A South Carolina law meant to help the government collect debt is being used by hospitals to seize the tax refunds of people with unpaid medical bills, The Associated Press reported. Health organizations took at least $92.9 million in more than 172,000 seizures in 2017. The investigation of the Setoff Debt Program found it effectively allows hospitals to use the Department of Revenue as a debt collector. The state benefits by tacking on a $25 debtor fee to each seizure, collecting a total of $12.6 million in 2017. The South Carolina Association of Counties, a lobbying group for county governments, also collects $25 for processing each claim. Unpaid medical bills are the largest drivers of debt and bankruptcy for South Carolina’s poorest people.
As the filing deadline for individual income tax returns approaches on April 15, people are a bit uncertain about some of the changes in the federal “tax reform” law passed in 2017, The Hill reported. Millions of tax returns have been submitted, but indications are that they are coming in slower than usual. Tax experts often speak of three principles of taxation, which are fairness, simplicity and efficiency. These three principles are sometimes called the “holy trinity” of taxation. The success of the 2017 tax law on these criteria is indeed a matter of controversy. However, there is another standard that may arouse even more debate. Some tax policy texts refer to a fourth goal of “revenue sufficiency.” It would seem so fundamental as to not even bear saying. Yet after almost two decades of consistent and sometimes enormous federal budget deficits, which are today clearly far too large, perhaps we should etch this fourth principle in stone. The 2017 tax law took our already oversized deficits and made them even larger. Assuming all of its provisions are made permanent, that will expand the deficits and the debt by more than $2 trillion over 10 years, with larger and larger deficits thereafter. Some of the most generous provisions for typical taxpayers were originally made temporary, so that the price tag would look smaller in the legislation. Those provisions are certain to be made permanent without some very real soul searching.
Alexandria, Va. — Leading bankruptcy professionals and dealmakers will converge at “VALCON 2019: Cutting-Edge Valuation Solutions,” taking place at the Four Seasons Hotel in Las Vegas Feb. 27-March 1, 2019. Sponsored by the American Bankruptcy Institute and the Association of Insolvency & Restructuring Advisors, the conference will feature up to 11.5/13.5 hours of CLE/CPE credit, including 1 hour of ethics. A special keynote presentation will feature a bipartisan discussion by former Senator Byron Dorgan and former Congressman Phil English on the 2018 elections and what they mean for business and investing. There will also be a "VALCON Talks" featuring a provocative point-counterpoint on the role of hedge funds in today's business financing and the effect on corporate restructuring. Patricia B. Tomasco of Jackson Walker LLP (Houston) and Prof. Jack F. Williams of Baker Tilly Virchow Krause, LLP (Atlanta) are the co-chairs for the conference.
In addition to cutting-edge valuation topics, VALCON attendees will enjoy a joint workshop-style case study on Feb. 27 with participants from ABI’s Complex Financial Restructuring Program.
Sessions at VALCON 2019 include:
Hot Topics in Valuation & Creditworthiness Analyses
Lessons Learned from Contested Solvency and Valuation Trials
The Impact of the Tax Reform Bill on Valuations
Estimating the Value of Causes of Action for Purposes of Plan Releases in Chapter 11 Plan-Support Agreements
Valuing Debtors Still in Development: The Pre-Earnings Conundrum
Judicial Panel
Preparing for Direct and Cross-Examination Testimony as a Valuation Expert
Duties of PE-Controlled Board Members, Their Counsel, and Valuation Advisors
For a program schedule and full list of speakers, please click here.
Members of the press looking to attend the VALCON 2019 conference should contact ABI Public Affairs Manager John Hartgen at 703-894-5935 or jhartgen@abiworld.org.
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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abiworld.org. For additional conference information, visit http://www.abi.org/calendar-of-events.
Some taxpayers who didn’t have enough money withheld from their paychecks last year won a reprieve yesterday from the Internal Revenue Service, the Wall Street Journal reported. The tax agency said that it would waive penalties for some people who didn’t pay enough taxes throughout 2018, nodding to the uncertainty surrounding the implementation of the tax law Congress enacted at the end of 2017. “We realize there were many changes that affected people last year, and this penalty waiver will help taxpayers who inadvertently didn’t have enough tax withheld,” IRS Commissioner Chuck Rettig said in a statement. “We urge people to check their withholding again this year to make sure they are having the right amount of tax withheld for 2019.” Americans will begin filing their returns for tax year 2018 on Jan. 28 even as the partial government shutdown has the IRS operating at diminished capacity with unpaid workers. (Subscription required.)
The partial government shutdown has left some companies unable to get a taxpayer identification number from the IRS, holding up routine business deals until the agency’s workers return, the Wall Street Journal reported. Andy Mattson, an accountant with Moss Adams LLP in California who advises Silicon Valley companies, said the number-issuing halt has delayed deals for startups, some of which are based offshore to prevent double taxation of investors. Without a tax identification number, a foreign startup can’t get bank accounts to receive venture-capital money or make crucial tax elections, Mattson said. The shutdown’s impact on small businesses reaches beyond the slowdown in new identification numbers. “We have a buyer, but the buyer can’t actually take ownership of the business,” said Thompson. “All our tax planning is done. We are retiring. We are trying to be done, but it’s not happening.” The IRS system is still processing online requests for new taxpayer identification numbers. Many businesses in the U.S. or a U.S. territory can use the online system. But paper applications that need to be processed by IRS workers are stuck for now. Physical applications are typically made by foreign companies and by some companies in complicated financial situations. The IRS has been operating with a skeleton staff since the shutdown started on Dec. 22. Just one in eight employees are working, largely to maintain computer systems and investigate crimes, according to the IRS’s shutdown plan. Under federal law, the IRS can generally still perform activities needed to protect life and government property, including tax revenue.
