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A U.S. appeals court has reversed a judge's order that barred financial technology firm Block Inc from using its name in conjunction with its tax-preparation app during a trademark dispute with H&R Block. The ruling comes in a battle following Block Inc.'s 2021 rebrand from Square, offering guidance to practitioners seeking to secure early court orders blocking trademark use during legal disputes. H&R Block was unable to show that Block Inc.'s name change would cause “substantial consumer confusion,” so an injunction at this early stage of the case isn’t warranted, Circuit Judge Ralph R. Erickson wrote for a 2-1 panel majority. They found that H&R Block needed more than just social media posts and media articles as evidence of actual consumer confusion over the two brands. “We are disappointed in the ruling and believe the dissenting judge was correct in his assessment of the appeal,” H&R Block said in a statement. “We remain confident in the strength of our brand and trademark rights and are evaluating next steps."

 

Bloomberg Law

Reuters

AMC Networks and Sony Pictures Television, the companies behind acclaimed TV show Better Call Saul, have asked a U.S. judge to dismiss Liberty Tax Service's lawsuit objecting to an episode of the crime drama. Liberty sued the firms over the depiction of "Sweet Liberty Tax Services" in the episode Carrot and Stick, broadcast April 18th 2022. The title character Saul Goodman, a lawyer also known as Jimmy McGill and played by Bob Odenkirk, was shown visiting Sweet Liberty in the New Mexico desert. Liberty Tax said the depiction misled viewers into thinking Sweet Liberty was one of its more than 2,500 offices. AMC and Sony argue the episode is "fully protected" by the U.S. Constitution's First Amendment, and that it was implausible for viewers to believe Liberty Tax engaged in tax fraud based on the show. The lawsuit seeks unspecified punitive and triple damages.

 

Reuters

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U.S. Supreme Court Justice Neil Gorsuch has questioned whether a $2.17m tax penalty assessed on a Massachusetts woman for not reporting a Swiss bank account was unconstitutionally excessive, saying the high court should have heard her appeal. The conservative justice laid out those concerns as he dissented from the court's decision not to hear Monica Toth's appeal of a lower-court decision upholding the penalty, saying the case "would have been well worth our time." According to her lawyers, Toth's father had fled Germany for Argentina in the 1930s after he was assaulted for being Jewish. He became a successful businessman and before his death in 1999 gave Toth millions of dollars in a Swiss bank account. Gorsuch, in his three-page dissent, noted that Toth's father had himself always maintained a reserve of funds in a Swiss bank account, "perhaps owing to his early formative experiences," and encouraged his daughter to keep money there "just in case." Samuel Gedge, a lawyer for Toth at the libertarian public interest law firm Institute for Justice, said he hoped the 1st Circuit heeds Gorsuch's dissent.

 

Reuters

The Maryland Supreme Court will hear an appeal of a lower court's ruling that the state's first-in-the-nation tax on digital is unconstitutional. Anne Arundel County Circuit Court Judge Alison Asti ruled in October that the Maryland law violates the U.S. Constitution’s prohibition on state interference with interstate commerce. She also ruled that it violates the federal Internet Tax Freedom Act, which prohibits discrimination against electronic commerce. Maryland lawmakers overrode then-Gov. Larry Hogan's veto of the measure to pass the legislation in 2021. The state estimated the tax on digital advertising could raise about $250m a year to help pay for a sweeping K-12 education measure. Attorneys for companies such as Facebook, Google and Amazon contend that the law unfairly targets the companies. It would impose a tax based on global annual gross revenues for companies that make more than $100m globally.

 

US News and World Report

Tax professionals who have begun working on their clients' tax returns this year are encountering a slight change in wording at the top of Form 1040 when it comes to declaring whether taxpayers bought or sold any cryptocurrency last year. The IRS decided to change the term from "virtual currency" to "digital asset" this year so it would include more than just cryptocurrencies like Bitcoin, but also non-fungible tokens and stablecoins. A question regarding digital assets must be answered by all taxpayers on their 2022 income tax returns. The IRS said anyone who files Form 1040, Form 1040-SR, or Form 1040-NR must check one box, answering either “Yes” or “No” to the digital asset question. Additionally, the IRS wants people who claim tax deductions for donating cryptocurrency to charity to first receive a "qualified appraisal" of the value if it exceeds $5,000. In a Chief Counsel Memorandum released earlier this month, the IRS responded to a request for advice on whether a hypothetical taxpayers needs to obtain a "qualified appraisal" under Section 170(f)(11)(C) of the Tax Code for contributions of cryptocurrency for which the taxpayer claims a charitable contribution deduction of more than $5,000.

