Finance

Rep. John Dingell, D-Mich., said he plans to issue a proposal when Congress returns from recess that would impose stiff new taxes on gasoline and end the mortgage interest tax deduction on "McMansions," or homes greater than 3,000 square feet, as a way to discourage over-consumption of fuel.

Sen. Charles Schumer, D-N.Y., has written letters to the Big Four accounting firms asking what they are doing to let their financial institution clients know about waivers on mortgage accounting standards that could let borrowers refinance their loans.

Republican presidential candidate Rudolph Giuliani announced his tax proposals, saying he would make the Bush administration tax cuts permanent, eliminate inheritance taxes and reduce marginal tax rates.

CPAs who work as C-suite financial executives would like to see corporate America get more involved in issues such as health care, Social Security and the environment, according to a survey by the American Institute of CPAs.

Congress hopes to partially remedy the tax gap by making tax preparers more responsible for the positions their clients take on returns.Because paid preparers prepare over 62 percent of all individual income tax returns, they are a critical quality control for tax administration by helping to prevent noncompliance, according to an April report released by the Government Accountability Office.

Potential Republican presidential candidate Fred Thompson has written a letter indicating that he would be willing to support an overhaul of the Tax Code called the FairTax, which could replace the income tax system and all payroll taxes with a non-regressive national retail tax.

President Bush said he is mulling the possibility of simplifying the corporate tax system, as long as the changes don't affect the amount of taxes the government collects.

One of the more intriguing ideas in the energy bill that the House passed over the weekend was that of doing a "carbon audit" of the U.S. Tax Code. Exactly how Congress proposes to conduct such an audit is another matter.

Longstanding weaknesses in the financial systems of government agencies pose a "formidable challenge," according to a report released by the Government Accountability Office.

House lawmakers passed a $16 billion energy tax bill that does away with tax breaks for oil and gas companies and shifts the incentives to alternative energy, despite the threat of a veto from President Bush.

Conceding that a full-blown repeal of the alternative minimum tax may now be near-impossible, representatives of the nation's enrolled agents urged Congress to place new restrictions on the type of tax preparers authorized to prepare AMT returns."Repealing the full AMT would be a huge step in the simplification of the Tax Code, but one that may no longer be in the cards," EA Frank Degen told the Senate Finance Committee on behalf of the National Association of Enrolled Agents. "Practically, we admit that full repeal of the AMT may be a bridge too far for Congress to cross."

When it comes to fixing things in my home, I hail from the Woody Allen school of repair. I try something twice. After that, I start to hit. When it comes to my car, I often ignore it and hope that it goes away - sort of like many Americans when it comes to the fiscal spending crises in Washington.The budget-depleting hulks known as Medicare, Medicaid and Social Security comprise about 40 percent of a much larger fiscal contagion that threatens to literally break the national bank as the Baby Boomer generation begins the retirement process.

Members of Congress have been calling for raising taxes on the profits of private equity firms and hedge funds, along with taxing the incomes of their top managers at the same rate as managers of corporations.

The White House has lowered projections for the federal budget deficit to $205 billion, from an earlier forecast of $244 billion by the Office of Management and Budget.

A bill before the Connecticut State Senate would give its state comptroller the legal authority to establish generally accepted accounting principles for the state's financials, thereby sidestepping the Governmental Accounting Standards Board - the standard-setter for governments and municipalities.Proponents said that GASB's accounting rules make it hard to achieve a balanced budget, which Connecticut requires.

By a margin of 240-179, House lawmakers approved funding for the Internal Revenue Service for fiscal 2008 and in the process eliminated a provision that would have capped spending on the service's private debt collection program at $1 million. The program, which has divided Congress along party lines, allows the IRS to contract with private debt agencies to collect delinquent taxes. Having a $1 million limit would have ended the program. Currently the IRS has contracted with two private agencies, but is looking to expand the program this year according to reports.

In an effort to increase diversity in the financial services industry, the House Financial Services Committee has passed H. Con. Res.140, the Financial Services Diversity Initiative. The bill, sponsored by Rep. Gregory W. Meeks, D-N.Y., specifically will: * Encourage financial institutions to promote workforce diversity, including partnering with organizations that focus on developing opportunities for minorities and women; placing youth in internships, summer jobs and full-time positions within the industry; and partnering with inner-city high schools and girls' high schools to establish financial literacy programs and provide mentoring. * Encourage financial institutions and federal and state financial institutions' agencies to attract and retain a diverse workforce by recruiting at women's colleges and colleges that serve minority groups; sponsoring and recruiting at job fairs in urban communities; and placing employment ads in media outlets oriented to people of color; and, * Require that active measures should be taken by employers and educational institutions to increase the demographic diversity of the financial services industry. Meeks cited a Government Accountability Office report on diversity within the financial services industry that said that "representation for minorities in the financial services industry still lagged behind reasonable numbers on all levels and for women in upper management levels exclusively."

Ousted Fannie Mae chief executive Franklin Raines is charging regulators with withholding documents that show a deliberate attempt to drive down the stock price of the mortgage securities concern. In a filing with the U.S. District Court here, Raines, 58, who was shown the door after the company was forced into a $6.3 billion restatement, said that Fannie Mae's overseer, the Office of Federal Housing Enterprise Oversight, "continues to guard jealously against the disclosure of information." Raines wants OFHEO to hand over documents related to a 2004 report published by the Department of Housing and Urban showing that the "officers of the agency had engaged in serious misconduct by deliberately attempting to manipulate and depress Fannie Mae's stock price." To date, the government has filed more than 100 charges against Raines, former Fannie Mae chief financial officer Timothy Howard and the company's former controller, Leanne Spencer, seeking fines and the return of millions in bonus money. Following a two-year dispute over deferred compensation after his dismissal, Raines had been awarded $2.6 million under a deal disclosed in an SEC filing.

Rep. Charles Rangel, D-N.Y., chairman of the House Ways & Means Committee, said House lawmakers might consider legislation that would raise taxes on the income of private equity and hedge fund managers. Under the current tax laws, private-equity companies can go public by paying a partnership tax rate of 15 percent versus the corporate tax rate of 35 percent. Rangel's proposal follows a Senate measure introduced last week requiring private-equity partnerships that go public after June 14 to pay corporate taxes.

The Treasury is seeking nominations for its previously announced strategy to establish an Advisory Committee on the Auditing Profession -- a committee charged with studying the accounting profession and ways to keep the auditing profession vibrant and the U.S. capital markets competitive. Last month, Treasury selected former Securities and Exchange Commission Chairman Arthur Levitt and former SEC chief accountant Donald Nicholaisen to help lead the effort. The committee is expected to take about a year to study topics such as the concentration of the Big Four and their exposure to potentially crippling shareholder lawsuits. The panel is scheduled to begin its work in the fall. Nominations should be sent to ACAPmembership@do.treas.gov or Advisory Committee on the Auditing Profession Membership, Office of Financial Institutions Policy, Department of the Treasury, Main Treasury Building, Room 1418, 1500 Pennsylvania Avenue, NW., Washington, D.C. 20220. Nominations must be received on or before July 11, 2007.