Beaches, bombs and gangsters - Corsica becomes victim of its own success as vacation paradise

The bombs exploded across hundreds of miles of Corsican coastline, gutting two dozen villas nearly simultaneously on some of Europe's most beautiful — and valuable — land. Elsewhere on the same French island off the Mediterranean coast, a young man was shot to death in his car, his stepson wounded beside him.
The night of violence in early December epitomized the problems of Napoleon's native island today: Organized crime is gaining ground, spreading beyond the usual vices on the mainland to real estate, tourism and politics back home. And separatists, who extinguished themselves in a spasm of deadly infighting in the late 1990s, have come back with a vengeance, as they wage a desperate battle to prevent mob-dominated mass tourism from dooming their dreams of self-rule.
Corsican coastal land prices have risen as much as five times in as many years, and the number of tourists also has shot up as a once-exclusive haven for the wealthy and their yachts and private vacation homes became a destination for cruise ships and budget flights. Corsican mobsters — infamous in mainland France and the United States for their ties to gambling, nightclubs and drugs — saw a killing to be made back home.
Gang warfare over Corsican spoils and the separatist bombing campaign have created a climate of lawlessness, although the combatants have been careful not to turn the violence on the tourists themselves.
"The state has completely failed," said Dominique Bianchi, a former nationalist leader who recently stepped down as mayor of the southern village of Villanova. "In this world, there's only one thing that counts: how to divide the loot."
Shaken by the bombings, and the recent assassinations of a defence lawyer and community leader, the Paris government is making new promises to clean things up on an island where separatist sentiment has simmered ever since France officially took charge in 1769. Corsica has emerged as a jewel of French mass tourism only recently: More than 4.2 million tourists visited the island last year, compared to 2.4 million in 1992. The 2013 Tour de France, the world's premier cycling competition, will begin here — adding to the sense that Corsica has joined the big leagues as a top travel destination.
Complicating the challenge for France is what mainland officials describe as a code of silence — known as "omerta" — that also runs through areas of mafia-plagued southern Italy. Locals say it's fear, not omerta, that keeps people silent.
Of the 85 gangland killings and attempted assassinations in Corsica in the past eight years, only one case — a plot against a former nationalist turned president of Corsica's biggest soccer team — has ended in conviction.
Both the mob violence and the bombings claimed by militant nationalists have the same root, Corsicans say: the land.
Three-quarters of the coastline is untouched, the beaches and Mediterranean views achingly empty of a human presence just a 90-minute flight from Paris — as developers were scared off by gangland warfare and separatist militancy. "Where else could you go and have this kind of virgin land? It doesn't exist anymore," said Dominique Yvon, who is part of an anti-corruption group on Corsica.
Through the 1990s, the island was rocked by more than 1,000 separatist bombings of vacation homes and construction sites. For mainstream investors, France's Cote d'Azur, much more stable despite its own mob presence, was the place to be.
Then the separatists imploded in the late 1990s. And organized crime came home, seeing an opening to make new profits laundering drug money, much of it during three decades of heroin sales in the United States — spearheading the so-called "French Connection" drug ring — and on the Cote d'Azur, according to Thierry Colombie, who has written a book about the Corsican mob.
Most of the tourists who stayed overnight on the island in 2012 stayed in villas, many of them suspected of links to mob money, that popped up on the coastline when the bombing wave of the 1980s and 1990s finally ended. The number of cruise ship day visitors has also risen from 298,000 in 2001 to 1.1 million in 2011; they spend money in stores, restaurants and clubs before returning to their ships.
Each summer, the population of Corsica doubles from its 300,000 residents. Visitors pay a premium for ocean views and spend money in restaurants and nightclubs. They fly in by plane or sail into harbours like Ajaccio, outfitted for yachts and cruise ships. They come despite a murder rate about eight times higher than the rest of France, largely thanks to the fact that no tourists have been killed in Corsican gangland or separatist violence.
For most of the 20th century, the French government's driving focus was on ending nationalist sentiment, even as Corsica's problem with feeding the global criminal underworld grew. The "French Connection" brought hundreds of millions of dollars worth of heroin into the United States. And Corsican mobsters dominated the gambling and prostitution houses of Paris.
When the latest wave of gangland killings started, in 2006, the French government looked the other way, hoping the criminals would implode the way the nationalists had.
Then, at the end of 2012, when score-settling reached beyond established criminals to Corsica's mainstream political class, the government began to pay serious attention. First, a prominent defence lawyer was killed as he made his usual stop at a gas station on his way to work in Ajaccio. Next, a former nationalist with a uniquely powerful post as head of the chamber of commerce was shot as he closed up shop.
As president of the chamber of commerce, Jacques Nacer was in charge of the air- and seaports that are the island's link to the outside world, and the government money that keeps both up and running. Authorities have not said why they think he was gunned down, beyond noting that it was a professional killing.
More than 15 years ago, the chamber's president used the airport as a helicopter base for drug running between Africa and Europe. His successor was convicted in a fraud scheme involving government contracts.
The slain defence lawyer, Antoine Sollacaro, was best known for representing the nationalist who killed the island's highest ranking official, prefect Claude Erignac, in 1998. Police have offered no theories on his death, beyond noting that it had the same professional hallmarks as all of Corsica's gangland murders.
These killings finally caught the attention of France's top security and justice officials, who stood before the cameras to vow that this time, things would be different. "In Corsica, those who give the orders are known. Everyone knows and no one speaks," said French Interior Minister Manuel Valls.
Of course they don't speak, counters Raphael Vallet, a police investigator in Corsica. Most people can offer only rumours, and those who might know more can't look to the state's shield in France — which, unlike Italy and the United States, has no robust witness protection program for mobster turncoats.
"If you're dealing with someone who is capable of killing you at any moment and we say 'we can't protect you,' would you talk?" said Vallet. "Corsicans are no less brave than anyone else."
The Corsican city of Ajaccio was the birthplace of Napoleon Bonaparte, who left the island as a youth after deciding that greatness couldn't be attained there. Many others have made similar bets about their future on an island with few resources beyond its natural beauty. Among them, a preferred path has been criminal empire.
French government policy was — and remains — that Corsica is an integral part of the nation. Islanders, meanwhile, call the rest of France "the continent" and proudly speak their own Italian-inflected language that the Paris government once tried unsuccessfully to wipe out.
The bombings of Dec. 7 struck at 31 villas, all of them with absentee homeowners away on "the continent."
The nationalist FLNC, which announced its resurrection in a theatrical news conference in July complete with masks and guns, claimed responsibility on Dec. 19 and denied any collusion with organized crime, saying gangsters had "prospered in the shadow of the French state for decades."
The explosions appeared to have no links to the hit on the young man, whose death is believed to be the latest professional killing to go unsolved.
Bianchi, the former mayor, was once jailed for his links to the group and has since publicly renounced violence. But he, like many Corsicans, couldn't bring himself to condemn the bombings in a place they consider their homeland.
"Even if I don't approve, I understand. I understand because in the current climate of Corsica, where there is enormous land speculation, there is a revolt," he said. "We don't want their country ... to become a place just for rich retirees in the next 10 or 15 years. We don't want it to become another Cote d'Azur.
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Jaguar to add 800 new UK jobs on soaring Chinese demand

