What's Important in the Financial World (2/15/2013)

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The IRS has decided to state the obvious. If someone other than yourself prepares your taxes, make sure the person (or firm) is not a fake, fraud or dishonest. In an announcement, the agency’s management writes:

As the April 15th tax return filing deadline approaches, taxpayers are reminded of the importance of finding honest and qualified tax professionals if they need help with preparing and filing their tax returns. “While most return preparers provide their clients with competent and professional service, there are unscrupulous tax preparers who prepare fraudulent returns that defraud the government, the tax-paying public and their own clients,” said Toni Weirauch, the Special Agent in Charge of the New York Field Office of IRS-Criminal Investigation (“IRS-CI”).

IRS-Criminal Investigation Special Agents are responsible for investigating allegations of fraud committed by tax return preparers. “Ultimately, the taxpayer is responsible for what is on his or her tax return,” said Weirauch. “You can often avoid problems, however, if you use your common sense and ask your paid tax preparer questions if something sounds too good or does not seem right.

To be forewarned is to be forearmed.

LGBT-Friendly States

In an odd bit of research, Gallup has reported that states that have the most and least lesbian, gay, bisexual or transgender people. The polling firm reports that:

The percentage of U.S. adults who identify as (LGBT) ranges from 1.7% in North Dakota to 5.1% in Hawaii and 10% in the District of Columbia, according to Gallup surveys conducted from June-December 2012. Residents in the District of Columbia were most likely to identify as LGBT (10%). Among states, the highest percentage was in Hawaii (5.1%) and the lowest in North Dakota (1.7%), but all states are within two percentage points of the nationwide average of 3.5%.”

Interestingly, government policy may cause the differences from state to state, which is often the case with economic and social trends.

States with high LGBT percentages tend to be more liberal and have more supportive LGBT legal climates, while those at the lower end of the LGBT spectrum are generally the most conservative. This suggests that one explanation for the variation across states is the relationship between the willingness to disclose LGBT identity and the environment of one’s state of residence. It is also possible that LGBT adults make conscious choices to reside in certain states rather than others, but this possibility is difficult to assess and seems less likely.

A Merger Surge

Financial reporters and editors at The New York Times believe that the Buffett takeover of H.J. Heinz Co. (NYSE: HNZ) and LBO deals that include Dell Inc. (NASDAQ: DELL) are the start of a surge in M&A, which has not existed since before the economic disaster of 2008. Writers for the paper report:

The mega-merger is back.

For the corporate takeover business, the last half-decade was a fallow period. Wall Street deal makers and chief executives, brought low by the global financial crisis, lacked the confidence to strike the audacious multibillion-dollar acquisitions that had defined previous market booms.

The trend could die as quickly as it restarted. A large correction in the stock market, slowing GDP numbers, new legislation that raises taxes or an end to the low interest rates that large companies have enjoyed could, together or individually, scare off private equity investors.