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A new initiative announced yesterday by the IRS and the Treasury Department will allow eligible employers to claim tax credits equivalent to the wages paid for providing paid time-off to employees to take a family or household member or other individuals to get vaccinated for COVID-19, or to take care of a family or household member or other individuals recovering from a vaccination. Comparable tax credits are also available for self-employed individuals. The announcement Thursday expands a tax break that was announced last spring.

 

Accounting Today

Two lawmakers in the House have reintroduced bipartisan legislation to change a provision in the Tax Cuts and Jobs Act (TCJA) that makes it difficult for performers to deduct business expenses. The Performing Artist Tax Parity Act, sponsored by Rep. Judy Chu (D-CA) and Vern Buchanan (R-FL), would update the Qualified Performing Artist tax deduction to help artists deduct work-related expenses. The TCJA mostly eliminated the ability to claim miscellaneous itemized deductions that used to allow performing artists to deduct their work expenses. Elimination of the deductions has caused many artists to pay thousands more in taxes. The proposed measures would correct this by updating the thresholds of the Qualified Performing Artists Deduction to enable more lower and middle-income performing artists to claim it. “After an unprecedented pandemic that darkened stages and film sets around the country, performing artists face a long recovery that could mean being some of the last people to return to work,” Ms. Chu said in a statement. “That is why we must restore tax deductions that let these workers seek employment without facing steep personal expenses.”

 

Accounting Today

EY has completed a blockchain-based project to address complexities and inefficiencies in the cross-border withholding tax (WHT) process. The WHT tool implements EY’s blockchain-based technology to enable secure, automated and decentralized sharing of financial information between tax authorities and related intermediaries and improve tax compliance and reduce fraud. The solution deploys smart contracts to tokenize investment entitlements and distributes them on blockchain wallets owned by various financial entities. The tool uses tokens to receive investment data and calculate the appropriate WHT once final investors are identified. To ensure privacy on the TaxGrid network, the solution implements zero-knowledge proof technology, a digital protocol that allows sharing data between parties without using passwords or other private information.

 

Cointelegraph

Rea & Associates has named Cheryl Coblentz as its new director of accounting services. She will work with Rea & Associates’ regional presidents, office partners and firm-wide client service specialist teams to further current initiatives and support best practices. 

 

The Times-Reporter

U.S. GDP surged 6.5% in the second quarter of the year on an annual basis, according to the Commerce Department, falling short of expectations as business reopenings and government aid fueled the recovery, but inflation and shortages held growth back. The overall increase came thanks to increasing personal expenditures, which rose 11.8% as consumers accounted for 69% of all activity. Nonresidential fixed investment, exports and state and local government spending also helped boost output. “The good news is that the economy has now surpassed its pre-pandemic level,” wrote Paul Ashworth, chief U.S. economist at Capital Economics. “But with the impact from the fiscal stimulus waning, surging prices weakening purchasing power, the Delta variant running amok in the south and the saving rate lower than we thought, we expect GDP growth to slow to 3.5% annualized in the second half of this year.”

 

New York Post

CNBC

New York Times

Wall Street Journal

New jobless claims dropped slightly to 400,000 in the seven days to July 24th, the Labor Department reported on Thursday. The median estimate in a Bloomberg survey of economists called for 385,000 new applications. The four-week moving average, which smooths out volatility in the weekly figures, edged higher to 394,500. Initial claims in Illinois, Pennsylvania and Texas saw the biggest declines last week, with five states reporting drops exceeding 5,000. California led increases, followed by Nevada and Tennessee. Continuing claims for state benefits climbed for the first time in four weeks, rising to 3.27m in the week ended July 17th. “Beyond weekly ups and downs, the trend in total filings should remain downward over coming weeks," commented Rubeela Farooqi, chief U.S. economist at High Frequency Economics. "Overall, job growth should pick up and labor shortages should ease as near-term constraints – virus concerns, child-care issues and enhanced unemployment benefits – diminish. But rising virus cases could be a headwind for the labor market and the economy.''

 

Bloomberg

US News and World Report

Wall Street Journal

Companies hit by data breaches are impacted by $4.24m per incident on average, according to the annual Cost of a Data Breach Report conducted by Ponemon Institute and published by IBM Security. That cost is up 10% from one year ago and is the highest cost in the 17-year history of the report. The financial services industry and the pharmaceutical sector saw their respective data breaches averaging $5.72m per incident and $5.04m per incident. The report also found that 44% of breaches involved personal data - including name, email, password, and health records, while compromised user credentials were the most common entry point used by cyber miscreants. Breaches resulting from compromised credentials took an average of 250 days to identify. Regionally, the most expensive data breaches occurred in the U.S. ($9.05m per incident), followed by the Middle East ($6.93m) and Canada ($5.4m).

 

CFO

New reports based on data from the 2019 tax year indicate 497 high-income taxpayers had over $150m in their individual retirement accounts, and nearly 25,000 taxpayers had aggregate IRA account balances of $5m or more. Senate Finance Committee chairman Ron Wyden (D-OR) and House Ways and Means Committee chairman Richard Neal (D-MA) released new data they had requested from Congress’s Joint Committee on Taxation on the prevalence of mega-IRA accounts. “It is shocking, but not surprising, to see how the use of mega-IRA accounts by mega-millionaires and billionaires has exploded,” Mr. Wyden said in a statement. “IRAs were designed to provide retirement security to middle-class families, not allow the super wealthy to avoid paying taxes. This is the perfect example of what I’ve long called the tale of two tax codes." He said the Senate Finance Committee is developing proposals to make the Tax Code fairer, and he planned to make ending the tax break a top priority.

 

Accounting Today

Colombian singer Shakira is facing possible trial in Spain after a judge said there was sufficient evidence to prosecute her over allegations related to €14.5m in unpaid tax. Judge Marco Jesus Juberias said that the singer could face six charges over alleged failure to pay income tax while she was resident in Spain between 2012 and 2014.  Juberias wrote that Shakira lived more than 200 days in Spain in each of those three years, making her liable to pay taxes in the country. The judge said that in the investigation so far, Spain's tax agency and Shakira's lawyers have argued over the meaning of "main residence."

 

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