LONDON (Reuters) - Jaguar Land Rover plans to create 800 new jobs at its Solihull factory in central England as demand for its premium cars rockets in China and elsewhere.
For the first time, demand from China outstripped that of British carmaker JLR's home market, with sales in China in 2012 rising more than 70 percent to 71,940 cars.
JLR, owned by India's Tata Motors , said on Sunday that total global sales rose 30 percent to over 350,000 vehicles.
JLR said earlier this month that its outlook for 2013 was positive after UK vehicle sales rose almost 20 percent in 2012.
Its next biggest markets are the U.S., Russia and Germany.
The expansion at the Solihull plant would support the introduction of new models in 2013, the company said.
Last week, Japanese carmaker Honda cut around 800 jobs at its plant near Swindon due to falling demand for its vehicles across mainland Europe.
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Goldman may delay UK bonuses until top tax rate falls

REUTERS/Brendan McDermid
NEW YORK (Reuters) - Goldman Sachs Group Inc is considering delaying bonus payments in the U.K. until after April 6, when the top rate of income tax in the country will drop to 45 percent, from 50 percent, a person familiar with the bank's operations said on Sunday.
The strategy relates to bonuses that were deferred from 2009, 2010 and 2011, the person said. The Financial Times reported the news earlier today.
Goldman recently brought forward payments of deferred stock to executives in the U.S. to 2012, in order to beat tax hikes implemented for top earners in 2013.
The investment bank made the payments weeks earlier than usual, disclosing about $65 million of stock awards to 10 executives including Chief Executive Lloyd Blankfein in filings with the U.S. Securities and Exchange Commission on the last day of December.
About 24 hours after the grants, the U.S. Congress agreed to raise the top tax rate for individuals with more than $400,000 in taxable income to 39.6 percent in 2013 from 35 percent last year, and to raise capital gains taxes.
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Soccer-La Liga top scorers

