The UK Supreme Court rules against two bank tax schemes. It says Deutsche Bank and UBS must pay taxes on two employee bonus plans. In 2003, the banks set up two £90 million ($128 million) plans to reduce tax liabilities on some bonuses the following year. The UK tax agency said the scheme amounted to tax avoidance and asked UBS and Deutsche Bank to pay about £50 million each. The British high court agreed: “It is difficult to accept that Parliament intended to encourage, by exemption from taxation, the award of shares to employees, when the award of such shares has no purpose other than the obtaining of the exemption itself.”
Too little warning, too late? Scammers convinced several companies—including Snapchat and Seagate Technology—to send them employee W-2s. By doing so, the firms exposed thousands of their employees’ incomes, addresses, and Social Security numbers to the crooks. Company payroll and personnel staff fell for email requests that appeared to be sent by their CEOs. The IRS notes a 400 percent increase in phishing and computer malware incidents this tax-filing season, and posted an alert about this particular scheme on March 1. But the firms were duped before the alert went out.
In South Carolina, a push to end taxes on military retirement benefits. GOP Governor Nikki Haley wants to cut the state budget by $10 million to cover the tax cut, which could end up eventually costing the state $33 million a year. Her effort comes amid lawmakers’ continued fight over how to pay for the state’s ailing infrastructure.
In Kansas, some GOP lawmakers are looking to tax owners of pass-through firms. In 2012, at the urging of Republican governor Sam Brownback, Kansas exempted owners of limited liability companies from income tax. A wave of taxpayers shifted their filing status to LLC, and the state is losing an estimated $250 million-a-year in revenue. With the state’s budget shortfall continuing to grow, lawmakers are looking to reverse the law. Brownback says absolutely not.
Traditions change in families, but not tax benefit requirements. TPC’s Elaine Maag explains. “Tax benefits for children can provide a substantial lift for families – but for people living in the growing number of non-traditional families, these benefits can be complicated to claim and difficult for the IRS to administer.
The presidential debates continue… Democratic presidential hopefuls Hillary Clinton and Bernie Sanders debated last night, and tonight GOP candidates take another turn on the stage. Check out their tax plans and TPC analyses of those plans here. You can also explore TPC’s beta website here—we’d love your feedback.
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