Authorities Raid Caterpillar Offices On Account Of Tax Fraud

Caterpillar is a leading machinery manufacturing company that is literally a pioneer in the field. For several years now, the company is accused of not paying the taxes as it facilitates transfer between the US and foreign subsidiaries. The business practices and tax evasion strategies were scrutinized for a long time and it ended with a raid in three offices, including the headquarters at Peoria.

The headquarters at Peoria, offices in East Peoria and Morton parts distribution center were raided by several federal authorities. It is reported that raid is conducted by Internal Revenue Service, Federal Deposit Insurance Corporation and Department of Commerce. The authorities entered the premises with a search and seizure warrant. As a part of the warrant, the authorities got hold of electronic information and other documents. Caterpillar had no other choice than to cooperate with the officials.

A couple of years ago, a subpoena was issued to Caterpillar asking for documents related to cash movement between the US and foreign subsidiaries of the company. Caterpillar has a subsidiary company called SARL in Switzerland and it is alleged that the company made several payments to SARL to evade taxes. Subpoenas were issued for Caterpillar to submit the information related to resale and purchase of replacement parts and dividend payments.

On February 15th, Caterpillar made it clear that it will cooperate with the investigations and hoped that it won’t affect the liquidity of the company. Switzerland is a tax haven with only 4% tax and it Caterpillar saved millions of dollars in taxes using fake transactions to SARL. At the end of the year, in the non-US subsidiaries, Caterpillar had undistributed profits of $16 billion and $5 billion cash. Caterpillar would have to pay a huge amount of money in tax if the money was sent back to the USA.

In 2014, the Senate ordered a probe on the tax evasion plan formulated by Caterpillar in 1999 with PricewaterhouseCoopers’ auditor. The profits made through sales of machinery parts were sent to Switzerland and this saved $2.4 billion in taxes for Caterpillar over a period of 12 years. The IRS in 2016 fined $2 billion tax as a penalty for tax avoidance. It also canceled $125 million foreign arrangement between the various subsidiaries of the company. Caterpillar was working on proving to IRS that it didn’t violate tax laws.

Despite the cooperation provided by Caterpillar, the federal authorities were determined to raid Caterpillar’s offices. This came as a shocker for the corporate world because a few days ago President Donald Trump endorsed Caterpillar as his favorite company. The former CEO of Caterpillar along with CEOs from various companies met with the president to discuss infrastructure spending, tax reforms, and deregulation.

The present CEO of Jim Umpleby is forced to deal with the highly controversial case of tax appropriation and he has commented that the company was surprised by the federal action. In a letter sent to the employees, he apologized for the present situation the company is in. The shareholders have also sued Caterpillar for deception and misleading statements for the investors.

Snap Has A Long Way To Go After Launching IPO

Snap, the operating company of the popular app Snapchat has launched IPO to become the first technology company to do so in 2017. Snap is relatively new in the market and it is extremely rare to find such a new company to begin selling stocks to the public. The public investors are generally interested only in companies with a handsome cash flow and good revenue growth. Snap has generated revenue only for the past two years and the company is far from being called as profitable. The popularity of Snap IPO shows that investors are willing to bet on a fast-growing unprofitable company.

Snapchat is an entertaining and communication app developed targeting the millennials. The fast disappearing photos and stories have attracted the attention from the young generation who are always interested in doing something quirky with their phones. The introduction of Instagram Stories has made it difficult for Snapchat to continue offering just what it offers now. However, this didn’t stop Snap from going public even though it was spending $1.14 for every dollar generated as revenue.

On Wednesday, when Snap shares were opened for the public, it was priced at $17 per share to generate $3.4 billion for the company. The demand for the Snap shares increased with Snap gaining 44% the next day and selling at $24 per share. Based on the outstanding shares available for the public, the capitalization revenue is capped at $28.4 billion, much greater than the expectation of $17.8 billion.

Even though Snapchat has advertising opportunities, the user base is elusive. Monetization is achieved through ads and third party contents. Snapchat Specs is a new hardware product released by the company with Snapcash payment system. The Snapchat app has 158 million daily active users, but the user base is not increasing rapidly.