Jan 11 (Infostrada Sports) - Top scorers of the La Liga on Friday
27 Lionel Messi (Barcelona)
17 Radamel Falcao (Atletico Madrid)
16 Cristiano Ronaldo (Real Madrid)
11 Aduriz (Athletic Bilbao)
10 Ruben Castro (Real Betis)
9 Piti (Rayo Vallecano)
Roberto Soldado (Valencia)
8 Iago Aspas (Celta Vigo)
Helder Postiga (Real Zaragoza)
Alvaro Negredo (Sevilla)
7 Tomer Hemed (Real Mallorca)
Gonzalo Higuain (Real Madrid)
Carlos Vela (Real Sociedad)
Oscar (Real Valladolid)
6 Riki (Deportivo Coruna)
Obafemi Martins (Levante)
Leonardo Carrilho Baptistao (Rayo Vallecano)
Jorge Molina (Real Betis)
Manucho (Real Valladolid)
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Soccer-La Liga summaries

Jan 11 (Infostrada Sports) - Summaries from the La Liga matches on Friday
Athletic Bilbao 1 Mikel San Jose 77
Rayo Vallecano 2 Alhassane Bangoura 48, Piti 65pen
Red Card: Alejandro Galvez 89
Halftime: 0-0; Attendance: 35,000
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Next Fixtures (GMT):
Saturday, January 12
Real Valladolid v Real Mallorca (1500)
Espanyol v Celta Vigo (1700)
Osasuna v Real Madrid (1900)
Valencia v Sevilla (2100)
Sunday, January 13
Real Betis v Levante (1100)
Real Sociedad v Deportivo Coruna (1600)
Atletico Madrid v Real Zaragoza (1800)
Malaga v Barcelona (2000)
Monday, January 14
Getafe v Granada CF (1900)
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Soccer-La Liga results and standings

Jan 11 (Infostrada Sports) - Results and standings from the La Liga matches on Friday
Friday, January 11
Athletic Bilbao 1 Rayo Vallecano 2
Standings P W D L F A Pts
1 Barcelona 18 17 1 0 61 19 52
2 Atletico Madrid 18 13 2 3 38 18 41
3 Real Madrid 18 11 3 4 45 20 36
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4 Malaga 18 9 4 5 28 13 31
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5 Real Betis 18 10 1 7 28 29 31
6 Rayo Vallecano 19 10 1 8 27 34 31
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7 Levante 18 9 3 6 24 25 30
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8 Valencia 18 8 3 7 25 27 27
9 Real Sociedad 18 7 4 7 27 24 25
10 Getafe 18 7 3 8 22 28 24
11 Real Valladolid 18 6 4 8 24 24 22
12 Sevilla 18 6 4 8 23 26 22
13 Real Zaragoza 18 7 1 10 21 26 22
14 Athletic Bilbao 19 6 3 10 23 39 21
15 Celta Vigo 18 5 3 10 19 23 18
16 Real Mallorca 18 4 5 9 17 30 17
17 Granada CF 18 4 4 10 14 27 16
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18 Espanyol 18 3 6 9 19 30 15
19 Deportivo Coruna 18 3 6 9 22 39 15
20 Osasuna 18 3 5 10 14 20 14
1-3: Champions League / EC I
4: Champions League preliminary round
5-6: Europa League
7: Europa League depending on domestic cup
18-20: Relegation
Next Fixtures (GMT):
Saturday, January 12
Real Valladolid v Real Mallorca (1500)
Espanyol v Celta Vigo (1700)
Osasuna v Real Madrid (1900)
Valencia v Sevilla (2100)
Sunday, January 13
Real Betis v Levante (1100)
Real Sociedad v Deportivo Coruna (1600)
Atletico Madrid v Real Zaragoza (1800)
Malaga v Barcelona (2000)
Monday, January 14
Getafe v Granada CF (1900)
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Kremlin: Adoptions deal with US valid until 2014