 

Accounting Today

Accounting Today

CPA Practice Advisor

Cryptocurrency exchange Kraken has named CJ Rinaldi as its new chief compliance officer, hiring him from rival Blockchain.com, as the company continues to revamp its compliance program after a sanctions violation settlement amid increasing regulatory scrutiny of the crypto sector. Kraken in November agreed to pay more than $362,000 to settle allegations it violated U.S. sanctions against Iran. The company allegedly violated U.S. sanctions laws by failing to prevent users in Iran from accessing its platform, which allowed them to conduct transactions worth more than $1.68m between October 2015 and June 2019.

 

FinanceFeeds

Wall Street Journal

U.S. business activity weakened again in January, adding to signs of a slowing economy at the beginning of the year as still-high inflation and rapidly increasing interest rates weigh on demand. The S&P Global Flash Composite Output Index, which gauges activity in the manufacturing and services sectors, rose to 46.6 in January from 45.0 in December, a three-month high but remaining under the 50 threshold which separates expansion from contraction for a seventh consecutive month. On the manufacturing side, S&P Global's flash Manufacturing PMI came in at 46.8 this month, up from 46.2 in December and exceeding the median estimate of 46.0 in a poll of economists by Reuters. In the services sector, the pace of contraction moderated to 46.6 in January from 44.7 last month, exceeding the median estimate in the Reuters poll of 45.0. "The U.S. economy has started 2023 on a disappointingly soft note," S&P Global chief business economist Chris Williamson said. "Although moderating compared to December, the rate of decline is among the steepest seen since the global financial crisis," he said.

 

Market Watch

Reuters

Wall Street Journal

Bedding manufacturer Serta Simmons has filed for Chapter 11 bankruptcy protection, in an effort to eliminate most of its debt. The company, which counts brands such as Serta, Simmons, Beautyrest and Tuft & Needle in its portfolio, has filed a pre-packaged bankruptcy plan with the U.S. Bankruptcy Court in the Southern District of Texas, which aims to cut its debt from $1.9bn to $300m. It has also lined up $125m in financing to keep operating, including to pay its 3,600 employees.

 

Reuters

Wall Street Journal

Australian Assistant Treasurer Stephen Jones has threatened to end confidential briefings with the country's largest consulting firms after a former PwC partner was banned by the Tax Practitioners Board for leaking confidential government tax plans - including new rules to stop multinationals avoiding tax - to other staff and partners at the firm. “The tax advice profession is now on notice,” Jones said, adding “When the integrity of that process is breached, we may need to rethink our approach.” Peter-John Collins, the former head of international tax at PwC Australia, was deregistered by the Tax Practitioners Board for leaking confidential government information and banned from the profession for two years. The Treasury had briefed Mr Collins in confidence on measures to prevent multinationals avoiding tax by shifting profits from Australia to tax and secrecy havens. But a probe found Mr Collins leaked the confidential information to PwC partners and staff.

 

Sydney Morning Herald

Remote work saves commuters around the world 72 minutes a day, according to a new study from the National Bureau of Economic Research. Working from home is saving the most time in China, freeing up 102 minutes a day. Workers in Serbia saw the smallest savings of 51 minutes; those in the U.S. had a comparatively low 55 minutes spared. U.K. workers saved 73 minutes; workers in Germany saved 65 minutes. The study nevertheless shows that businesses are the biggest beneficiaries of the travel time savings, with workers devoting 40% of their saved time toward primary and secondary jobs. About a third of saved time was directed toward leisure activities and 11% went to caregiving, the study found.

 

Bloomberg