Pardon Our Dust
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The House and Senate remain in recess until after the November elections, and are set to return on Nov. 12.
More FATCA Form Updates. The IRS released updated information to foreign financial institutions reporting U.S.-owned accounts on Form 1099 under the Foreign Account Tax Compliance Act, instead of on Form 8966. The new information is available here.
New Regs Blamed for Nixed Inversion Deal . Salix Pharmaceuticals Ltd. says it scrapped a $2.7 billion merger agreement with Italy’s Cosmo Pharmaceuticals SpA because of the Treasury Department’s recently released anti-inversion rules. Actavis Plc is reportedly now in talks to buy the Raleigh, North Carolina-based Salix, according to news reports.
In a statement announcing the termination of the inversion deal, Salix’s chief executive officer, Carolyn Logan, said, “The changed political environment has created more uncertainty regarding the potential benefits we expected to achieve.”
EU Launches In-Depth Probe of Apple, Fiat Tax Deals. The European Commission on Sept. 30 detailed accusations against Ireland for allegedly violating European Union “state aid” rules prohibiting member countries from giving anticompetitive advantages. The announcement sets off a more “in-depth” probe to determine whether Ireland’s transfer pricing tax arrangements with Apple improperly allow the company to shift profits and pay a lower tax rate than other Ireland-based companies. The European Commission also announced a similar probe would proceed regarding Luxembourg’s tax arrangements with a financing arm of carmaker Fiat SpA.
If the allegations are confirmed, the Commission could force EU member state governments to retrieve the “illegal state aid.” Ireland and Luxembourg government officials — and officials from Apple and Fiat — have denied any wrongdoing.
COURTS & LEISURE
SCOTUS Won’t Hear Same-Sex Marriage OR Tax Cases. The Supreme Court today refused to review all seven pending petitions urging the court to decide whether there is a right to same-sex marriage under the U.S. Constitution.
In other, less controversial news, the Court also declined to hear three tax-related cases this term, including a closely watched case on whether the IRS can tax data services as local telephone service, according to Politico. Bankrupt telecommunications company WorldCom filed a brief earlier this year requesting that the Supreme Court review an appeals court decision that would allow the IRS to collect back taxes for local telephone service on dial-up Internet access in the early 2000s. The appeals court determined that the dial-up Internet services in question could provide telephone-like connections and could be taxed as local phone service. Read more coverage here.
Relevant Agency Activity
Tuesday, Oct. 7
Treasury Secretary Jack Lew will deliver remarks at the Peterson Institute for International Economics on the state of the global economy and a recent trip to the G-20 finance ministerial meetings in Australia, ahead of the IMF and World Bank fall meetings in Washington.
Thursday, Oct. 9
European Central Bank (ECB) President Mario Draghi will speak on Europe and global central banking at the Brookings Institution’s Hutchins Center on Fiscal and Monetary Policy. His remarks will be followed by a conversation between Draghi and Stanley Fischer, vice chair of the Federal Reserve Board.
Fed Governor Daniel Tarullo will join a panel on “regulatory reform” at the 2014 Bretton Woods Committee International Council Meeting. Other topics to be discussed include resilience and risks within the global economy; the state of global economic policy coordination and implementation to drive strong, sustainable and balanced global growth; harmonization and implementation of global financial regulation; improvements and remaining challenges in addressing systemic risks (e.g., too-big-to-fail); and roles and risks of nonbank financial firms and activities.
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