MOSCOW (AP) — The Kremlin said Thursday that an adoption deal with the U.S. will remain valid until 2014 despite a new Russian law banning the practice, but no new adoptions will be permitted and only those already cleared by Russian courts before the ban will be allowed to complete.
Last month, President Vladimir Putin signed a law banning Americans from adopting Russian children, part of a harsh response to a U.S. law targeting Russians deemed to be violating human rights.
Putin's spokesman Dmitry Peskov said on independent Dozhd (Rain) TV that the adoptions agreement will remain in force until Jan. 1, 2014 due to its provision that it should be valid for a year after one of the parties terminates it, which Russia did on Jan. 1. But he added that all new adoptions and also those which hadn't been completed before the new law took effect will be banned.
"In cases when certain judicial procedures haven't been completed, a complete ban on adoptions by U.S. parents will be enforced," Peskov said. "The agreement isn't a mechanism that obliges Russia to provide its children for adoptions. It regulates the regime for our children there, the monitoring mechanism."
Peskov said that those Russian children whose adoption by U.S. families had been cleared by Russian courts will be allowed to leave.
More than 50 Russian children were preparing to join their new families in the U.S. when the ban on adoptions was passed, but it wasn't immediately clear how many of them already got a court order allowing them to leave Russia by the time the ban was introduced.
"With regard to those who had failed to leave even though all formalities had been completed, and if there are some local abuses, we will naturally consider those cases," Peskov said.
Russian and U.S. diplomats have been in intense talks over the issue.
"We are very hopeful that we will be able to complete the cases of adoption that had been begun before the law was passed. So that's something that we will be working on with the Russian government," U.S. State Department spokeswoman Victoria Nuland said Thursday.
She said that in response to the State Department's request for information from American families who were trying to adopt, it had received e-mails from some 950 people and was evaluating where each party stood in the process.
Nuland added that U.S. officials would prefer not to get into specifics because "we want to see as many children be able to have the future that we'd like for them as possible, and we don't want to be putting people in different categories." She also said there are privacy concerns with regard to both the Americans and the children.
Although some top Russian officials including the foreign minister openly opposed the bill, Putin signed it into law in less than 24 hours after receiving it from the parliament, which overwhelmingly passed it.
Peskov's statement ended the controversy over the length of the agreement's validity. Russian rights ombudsman Pavel Astakhov had earlier claimed that the agreement became void on Jan. 1.
The ban on U.S. adoptions has sparked outrage in Russia, where some Kremlin critics compared Putin to King Herod. A protest against the law, expected to draw tens of thousands, is planned in Moscow on Sunday.
In one case that received wide publicity in Russia, some media reported that 14-year-old Maxim Kargopoltsev, who has long hoped that he would be adopted by a U.S. couple, has written a letter to Putin asking him for permission to join his new parents.
In an apparent media counteroffensive, Russian state television and RIA Novosti on Thursday interviewed the boy, who said he hadn't written such a letter and would like to stay in Russia. The state TV also interviewed a parliament member claiming he wants to take care of the boy, whom he took shopping for a new phone and notebook.
State television also showed photographs of Maxim with the American couple, Dianna and Mil Wallen, of Woodstock, Virginia, who have been trying to adopt him for more than a year.
Reached by telephone, Mil Wallen said he had talked to Maxim five times that day and, although the boy was thrilled by the attention, he was still hoping to be adopted.
Peskov insisted that the boy hadn't sent a letter to Putin, but promised to have a look at why the U.S. couple hadn't been allowed to adopt the boy.
According to U.N. estimates, there are about 740,000 children not in parental custody in Russia, while only 18,000 Russians are now waiting to adopt a child. Russian officials claim that they want to encourage more Russians to adopt Russian orphans.
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Just Explain It: Why taxes for most are rising while others don’t pay any federal income tax

The fiscal cliff has been averted, but at a cost. Most Americans will pay higher taxes this year.
According to the Tax Policy Center, 77% of American households will face higher federal taxes in 2013.
Here’s how it breaks down. If you’re an individual making over $400,000 a year, or a family pulling in more than $450,000 -- your taxes will increase by almost 5%.
Tax rates on capital gains and dividends for wealthier households will go from 15% to 20% under the agreement.
Every worker will see an increase in taxes. That’s because Congress let the payroll tax cut expire on December 31st. So for every $100 you earn in 2013, up to $113,700, you’ll take home $2 less than you did last year.
The debate over taxes was a major part of last year’s presidential election. President Obama did what he said and raised taxes on the wealthy. The question of who should bear more of the tax burden was a hotly contested topic. Is our tax system fair? And are the wealthy asked to do more while others contribute nothing?
It has often been quoted that almost half of Americans don’t pay federal income taxes. In fact, former Republican Presidential nominee Mit Romney created controversy last year when he described those that don't pay federal income taxes as "victims... who are dependent upon government."
The truth is most Americans pay taxes in some form or another, but not everyone pays the federal income tax. Bob Williams, a Senior Fellow at the Tax Policy Center, says “the income tax was set up in a way that allows people not to pay it by doing particular things.” Williams authored a report that found 46% of Americans in 2011 (47% in 2010) didn’t pay federal income tax because they took credits and deductions for things like, going to school, retirement savings plans, childcare and mortgages.
Here’s a look at how a family might end up not paying any federal income taxes.
If a couple earning $51,000 with childcare expenses of three thousand dollars a year for their two kids under 13. At that income level, the family would have a basic tax liability of almost $2,600. But after standard deductions, credits for childcare, this family's net tax bill would be -$12. The family wouldn't have to pay federal income tax at all in 2012.
In certain cases wealthy Americans who earn over $1 million don’t have to pay federal income taxes either. For example, if your business losses offset positive income or, if you’re given credit for foreign taxes to avoid double taxation.
Billionaire investor Warren Buffett believes the rich don’t pay enough in taxes. Buffett said his 2010 tax bill was $6.9 million. That was about 17.4% of his income. Even though that’s a lot of money, he was taxed at a much lower rate than 20 other people in his office. An average of 36% of their income went to taxes.
If all of this seems complicated to you, you’re not alone. Income taxes have been a point of contention in this country since Abe Lincoln and Congress introduced them 150 years ago. About the only thing Americans agree on is that the tax code has to be simplified.
Did you learn something? Do you have a topic you’d like explained? Give us your feedback in the comments below or on Twitter using #justexplainit.
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Holmes Can Face Trial for Aurora Shooting

