Become more informed in minutes....

House Democrats are expected to today approve the Inflation Reduction Act, a sweeping package to lower health-care costs, combat climate change, raise taxes on some large companies and reduce the deficit, sending the proposal to the Oval Office for President Joe Biden's signature. With debate set to begin in the morning, and a vote on passage likely later in the afternoon, the chamber is on track to deliver for Democrats a major legislative victory. The package will be funded through changes to tax laws, including a new 15% minimum tax on some billion-dollar corporations that currently pay nothing to the federal government. They also seek taxes on companies that buy back their own stock, and money to help the IRS fight against tax evasion. Initial analyses of the legislation found that it could reduce the nation’s deficit by as much as $300bn over a decade.

 

New York Times

Washington Post

Wall Street Journal

Allen Weisselberg, for decades the chief financial officer of former President Donald Trump's namesake family business, is due in a New York court today. for a hearing in his criminal case. The Manhattan District Attorney's office charged him and the Trump Organization last summer with tax fraud after they were accused of compensating employees "off the books" in order to pay less in taxes. Mr. Weisselberg has pleaded not guilty to charges that he avoided taxes on more than $1.7m in the past 15 years, resulting from the payment of his rent on an apartment in a Trump-owned building and related expenses that prosecutors said included cars and private school tuition for his grandchildren.

 

ABC News

The IRS is searching for a new deputy chief of its Independent Office of Appeals to help manage and develop the office. The successful applicant will replace Lia Colbert, who was named commissioner of the IRS's Small Business/Self-Employed division in April, and will function as principal advisor to the chief of appeals in providing executive leadership and direction in the design, development and delivery of a comprehensive tax administration program to meet the administrative appeals needs of all taxpayers.

 

Accounting Today

Register Now, FREE ERC Referral Partner Passive Income Webinar

Join Jerry Packer, Director of Business Development, Omega Accounting Solutions, for a free webinar about Omega’s Employee Retention Credit (ERC) Partner Referral Program (PRP).

• Extend your team’s capabilities & access services outside your specialty 
• Partner with ERC specialists able to scale and support the government incentive process
• Join forces with a team whose services complement rather than compete with your own
• Collaborate with an established accounting services company recognized for its integrity and reliability
• Earn referral fees (if applicable) simply for making warm introductions between Omega and your clients

DON’T MISS OUT
Learn more with Jerry Packer and Omega’s FREE webinar:  Omega ERC Referral Partner Passive Income Webinar

REGISTER HERE

 

The number of Americans filing new claims for unemployment benefits rose for the second straight week, indicating further softening in the labor market despite still tight conditions as the Federal Reserve tries to slow demand to help tame inflation. Initial jobless claims increased to a seasonally-adjusted 262,000 last week from a revised 248,000 the previous week, the Labor Department said Thursday. Economists polled by Reuters had forecast 263,000 applications. Last week’s total was slightly above the prior 2022 peak set in July of 261,000 and was above the 2019 weekly average of 218,000. The four-week moving average for initial claims, which smooths out weekly volatility, rose by 4,500 to 252,000. Continuing claims, a proxy for the number of people receiving government unemployment payments, increased by 8,000 to 1.43m in the week ended July 30th. “The rise in initial claims since early April is a cool breeze blowing at the hot labor market this summer” and a clear sign that layoffs are happening at a growing number of companies, said Stuart Hoffman, senior economic advisor at PNC Financial Services Group.

 

Bloomberg

Market Watch

Reuters

Wall Street Journal

U.S. suppliers raised prices in July at the slowest annual pace since last fall as energy costs dropped, adding to signs price pressures in the economy have eased slightly. The Labor Department's producer-price index increased by 9.8% annually in July, the smallest annual rise since October 2021’s 8.9% increase. Producer prices decreased a seasonally adjusted 0.5% in July from the prior month, down sharply from June and the first decline since April 2020. “A potential peak in annual inflation measures is a welcome sign,” said Mahir Rasheed, U.S. economist at Oxford Economics. “Historically elevated price dynamics churning in the economy will likely persist through the end of the year. However, with the Fed remaining laser-focused on tightening policy to restrict inflation pressures, producer price inflation will downshift significantly in 2023.”

