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TaxBuzz Top 5 - Sen. Wyden Pressures TurboTax, Glen "Big Baby" Davis Sentenced to Prison & More

TaxBuzz Top 5 - Sen. Wyden Pressures TurboTax, Glen "Big Baby" Davis Sentenced to Prison & More

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. Senator Wyden Pressures Intuit to Rectify TurboTax Error Impacting Oregon Taxpayers

Credit: Justin Sullivan/Staff/GettyImages

U.S. Senator Ron Wyden (D-OR) is urging Intuit to compensate all Oregon taxpayers who were misled by TurboTax into overpaying state taxes. In a post on his official website, Wyden, the Chair of the Senate Finance Committee, noted a software glitch that automatically selected the standard deduction instead of itemizing, resulting in diminished refunds for many. Despite early warnings from the Oregon Department of Revenue, Intuit failed to address the issue in a timely fashion.

Wyden cited TurboTax's "Maximum Refund Guarantee,"  writing, “And because the vast majority of taxpayers understandably dread filing season and avoid thinking about taxes after it ends, many of those affected will not learn on their own that they overpaid. Intuit must inform them and help them get the full tax refunds they are entitled to receive.”

Intuit faces mounting pressure to address the TurboTax error and uphold its commitment to taxpayers. With the May 15 deadline looming for Intuit's response, Oregonians await assurances that their tax concerns will be promptly and adequately addressed. 

Read Wyden's full letter to Intuit here.EditSign.

2. Carbon Offset Initiatives Face Scrutiny 

Recent revelations cast doubt on the efficacy of carbon offsets in reducing greenhouse gas emissions, sparking debate within the corporate climate action sphere. The Science-Based Targets Initiative (SBTi) faces scrutiny for considering carbon credits prematurely.

"Higher quality empirical and observational evidence suggests that some or most emission reduction credits are ineffective in delivering emissions reductions," notes a confidential preliminary draft reviewed by Reuters and shared by Fast Company.

Initial findings suggest many carbon offset projects fail to deliver promised climate benefits, challenging emission reduction strategies. This intersects with U.S. tax incentives such as the Federal Renewable Electricity Production Tax Credit and the Alternative Fuel Vehicle Refueling Property Credit, encouraging investment in renewables and low-carbon transport.

As governments worldwide contemplate guidelines for carbon offset usage, questions arise about their role in achieving emission targets. While some argue offsets stimulate clean energy investment, skeptics question their integrity and potential to undermine genuine emission reduction initiatives.

3. Former NBA Star, Glen "Big Baby" Davis, Sentenced to Prison

Credit: Gail Oskin/Getty Images for T-Mobile

Former NBA player Glen "Big Baby" Davis was sentenced to 40 months in prison for his role in defrauding the league's health care benefits plan, part of a scheme that ensnared multiple players. Assistant U.S. attorney Ryan Finkel described Davis's actions as a "sophisticated and intelligent effort" to conceal fraud.

Twenty-two people, including 18 former players, have been sentenced to date according to an ESPN report. So far, however, only supposed ringleader, Terrence Williams, has received more prison time than 38-year-old Davis. The case has garnered significant attention, with NBA executive director, former player Andre Iguodala, advocating for leniency in Davis's case, citing his positive impact on the league. 

Despite support from the NBA community, few attended the sentencing, prompting defense attorney, Sabrina Shroff, to express disappointment. Davis, visibly emotional, pleaded for a chance to rediscover himself beyond basketball.

"When I lost basketball, I lost myself," Davis told Judge Valerie E. Caproni. "I ask you, your honor, to help me get back to who I am."

4. Second Billionaire Sues in Relation to IRS Data Leak

Following the sentencing of a former IRS contractor for leaking tax information, Thomson Reuters reports that Energy Transfer's Kelcy Warren has filed a complaint against Booz Allen Hamilton Inc., the employer of the contractor, Charles Littlejohn. Littlejohn, who was sentenced to five years for disclosing taxpayer documents to ProPublica, sparked legal action from Warren and hedge fund manager Ken Griffin. While Griffin's case targets the IRS and Treasury Department, Warren's complaint, filed in Maryland federal court, alleges privacy violations by Booz Allen.

The suit refers to Code Sec. 6103, which safeguards taxpayer data. Booz Allen, in response, condemned Littlejohn's actions and pledged cooperation with investigations. Warren seeks damages for reputational harm and privacy loss, asserting the company's negligence in safeguarding his data. Represented by Kirkland & Ellis LLP, Warren's complaint highlights the importance of protecting taxpayer confidentiality and holding accountable those responsible for breaches.

"We wholly condemn Littlejohn's crimes," a Booz Allen spokesperson stated. "Our employees support critical missions with professionalism and ethics, defining our company's values."

5. China Considers Dividend Tax Waiver for HK Stocks Connect

Credit: Keith Tsuji/Stringer/Getty Images

China is contemplating exempting individual investors from dividend taxes on Hong Kong stocks purchased via Stock Connect, sources familiar with the matter revealed to Bloomberg. The proposal, under review by regulators like the China Securities Regulatory Commission and the State Taxation Administration, seeks to waive the 20% tax on dividends from Hong Kong stocks. It aims to prevent double taxation and establish fairer arrangements for investors in both regions, where Hong Kong currently imposes no tax on dividends.

While a final decision is pending and no definite timeline has been set, Hong Kong stock exchange and regulatory authorities declined to comment. The proposal coincides with Hong Kong's efforts to revive its market, with trading volumes showing signs of recovery following supportive measures by the CSRC. SFC Chief Executive Julia Leung expressed intentions to implement changes within the year.

Feature Image Credit: Kimberly White/Stringer/GettyImages

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Rebekah Barton

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