Despite a huge growth in revenue, Snap continues to experience loss. By 2016, Snap increased its revenue from $58.7 million to $404.5 million. However, the net loss also increased to $514.6 million from $372.9 million. Before going public, Snap warned the investors that it may not be able to achieve profitability. Snapchat generated 98% of its revenue from advertising in 2016.

Snapchat is heavily used by users between the ages 18-34 and this demographic is highly coveted by the advertisers. Young adults are extremely active on Snapchat, but the user base is not growing fast. Snapchat has noted that the competition in fierce, mainly due to the development of similar features by competitors. The app is not popular in the developing countries that lack high bandwidth mobile networks.

Snap has made common A stocks available for the public and this means that investors have no voting power. The co-founders Evan Spiegel and Robert Murphy have 10 votes per share and they have complete control over the development of the company. It is a very brave move for a technology company to become public, without making profits and offering shares with no voting power. Investors have to wait and watch if these shares would bring in the much-desired return on their investment.

Bitcoin Beats Gold Price For The First Time In History

Bitcoin, the digital currency is gaining a lot of significance all over the world. Immediately after the introduction of Bitcoin, the value of the digital currency started gaining. However, after the scandal over mining of bitcoins by tech companies, the price dropped suddenly. Bitcoin raised again in 2016, reaching the much awaited $1000 mark in 2016. Now, for the first time in the history of Bitcoins, the value of one bitcoin has surpassed the price of one ounce of gold. Investors celebrate bitcoin as the digital gold. On Thursday, bitcoin was priced at $1,271 whereas one ounce of gold was selling at $1,235.

Bitcoin is an entirely digital currency created in the year 2009. Software developer under the name Satoshi Nakamoto introduced bitcoin to the world market as a digital currency and its limit is set. It is not printed on paper and it is mined through computers.

Around the same time in 2016, bitcoin was priced at $421.60. Now, it is valued at more than $1200. In just 12 months, the value of Bitcoin has tripled and the value continues to increase. In comparison, gold was traded at almost the same price last year.

Even though gold price continues to increase every year due to the limited availability of the metal, the value is not rapidly increasing like bitcoin. The value of bitcoin is not influenced by the fluctuations in the currency market.

About four years ago, Tyler and Cameron Winklevoss proposed bitcoin exchange-traded fund (ETF). The Securities Exchange Commission is expected to make a decision on March 11th. If the proposal is approved, it would start the first bitcoin ETF in the United States of America. In that case, ETF will purchase bitcoins for $300 million. This will effectively double the value of the digital currency.

Bitcoin could easily become an alternative asset in the future, even surpassing the popularity of gold. The total number of bitcoins available is just 21 million and it is not controlled by any company or country. However, it is much easier to trade bitcoin than gold because the currency is absolutely digital. About 100,000 merchants worldwide including Microsoft, Expedia and Dell accept bitcoin payment. You can even use a portion of you bitcoin for payment and it is impossible to do it with gold.

Investors are interested in using bitcoins and this has decreased the popularity of gold. The price continues to increase because of the interest in the digital currency. The users of bitcoin have doubled in just one year and this new digital asset is here to stay. However, economists are not sure how this demand will keep up in the future. There is nothing like bitcoin before and the concept is itself arbitrary.

Even though bitcoin has reached an all-time high in recent days, it is not going to be extensively used like regular old currency. Bitcoin is regarded as a medium of exchange and it doesn’t have a definite store of value. The investors are nevertheless enthralled by the digital fool’s gold.

Subway Refutes Report Claiming Chicken Is Only 50% Chicken

The fast-food restaurant chains are constantly coming under scrutiny for their treatment of animals and additives added to the meat. Recently, people were shocked after reading a report from Canadian Broadcasting Corp. In the Marketplace program, chicken meat and strips from several fast-food chains were tested to find out the percentage of chicken DNA. The laboratories tested to find out the proportion of chicken DNA and plant-based DNA. According to the CBC’s report, chicken from McDonald’s, Wendy’s and Tim Hortons had 85% to 90% of chicken DNA. However, the chicken meat samples from Subway had about 50% chicken DNA and 50% plant DNA.