 

CNBC

Washington Examiner

Wall Street Journal

The U.S. Senate Finance Committee is widening its investigation into the tax practices of U.S. drugmakers to include Amgen, according to a letter sent by the committee's chairman, Senator Ron Wyden (D-OR). The IRS is pursuing more than $10bn in back taxes and penalties it says the biotech firm owes. The committee has been looking into how the tax law passed by Republicans in 2017 has benefited large U.S. drugmakers like Amgen, Merck and AbbVie, and whether those companies have been exploiting foreign subsidiaries to avoid taxes. Mr. Wyden wrote to Amgen chief executive Robert Bradway asking what methods the company has used in order to pay an average effective tax rate of around 12% over the past four years. 

 

Reuters

The federal judge overseeing about 230,000 claims over 3M's military-issue earplugs has sharply questioned the company's strategy of offloading its liabilities onto a newly bankrupt subsidiary. U.S. District Judge M. Casey Rodgers in Pensacola, Florida, deferred a ruling on military veterans’ request that she maintain jurisdiction over mass claims that 3M earplugs were defective, the largest multidistrict litigation in U.S. history. However, she questioned last month’s bankruptcy filing by Aearo Technologies, a 3M subsidiary named as a co-defendant along with its publicly traded parent company in the roughly 230,000 pending claims, mostly by military service members. Judge Rodgers, who oversees the earplug litigation, said in the hearing that it appears 3M placed Aearo under Chapter 11 to get out of her courtroom and face the earplug claims in bankruptcy court instead. “3M believes that’s a valid reason to seek [bankruptcy] protection and do what they’ve done very, very creatively,” she said, adding that Aearo “voluntarily agreed to go into financial distress” by assuming responsibility for earplug claims shortly before its Chapter 11 filing.

 

Reuters

Wall Street Journal

The IRS is seeking to identify customers of cryptocurrency prime dealer SFOX as part of its efforts to force crypto investors to pay tax on their holdings. In court filings in New York and Los Angeles, the tax authority asked federal judges to let it serve summonses on SFOX and M.Y. Safra Bank, which partnered with SFOX in 2019 to offer its customers cash deposit accounts backed by the Federal Deposit Insurance Corporation. The agency is seeking account and transaction records for users with cryptocurrency transactions over $20,000 in any year from 2016 to 2021. According to a recent report from Barclays, crypto investors are paying less than half the taxes they owe.

 

Bloomberg

The EU says a new U.S. tax credit plan aimed at encouraging Americans to buy electric vehicles could discriminate against European producers and contravene World Trade Organisation (WTO) rules. Under the $430bn climate and energy bill passed by the U.S. Senate, Congress would lift the cap on the existing $7,500 tax credit for electric vehicle purchasers but impose restrictions, including barring vehicles not assembled in North America from receiving the credit. "We think it's discriminatory, that it is discriminating against foreign producers in relation to U.S. producers," said European Commission spokesperson Miriam Garcia Ferrer. "Of course this would mean that it would be incompatible with the WTO."

 

Reuters

Calgary-based researcher Paul Fairie recently went viral with a tweet thread that compiled old newspaper clippings – going back to 1894 – on the theme of “Nobody wants to work anymore.” Despite the antiquity of some of the clippings cited in the thread, Fairie said: “It’s a conversation about work — about COVID and inflation and the pace of the economy right now — that caught people’s interest . . . It’s that point of, there’s nothing especially wrong with workers today.” Joseph McCartin, a labor historian at Georgetown University, observes the notion that people simply don’t want to work is a long-running trope in American history, and tropes about today’s labor shortages in sectors such as trucking, healthcare and service get linked to the idea that people don’t want to work. “But that sidesteps the key issue, which is that a lot of jobs, for the amount of wear and tear and the hard labor involved — they just don’t pay enough,” he said. “Very often what this kind of rhetoric, whether it’s people don’t want to work or there’s a labor shortage, what that often speaks to is that wages simply aren’t attractive enough for workers.”

 

Los Angeles Times