Ex-KPMG Partner to Admit Fraud [AP]
A former partner at the accounting firm KPMG agreed on Tuesday to plead guilty to a securities fraud charge for providing insider information to a friend who plied him in return with cash bribes, a Rolex watch and other luxury items. The former partner, Scott London, 50, agreed to plead guilty to one felony count of securities fraud that carries a maximum 20-year prison term. He is scheduled to appear in court on Friday.
Corporate Interest Deduction Proves Sacred Amid Reformers [Bloomberg]
A newly formed coalition of businesses is stepping up efforts to protect interest deductions as tax reform advances in Congress. Interest on debt has been fully deductible for 100 years — encouraging factory expansions and hiring for new initiatives, and fueling a spate of private equity takeovers. The deductions totaled more than $8.5 trillion in a decade by one estimate. As part of tax reform and discussions about the U.S. debt, both Democratic and Republican lawmakers are calling for limits. A group of businesses in industries from real estate development and housing to finance started last week to push back, Bloomberg BNA reported. The BUILD Coalition, an acronym for Businesses United for Interest and Loan Deductibility, says capping the deduction may damp willingness to borrow for capital improvements or other expenses.
Microsoft’s Gates Supports Corporate Tax Scrutiny [WSJ]
“That’s a good debate that people should have,” he told reporters in Canberra Tuesday.
The Trouble With Taxing Corporations [NYT]
“We have a tax problem; we are not collecting enough tax revenue — period,” said Jim Hines of the University of Michigan. “But we are never going to finance what we need with corporate taxes.”
Tax-writers say case for reform grows [The Hill]
Senate Finance Chairman Max Baucus (D-Mont.) and House Ways and Means Chairman Dave Camp (R-Mich.) are looking to marshal support on and off Capitol Hill with a populist pitch meant to appeal to the regular workers they say could be helped the most by a tax code rewrite. Apple’s ability to pay minimal taxes on billions of dollars stashed offshore, they suggest, shows that the code is stacked against those who can’t afford high-priced lobbyists or accountants. “If Apple isn’t a case for tax reform, I don’t know what else is,” Camp told reporters last week. “Apparently, every thing they did was legal. But that means we need to take a look at our tax laws.”
IRS Worker Used Federal Plastic For Amazon Buys [TSG, Complaint]
Entrusted with a government credit card, an Internal Revenue Service worker allegedly used the plastic for a years-long Amazon.com shopping spree that netted her hundreds of items, including a chocolate fondue fountain; Bollywood movies; Pampers; Harlequin romance novels; Omaha Steaks; Apple Bottoms skinny jeans; mango body wash; and a Ginsu knife set.
Law & Disorder: Producer’s Ex Sues Accounting Firm [JV, Earlier]
The ex-wife of “Law & Order” producer Dick Wolf is suing her former accountants, just as crime novelist Patricia Cornwell won a $51 million verdict against the same firm. Christine M. Wolf claims Anchin, Black and Anchin LLP overbilled her $290,000 for balancing her checkbook, and botched the lease on a Greenwich, Conn., rental, according to the $6 million suit. “[Evan] Snapper, the Anchin partner at the heart of the Cornwell Action, is the same Anchin partner primarily responsible for Wolf’s accounts and her loses,” the Manhattan Supreme court filing states. When she fired Snapper in 2010, Christine Wolf allegedly discovered he’d “secretly” raised his fees from $7,000 to $11,000 per month.
The U.S. Senate may — and should — review the NFL’s tax-exempt status [Yahoo]
Technically, the NFL is a 501(c)(6) non-profit organization. That part of the Internal Revenue Code "provides for the exemption of business leagues, chambers of commerce, real estate boards, boards of trade and professional football leagues, which are not organized for profit and no part of the net earnings of which inures to the benefit of any private shareholder or individual." It's an interesting wrinkle, because while the NFL's member teams essentially act as a group of individual entities with an overarching partnership governed by the league, the league itself has not always argued so when it was against its benefit.
IRS Appoints Executive to Restore Integrity after Controversy [Bloomberg]
The Internal Revenue Service has appointed David Fisher, chief financial officer of the Government Accountability Office, as a senior executive to help the tax agency recover from the controversy over its scrutiny of small-government groups.
Rise of Al-qaida Sahara Terrorist [AP]
After years of trying to discipline him, the leaders of al-Qaida's North African branch sent one final letter to their most difficult employee. In page after scathing page, they described how he didn't answer his phone when they called, failed to turn in his expense reports, ignored meetings and refused time and again to carry out orders. Most of all, they claimed he had failed to carry out a single spectacular operation, despite the resources at his disposal. The employee, international terrorist Moktar Belmoktar, responded the way talented employees with bruised egos have in corporations the world over: He quit and formed his own competing group.