When is a tax payment an “advance” payment? In the 1990s, Ford made an $875 million payment to the IRS to cover some of $2 billion in underpaid taxes from the 1980s. Ford later learned that it had overpaid and asked the IRS to treat the money as an advance tax payment against future liabilities. The automaker thought the IRS owed it interest from the time the agency received the payment. The IRS said interest started accruing only after Ford asked that the payment be considered an advance. Ford, which said the decision cost it $450 million, sued, lost, and appealed to the US Supreme Court. But SCOTUS won’t hear the case.
Highway funding: City leaders would like the nation’s leaders to… lead. The US Conference of Mayors wants Congress to take the lead on a long-term funding plan for the Highway Trust Fund. The Congressional Budget Office says it would take about $100 billion in new revenue to finance a six-year extension of the Fund. No word yet on where that money will come from, but House Majority Leader Kevin McCarthy is the latest GOP leader to rule out a gas tax increase. The current temporary funding extension expires in six weeks.
Greece has a new plan to increase taxes and reform pensions. Businesses and the wealthy would face new levies and the value-added tax could be raised. The plan helps move forward the nation’s debt negotiations with the European Union and creditors: Without a deal soon, Greece won’t receive a bailout payment of 7.2 billion euros. The bailout program expires June 30.
UK Prime Minister David Cameron may trim tax credits for low-income workers. His government vows to cut the nation’s £220 billion welfare budget, and may put £30 billion for tax credits on the chopping block. Cameron said, “There is what I would call a merry-go-round. People working on the minimum wage having that money taxed by the government and then the government giving them that money back—and more—in welfare.” Over the weekend, over 250,000 protested the government’s planned spending cuts. The UK’s next budget is due out next month.
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