In a ruling that comes as little surprise, the judge overseeing the Aurora, Colo., theater massacre has ordered that there is enough evidence against James Holmes to proceed to a trial.
In an order posted late Thursday, Judge William Sylvester wrote that "the People have carried their burden of proof and have established that there is probable cause to believe that Defendant committed the crimes charged."
The ruling came after a three-day preliminary hearing this week that revealed new details about how Holmes allegedly planned for and carried out the movie theater shooting, including how investigators say he amassed an arsenal of guns and ammunition, how he booby-trapped his apartment to explode, and his bizarre behavior after his arrest.
PHOTOS: Colorado 'Dark Knight Rises' Theater Shooting
Holmes is charged with 166 counts, including murder, attempted murder and other charges related to the July 20 shooting that left 12 people dead and 58 wounded by gunfire. An additional 12 people suffered non-gunshot injuries.
One of the next legal steps is an arraignment, at which Holmes will enter a plea. The arraignment was originally expected to take place Friday morning.
Judge Sylvester indicated through a court spokesman that he would allow television and still cameras into the courtroom, providing the outside world the first images of Holmes since a July 23 hearing. Plans for cameras in court, however, were put on hold Thursday afternoon.
"The defense has notified the district attorney that it is not prepared to proceed to arraignment in this case by Friday," wrote public defenders Daniel King, Tamara Brady and Kristen Nelson Thursday afternoon in a document objecting to cameras in court.
A hearing in the case will still take place Friday morning. In his order, Judge Sylvester said it should technically be considered an arraignment, but noted the defense has requested a continuance. Legal experts expect the judge will grant the continuance, delaying the arraignment and keeping cameras out of court for now.
Sylvester also ordered that Holmes be held without bail.
Holmes' attorneys have said in court that the former University of Colorado neuroscience student is mentally ill. The district attorney overseeing the case has not yet announced whether Holmes, now 25, can face the death penalty.
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U.S. charges three Swiss bankers in offshore account case

(Reuters) - Three Swiss bankers accused of conspiring with American clients to hide more than $420 million from the tax-collecting U.S. Internal Revenue Service were indicted, the U.S. Attorney's Office in Manhattan said on Wednesday.
The indictment named Stephan Fellmann, Otto Huppi and Christof Reist, all former client advisers with an unnamed Swiss bank. None of the bankers have been arrested, authorities said.
Their attorneys were not immediately known.
The indictment said the unnamed bank did not have offices in the United States.
Banking secrecy is enshrined in Swiss law and tradition, but it has recently come under pressure as the United States and other nations have moved aggressively to tighten tax law enforcement and demanded more openness and cooperation.
In April, two Swiss financial advisers were indicted on U.S. charges of conspiring to help Americans hide $267 million in secret bank accounts.
In January, prosecutors charged three Swiss bankers with conspiring with wealthy taxpayers to hide more than $1.2 billion in assets from tax authorities.
UBS AG, the largest Swiss bank, in 2009 paid a $780 million fine as part of a settlement with U.S. authorities who charged the bank helped thousands of wealthy Americans hide billions of dollars in assets in secret Swiss accounts.
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"Fiscal cliff" turmoil could hit 100 million taxpayers: U.S. IRS

