Tax Break

Essential reading: State, local fiscal burdens drag on economic recovery, and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* State, local fiscal burdens drag on economic recovery. Connor Dougherty – The Wall Street Journal. State and local government tax collections have improved from the recession years, they only recently regained their pre-downturn peak. Meantime, local governments, which unlike states rely on property taxes, continue to suffer from the big drop in real estate prices. Given political pressure to reduce the federal budget deficit, cities and states are likely to get less help from Washington. If that happens they would have to make up the gap with tax hikes of their own or else live more frugally—what they’re doing now. Link

* Public pensions to give ‘clearer picture’ of finances. Lisa Lambert – Reuters. Public retirement systems will have to make major changes in how they disclose their pension assets and liabilities, under new rules that the board in charge of accounting standards for U.S. state and local governments is set to approve on Monday. The Governmental Accounting Standards Board will vote on the changes at an afternoon meeting. The reforms were proposed nearly a year ago to give more detail on how pensions affect governments’ finances. Link

* IRS whistleblower tax take plunges, senator frets. Patrick Temple-West – Reuters. A report from the U.S. Internal Revenue Service’s troubled whistleblower program said tax collections from tipsters fell sharply last year, prompting a U.S. lawmaker on Friday to say he may delay two Treasury Department nominees until the program improves. In fiscal 2011, the IRS collected only $48 million through the program, down from $464 million in fiscal 2010, the agency reported to Congress on June 15. Link

* Germany builds core group for transactions tax. John O’Donnell – Reuters. Germany will work with a core group of European Union countries on introducing a financial transactions tax, its finance minister said on Friday, after efforts to get an agreement among all 27 EU countries fell short. Finance Minister Wolfgang Schaeuble said 10 countries were prepared to use an EU process known as ‘enhanced cooperation’ to push ahead with developing the tax, which Britain and other states, including some in the euro zone, oppose. Link

* MHRC looks to close 2 percent tax loophole. Kiran Stacey – The Financial Times. Tax officials have hinted they could close the six-year-old loophole which may have allowed wealthy people to reduce their tax rate to just 2 per cent by borrowing money from companies of which they were directors. The UK tax-collecting agency HM Revenue & Customs said yesterday its staff were looking into the scheme, which allows people to borrow large sums from their companies, free of tax. Link

* Tax case defeat weighs on Essar Energy. Mark Wembridge – The Financial Times. Essar Energy’s loss of a tax case in India’s Supreme Court has dragged the oil and power company to a pre-tax loss of more than $1 billion. The London-listed group on Monday said January’s negative ruling had pushed it to a pre-tax loss of $1.1 billion for the 15 months to March 31. January’s negative ruling by the Indian Supreme Court left the energy group liable for $1.2 billion in taxes, which weighed on the shares to such an extent that it dropped out of the FTSE 100 index earlier this year. Link

Essential reading: China minister calls for tax changes to boost spending, and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* China minister calls for tax changes to boost spending. Liyan Qi – The Wall Street Journal. China needs to improve its tax system to stimulate spending, Finance Minister Xie Xuren said Thursday. The central government will study measures to expand a value-added tax trial, and improve China’s consumption tax to “guide reasonable consumption” more effectively, Mr. Xie said in a statement on the ministry’s website. Link

* Obama stands firm against extending tax cuts for rich. Caren Bohan and Thomas Ferraro – Reuters. President Barack Obama’s Democrats traded shots with Republicans on Wednesday about how best to avoid a year-end “fiscal cliff,” as the administration insisted on the need to let tax cuts for wealthier Americans expire as scheduled on January 1. The prospect of higher taxes and automatic spending cuts that kick in next year have spurred calls for Obama to temporarily extend all of the Bush-era tax breaks to coax Republicans into a sweeping debt deal, but the White House stood firm. Link

