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Legislation has been introduced by Senate Finance Committee chairman Ron Wyden, D-Oregon which would allow accountants, lawyers, doctors and others to qualify under the section 199A deduction for qualified business income for pass-through entities. Wyden stated: “The American people are strongly supportive of the proposition that everybody pay their fair share in taxes, and that means the very wealthy and mega corporations," continuing: "Let’s be clear. Democrats aren’t raising taxes on Main Street and small businesses. We’re also going to make sure that Republicans and their special interests can’t classify every millionaire as a small business.” Anne Zimmerman, founder of Zimmerman and Co. CPAs, and co-chair of advocacy group Small Business for America’s Future, noted that: “As a CPA, I provide accounting services to small businesses and help them navigate the hurdles of the tax laws. The COVID-19 pandemic has had a disproportionate impact on small business owners who are struggling to recover.”

 

Accounting Today

The second Sovos Sales and Use Tax report has been released, with Accountancy Today noting that it "sheds surprising light on the existing landscape of sales and use tax compliance, and raises questions about the future, particularly as we move into a digital age." Charles Maniace, vice president of regulatory analysis and design at Sovos, said: “First, there is the continuing pace and rate of change in rates, rules and forms. Second, there is an increasing expanded compliance responsibility of global sellers to collect tax on nearly everything they sell. It’s a real responsibility because we’re on the verge of seeing heightened emphasis on enforcement. And lastly, there is the inevitable digitalization of enforcement, meaning that states are using data and analytics to find taxpayers that are not in compliance, and are assessing them liability.” He continued: “One thing that I find interesting is how things will play out with respect to the trend of digital advertising. While a number of states have looked at this, Maryland is the first to actually impose such a tax within the U.S. On the international stage, the U.S. is opposed to these taxes because they unfairly single out U.S. tech companies, but within our own shores, one state has imposed such a tax." 

 

Accounting Today

According to figures from the Joint Legislative Budget Committee and the state Department of Revenue, Mississippi tax collections increased during the state budget year ending June 30, by over $924m. The state collected almost 16% more in taxes than in the previous year, with sales taxes paid on in-person purchases up 4% over the previous year, use taxes, paid for online purchases, up 20%, taxes paid on the purchase of liquor up almost 23% and taxes paid on beer and wine almost 6%. Mississippi casinos collected nearly 39% more taxes in the most recent year compared to the preceding one.

 

U.S. News

A new accounting standard has been proposed by the GASB that would tackle a wide range of issues for state and local government finance departments that have been identified by the board as needing attention.

 

Journal of Accountancy

Accounting Today looks at how CPA firms can attract quality partners. It suggests that: “'Rising stars' and laterals need a quality firm that has two major things going for it: (1) a track record of achieving sustained success and continually improved average partner earnings; and (2) a strategic plan that will enable the firm to transition from a merely good firm to a mid-market sustainable brand," continuing: "Unless the firm exhibits these two key ingredients, a CEO truly doesn’t have a good answer as to why the firm will be attractive to potential partners." The article concludes that "Firms must develop and institute a plan to change and adapt their succession plans. The updated plans should focus on accelerating transformation of the existing partners and staff in terms of adapting quickly to the firm’s succession needs and the evolving future marketplace so they’re prepared to step in and fill those needs."

 

Accounting Today

Congress will learn today when the federal government will likely run out of money to pay its bill. Reuters suggests that a failure by Democrats and Republicans to work out differences over whether government spending cuts should accompany an increase in the statutory debt limit, currently set at $28.5trn, could lead to a shutdown of the federal government - something that has happened three times in the past decade. "Every time, it's messy," said the top Republican on the Senate Finance Committee, Mike Crapo, when asked about the process of adjusting the debt limit. He noted that in his nearly three decades in Congress he had pushed for spending cuts in those negotiations, adding in a brief interview that he would be seeking cuts again. On July 31, the Treasury Department technically bumps up against its statutory debt limit. Much like a personal credit card maximum, the debt ceiling is the amount of money the federal government is allowed to borrow to meet its obligations. These range from paying military salaries and IRS tax refunds to Social Security benefits and even interest payments on the debt. If Congress does not raise the debt ceiling from its current $28.5trn by then, Treasury Secretary Janet Yellen is expected to take special steps to avoid a government default. Such stop-gap measures are effective for only a short period. The non-partisan Congressional Budget Office is scheduled today to release its latest estimate of when the government actually would be unable to pay its bills -- the so-called X Date.

 

Reuters

BlackRock has increased its opposition to executive pay in Europe over the past year, details of the asset manager’s voting records show, indicating an increased willingness to drive up corporate governance standards. BlackRock said it voted against management on 33% of “say-on-pay” proposals in European companies in the year to the end of June – up from 26% last year. This increase in opposition votes was “largely attributed” to BlackRock's opposition to adjustments that companies made during the pandemic. “BlackRock opposed executive pay programmes when companies were not able to explain how these adjustments supported long-term, sustainable value creation for shareholders, ” said Sandy Boss, global head of investment stewardship.

 

Financial Times

Reuters

Former Internal Revenue Service IT specialist Kwashie Senam Zilevu has been convicted on fraud charges by a federal jury. He was accused of operating a scheme under which he opened a line of credit using information acquired from the Dark Web, using a credit card mailed to his home to pay for airline tickets, hotel rooms, interior decorating and work on his home, among other products and services. Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia, said in a statement: "As the evidence at trial showed, the defendant engaged in a scheme involving fraudulent purchases and payments, including by using a fictitious charity website, for his own benefit. We thank the trial team and our partner agencies for ensuring that the defendant has been held accountable for inexcusably committing this crime while he was serving as a federal employee.”

 

Accounting Today