Subway released a report stating that the CBC’s report is 100% wrong. Subway claims that it uses 100% white meat chicken which is flavored using soy protein additives. The total of soy protein content is less than 1% and it is added to keep the meat moist and flavorful. Subway Canada refuted the claim as it argued that test results from two different laboratories aligned with the food standards and the quality promise of Subway.

According to CBC news, Trent University’s Wildlife forensic DNA laboratory conducted the testing on different chicken samples from the fast food restaurants. After the first round of tests showed 50% chicken in Subway meat, laboratory conducted another round of tests from different Subway samples of chicken meat and strips. The repeated test also showed about 50% chicken DNA and another 50% Soy Protein in the chicken meat and strips. Even after Subway’s report, the CBC announced that it stands by its report.

Subway announced that the independent test laboratories of Maxxam Analytics, Canada, and Elisa Technologies Inc, Florida were used for testing their chicken samples. A single supplier is responsible for providing chicken meat to different subway outlets in Canada while another supplier is used in the USA. Suzanne Greco, CEO and President of Subway Canada claimed that the flawed test by Marketplace is a great disservice to the customers of Subway. Greco assured that Subway always focuses on delivering safe and high-quality food to the customers.

Dave Theno, Chief of Food Safety and Quality said that the Subway chicken has no artificial flavors, colors or preservatives. He argued that the company performs numerous tests for several years to ensure high quality of chicken meat and the results claimed by the program were never experienced. The less than 1% soy protein is used in spices, seasonings, and marinade that are used to enhance the flavor of the meat and also to keep it moist for the customers.

Even though Subway called the CBC report to be false and misleading, CBC assured that the chicken samples for the test were acquired from various outlets in Southern Ontario. It also concluded that the DNA test is not meant to reveal the amount of chicken, but it is a clear indication of the proportion of the chicken DNA. CBC has not released the method of testing or other findings. It has only released its conclusions and results.

Buffett Gets Back at Trump, Releases Tax Information

Donald Trump

Billionaire investor Warren Buffet has hit back at Donald Trump a day after being accused of tax avoidance by the Republican U.S. presidential candidate, releasing data showing he has been consistent in his payments.

While speaking at Sunday night’s presidential debate, Trump for the first time admitted since entering the race that he had avoided paying federal taxes on his income for years. But he moved quickly to somewhat exonerate himself by claiming that some supporters of his Democratic opponent, Hillary Clinton, including Buffett, were also guilty of similar thing.

“Many of [Clinton’s] friends took bigger deductions,” Trump claimed. “Warren Buffett took a massive deduction.”

Responding in a statement released on Monday, Buffett said he has paid his federal income taxes every year since 1944. He went ahead to provide his tax data while calling on Trump to do the same.

“I have been audited by the [Internal Revenue Service] multiple times and am currently being audited,” he said. “I have no problem in releasing my tax information while under audit. Neither would Mr. Trump – at least he would have no legal problem.”

The Berkshire Hathaway chairman revealed that his adjusted gross income for 2015 was $11,563,931, while his total deductions stood at $5,477,694. His federal income tax payment for last year was $1,845,557, which amounted to around 16 percent of his reported total income. The billionaire, who said he has copies of all returns for the past 72 years, revealed that his returns for previous years were similar in terms of contributions, deductions and tax rates.

Charitable contributions were responsible for the largest chunk of Buffett’s deductions. He further disclosed that the amount deducted was quite little in comparison to the over $2.85 billion he gave out to charities in 2015. He had been limited by tax laws in terms of how much he could claim in charitable deductions.

This is unlike Trump whose charitable foundations have come under increasing scrutiny. It has been claimed that most charitable donations made by the Republican presidential candidate had actually come from donors to his foundation. The New York attorney general recently ordered that the Donald J. Trump Foundation should stop soliciting donations in the state.

Trump has vehemently refused to accede to requests that he should make his federal income tax returns public. This is quite unlike most American presidential candidates of recent memory. The billionaire has often given the excuse of being under audit by the IRS as a reason for not doing so, even though the U.S. tax authorities have said that does not prevent him for doing so.