* Bill Clinton becomes Romney’s favorite surrogate for Obama. Sam Youngman – Reuters. In the space of five days, Bill Clinton went off message on two important issues – tax cuts and Romney’s time as a private equity executive – raising questions about the former president’s motives. This week, Clinton said he favored a temporary extension of George W. Bush-era tax cuts for all Americans, not just the middle class, as Obama prefers. Link

* Scottish Power tests US tax breaks on interest. Kim Dixon – Reuters. The U.S. Tax Court is expected to issue shortly its first major decision in years on the tax deductibility of interest in certain corporate debt transactions in a case that pits the UK’s Scottish Power against the Internal Revenue Service. The IRS is challenging $932 million in interest deductions taken by the power utility on $4 billion in intercompany notes issued between company units. The tax collector argues that the transactions should be treated as equity, which would nullify the deductions taken by the Spanish-owned company. Link

* Tweaking tax code could spur green energy: senator. Roberta Rampton – Reuters. A freshman Democratic senator thinks he may have found a way to encourage investment in wind, solar and biofuel projects without sapping too many taxpayer dollars or injecting new venom into a bitter partisan battle over energy incentives. Chris Coons will introduce legislation on Thursday that would allow a broad range of renewable power generation and transmission projects to qualify for a tax structure used widely by pipeline and other energy-related companies. Link

* California governor shrugs off tobacco tax defeat. Jim Christie – Reuters. California Governor Jerry Brown said on Wednesday the defeat of a measure proposing a tobacco tax increase in the state’s primary election is not a bad sign for the tax measure he aims to put on the November ballot. The Democratic governor told the San Francisco Chronicle the narrow defeat of the measure on Tuesday reflects how its campaign was simply outspent on advertising by its opponents. Link

Essential reading: As governor, Romney picked winners and losers, no taxes for Lagarde, and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* As governor, Romney picked winners and losers of his own. Andy Sullivan – Reuters. Massachusetts Gov. Mitt Romney’s June 2006 announcement that drugmaker Bristol-Myers Squibb was moving into his state served as a signature accomplishment. The new facility came with a price tag: Romney and other state officials agreed to $67 million in tax breaks and other inducements to ensure the New York-based company picked Massachusetts over rival states like North Carolina. Romney backed tax breaks for film makers and biotech and medical-device manufacturers. His administration promoted venture capital-style funds that extended loans to start-up companies, some of which subsequently went out of business. Link

* Christine Lagarde, scourge of tax evaders, pays no tax. Kim Willsher – The Guardian. Christine Lagarde, the IMF boss who caused international outrage after she suggested in an interview with the Guardian on Friday that beleaguered Greeks might do well to pay their taxes, pays no taxes, it has emerged. As she is an official of an international institution, her salary of $467,940 (£298,675) a year plus $83,760 additional allowance a year is not subject to any taxes. Link

* Anti-tax crusader assails report on Republican shift. Patrick Temple-West – Reuters. Anti-tax crusader Grover Norquist, scourge of any and all tax increases, said on Tuesday that a news report questioning the vitality of his “no new taxes” pledge – a vow taken by many Republican politicians – is overblown. Republicans who have not signed the pledge may be in congressional races they are unlikely to win anyway, while other candidates have rules against signing pledges, he said. Link 

* Japan PM, Ozawa still apart on tax, opposition deal beckons. Tetsushi Kajimoto – Reuters. Japanese Prime Minister Yoshihiko Noda edged closer on Wednesday to a possible deal with the opposition to push through his plan to double the sales tax, after party heavyweight Ichiro Ozawa refused to support his signature initiative. Former finance minister Noda has pledged to bring the plan to a vote in the current session of parliament that ends on June 21, and requires masterful maneuvering to get it passed. Link

* ‘Pasty tax’ u-turn signals uncertainty for UK business. Ainsley Thomson – The Wall Street Journal. Following Chancellor of the Exchequer George Osborne’s u-turn, the meat-filled pastry and parked mobile homes have come to symbolize a government that is prepared to reverse a budget measure if it proves unpopular enough. There is also a significant negative side. The u-turn risks undermining one of the central conditions the annual budget statement is meant to foster: certainty. Link