WASHINGTON (Reuters) - U.S. tax authorities warned on Wednesday that as many as 100 million taxpayers - far more than previously estimated - could face refund delays if lawmakers' "fiscal cliff" negotiations fail to fix the alternative minimum tax (AMT) before year-end.
The Internal Revenue Service said in a letter to lawmakers that it was raising its estimate on AMT impact from 60 million.
"It is becoming apparent that an even larger number of taxpayers - 80 to 100 million of the 150 million total returns expected to be filed - may be unable to file," IRS Acting Commissioner Steven Miller wrote.
The AMT is a levy designed to ensure that high-income taxpayers pay a minimum tax. Democrats and Republican typically agree to adjust the tax for inflation to prevent unintended taxpayers from being hit by it.
This year, however, its fate is tied to heated negotiations - primarily between President Barack Obama and House Speaker John Boehner - over future taxes and federal spending as they try to avoid the automatic tax increases and spending cuts known as the fiscal cliff.
The AMT fix for calculating 2012 income tax has broad bipartisan support, but so far been drowned out by the larger federal budget questions.
Without action soon to fix the AMT, there could be "lengthy delays of tax refunds and unexpectedly higher taxes for many taxpayers," Miller said.
The IRS needs congressional authority to update tax-filing software and forms so that Americans can start their tax returns next year. Inaction by Congress on the AMT has left IRS unsure which taxpayers will need to pay the AMT tax.
An IRS spokesman declined to comment on the agency's AMT preparations to date.
"Failure to act on the fiscal cliff will throw the 2013 tax filing season into chaos," Representative Sander Levin, a Michigan Democrat, said in a statement.
About 4 million taxpayers pay the AMT now because Congress routinely "patches" it for inflation to keep it from reaching down into middle-income tax brackets.
Without a patch for 2012, up to 33 million taxpayers will have to pay the AMT, according to IRS.
Obama's most recent offer to Republicans included a permanent AMT patch.
House Republicans plan to vote Thursday on a bill to address the fiscal cliff that also includes an AMT patch.
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What's on the table now in 'fiscal cliff' talks

An update on the latest offers on the table in negotiations to avert a year-end avalanche of federal tax increases and spending cuts known as the "fiscal cliff":
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INCOME TAXES
House Speaker John Boehner would allow income tax rates to rise for people making more than $1 million per year and would hold rates where they are for everyone making less. The top rate on income exceeding $1 million would go from 35 percent to 39.6 percent.
President Barack Obama would freeze income tax rates for taxpayers making $400,000 or less and raise them for people making more.
The two sides are moving closer together. Previously, the Republican House leader opposed allowing any tax rates to go up; Obama wanted higher taxes for individual income above $200,000, or $250,000 for couples.
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PAYROLL TAX
Obama has dropped his proposal to extend a temporary cut in Social Security payroll taxes paid by 163 million workers. Republicans want that tax to go back up.
Raising the payroll tax by 2 percentage points to its old level would cost a worker making $50,000 a year another $1,000 — or a little more than $19 per week — during 2013.
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SOCIAL SECURITY
Obama is offering to reduce cost-of-living increases for Social Security recipients. Republicans have been seeking this as a key to long-term deficit reduction. But many congressional Democrats oppose it.
Government pensions and veterans' benefits would also get smaller cost-of-living increases.
In addition, taxpayers, especially low- and middle-income families, would pay more because of changes in the way that tax brackets are adjusted for inflation.
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MEDICARE
Obama continues to reject Republicans' plan to raise the eligibility age for Medicare from 65 to 67. Boehner now says raising the eligibility age is not essential to a deal.
Obama wants to limit cuts in Medicare and other health care programs to about $400 billion over 10 years; Republicans want to overhaul Medicare to save even more money.
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DEBT LIMIT
Obama wants a deal that would raise the amount the government is allowed to borrow to cover the next two years, to avoid another debt showdown with Congress until after the 2014 midterm elections.
Previously, Obama had demanded permanent authority to increase the debt ceiling without congressional approval. Republicans want Congress to be part of the decision-making process so they can demand budget-cutting in exchange for additional borrowing.
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OTHER TAXES
Obama and Boehner both propose raising taxes on dividends and capital gains from 15 percent to 20 percent.
Both sides would reduce the number of deductions and exemptions that wealthy taxpayers can claim.
Obama would also let estate taxes revert to a 45 percent rate, after the first $3.5 million of an estate is exempted. Boehner backs a plan for a 35 percent rate and $5 million exemption.
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UPDATE 7-NBA results

Jan 6 (Infostrada Sports) - Results from the NBA games on Saturday (home team in CAPS)
Boston 89 ATLANTA 81
NY Knicks 114 ORLANDO 106
INDIANA 95 Milwaukee 80
BROOKLYN 113 Sacramento 93
Houston 112 CLEVELAND 104
Portland 102 MINNESOTA 97
New Orleans 99 DALLAS 96 (OT)
SAN ANTONIO 109 Philadelphia 86
DENVER 110 Utah 91
LA CLIPPERS 115 Golden State 89
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UPDATE 3-NBA results

