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A useful guide to navigate the Tangible Property Regulations

McGladrey’s new flowcharts help aid taxpayers in applying the final regulations and help to clarify common items of confusion.

McGladrey names new Washington National Tax leader

McGladrey LLP, the nation's leading provider of assurance, tax and consulting services focused on the middle market, is pleased to announce that David Kautter has joined McGladrey as partner in charge, Washington National Tax, succeeding Rick Bailine who will retire Dec. 31, 2014. Kautter will be based in the firm's Washington, D.C. office.

Prior to joining McGladrey, Kautter was the managing director of the Kogod Tax Center at American University, a nonpartisan research institute focused on tax issues affecting small businesses, entrepreneurs and middle-income taxpayers. During his tenure, Kautter also served as the executive in residence in the department of accounting and taxation at the Kogod School of Business.

Kautter's previous experience also includes serving as the director of national tax and as the national director for human resource services for a Big Four accounting firm, where he was also lead specialist in the taxation of compensation and benefits for more than 20 years. Kautter's client base included range of companies, from Fortune 100 companies to small start-up businesses; his experience includes assisting clients with monitoring, interpreting and participating in the federal legislative and regulatory process. Government policy-makers have sought Kautter's advice about the impact of proposed rules and regulations in a wide range of areas, and he has testified before the House Ways & Means Oversight Committee on the biggest tax issues facing small businesses. He spent three years as tax legislative counsel for former U.S. Senator John C. Danforth, who was a member of the Senate Finance Committee. Kautter was the original drafter of the research and development tax credit legislation.

"We are thrilled that Dave is bringing to McGladrey clients his deep level of knowledge and understanding of important tax issues impacting businesses," said Jeff Johannesen, national line of business leader, tax services, for McGladrey. "His proven track record of serving clients of all sizes and his insights into the federal legislative and regulatory process will enhance our ability to meet and exceed the needs of our middle market clients who will now have access to this nationally recognized taxation thought leader."

Kautter holds a B.B.A. in accounting, with high honors, from the University of Notre Dame, and a J.D. from Georgetown University Law Center. He is a certified public accountant, licensed in the District of Columbia, and is a member of the American Institute of Certified Public Accountants. He is also a member of the District of Columbia Bar and the American Bar Association, and is a Fellow of the American College of Employee Benefits Counsel. Kautter has published more than 50 articles on various areas of federal taxation.

McGladrey Survey: Middle Market Tax Burden Rising, Threatening Job Growth

The vast majority of middle market companies have experienced tax hikes since the beginning of 2013 as a result of the "fiscal cliff" tax deal that became law last year and subsequent tax changes, reports McGladrey LLP, the leading U.S. provider of assurance, tax and consulting services focused on the middle market According to McGladrey’s survey of 525 middle market executives, 79 percent of middle market firms saw their tax bills increase at least somewhat last year. More than half of those that had to cut their workforces in 2013 reported the law contributed to that decision.

Prepare for IRS post-exam process with a webinar

Has your company had an IRS exam? Join McGladrey for a webcast entitled “Now that my IRS exam is over, what’s next?” on September 24 at 1 p.m. EDT. Join Patti Burquest, David Click and Brian Kirkell for a discussion about how companies can prepare for the IRS post-examination process.

They will address how companies can solidify positive IRS exam results through a closing agreement, how to prepare for the appeals process, how companies can get the same result in the next audit cycle, the top interest calculation errors made by the IRS, and how state rules for filing amended returns vary and how to ensure you are not caught off guard or up against a quick deadline.

Learn more or register here. One CPE credit will be available to participants.

KPMG to host tax reform video webcast

KPMG’s Tax Governance Institute will host a timely live video webcast, “The Baucus Tax Reform Discussion Drafts,” on Monday, Dec. 16, from noon to 1:30 p.m. (ET). The 90-minute program will review the substance of these important proposals, the rationale behind them and their potential impact.

KPMG’s Hank Gutman, director of TGI and former chief of staff of the U.S. Congressional Joint Committee on Taxation, will moderate the discussion with a webcast panel that includes: Lily Batchelder, majority chief tax counsel for the U.S. Senate Finance Committee; Mark Prater, minority chief tax counsel for the U.S. Senate Finance Committee; Manal Corwin, national leader of KPMG’s International Tax practice and principal-in-charge of International Tax policy in the firm’s Washington National Tax practice, and former deputy assistant secretary for International Tax Affairs in the Office of Tax Policy at the U.S. Department of Treasury; and Scott Vance, principal-in-charge, Income Tax and Accounting group of KPMG’s Washington National Tax practice.