* Give me your tired, your over-taxed. Andrew Rosenthal – The New York Times. A couple of conservative news outlets reported that New York State shed 1.3 million residents on net over the last 10 years, with more than 600,000 leaving for Florida. During the same period, more than 200,000 Pennsylvanians also moved to Florida, according to the Tax Foundation. There’s no reason to think that taxes played a part in a single person’s decision to leave New York—let alone that taxes “may have” spurred “many more” departures than weather. The Tax Foundation did not commission a poll on the topic, and does not present any evidence to support that assertion. Not even anecdotal evidence. Link

Essential reading: Renouncing U.S. citizenship to save on taxes, and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* No comment necessary: Grover Norquist plays the Nazi card. Andrew Rosenthal – The New York Times opinion. Senators Chuck Schumer and Bob Casey introduced legislation last week that would penalize Americans who renounce their citizenship to evade taxes. Grover Norquist, the president of Americans for Tax Reform, had this to say: “I think Schumer can probably find the legislation to do this. It existed in Germany in the 1930s and Rhodesia in the ’70s and in South Africa as well. He probably just plagiarized it and translated it from the original German.” Link * Ireland-bound Eaton is latest to end U.S. corporate citizenship. Nanette Byrnes – Reuters. Eaton Corp’s purchase of electrical equipment maker Cooper Industries means another U.S. company will soon leave the United States in favor of relocating its headquarters to a foreign country with sharply lower taxes. In the case of diversified industrial manufacturer Eaton, a complicated corporate structure will allow it to become part of an Irish corporation and enjoy that country’s low 12.5 percent corporate tax rate. Link

* Yahoo to sell Alibaba stake, take hit on taxes. Maxwell Murphy – The Wall Street Journal. Yahoo tried for years to find a tax-efficient way to unlock the value in its partial Alibaba ownership, but ultimately decided to eat the full 38 percent in federal, state and local taxes in order to finalize a deal, CFO Tim Morse said on Monday. Though a tax-free deal eluded Yahoo and Alibaba, the taxable alternative is nonetheless complex, and is designed to incentivize Alibaba’s initial public offering. Link * Brazil makes new tax cuts to revive economy. Luciana Otoni and Tiago Pariz – Reuters. Brazil’s government on Monday unveiled a new round of temporary tax cuts worth about $1 billion to boost the struggling automotive sector and other industries in its latest attempt to restore a lost economic boom. Investor jitters about the economy at home and abroad helped send Brazil’s currency to its weakest closing level in three years on Monday. But Finance Minister Guido Mantega said the measures should help revive an economy that has been stagnant since mid-2011, while also providing protection from the debt crisis in the euro zone. Link

* Japan tax hikes can’t wait; BOJ stimulus still needed-OECD. Reuters. Japan should stick to its plan of raising the consumption tax from 2014 or even earlier to demonstrate budget prudence and avert a run-up in borrowing costs, the OECD said, adding that a credible fiscal consolidation plan must be top priority. The Organization for Economic Co-operation and Development also urged the central bank to maintain the zero rate policy and quantitative easing mainly via asset purchases until inflation returns and reaches the Bank of Japan’s target of 1 percent. Link * IRS widens debt forgiveness program. Patrick Temple-West – Reuters. More middle-class Americans will be able to work out their debts to the U.S. Internal Revenue Service because of changes in a tax payment forgiveness program, the agency announced on Monday. The “Offer in Compromise” program lets taxpayers negotiate agreements with the IRS to pay less than the full tax owed. The announced changes make the program more flexible for taxpayers, with some people able to pay off their debts faster, according to the IRS. Link * Would Romney be another Bill Clinton or another George W. Bush? Bruce Bartlett – The New York Times opinion. The Bill Clinton and George Bush 43 administrations are almost perfect tests of starve-the-beast, tax and spending theory; Clinton raised taxes in 1993, while Bush signed into law seven different major tax cuts, according to a Treasury Department study. If there were any truth whatsoever to starving the beast, we should have seen a rise in spending during the Clinton years and a fall in spending during the Bush years. In fact, we had exactly the opposite results. Link