Jan 7 (Infostrada Sports) - Results from the NBA games on Sunday (home team in CAPS)
Oklahoma City 104 TORONTO 92
MIAMI 99 Washington 71
Charlotte 108 DETROIT 101 (OT)
Memphis 92 PHOENIX 81
Denver 112 LA LAKERS 105
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NBA-Nuggets survive Kobe fireworks to ice Lakers

LOS ANGELES, Jan 6 (Reuters) - The Denver Nuggets dropped the stumbling Los Angeles Lakers further into the doldrums on Sunday with a 112-105 win despite some fourth-quarter fireworks from Kobe Bryant.
Ty Lawson scored 21 points and 10 assists and Danilo Gallinari hit five of his 20 in the final seconds to kill the Lakers' rally and send them to a third successive defeat.
Bryant did his best to rescue Los Angeles again by scoring 18 of his 29 points in the final quarter but the Lakers fell just short in front of a frustrated home crowd.
Los Angeles trailed by 10 midway through the fourth, although they fought back as Bryant twice made three-pointers to pull them within three in the final minute.
Gallinari drained a three of his own to halt the comeback with 13 seconds remaining and Denver (20-16) made four straight free throws to ice the game for their third win in four.
The Lakers (15-18) have now lost four of five and are tumbling down the standings under their new coach Mike D'Antoni and a star-studded roster.
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Republicans push own "fiscal cliff" plan; talks frozen

WASHINGTON (Reuters) - Republicans in the Congress pushed ahead on Thursday with a "fiscal cliff" plan that stands no chance of becoming law as time runs short to reach a deal with President Barack Obama to avert a Washington-induced economic recession.
House of Representatives Speaker John Boehner's "Plan B" to limit income-tax increases to the wealthiest sliver of the population appeared likely to pass the House on Thursday evening after it narrowly cleared a procedural hurdle in the afternoon.
However, Obama has vowed to veto the plan, and Senate Majority Leader Harry Reid said he will not bring it up for a vote in the Democratic-controlled chamber. White House spokesman Jay Carney called it a "multi-day exercise in futility."
Still, passage of Plan B could give Boehner the political cover he needs to strike a deal that would break with decades of Republican anti-tax orthodoxy.
"Time's running short. I'm going to do everything I can to protect as many Americans from an increase in taxes as I can," Boehner told a news conference.
Though it does not raise taxes on as many affluent Americans as Obama wants, the bill would put Republicans on record as supporting a tax increase on those who earn more than $1 million per year - a position the party opposed only weeks ago.
That could make it easier eventually to split the difference with Obama, who wants to lower the threshold to households that earn more than $400,000 annually. Obama also faces resistance on his left flank from liberals who oppose cuts to popular benefit programs, which Republicans say must be part of any deal.
Obama and Boehner will need to engage in more political theater to get lawmakers in both parties to sign on to the painful concessions that will have to be part of any deal to avert the cliff and rein in the national debt, analysts say.
"They are now in the mode where they have to demonstrate how hard they're trying to get everything they can," said Joe Minarik, a former Democratic budget official now with the Committee For Economic Development, a centrist think tank.
Even as he pressured Obama and the Democratic Senate to approve his plan, Boehner indicated that he was not willing to walk away from the bargaining table.
"The country faces challenges, and the president and I, in our respective roles, have a responsibility to work together to get them a result," Boehner said.
TIME RUNNING OUT
Obama and Boehner aim to reach a deal before the end of the year, when taxes will automatically rise for nearly all Americans and the government will have to scale back spending on domestic and military programs. The $600 billion hit to the economy could push the U.S. economy into recession, economists say.
Investors so far have assumed the two sides will reach a deal, but concerns over the fiscal cliff have weighed on markets in recent weeks. The S&P 500 index of U.S. stocks was up 0.4 percent in Thursday trading, despite a round of strong data on economic growth and housing.
"The closer we get to the end of the year without a deal, the more optimism is going to evaporate," said Todd Schoenberger, managing partner at LandColt Capital in New York.
Shares crept up after Boehner said he was prepared to work with Obama to prevent the fiscal cliff from kicking in.
Lawmakers are eager to wrap up their work and return home for the Christmas holiday, but congressional leaders kept the door open for last-minute action.
The Senate was expected to leave town on Thursday or Friday, but Reid said it could return next week to vote on any deal.
Boehner indicated the House would stay in session after Thursday's vote, scheduled for 7:45 p.m. EST (0045 GMT on Friday).
Several influential conservative groups have condemned Plan B, and some Republicans are expected to vote against it. But passage appeared likely after the House narrowly voted by 219 to 197 to bring the bill to the floor for debate.
The U.S. Chamber of Commerce, an influential business group that has often tangled with the Obama administration, offered grudging support.
"We are not comfortable allowing tax increases on anyone in this environment. However, we understand that, at times, politics requires compromise," the Chamber's top lobbyist, Bruce Josten, wrote in a letter to lawmakers.
To placate conservatives, Boehner also scheduled a vote on legislation that would shift $55 billion in scheduled defense cuts to cuts in food and health benefits for the poor and other domestic programs.
That measure also would roll back some of the Dodd-Frank financial regulation reforms of 2010. It is not expected to become law.
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Canada's seven-month budget gap narrows to C$10.6 billion

