Treasury issues earnings stripping rules. The wait is finally over. Treasury has issued temporary rules aimed at curbing earnings stripping, the widespread corporate practice of shifting income to low-tax jurisdictions and interest costs to the high-tax rate US. The proposed regs would treat some financial instruments now considered as debt to be stock, or part stock. It would allow IRS auditors to split financial instruments into part equity and part debt. The new rules also include new provisions intended to curb inversions.
Thanks for the three days, DC! TPC’s Richard Auxier explains how the District of Columbia gave us the Tax Day extension, from April 15 to April 18. DC may be taxed without representation, but this year, at least it gets to represent procrastination.
What’s the deal with the Panama Papers? Somebody leaked 11.5 million records belonging to the Panamanian law firm Mossack Fonseca to the International Consortium of Investigative Journalists. The data dump exposes 40 years’ worth of financial activities of the very rich, famous, and powerful—Vladimir Putin-level powerful. A key finding: Shell companies hold as much as $21 trillion in individuals’ wealth. TPCs’ Steve Rosenthal explains that this might be because individuals want to isolate risk by dividing financial interests. But it’s probably more about evading taxes.
Bernie Sanders would pay for college tuition with a tax, and a lot of state help. Democratic presidential candidate Bernie Sanders asserts his tax on financial transactions would pay for his free college tuition program. Politifact checked his numbers using TPC’s revenue estimates. His tax would bring in significant revenue—but Sanders wants the federal government to cover $50 billion of the $75 billion tuition program. States would need to come up with $25 billion a year.
Donald Trump says the rich will “end up probably paying more” under his tax plan. The GOP presidential candidate explained his reasoning during a televised town hall on Sunday night by saying he’d get rid of the carried interest loophole. But according to TPC’s analysis of Trump’s plan, “The top 0.1 percent of taxpayers — a group that includes those with incomes over $3.7 million — would receive an average tax cut of $1.3 million… Those in the bottom 20 percent of income, meanwhile, would receive an average tax cut of $128.”
Apple’s tax deal in Ireland: So. Much. Data. The European Union’s antitrust chief says it will take far longer to investigate because of the amount of data involved. The investigation has been going on for two years already. In 2014, the European Commission accused Ireland of allowing Apple to shelter tens of billions of dollars in profits if Apple kept jobs on the Emerald Isle.
The IRS Data Book is out. The IRS released its 2015 snapshot of agency activities, which includes information about returns filed, taxes collected, enforcement, taxpayer assistance and the IRS budget and workforce. This edition also features charts that show key trends: a decline in the number of audits, a reduction in telephone and in-person tax assistance, and increases in the use of online resources and volunteer tax assistance.
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