Tax & Accounting News
TaxBuzz Top 5 - The News You Need This Week
Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.
We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.
1. CA Lawmakers Approve First-of-Its-Kind Ammunition Tax
Legislators in California have approved a first-of-its-kind ammunition and gun tax that will help fund school safety improvements throughout The Golden State. The Associated Press notes that the federal government has its own existing tax on firearms. Those funds are disbursed to the states where sales were made, earmarked for wildlife education and hunter safety programs.
California’s proposed new tax, if it is signed into law, would be 11%. This is equal to the highest federal gun tax. Democratic Governor Gavin Newsom has until October 14 to either sign or veto the bill. At this time, it remains unclear what he will do -- Newsom has opposed some tax increases, such as the controversial Proposition 30 measure last year.
2. Former Fortis Banker Says He Was Coerced Into Cum-Ex Scheme
An ex-Fortis banker, who is only identified only as Frank H., has spoken out against his former employer during his Frankfurt trial. H. was arrested in Mallorca, Spain in July 2022. He has since been in custody at the Gießen prison in Hesse.
The Frankfurt Public Prosecutor’s Office filed charges in February 2023. Authorities accuse H. of heading a Cum-Ex tax evasion model from 2008 to 2010. In two instances, prosecutors allege he initiated the illegal activities himself.
H. is said to have siphoned off €51.5 million ($55 million) via illegal dividend deals. He says his bosses pressured traders into engaging in Cum-Ex deals. During a two-hour confession at trial, H. shared that he felt “inner deadening" while he was engaged in the scheme, per Bloomberg.
3. Africa Proposes Global Carbon Taxes to Combat Climate Change
The Nairobi Declaration served as the capstone of the three-day Africa Climate Summit in the Kenyan capital. The document, which was released on Wednesday, asks that "major polluters" around the world -- including the United States -- dedicate more resources to assisting vulnerable, less-wealthy nations.
The Declaration asks world leaders "to rally behind the proposal for a global carbon taxation regime including a carbon tax on fossil fuel trade, maritime transport and aviation, that may also be augmented by a global financial transaction tax".
Human rights activist Graça Machel spoke to the BBC calling the tax plan "a huge step forward". However, there is also notable opposition to the Declaration.
African heads of state have confirmed that they will use the document as their primary negotiating platform at the COP28 summit in November.
4. Richmond, VA Eyes More "Compassionate" Tax Collection Policies
Richmond, Virginia officials are looking to pass more "compassionate" tax collection policies after threatening local homeowners with drastic measures. According to an Axios report, at least 21 families were told their homes would hit the auction block due to unpaid bills.
The city's Chief Administrative Officer, Lincoln Saunders, said one proposed change would allow homeowners to enroll in existing relief programs for elderly and disabled residents even if they owe back taxes. Currently, Richmond requires all enrollees to be fully tax-compliant.
The municipality is also reportedly looking into revamping its current repayment plan options. Axios spoke to one anonymous 70-year-old resident who is required to pay over $20,000 in just two years. She told the outlet she had to take out a loan for the $3,000 down payment and will now need to take a job to afford the upcoming $800 monthly installments.
5. IRS Commits to Cracking Down on 1,600 Millionaires Who Owe Hundreds of Millions
The IRS has committed to cracking down on audits of 1,600 individual millionaires and 75 business partnerships who owe hundreds of millions of dollars in back taxes. CBS affiliate WBOC reported on IRS Commissioner Daniel Werfel's comments today. Werfel stated that thanks to an $80 billion federal funding boon and new artificial intelligence resources, the agency can more easily target wealthy taxpayers who have “cut corners."
“If you pay your taxes on time it should be particularly frustrating when you see that wealthy filers are not,” Werfel told reporters. He shared that the 1,600 millionaires on the agency's radar owe a minimum of $250,000 each and the 75 partnerships, who hold approximately $10 billion in assets apiece, will be specifically targeted by new “compliance efforts."
Per Werfel's comments, the tax collection effort is set to start as soon as October of this year.
Which tax news story this week is most interesting to you? Tell us in the comments!
Feature Image Credit: Creatas/Getty Images
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