Board and audit committee members, CFOs, tax directors and other business professionals interested in attending the program – another in a series of KPMG presentations on this important topic – can register at www.taxgovernanceinstitute.com.

Part of the KPMG Institute Network, the Tax Governance Institute provides opportunities for board members, corporate management, stakeholders, government representatives and others to share knowledge regarding the identification, oversight, management, and appropriate disclosure of tax risk.

Come One, Come All:  Registration Opens for TEI's Midyear Conference

Winter has come to the Northern Hemisphere​, with wind and snow and rain afflicting many holiday travellers.  The fourth world reached the end of its 13th b'ak'tun, or Mayan date, earlier today, on December 21, 2012.  The good news is this didn't mean "the end of the world"; the bad news is that concern about the Mayan Calendar may have had something to do with what has - hasn't - happened in Washington.  Did concern about the world ending contribute to there being no Plan A or Plan B.  Is "end of the world" just another way of saying, "Skidding off the Fiscal Cliff"?  As they often say on the Sunday morning talk shows, it's too early to tell.

It's not too early, however, to know that 2013 will be a challenging year for business tax professionals.  Nor is it too early to say with certainty that the need for top-quality tax education and unsurpassed networking opportunities will be important.  Thus, it is not too early to know that THE place to be on St. Patrick's Day 2013 is the Grand Hyatt Washington for TEI's 63rd Midyear Conference.  The conference will begin on Sunday, March 17, and continue through lunch on Wednesday, March 20.  Its theme will be "Backing Away from the Precipice: Tax Policy, Practice, and Procedure in 2013 and Beyond." Speakers will include acting IRS Commissioner Steve Miller.  Entertainment at the Tuesday banquet will be The Capitol Steps.


For complete details, please click here.

KPMG Survey:  Most Senior Execs Don't See "Fiscal Cliff" Agreement by Year-End

(from KPMG)

Vast Majority on Lookout for Temporary ‘Stop Gap’ Measure on Issue

NEW YORK, Dec. 14 – Almost half of senior executives polled said they did not expect an agreement on the so-called “fiscal cliff” negotiations by year-end, according to a survey of more than 2500 business leaders conducted by KPMG’s Tax Governance Institute (TGI) earlier this month. 
In the survey, 48 percent of respondents said they did not expect an agreement on the “fiscal cliff” by Dec. 31, while 32 percent said that they thought there would be resolution by the year-end. Some 19 percent were not sure.
At the same time, a vast majority of respondents (77 percent) are also on the lookout for a temporary “stop gap” measure on the looming issue which -- if left unresolved -- would result in a combination of tax increases and forced spending cuts on Jan. 1.  
KPMG’s Hank Gutman, principal and director of the TGI and former chief of staff of the U.S. Congressional Joint Committee on Taxation, said: “It’s clear from our survey findings that the business community doesn’t think the government will be able to resolve the ‘fiscal cliff’ by Dec. 31.  Prudent companies are taking steps now to assess the potential implications.”
In any agreement, 55 percent of respondents said they would like to see a combination of government spending cuts and tax rate increases on higher-income individuals, while 32 percent said they would most like to see cuts in government spending, including entitlement programs.
Some 54 percent of respondents expect any agreement to include the extension of the 2001/2003 tax rates for those with income below $250,000, but not for taxpayers with income of $250,000 and above; 22 percent said there would be agreement on a plan that would temporarily extend all current tax rules. 
In addition, the survey revealed that 33 percent said they do not expect enactment of any business tax reforms until beyond 2015; some 26 percent said they expect reform in 2014. Only 11 percent said they expect business tax reform in 2013. 
If the corporate tax rate is reduced, most respondents (38 percent) predicted that the new rate would be 28-29 percent, while a quarter of respondents (26 percent) said they see the rate falling to 30-31 percent. Eighteen percent said the rate would go to 25-27 percent.
“Lowering the corporate tax rate from its current 35 percent to 25 percent in a revenue-neutral manner will not be easy,” Gutman said.  “The cost of reducing the rate is going to have to be offset in some way, and that offset is likely going to come out of the business community,” Gutman said.
In other survey findings, all focused on U.S. economic recovery:
·         Some 40 percent of respondents believe the “fiscal cliff” has been a significant issue over the past 12 months with regard to economic recovery in the United States.
·         Forty-nine percent feel hiring by U.S. businesses will be the most important driver of any economic recovery over the next 12 months.
·         And 45 percent feel increased certainty on U.S. taxation for individuals and businesses will have the most significant affect on economic recovery in 2013.
The survey reflects the responses of more than 2500 members of the Tax Governance Institute -- including board and audit committee members, chief financial officers and tax directors -- who participated in the TGI’s Dec. 6 video webcast, “Gutman, Kies, Talisman Address the Fiscal Cliff and Tax Reform.”  A replay of the video webcast is available here.