Essential reading: HP loses Dutch tax shelter case, popular deductions on the block, and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* HP loses $190 million tax case against IRS. Lynnley Browning – Reuters. Hewlett-Packard Co on Monday lost a battle with the U.S. Internal Revenue Service for more than $190 million in tax refunds tied to a Dutch tax shelter designed by the derivatives arm of American International Group. The ruling turns a spotlight on an aggressive tax-cutting strategy created last decade by AIG Financial Products and bankrolled by several European banks. The strategy involved trading derivatives with the aim of generating capital losses and foreign tax credits for large corporations, like HP, which then used them to try to lower their U.S. tax bills. Link

* In Republicans’ push for tax overhaul, popular deductions on the block. Donna Smith – Reuters. Republicans have not touched hundreds of tax breaks in tax laws, fearing that doing so could be called a tax hike. That could be changing. They’re not advertising it, but Republicans in Congress, along with a few Democrats, are exploring the idea of limiting or ending some of Americans’ most sacred tax breaks. They include deductions on contributions to 401(k) retirement accounts and possibly those on home mortgage interest, each of which save millions of Americans thousands of dollars each year. Link

* Brown warns Californians: Taxes or cuts. Jim Carlton – The Wall Street Journal. California Gov. Jerry Brown laid out a revised budget plan that relies on deeper spending cuts and higher taxes to bridge a projected state deficit that has widened to $15.7 billion from $9.2 billion since January. The Democratic governor said Monday he had no choice but to cut even deeper into social services to help close a budget gap that has shot up due to lower-than-expected tax revenue and delays and court-ordered impediments to spending cuts. Brown proposes to nearly double spending cuts to $8.3 billion for fiscal year 2012-13 from a January estimate that $4.2 billion of reductions were needed. Link

* Hollande faces budget shortfall test. Hugh Carnegy – The Financial Times. There will be none of the “bling-bling” that accompanied Nicolas Sarkozy’s entry to the Elysée palace five years ago when François Hollande is inaugurated as France’s new president on Tuesday. To finance his campaign promises — estimated at 20 billon euros over five years — and to cut the deficit, Hollande has laid out a raft of new tax measures. These include repealing a range of tax breaks for companies and households, raising corporation tax on big companies to 35 percent from 30 percent, a surtax on banks and an increase in wealth taxes, inheritance tax, capital gains taxes and income taxes — including a marginal rate of 75 percent on incomes above 1 million euros. Link

* California ugly. The Wall Street Journal editorial. It looks as if that Facebook IPO may not be enough to save California’s fiscal crisis after all. Facebook co-founder Eduardo Saverin has renounced his U.S. citizenship to move to Singapore, which has no capital gains tax. And now we learn the Golden State’s budget deficit will come in at $16 billion, up from a merely awful $9.2 billion estimate in January. California Controller John Chiang reported last week that April tax collections were a gigantic 20.2 percent, or $2.44 billion, below 2012-13 budget projections. You have to admire Mr. Chiang’s capacity for understatement as he noted that “revenues disappointed.” Yes, and J.P. Morgan’s whale trade was a $2 billion rounding error. Link

* Saying no to state bailouts. Kevin Brady and Jim DeMint – The Wall Street Journal opinion. States that have followed Europe’s economic policy model of unbridled spending are getting Europe’s economic results: low growth and looming fiscal catastrophe. Higher taxes called for by California Gov. Jerry Brown to help pay for an “unexpected” 74 percent increase in the state’s budget shortfall this year, and Illinois’s recent income tax hikes of 67 percent on individuals and 30 percent on businesses, have done and will do nothing to stem the flood of people and businesses out of those states. It is becoming clear that the only way to force recalcitrant states to put fiscal reform on the table is for Congress to take state bailouts off of it. Link

