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Bank of America may have helped clients avoid taxes. Since at least 2011, it had been using its US unit’s funds to finance transactions by its European investment-banking arm. In doing so, it was able to help hedge funds avoid taxes on stock dividends. “BANA (Bank of America National Association) no longer finances dividend arbitrage activity," Bank of America told Reuters.
Tax legislating by a 1,000 cuts… or at least 17. The Senate Finance Committee passed seventeen tax-related bills yesterday. Chairman Orrin Hatch noted that the bills had bipartisan support, faced little opposition, and were fully paid for with offsetting revenue measures. Ranking Democrat Ron Wyden said that “The push for comprehensive tax reform is going to continue. This legislation may not be a comprehensive overhaul, but it makes a number of targeted improvements that will benefit our economy, workers and families.” And assure “common carbonation” when it comes to taxing hard cider.
The House: The IRS should lighten up on asset seizures. “Structuring,” or organizing cash deposits to keep them below $10,000 avoids reporting requirements. And is against the law. The IRS had been seizing assets based on evidence of such transactions and a judge’s warrant. After public scrutiny, the agency now generally ignores cases unless the money comes from illegal sources, such as drug dealing. At a hearing yesterday, House members urged the IRS to do more to protect the assets of small, cash-dependent businesses. IRS Commissioner John Koskinen said taxpayers should be able to contest asset seizures without an attorney.
The FBI is on the TurboTax case. The Federal Bureau of Investigation will try to determine how scam artists got their hands on personal information they used to file fraudulent tax returns through Intuit’s TurboTax. The software company reported that its systems were not breached, but the FBI will try to identify the sources of the information.
Pennsylvania’s Governor wants a new fracking tax. Democrat Tom Wolf has put forth a new 5 percent severance tax on natural gas extraction. His Republican predecessor Tom Corbett opposed the levy. Wolf says it could raise over $1 billion and that he’d use the “lion’s share” of the new revenue to fund public education.
Colorado raked in the green for weed. Its year-end report says the state collected $44 million in new sales and excise taxes on sales of recreational marijuana. Medical marijuana, legal since 2000, yields additional fees and taxes. All told, Colorado collected $76 million last year. Harvard University’s Jeffrey Miron says “Colorado is probably kind of a best-case scenario” for pot tax collections—for now. It was the first state to legalize recreational marijuana, but it will face increasing competition as neighboring states try to follow suit.
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