He acknowledged on Sunday that he avoided paying income taxes to the federal government for years by claiming he had $916 million in losses in 1995.

Previously, Trump had claimed that Buffett reported an $873 million loss. He however did not provide evidence to back that claim.

Buffett has repeatedly spoken against loopholes in tax laws that allow him pay just a little portion of his income in taxes, according to the New York Times. He has called for a minimum 30 percent tax on income of those who make more than $5 million – a proposal Clinton is believed to be in support of.

Trump, who has criticized his Democratic opponent for not doing enough as a senator to block tax loopholes, plans to reduce the amount wealthy Americans pay in taxes.

Comment Period for CFPB’s Payday Loan Proposal Winding Down

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In June, the Consumer Financial Protection Bureau (CFPB) released its much-anticipated proposal pertaining to the payday loan industry. The consumer federal watchdog agency announced new rules and regulations for payday loans at the federal level, which is the first time in the nation’s history.

CFPB director Richard Cordray gave the general public 90 days to comment on the regulatory framework. Cordray said that he wanted to get everyone’s feedback so their proposal could be improved upon.

Well, that 90-day window is coming to a close. The American general public – consumers, payday loan businesses, consumer advocacy groups, community leaders and so on – will have until October 9 to submit any complaints, concerns, questions or grievances regarding the CFPB’s proposal.

Since June, many proponents and opponents of the forthcoming regulations have openly explained why the new rules and regulations are good or bad. Some say the proposal goes too far or it doesn’t go far enough. One of those people in the latter camp were Nick Bourke of the Pew Charitable Trusts.

“The CFPB is missing a big opportunity to encourage safer and more affordable loan options, our goal is to leave the best online payday loans standing while weeding out those who can’t follow the rules” he said.

Also, Traci Wickett, executive director of the United Way of Southern Cameron County, recently panned a recommended rule that would prevent low-income borrowers from entering into a payday loan debt trap. The CFPB said in its initial release that one new rule would require lenders to ensure borrowers do have enough funds to pay their debt when they take out a payday loan. She argues that many payday loan lenders could actually be exempt from this provision in the legislation.

“That’s just unacceptable, that that many loans would be exempted from the ability-to-repay,” she said.

Ultimately, according to Wickett and others, the CFPB needs to close several loopholes in the proposal.

Meanwhile, Dave Pommerehn of the Consumer Bankers Association, warned that some of the new rules could put a lot of payday loan stores out of business, which will ultimately hurt impecunious customers.

“This is resource prohibitive for most providers of this type of lending, whether they be a bank or a non-bank,” he averred. “And quite honestly, the cost [of compliance] would add greatly to the cost of the loans themselves, making them rather cost-prohibitive to offer.”

And, of course, as the United States heads towards the finish line of an election cycle, many members of Congress are looking to either shelve the proposal or get President Obama to sign it before he leaves office. Some Congressmen argue that the CFPB’s proposal will “trample on sovereignty of both consumers and Native American tribes.” Other Congressmen say the regulations help consumers who are “already overextended.”

The current administration has pledged over the years to tackle payday loans. With the incumbent president signing as many regulations as possible before he exits the White House, the CFPB’s payday loan framework could be one of the final regulatory acts he puts into law.

Felonious Wells Fargo Executives Remain Uncharged

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The Wells Fargo scandal continues to grow in the national spotlight to the extent that they themselves have admitted to more than two million felony acts and yet not a single charge has been filed against them. Not one body has been arrested or even handcuffed for these self admitted crimes.

What has occurred to date is more than 5,100 employees have lost their jobs.

Customers were personally addressed this past weekend for the first time. However, the only ones that will be able to make not of this are those that happened to sign onto the Wells Fargo website.

Executives who began the scamming process continue to draw their full wages, continue to work their regular hours, and continue to live life as if they have not done anything wrong.

In a written statement from Wells Fargo CEO John Stumpf he admits to failing to fulfil his job responsibilities. Even with this written admission he remains on payroll unlike the 5,100 others.

