U.S. tax refund delays may surprise low-income filers

By Beth Pinsker | NEW YORK

NEW YORK Deep within the recesses of recent tax policy is a provision that will delay refunds for millions of taxpayers who file for two popular credits aimed at helping low-income workers.

The Internal Revenue Service last week reminded filers that no refunds would be available before Feb. 15 for returns claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC). The changes stem from the Protecting Americans From Tax Hikes Act of 2015, known as PATH.

The IRS will open up e-filing for 2016 returns around Jan. 23, three days after the inauguration of Donald Trump as president.

Many of those who claim these credits tend to file their taxes early and count on the money coming well within the IRS's traditional 21-day refund period.

"It's not highly publicized, but it will impact a lot of the hardest working and will hit them early and the most difficult period," said Mark Steber, chief tax office at preparer Jackson Hewitt.

The reason for the delays is to prevent fraud and theft, which was particularly rampant among about 26 million returns claiming $65.6 billion of Earned Income Tax Credits for 2015.

The credits go to qualifying people whose deductions exceed their income. The average 2015 refund was $2,482, according to IRS data. The maximum allowed by law is $6,318 for a return claiming three or more children. The Additional Child Tax Credit can add up to an additional $3,000.

The IRS has said that it would process returns normally after Feb. 15, but tax preparers still have a lot of questions.

"Will all direct deposit returns go on Feb. 15? I don't know," said Jeffrey Schneider, an enrolled agent with SFS Tax & Accounting Services in Port St. Lucie, Florida. "I'm just making a presumption, but most of these filers don't have bank accounts, so they don't get direct deposit."

A dozen or so clients of Schneider's clients affected by these delays will be notified via his email newsletter, he said.

"If they get their W-2 early, and they're expecting $8,000 - they'll go nuts, I'll guarantee you," Schneider said.

Schneider and other tax preparers said they were worried that filers might seek advances from refund advance outfits, which charge high interest rates and fees.

Tax preparer Jackson Hewitt has an alternative, the Express Refund Advance, with no interest or fees, that will start early this year - on Dec. 15, with the option to pre-qualify before the end of November.

Jackson Hewitt arranges loans for qualifying clients through partner MetaBank for $200 to $1,300, and also helps them open a temporary deposit account with another partner bank for the refund. When the IRS direct-deposits the funds, the client repays the loan. If the refund falls short, Jackson Hewitt will take the loss.

"The client has told us that they don't want to go into debt, but they already earned this money and we're just getting it to them," Jackson Hewitt President David Prokupek said.

If taxpayers can just hold out a few weeks, however, they can get their checks directly and not deal with any middlemen.

"What people need to know is, first of all, it's industry-wide and the IRS says still to file. As soon as Feb. 15 hits, they will release the refund," Lisa Greene-Lewis, a CPA and TurboTax blog editor, said.

(Editing by Lauren Young and Richard Chang)

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Beijing's scrap collectors swept up in latest crackdown on migrants

By Sue-Lin Wong | BEIJING

BEIJING Working in the shadow of Beijing's looming skyscrapers, Yin Xueqiang weighs a pile of cardboard and old shoe racks in a dusty scrapyard, the latest casualty of a crackdown on migrant workers in China's capital.

   Last week, security guards blocked the road Yin and fellow scrap collectors took to enter the yard. The authorities had posted signs this month giving the collectors ten days to leave.

    "The city government is trying to get us migrant workers to leave Beijing, they say there are too many of us and not enough space," said Yin, who hails from China's central province of Henan.

    As authorities try to rein in Beijing's growing population and capitalize on skyrocketing land prices, scrap collectors say they are being pushed out, despite playing a vital role in China's unique recycling ecosystem.

    Unlike many Western cities, where local authorities run recycling programs, in Beijing, entrepreneurial migrant workers drive a significant part of the effort.

They cycle around the city collecting cardboard, plastic and other scrap before selling it on to rubbish traders, who then resell it to factories as scrap.

    "Beijingers wouldn't be able to survive for even a day without us," Yin said, weighing piles of plastic on a rusty scale before handing a few dollars to a fellow collector, who pedaled away on a motorized tricycle.

    "Who is going to collect all the rubbish? Who is going to recycle it all? Do you think Beijingers would be willing to do this kind of work?" Yin said.

    Yin, whose efforts can bring in 3,000 to 5,000 yuan a month, has been in Beijing for more than 10 years. He moved to the scrap yard three years ago.

    Few of his friends from Henan are left in Beijing, as it gets harder to make a living in the expensive city. Yin said he is considering going home or moving to a scrapyard further away from the city center.

    A generation of young consumers has come of age in China lacking the recycling habits of parents and grandparents who suffered hardships before the economy began opening up in the late 1970s.

This absence of the impulse to recycle, along with astronomical economic growth, swift urbanization and surging consumption, led China to overtake the United States as the world’s largest generator of waste in 2004, the World Bank says.

    By 2025, China will produce around 1.4 million tons of waste every day, but as scrap collectors shift into other industries, whether voluntarily or after being compelled by the authorities, the country is burying or burning more waste.