Essential reading: Facebook elite set up to skirt estate tax, California tax hike talk, and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* How Facebook’s elite skirt estate tax. Laura Saunders – The Wall Street Journal. Tax specialists are paying attention to how half a dozen of Facebook’s luminaries, including founder Mark Zuckerberg, appear to be using a perfectly legal maneuver called a grantor-retained annuity trust, or GRAT, to avoid at least $200 million of estate and gift taxes on their own Facebook shares. Facebook’s prospectus cites eight separate “annuity trusts” set up by insiders. All told, these trusts hold about 22 million shares that will be worth more than $690 million if Facebook goes public at $31.50 a share, the middle of its projected range. Link

* Brown pushes tax hike as California’s money woes deepen. Jim Christie – Reuters. California Governor Jerry Brown was elected in 2010 on a promise to fix the state’s chronic fiscal crisis. His weekend announcement of a much bigger-than-expected shortfall in the state budget signals how far he still has to go. In an unusual move that underscored the highly politicized nature of the state budget, Brown took to YouTube on Saturday to deliver the bad news: the state’s projected budget deficit for the fiscal year starting July 1 is now $16 billion, up from the $9 billion anticipated in January. Link 

* Arrest is warning on secret offshore accounts. Laura Saunders – The Wall Street Journal. In a fresh warning to U.S. taxpayers who haven’t confessed secret offshore accounts, the U.S. Attorney for the Southern District of New York and the Internal Revenue Service announced the arrest of Michael Little, a British investment adviser who allegedly helped several members of a prominent American family conceal more than $10 million in Swiss bank accounts for 11 years. According to the charges, Little advised the family members to set up Swiss accounts that would nominally be controlled by him and a Swiss lawyer. Link 

* Japan opposition leader hints at extended tax hike debate. Alexander Martin – The Wall Street Journal. The leader of Japan’s main opposition party on Monday suggested that an extension to the current parliamentary session may be necessary to debate the government’s proposed consumption tax hike, in a sign that he may be leaving the door open for compromise ahead. The opposition party LDP may be willing to give Prime Minister Yoshihiko Noda more time to reach a compromise on a bill that would double the country’s 5 percent consumption tax to 10 percent by 2015. Link

* Americans feel defriended over perceived Eduardo Saverin tax dodge. Rene Lynch – The Los Angeles Times. Eduardo Saverin, the Facebook co-founder who renounced his U.S. citizenship in what many have seen as a move to avoid paying federal taxes, has managed to unify many Americans behind Uncle Sam’s outstretched hand. Many in the online world this week are outraged at the perception that Saverin is trying to dodge the tax man. Saverin made his riches off Facebook-loving U.S. taxpayers and is now defriending the country that made him rich. Link 

* Should carried interest be taxed as ordinary income, not as capital gains? The Wall Street Journal opinion. In the private-equity business, carried interest is the share of the profit from the sale of a company that goes to the managers of the firm that bought and then sold the company. Michael Graetz, a professor of tax law at Columbia Law School, wants carried interest taxed as ordinary income. David Tuerck, executive director of the Beacon Hill Institute and a professor and chairman of the economics department at Suffolk University in Boston, believes it should be taxed as capital gains. Link 

Essential reading: Private equity defends deductions, Brazil’s tax “lion,” and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* Private equity defends business-debt deductions. John McKinnon – The Wall Street Journal. A private-equity group will release a report on Tuesday that attacks one of the central tenets of many tax-overhaul plans in Washington – the idea of curbing deductibility of business debt. Limiting debt deductibility could raise the effective tax rate on new investment and could well stifle growth, said the Private Equity Growth Capital Council, a trade group. The group says that a limit on deductibility of interest expenses in exchange for a 1.5 percentage point reduction in the corporate rate, “would increase the marginal effective tax rate on new corporate investment from 31.0 percent to 33.1 percent. Link

