Issue #006 IRS Takes Aim at TurboTax

Also...Mobile Mammogram at the Coventry Mall and U.S. Chamber Sues SEC

Author

Drew Griffin
22 May

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IRS Takes Aim at TurboTax: Plans to Develop its Own Tax Preparation Software

The IRS plans to develop its own tax preparation software, potentially posing a threat to companies like TurboTax and H&R Block.

Advocates argue that a government-run platform would simplify and reduce costs for taxpayers. The IRS commissioned a feasibility study, which found that building a direct-file tool is feasible and that a majority of Americans might use it.

However, the tax preparation industry and some Republican lawmakers oppose the IRS taking on this role, citing conflicts of interest and cost concerns. The success of the program would depend on adoption rates, with previous free filing programs having low participation.

Despite the pilot program, it would likely take years before the IRS software becomes widely available. Some hope it could lead to automatic tax deductions without filing a return, similar to systems in other countries.

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Mobile Mammogram at the Coventry Mall

Mobile Mammogram Service: A mobile mammogram service is available at the Coventry Mall, North Coventry, through a partnership between Community Health & Dental Care and Tower Health.

This service offers 3D mammogram screenings using state-of-the-art technology. The Mobile Mammography Coach will be parked in the parking lot outside of Community Health & Dental Care on May 23 and June 26.

Appointments are required to receive a mammogram screening.

The Mobile Mammogram Coach aims to increase access to breast screenings and raise awareness on the importance of early detection of breast cancer.

You can book your mobile mammogram appointment by calling 484-628-8611.

It's important to have your health insurance policy number and primary care physician’s contact information ready when scheduling an appointment.

Business

U.S. Chamber Sues SEC to Protect Investors and Businesses


On May 12, the Chamber initiated legal proceedings against the SEC.

"Share repurchases contribute significantly to the effective operation of robust and effective capital markets," stated Neil Bradley, the U.S. Chamber's Executive Vice President and Chief Policy Officer."

The SEC's rule on stock buybacks does not safeguard investors. Rather, it discourages buybacks despite evidence that share repurchases enhance returns for savers and investors throughout the economy.

Buybacks are an effective way of allocating capital to sectors where it is most likely to stimulate investments that enhance business growth and shareholder value. This lawsuit by the Chamber aims to protect investors' returns and maintain the freedom of companies to make decisions without excessive government interference."

SEC introduces new regulation

On May 3, the SEC introduced a rule limiting the practice of stock buybacks. The U.S. Chamber of Commerce backs responsible share repurchase programs, which fortify U.S. capital markets and benefit the average American and those holding retirement accounts.

"Stock buybacks boost returns for savers and investors across the economy while simultaneously directing capital towards areas most likely to stimulate economic growth and improve our living standards," said Tom Quaadman, executive vice president of the Chamber’s Center for Capital Markets Competitiveness. "The SEC's rule, which discourages share repurchases, will negatively impact the retirement savings of millions of Americans and slow economic growth, affecting workers' wages.

Market regulations should align with economic realities, and it's regrettable that the SEC prioritized political policies over the interests of American investors and our economy. If the new rule resembles the proposed rule, the U.S. Chamber will consider litigation to protect investors.”

Understanding stock buybacks

When companies have surplus cash, they often buy back their stock as a way of managing that extra capital efficiently. Prior to the SEC's establishment of a framework for companies to repurchase their stock, there was substantial evidence that managers might misuse excess cash for projects or acquisitions that did not serve the company's economic best interests. Currently, share repurchase plans, also known as stock buybacks, are a tool included in comprehensive management strategies that assist companies in making sound financial decisions and delivering value to investors.

Why are buybacks beneficial?

Despite their advantages, some policy makers have criticized share repurchase plans, arguing that companies, when opting to buy back their stock, are choosing not to invest in other areas of their business, such as research and development (R&D). However, this is a misconception: companies do not choose to repurchase stock over planned expenditures (like R&D), but rather use their excess capital to buy back stock after meeting those commitments. Share repurchases provide companies with an efficient mechanism for making wise business decisions and managing company value when they have extra capital that cannot be reinvested in a way that aligns with their strategic goals.

Other criticisms of share repurchase plans suggest that companies manipulate the timing of their buybacks to coincide with periods when internal shareholders sell their stock. However, recent research shows that these claims are based on flawed studies, and that the synchronization of internal shareholder sales and share repurchase programs can be attributed to the regular schedule of corporate activities, rather than attempts to gain unfair advantage.

Impact of eliminating buybacks

Restricting or abolishing share repurchase plans would destabilize U.S. capital markets. Share buybacks have been proven to support orderly market trading, lower transaction costs, diminish market volatility, and provide an economic benefit to retail investors of up to $4.1 billion. Furthermore, proposals to limit or ban stock buybacks could disrupt company governance, planning, and decision-making, thereby diminishing companies' ability to manage value.

U.S. Chamber's stance

The U.S. Chamber advocates for policies that encourage competitive, transparent, and fluid capital markets


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