    "Over the past few years, I've taken Americans, Japanese, visitors from several developed countries to scrapyards in Beijing and their reaction is – 'This recycling system is excellent, why isn't more being done to preserve it?'" said Chen Liwen, who has studied China's scrap collectors.

    Dong Dingxia, 50, who left her farm, accompanied by her husband, to collect wooden scrap in Beijing after her children departed for university, puzzled over the same question.

    "I don't understand why we're being kicked out. It won't be good if rubbish starts piling up around the city," she said, while stripping foam from old wooden chairs.

    "But I guess what I think doesn't matter."

(Editing by Clarence Fernandez)

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Prescott, Cowboys top 'Skins for 10th straight win

(The Sports Xchange) - Despite picking up a 10th straight win Thursday against the Washington Redskins, the Dallas Cowboys did not force a turnover for the third straight game.

While forcing turnovers is always a recipe for success in the NFL, the Cowboys found the weapon to compensate for it.

The weapon is rookie quarterback Dak Prescott.

Behind Prescott's 17 completions for 195 yards, his scoring run of six years and a touchdown pass to Terrence Williams, Dallas solidified its lead in the NFC East with a 31-26 over Washington.

Prescott's solid all-around performance improved the Cowboys to a franchise and NFL-best 10-1. His latest showing also extended Dallas' lead over the New York Giants to 2 1/2 games.

"We have high expectations for ourselves on offense," Prescott said. "We obviously want to score on every possession and they gave us some scoring chances late.

"No matter if we're up or down, we're going to go out there and score and I think we've shown that the last couple of weeks."

Prescott wasn't flashy throughout, but heated up when it mattered most in the fourth quarter. He has five rushing touchdowns, has thrown for 18 TDs and only been intercepted twice.

The Cowboys took a 17-6 lead into the fourth quarter and the Redskins scored two touchdowns. Each score was answered by Prescott leading two seven-play scoring drives.

Prescott capped the 75-yard drive with a six-yard TD run with 10:49 remaining. Rookie running back Ezekiel Elliott capped a 45-yard drive with a one-yard run with 6:29 left.

"Those guys are just really good football players," Dallas tight end Jason Witten said. "I don't think we really view them as rookies.

"The responsibilities that have been thrown on them, they've handled it well and they're executing at in a big way at critical times throughout games."

Franchise-tagged quarterback Kirk Cousins completed 41 passes for 449 yards and three touchdowns but the Redskins (6-4-1) could not come up with the magic to make a late push.

Washington didn't get its first touchdown until the start of the fourth quarter and the Cowboys defense didn't buckle in the final 6:29

Cousins connected with Jordan Reed on a five-yard TD six seconds into the fourth and pulled the Redskins within 24-19 on a 67-yard scoring strike to DeSean Jackson with 9:22 remaining.

"We pulled within striking distance a couple of times, but the way Dallas was able to come back and score says a lot of how good of a football team they have and why they're leading out division," Cousins said. "We know as an offense, that the job's the same and we need to put points on the board and manage it well.

The Redskins made one final push, pulling within five points on a eight-yard touchdown catch by Reed with 1:53 remaining in the game.

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Wall St. pulls back from record; utilities slump

By Chuck Mikolajczak | NEW YORK

NEW YORK U.S. stocks fell on Tuesday as investors engaged in profit-taking to pull major indexes from record levels, while the trend of modest moves and low volume continued heading into the final trading day of the year.

The day's losses were broad, with each of the ten primary S&P 500 sectors in negative territory. Utilities .SPLRCU - 2014's best sector performer - led the decline with a drop of 2.1 percent.

Equities have enjoyed a solid rally of late, buoyed by strong economic data and the U.S. Federal Reserve's commitment to be "patient" about raising interest rates. The S&P 500 gained nearly 6 percent over the prior eight sessions and managed to score its 53rd record close of the year on Monday.

The speed and scale of the rally provided incentive to take profits, and amplified volatility is possible this week with many market participants out for the holiday, which dampens volume. The stock market will be closed on Thursday for the New Year's holiday.

"It wasn’t going to take much to prompt the decline, it’s probably more resting than anything else. We’ve had a pretty significant move higher," said Stephen Massocca, managing director at Wedbush Equity Management LLC in San Francisco.

"We’ve marched straight up from 1,970 or so to about 2,100 so it’s only natural that we are going to get a little bit of a pullback here."

The Dow Jones industrial average .DJI fell 55.16 points, or 0.31 percent, to 17,983.07, the S&P 500 .SPX lost 10.22 points, or 0.49 percent, to 2,080.35 and the Nasdaq Composite .IXIC dropped 29.47 points, or 0.61 percent, to 4,777.44.

In the latest economic data, consumer confidence rose slightly less than expected in December, while U.S. single-family home price appreciation slowed less than forecast in October.

NeuroDerm Ltd (NDRM.O) soared more than 193 percent to $18.14 on heavy volume after it said data from a mid-stage study suggested that a higher dose of its Parkinson's drug could provide an alternative to treatments that require surgery.

