve Bank of New York survey. Household expectations for inflation one year ahead rose to 5.3% last month from 5.2% in August, while median expected inflation three years ahead rose to 4.2% from 4%, results of the New York Fed’s monthly Survey of Consumer Expectations, published Tuesday, showed. Both marked the highest readings on record in the survey’s eight-year history. The September survey, which is based on a rotating panel of 1,300 households, showed that consumers lowered their expectations for how much some essential expenses will rise over the near term. The price of gas is expected to rise by a median of 5.9% over the next year, down "sharply" from 9.2% in August. Expectations for home prices decreased for the fourth consecutive month, with consumers now expecting prices to rise by 5.5% over the next year, down from 5.9% in August. 

 

US News and World Report

Bloomberg

BDO USA has acquired Lowery Asset Consulting, a Chicago-based investment consulting firm. The firm’s eight employees will join BDO Wealth Advisors and relocate to BDO’s downtown Chicago office. The deal, which is slated to close this month, will add 401(k) plan sponsor investment advisory capabilities and expand BDO Wealth Advisors’ ability to serve insurance firms, private endowments, and high net worth individuals.

 

Consulting.us

The Social Security Administration is to release its annual cost-of-living adjustment for Social Security benefits, with an expected 6% cost-of-living adjustment the largest since 1982. Naomi Fink, a retirement economist at investment manager Capital Group, remarked: “If price rises turn out to be fleeting and reflect temporary supply shocks and they subsequently show much more modest rises in 2022, then that would be quite positive for those that got that windfall cost-of-living adjustment.” David Certner, legislative counsel at AARP, added: “Higher prices are generally not good for people who are living on fixed incomes. Security may have a cost-of-living adjustment, but most other income sources that seniors may have—for example, pension income—are not adjusted for inflation. So even if Social Security is keeping up with inflation, it may very well be that other sources of income are not.”

 

Wall Street Journal

Negotiations over the withdrawal of existing digital services taxes after a landmark corporate tax deal should ultimately end the threat of tariff wars between the United States and several countries over the levies, U.S. Treasury officials said. In the OECD tax agreement, 136 countries last Friday agreed to adopt a 15% minimum corporate tax and partly re-allocate taxing rights for large, highly profitable companies to countries where they sell products and services. In return, the deal requires all countries to remove unilateral digital services taxes (DST) that largely targeted U.S. technology giants. The U.S. Trade representative's office has readied tariffs against imports from France, Britain, Italy, Spain, Austria, India and Turkey over their digital services taxes, but has suspended them to allow for negotiations on a global tax deal to eliminate them. Proposed tariffs on French goods would slap 25% duties on cosmetics, handbags and other imports valued at some $1.3bn, while Paris has threatened retaliation of its own. One of the Treasury officials said the department was coordinating closely with the U.S. Trade Representative's Office on the digital tariff removals.

 

Reuters

White House officials, scrambling to relieve global supply bottlenecks choking U.S. ports, highways and railways, have warned that Americans may face higher prices and some empty shelves this Christmas season. "There will be things that people can't get", a senior White House official told Reuters, when asked about holiday shopping. "At the same time, a lot of these goods are hopefully substitutable by other things...I don't think there's any real reason to be panicked, but we all feel the frustration and there's a certain need for patience to help get through a relatively short period of time". President Joe Biden will meet with executives from Walmart and Home Depot, along with union leaders and other stakeholders, today to discuss efforts to relieve transportation bottlenecks before delivering a speech on the topic.

 

Reuters