KPMG's Tax Governance Institute to Host Webcast on Fiscal Cliff and Business Tax Reform

NEW YORK, Nov. 29 – KPMG’s Tax Governance Institute (TGI) invites board members, CFOs and other interested parties to a live video webcast featuring insight and perspective from key Washington, D.C., insiders on what may result from negotiations on the “fiscal cliff” and business tax reform, on Thursday, Dec. 6, from 3 p.m. to 4:30 p.m. (ET).


Hank Gutman, KPMG principal, director of the TGI and former chief of staff of the U.S. Congress Joint Committee on Taxation, will moderate the webcast, which will include a panel discussion with high-profile Washington lobbyists Ken Kies and Jon Talisman. The panelists will explore both the possible outcomes of the negotiations over the fiscal cliff and the longer-term prospects for individual and business tax reform.


Board and audit committee members, CFOs, tax directors and other business professionals interested in attending the program,  titled “Gutman, Kies and Talisman Address the Fiscal Cliff and Tax Reform,” can register by logging on to: www.taxgovernanceinstitute.com.


“As politicians debate how to avoid going over the ‘fiscal cliff,’ contain unsustainable budget deficits, reform the tax system, and cut spending, business leaders and individual taxpayers ponder what it all may mean for them,” Gutman said. “Few people inside or outside of D.C. have a better vantage point than Ken Kies and Jon Talisman from which to tell what is and is not fiscally or politically possible.”


·      Kies is managing director of the Federal Policy Group, and former co-managing partner of the Washington National Tax Services office of PricewaterhouseCoopers LLP, chief of staff of the Congressional Joint Committee on Taxation and Republican chief tax counsel to the Ways and Means Committee of the U.S. House of Representatives.  

·      Talisman is founding partner of Capital Tax Partners and former assistant secretary of the U.S. Treasury for Tax Policy in the Clinton Administration, Democratic chief tax counsel for the Senate Finance Committee, and legislation counsel of the Congressional Joint Committee on Taxation.


“CFOs, audit committee members and other executives should find this webcast of special interest,” Gutman added.


Part of the KPMG Institute Network (www.kpmginstitutes.com), the Tax Governance Institute (www.taxgovernanceinstitute.com) provides opportunities for board members, corporate management, stakeholders, government representatives and others to share knowledge regarding the identification, oversight, management, and appropriate disclosure of tax risk. A summary of the Institute’s recent insights on corporate tax reform can be found here.

KPMG Survey re Tax Reform

​(from KPMG)



Manufacturing Deduction, Research & Experimentation Tax Credits, Accelerated Depreciation All Placed On The Table