* House bill shields defense from cuts. Janet Hook and Damian Paletta – The Wall Street Journal. House Republicans, seeking to prevent defense-spending cuts at the end of the year, advanced a plan that would instead reduce spending on health-care programs, food aid and other major domestic initiatives of the Obama administration. Democrats agree that the arbitrary cuts should be replaced with a more carefully calibrated budget agreement, but they want a mix of defense cuts, tax increases and domestic spending cuts. Many Republicans oppose any tax increases and want to avoid the $55 billion in scheduled defense cuts next year and partially replace them with cuts in domestic entitlement programs such as Medicaid. Link

* Brazil’s secret fiscal weapon: the tax “lion.” Alonso Soto – Reuters. In Brazil, groups of armed agents fly around the country by helicopter, pounding on doors and instilling fear in the hearts of those who break the law. They’re not the police – they’re from the tax agency. The Federal Revenue Service will be one of the most important keys to Brazil’s economic prospects in 2012. President Dilma Rousseff is counting on the agency’s tax-collecting prowess to help her government meet ambitious budget targets without smothering the country’s suddenly brittle economy. Link

* Could dividend tax policy knock 30 percent off stocks? It’s complicated. Jonathan Cheng – The Wall Street Journal. We haven’t seen much of a drop-off in investor interest in dividend payers, or stocks generally. There has already been an odd pick-up in stock prices after the weekend’s European elections. If anything, dividend payers have been surging lately, as part of an increasingly noticeable shift in weight towards safer, steadier dividend payers. Telecommunications stocks, a steady dividend-paying group, are among the day’s best performers and have been the strongest stocks so far this month, together with favorites consumer staples and utilities stocks. Link

* Tax planning: Global crackdown on avoidance forces wealthy to be transparent. Elaine Moore – The Financial Times. The UK government’s announcement this year that it would crack down on aggressive tax planning has prompted some of the country’s wealthiest individuals to reconsider their financial arrangements. The emphasis on closing tax loopholes has led to a rise in the number of clients who wish their affairs to be structured in a more transparent and holistic way. Authorities in Europe and the United States have also been taking increasingly tough stances on tax avoidance and financial secrecy over the past few years, forcing national and international investors to disclose more information. Link

* Of course 70 percent tax rates are counterproductive. Alan Reynolds – The Wall Street Journal. President Obama and others are demanding that we raise taxes on the “rich,” and two recent academic papers that have gotten a lot of attention claim to show that there will be no ill effects if we do. The first paper, by Peter Diamond of MIT and Emmanuel Saez of the University of California, Berkeley, appeared in the Journal of Economic Perspectives last August. The second, by Mr. Saez, along with Thomas Piketty of the Paris School of Economics and Stefanie Stantcheva of MIT, was published by the National Bureau of Economic Research three months later. Both suggested that federal tax revenues would not decline even if the rate on the top 1 percent of earners were raised to 73 percent to 83 percent. Link

Essential reading: Offshore tax havens’ links to crime, budget choices, and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* These islands aren’t just a shelter from taxes. Robert Morgenthau – The New York Times opinion. The British Virgin Islands, the Cayman Islands, Gibraltar, Bermuda and the Bahamas – these offshore jurisdictions allow some individuals and corporations to engage in outright tax fraud, costing America at least $40 billion each year. The secrecy laws in these tax havens are at the root of serious crimes: fraud, money laundering and international terrorism. Follow the trail of nearly any major financial scandal and you will enter one or more of these notorious jurisdictions. Link