Another part of the Stumpf statement he addresses the new policy of which the staff of Wells Fargo will notify its customers via email when new accounts are opened. Yet previously it was proven and determined that many of the more than two million fraudulent accounts and credit cards also had fraudulent emails not made by the customer attached to them.

Here are a couple of questions that remain unanswered by John Stumpf’s new policy.

  • For the emailed notice that is to be sent to customers, are these emails being verified?
  • Of the accounts that were fraudulently made many had fictitious email accounts. Does the new policy simply have notice being sent to the fictitious email?
  • How is this changing the potential of fraudulently made accounts?
  • How is this actually helping protect the identities of the customers?

Wells Fargo customers, as of Monday October 3, are still finding themselves the victim of the accounts discovered, some known and unwanted and some unknown. The people and families often are still unaware of the issues that are being caused until fees or fines are charged.

The reports from Stumpf and others all claim that they are working with customers to reverse the negative effects and charges have been yet to be seen or proven.

Members of a Kansas branch of Wells Fargo, who wish to remain unnamed at this time, have seen the opposite. We will simply call them Ms. Kansas.

When Ms. Kansas logged onto her online banking accounts on October 1 she found one account in the negative because of fees that had been imposed prior to the release of her monthly statement on that account.

She immediately called the bank to discover what and how had created the negative balance only to be told it was a monthly fee that she was receiving for not meeting standards in which to reverse the fee.

This was due to the monthly transfer that Wells Fargo required had not occurred. An email from the bank stated that they were cancelling this transfer a few days prior. Ms. Kansas had not checked for such an email prior to the negative as she was unaware of it coming.

Wells Fargo refused to close this unwanted account unless the negative balance was first rectified. Ms. Kansas had no choice but to pay these fees in order to prevent herself from receiving even more bank charges.

Ms. Kansas told us that she is preparing her financial records and statements to take her all of her business elsewhere but is now leary as to whom to believe or where she should look first.

Congress Doesn’t Care About Your Paid Leave

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Paid leave which can be anything from a sick day to maternity leave seems to be an important issue to everyone with the exception of Congress in the days of late. President Barack Obama has been urging them members of the Republican Congress to finally act for the American people but continues to have little to no luck.

The matter of paid leave has been a part of both presidential candidates platforms as the presidential election nears.

The Trump campaign had him joined by his daughter Ivanka in a thirty second ad. #AmericaFirst was born and further clarified in a tweet from Donald Trump’s Twitter account that stated #AmericaFirst means that family should come first. He then went on to describe his proposed child care plan and that it calls for tax deductible child care and up to six weeks of paid maternity leave.

Clinton campaign is similar in nature. Hillary Clinton states no more than ten percent of income is to be spent on the child care front and calls for twelve weeks of paid medical and maternity leave.

Employees of the federal government are in a different class than those that perform the exact same work only having a different employer. According to the Department of Labor the federal government is requiring all their contractors to include up to seven paid days of leave to each and every employee. This will affect all contracts that begin on or after January 1, 2017.

Congress has yet to act even after President Obama called them out but the same is not to be said of the Danny Meyer’s Company. According to the Bureau of Labor Statistics a mere 5% of the entire restaurant industry currently offers any form of paid leave to its employees.

The same restaurant industry also ranks the lowest in terms of overall benefits as well. Statistics currently have only 20% that offer their employees such benefits.

The more than 1,800 employees that are fortunate to work at one of the Danny Meyer’s establishments which include the Gramercy Tavern, Blue Smoke, Union Square Café, and the Union Square Hospitality Group are no longer to be part of those low statistical numbers beginning in 2017.

The new Danny Meyer policy will allow for weeks one through four following the birth or adoption of a child to include rates of pay to be at 100%. The next four weeks will allow pay at 60%.

Jerry Brown, governor of California, recently vetoed the latest bill Hannah-Beth Jackson introduced also covering paid medical leave. Jackson’s bill was attempting to have companies with twenty or fewer employees to have the same benefits as those who are employed by larger companies.

Those companies having more than fifty employees will continue to be mandated to offer leave in California. All California employees will also still be guaranteed the six weeks in which they are paid up to 70% of wages.