Civeo Corp (CVEO.N), which provides temporary housing for oilfield workers and miners, late Monday slashed its workforce and forecast revenue could fall by one-third as slumping crude prices force oil producers to cut costs. The stock plunged 52.6 percent to $3.92 on volume of about 56.2 million shares, the most active day in its history.

Volume was light, with about 4.42 billion shares traded on U.S. exchanges, well below the 7.06 billion average so far this month, according to data from BATS Global Markets.

Declining issues outnumbered advancing ones on the NYSE by 1,806 to 1,262, for a 1.43-to-1 ratio; on the Nasdaq, 1,671 issues fell and 1,031 advanced for a 1.62-to-1 ratio favoring decliners.

The benchmark S&P 500 posted 25 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 107 new highs and 39 new lows.

(Reporting by Chuck Mikolajczak; Editing by Nick Zieminski)

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Pfizer walks away from $118 billion AstraZeneca takeover fight

By Ben Hirschler and Bill Berkrot | LONDON/NEW YORK

LONDON/NEW YORK Pfizer abandoned its attempt to buy AstraZeneca for nearly 70 billion pounds ($118 billion) on Monday as a deadline approached without a last-minute change of heart by the British drugmaker.

The decision ends a month-long public fight between two of the world's biggest pharmaceutical companies that sparked political concerns on both sides of Atlantic over jobs and corporate tax maneuvers.

British rules now require an enforced cooling-off period. AstraZeneca could reach out to Pfizer after three months and Pfizer could take another run at its smaller British rival in six months time, whether it is invited back or not.

Pfizer's move came two hours before a 5.00 pm (1200 ET) deadline to make a firm offer or walk away, under UK takeover rules. Its decision to quit the stage, at least for now, had been widely expected after AstraZeneca refused its final offer of 55 pounds a share.

"Following the AstraZeneca board's rejection of the proposal, Pfizer announces that it does not intend to make an offer for AstraZeneca," Pfizer said in a short news release.

The biggest U.S. drugmaker promised it would not go hostile by taking its offer directly to AstraZeneca shareholders, leaving the fate of what would have been the world's largest ever drugs merger in the hands of its target, whose board would have had to make a complete U-turn to get a deal done.

"We continue to believe that our final proposal was compelling and represented full value for AstraZeneca based on the information that was available to us," said Ian Read, Pfizer's chairman and chief executive.

Pfizer's final offer was at a price that many analysts and investors had previously suggested would bring AstraZeneca to the table for serious negotiations.

But in rejecting an earlier offer of 53.50 pounds as undervaluing the company, the British group indicated it needed a bid more than 10 percent higher, or at least 58.85 pounds per share, for its board to consider a recommendation.

Pfizer had urged AstraZeneca shareholders to agitate for engagement and several expressed disappointment at its intransigence, although others - encouraged by AstraZeneca's promising drug pipeline - backed the firm's standalone strategy.

AstraZeneca Chairman Leif Johansson welcomed Pfizer's decision to back down, which he said would allow the British company to focus on its growth potential as an independent company.

What happens next will depend upon whether AstraZeneca's share price deteriorates in the coming weeks and how hard its shareholders push for it to revisit a deal with Pfizer.

BlackRock, AstraZeneca's biggest shareholder, backed the board's rejection of Pfizer's 55 pounds a share offer, but urged it to talk again in the future.

POLITICAL OPPOSITION

The proposed transaction ran into fierce opposition from politicians in Britain, Sweden - where AstraZeneca has half it roots - and the United States over the likelihood that the marriage would lead to thousands of job cuts.

Ultimately, it was price and the lack of room for eleventh-hour maneuvering by Pfizer that killed the deal.

Pfizer had several reasons for taking aim at AstraZeneca for what would have been its fourth mega-merger in 14 years.

Highest on the list appeared to be Pfizer's desire to take part in a recent trend of so-called tax inversions, under which it could reincorporate in Britain and pay significantly lower corporate tax. Pfizer would also be able to use tens of billions of dollars it has parked overseas, avoiding high U.S. taxes for repatriating the huge cash pile.

Pfizer also had its eye on a promising portfolio of drugs in AstraZeneca's developmental pipeline, especially several potentially lucrative cancer medicines.

It was this pipeline that AstraZeneca management used to make its case for Pfizer significantly undervaluing the company.

Chief Executive Pascal Soriot went as far as making a 10-year forecast for a 75 percent rise in sales by 2023.

"As we said from the start, the pursuit of this transaction was a potential enhancement to our existing strategy," Pfizer's Read said. "We will continue our focus on the execution of our plans, bringing forth new treatments to meet patients' needs and remaining responsible stewards of our shareholders' capital."

The merger would have restored Pfizer as the world's largest drugmaker by sales, a position it relinquished to Swiss-based Novartis when billions of dollars in annual revenue evaporated after its top-selling cholesterol fighter Lipitor began facing generic competition in 2011.

(Editing by David Evans and Mark Potter)

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