* House Republicans target social cuts to shield military. David Lawder – Reuters. Republicans in the House of Representatives on Monday will fire their first shots of the next deficit-reduction battle, advancing legislation to cut nearly $380 billion largely from social programs while protecting defense spending. President Barack Obama is likely to consider signing a replacement measure that offers “balance,” meaning spending cuts combined with new revenues such as those proposed in Obama’s February budget plan. But the tax increases for the wealthy proposed by Obama, along with some spending increases, make that budget a non-starter for House Republicans. Link

* Facebook could dodge $14bn in US taxes. Nathalie Thomas – The Telegraph. Facebook has admitted it could dodge paying as much as $14 billion in U.S. corporation tax following its stock market flotation next week. In its latest filing to the U.S. Securities and Exchange Commission, Facebook said if all shares are cashed in before the end of 2012, this would trigger a tax deduction “of approximately $14bn”. Link

* Greek voters punish 2 main parties for collapse. Rachel Donadio and Niki Santonis – The New York Times. Greece was plunged into political uncertainty on Sunday after voters bolstered the far left and neo-Nazi right in a wave of protest that saw the crushing defeat of the dominant political parties they blame for Greece’s economic collapse. With Greece’s gross national product having dropped 20 percent since 2009 and unemployment soaring to 21 percent, fierce opposition to the bailout terms — tax increases and wage cuts — has led to the implosion of the Socialist and New Democracy Parties, and the rise of parties on the right and the left that oppose the loan deal. Link

* India defers implementation of anti-tax-avoidance rules. Mukesh Jagota and Anant Vijay Kala – The Wall Street Journal. The Indian government Monday postponed the implementation of a controversial tax proposal to the next financial year starting April 1, 2013, in an effort to arrest an alarming slide in investor confidence. It also clarified that the responsibility of proving wrongdoing under the General Anti Avoidance Rules will be on the government, rather than on companies. Link

* Tax inquiries of wealthy yield 200 mln pounds. Vanessa Houlder – The Financial Times. The extra tax take from inquiries aimed at some of Britain’s wealthiest individuals rose by nearly a quarter to 200 million pounds ($323.17 million)in 2011-12, in a sign of HM Revenue & Customs’ tougher and more sophisticated approach to tackling avoidance, evasion and errors. The increased compliance yield from HMRC’s high net worth unit, which scrutinizes the affairs of about 5,000 individuals with at least 20 million pounds in wealth, follows a rise in 2010-11 when it brought in 162 million pounds, nearly double the 85 million pounds it raked in its first year in 2009-10. Link

Essential reading: Ernst & Young no longer lobbying for companies it had audited, and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* Ernst, audit clients cut lobbying ties-records. David Ingram and Dena Aubin – Reuters. Ernst & Young’s lobbying unit is no longer listed as a lobbyist for three major U.S. companies, all of whom were 2011 audit clients of the accounting giant. The deregistration follows questions raised by two U.S. senators in March about whether the dual relationships crossed auditor independence boundaries. Documents filed last month with Congress showed that Washington Council Ernst & Young, the E&Y unit, was no longer registered as doing lobbying work for Amgen Inc, CVS Caremark Corp and Verizon Communications Inc. Link

* House Democrats plan to pounce again on GOP budget. Ed O’Keefe – The Washington Post. House Democrats plan to attack the spending plan next week as the GOP-controlled House votes on a budget reconciliation package that includes cuts to replace automatic, across-the-board reductions set to begin in January as part of the Budget Control Act. The BCA raised the debt ceiling, cut $1 trillion in federal spending and authorized another $1.2 trillion in cuts over the next decade, with roughly half of the money coming from defense spending. Link

* U.S. auditor watchdog in China talks: spokeswoman. Dena Aubin – Reuters. The head of the main watchdog group for U.S. auditors is in Beijing participating in annual talks between the United States and China, a spokeswoman said on Thursday. Public Company Accounting Oversight Board Chairman Jim Doty, whose group oversees U.S. auditors, is participating in U.S. Treasury meetings, PCAOB spokeswoman Colleen Brennan said. Link