NEW YORK, Nov. 16 – Business leaders are clearly coming to the realization that if they want to see meaningful U.S. corporate tax reform they will need to give up some tax preferences in exchange for a lower statutory corporate tax rate, according to a survey by KPMG LLP, the U.S. audit, tax and advisory firm.
In a survey of more than 680 business executives, almost 80 percent of respondents from both U.S. domestic and multinational companies said they would be willing to accept the repeal of certain tax incentives in exchange for the lower overall tax rate.
Among those who support the concept of corporate tax reform, accelerated depreciation (68 percent) and the manufacturing deduction (66 percent) were the two most cited tax incentives that respondents were willing to give up. Surprisingly, research and experimentation tax incentives were cited by 52 percent of respondents overall, the findings revealed.
“Business leaders understand the fiscal challenges of the United States and are increasingly recognizing that a hard stance on incentives with respect to corporate tax reform will not work,” said Hank Gutman, principal with KPMG LLP and former chief of staff of the U.S. Congress Joint Committee on Taxation. “They know that for effective reformation of business taxation to take place, incentives once considered untouchable need to be up for debate.”
According to the survey, only 16 percent of respondents expect fundamental tax reforms in 2013, while such reforms were expected by 2014 by 25 percent of those polled and by 2015 or beyond by 29 percent.  Thirty percent said they were unsure when any reform would be enacted.
The U.S. corporate tax rate is the top business tax concern among those surveyed (40 percent) followed by taxation of international operations (24 percent) and financial statement disclosure issues (17 percent). Of particular note, of 289 domestic companies surveyed, 16 percent said that employee benefits and executive compensation is their top business tax concern.
“Many commentators believe that the goal of U.S. tax reform should be to replicate the results of the 1986 Tax Reform Act, which simplified the tax code, broadened the tax base and eliminated many tax preferences,” Gutman said. “But today the fiscal challenges are very different.
“The reality is that any corporate tax reform will have to be at least revenue neutral, which will create winners and losers in the business sector,” Gutman continued. “As a result, some of the objectives being discussed for corporate tax reform may end up being mostly aspirational.”
One interesting disconnect among the findings revealed that CFOs, audit committees and boards who are discussing tax reform are, for the most part, not discussing the topic with their tax managers.  In fact, only 11 percent said they were doing so. Instead, most discussions were taking place primarily with the finance executives and the C-Suite, according to the survey.
The survey also revealed that 36 percent of respondents said they felt the corporate tax system is seriously flawed and needs a complete overhaul while another 59 percent said the system has some flaws and needs some reform. Concerning a question on what those polled think is flawed about the U.S. corporate tax system, respondents most named a tax rate that is too high (76 percent) and foreign source income that is not properly taxed (51 percent).
If the corporate tax rate is reduced, an overwhelming majority of respondents (82 percent) expect the new corporate tax rate to be 29 percent or less, down from its current statutory high of 35 percent.  Of those respondents, 42 percent expect a rate of between 25 to 27 percent, and 22 percent expect a rate of 28 to 29 percent. Only 18 percent expect a rate below 25 percent.
“Reduction of the corporate rate is very important,” Gutman said. “Proponents believe this will make the U.S. more attractive to foreign direct investment and reduce incentives to move income off-shore. All proposals to date espouse a reduction of the corporate rate to 25 to 29 percent and assume a revenue neutral outcome. The unanswered question is how to achieve that neutrality.”
When asked how the government will make up for the revenue shortfall if the corporate tax rate is reduced to 30 percent or less, a majority of total respondents (64 percent) expect the government to reduce business tax preferences while 25 percent of the audit committee/board respondents and 48 percent of CFOs expect the government to increase tax rates on the capital income of high-net worth individuals.
Concerning the possible adoption of a national consumption tax to generate additional revenue, 31 percent of respondents polled said they expect that the government would enact a Value-Added Tax (VAT). When asked if they individually would support a VAT to lower the corporate tax rate, 67 percent said no or not sure, while 32 percent said they would.
“To date, the business tax reform discussion has been long on concept but short on detail,” Gutman said. “In the zero-sum game that is created by budget constraints, the principal goal of significant rate reduction may be unattainable without an additional revenue source, such as a national consumption tax, financial transaction tax, or a form of energy tax.”
In other survey findings:
·         The majority (56 percent) of those polled said that lowering the corporate tax rate is seen as more important than reforming the taxation of non-U.S. source income.
·         Most respondents (40 percent) do not plan to be actively involved in efforts to shape the outcome of the corporate tax reform debate while 33 percent were unsure about their plans.
·         Moreover, 66 percent of respondents said they were taking a “wait and see” approach to preparing for corporate tax reform because it has not yet achieved enough of a footing to warrant action.
KPMG’s “2012 Tax Reform Survey” was conducted by the firm’s Tax Governance Institute between July and mid-September of 2012. A total of 684 business executives were polled, including directors of tax, vice presidents of tax, chief tax counsels, chief financial officers, controllers, treasurers, audit committee members and chairs, and board members and chairs.
A report with complete survey results is available at www.kpmg.institutes.com.

"Taxes in America - What Everyone Needs to Know"

(from Tax Prof Blog)

Taxes in AmericaLeonard E. Burman (Syracuse) and Joel B. Slemrod (Michigan), Taxes in America: What Everyone Needs to Know (Oxford University Press, Nov. 22, 2012):


Despite their passion and fury, contemporary Americans are remarkably clueless about how their tax system works. But with heated debates over taxation now roiling Congress and the nation, an understanding of our tax system is of vital importance. Taxes in America, by preeminent tax scholars Leonard E. Burman and Joel Slemrod, offers a clear, concise explanation of how our tax system works, how it affects people and businesses, and how it might be improved. Accessibly written and organized in a clear, question-and-answer format, the book describes the intricacies of the modern tax system in an easy-to-grasp manner. Burman and Slemrod begin with the basic definitions of taxes and then delve into more complicated and indeed contentious concerns. They address such questions as how to recognize Fool's Gold tax reform plans. How much more tax could the IRS collect with better enforcement? How do tax burdens vary around the world? Why do corporations pay so little tax, even though they earn trillions of dollars every year? And what kind of tax system is most conducive to economic growth?


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