* GSA: Tax troubles, too? John McKinnon – The Wall Street Journal. On Thursday, congressional investigators said they’ve learned that the much-maligned General Services Administration last year demanded a share of the federal energy-efficiency tax breaks it was offering to contractors, in order to spend the money on other projects. Representative Charles Boustany Jr., chairman of a Ways and Means oversight subcommittee, said in a statement on Thursday that “requiring a cash payment in exchange for a tax deduction is a kickback, pure and simple.”  He fired off a letter to a number of Obama administration officials, demanding more information. Link

* India mulls review of Mauritius tax treaty. Mukesh Jagota – The Wall Street Journal. The Indian government is considering a review of its tax avoidance treaty with Mauritius as it looks to boost revenue, junior Finance Minister S.S. Palanimanickam said Friday. An India-Mauritius joint working panel was set up in 2006 to put in place adequate safeguards for preventing the misuse of the double taxation avoidance agreement between the two countries. Seven rounds of discussions have taken place so far, Palanimanickam said in a reply to queries from lawmakers in the lower house of parliament. Link

* Indonesia tax on metals risks China shipments. Michael Taylor and Polly Yam – Reuters. New Indonesian taxes on metals and curbs on raw mineral shipments are likely to hit exports of nickel and bauxite to China, an industry source said on Friday, highlighting concerns over the impact of the policy changes by Southeast Asia’s biggest economy. Jakarta aims to boost investment in domestic ore processing to lift exports of higher-value finished metals by the G20 economy through the new rules which come into force on Sunday. Link

Essential reading: Mall landlords battle tax, Groupon shifts board amid accounting issues, and more

Welcome to the top tax and accounting headlines from Reuters and other sources.

* Mall landlords engage in taxing battle. Kris Hudson and Stu Woo – The Wall Street Journal. U.S. shopping-center owners, smarting from high vacancies partly due to the rise in Internet shopping, are throwing their weight behind federal bills aimed at requiring online retailers to collect sales tax. At the same time, some of the biggest mall owners also are gaining traction in their efforts in individual states to squeeze sales tax out of the world’s largest online retailer—Amazon.com Inc. Seven states have reached pacts with Amazon to collect sales tax, with Nevada and Texas joining the list last week. Five more are in talks on similar deals. Link

* Groupon replaces Schultz, Efrusy on board. Alistair Barr – Reuters. Groupon Inc (GRPN.O) appointed two new directors on Monday and said Starbucks Corp (SBUX.O) Chief Executive Howard Schultz and venture capitalist Kevin Efrusy were leaving the board as the company tries to address criticism of its accounting practices. The world’s largest daily deals company came under renewed fire in March after revising its fourth-quarter financial results and admitting to a “material weakness” in its financial statements, months after its high-profile IPO. Groupon’s audit committee was criticized because some members are busy executives who may not have enough time to devote to fixing the company’s accounting problems. Link

* Japan could face ‘day of reckoning’ if tax plans fail: Moody’s. Rie Ishiguro – Reuters. Japan could face “the day of reckoning” sooner than expected if the government fails to raise the sales tax and investors demand higher returns on government bonds, Moody’s Investors Service said on Wednesday, keeping up the pressure on Tokyo to enact tax reform bills. Facing snowballing debt, Prime Minister Yoshihiko Noda is struggling to preserve party unity and push through a contentious plan to double the 5 percent sales tax by 2015, with opposition parties that control the parliament’s upper house refusing to cooperate. Link

* Paul Hogan finally settles tax case in Australia. Larry Rohter – The New York Times. After eight years, the Australian actor Paul Hogan, best known for his “Crocodile Dundee” movies, has resolved his dispute with the Australian authorities, who said he and his former manager, John Cornell, owed $156 million in unpaid taxes and penalties dating to the 1980s heyday of the film series. At the case’s peak, in 2010, Hogan, who lives in California, was prevented from leaving Australia, where he had gone to attend his mother’s funeral. Link