OTTAWA (Reuters) - Canada's federal budget deficit narrowed in the first seven months of the fiscal year to C$10.57 billion ($10.68 billion) from C$13.90 billion in the same period last year as personal and corporate income tax revenues rose and debt charges were lower.
The monthly shortfall in October was C$1.68 billion, compared with a gap of C$2.13 billion a year earlier, the Department of Finance said in a report on Friday.
The Conservative government in October pushed back by one year, to 2016-17, the date it expects to eliminate the deficit. Most economists believe that if the economy continues to grow, the books could be balanced sooner.
Ottawa has estimated a 2012-13 deficit of C$26 billion, including a C$1 billion cushion for risk.
In the April-October period, revenues increased by 3.6 percent, or C$4.9 billion, from the same period in 2011, pushed up by personal income tax and corporate income tax. Program expenses rose by 2 percent, or C$2.7 billion, on increases in elderly benefits and direct program expenses.
Public debt charges decreased 6.1 percent, or C$1.1 billion, on a lower effective interest rate.
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"Fiscal cliff" creates waiting game for payrolls firms

WASHINGTON/NEW YORK (Reuters) - At payroll processing businesses across the United States, the "fiscal cliff" stalemate in Washington means uncertainty over tax-withholding tables just days before the start of 2013.
The U.S. Internal Revenue Service still has not issued the tables for next year that show how much money employers should hold back from workers' paychecks to cover federal income taxes.
Payroll processors need the tables to get their systems geared up for the new year. The tables are set by many factors, including tax rates and annual inflation adjustments.
In anticipation of late-breaking developments, Rochester, New York-based Paychex Inc will be serving Buffalo chicken wings for staffers working late on New Year's Eve, said Frank Fiorille, an executive at the payroll processing giant.
"Our systems are flexible enough that we can wait almost up until the last minute and still make changes," he said.
The IRS appreciates of the impact of Congress' inaction.
"Since Congress is still considering changes to the tax law, we continue to closely monitor the situation," IRS spokesman Terry Lemons said in a statement. "We intend to issue guidance by the end of the year on appropriate withholding for 2013."
Tax rates are slated to rise sharply for most Americans if Congress and President Barack Obama fail to reach an agreement that averts the "fiscal cliff" approaching at year-end.
"The political process will determine one way or the other what" the IRS must do, said Scott Hodge, president of the Tax Foundation, a business-oriented tax research group.
For now, he said, from the tax-collection agency's viewpoint, "doing nothing is probably the best course." This would be because withholding tables distributed now might only have to be revised if Congress acts in the next few days.
Some payroll servicers are not waiting for formal IRS guidance. The American Payroll Association, which represents about 23,000 payroll professionals, told members on Friday to rely on 2012 withholding tables until the IRS releases the new forms for 2013.
The association said its decision was based on a statement earlier this month from an IRS official.
The agency would not confirm that policy on Friday.
Tax preparer H&R Block Inc said it will use 2012 tax-withholding tables if the 2013 tables are not issued.
Executives said they were frustrated with the uncertainty in Washington, but were doing their best to cope.
"We are not doctors or surgeons and this is not life threatening," said Rob Basso with Advantaged Payroll Services, an Auburn, Maine-based payroll processor that serves 30,000 businesses. "It is annoying and disruptive to people's lives, but we will get through it."
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5 men charged with murder in New Delhi gang rape

NEW DELHI (AP) — Five men accused of raping a university student for hours on a bus as it drove through India's capital were charged with murder, rape and other crimes that could bring them the death penalty.
The attack on the 23-year-old woman, who died of severe internal injuries over the weekend, provoked a fierce debate across India about the routine mistreatment of females and triggered daily protests demanding action.
There have been signs of change since the attack. Rapes, often ignored, have become front-page news, politicians have called for tougher laws, including the death penalty and chemical castration for rapists, and the government is examining wide-scale reforms in the criminal justice system's handling of sexual assaults. Activists say the tragedy could mark a turning point for women's rights.
In a nation where court cases often linger for years, the government set up a special fast-track court Wednesday to deal with crimes against woman, and that is where the charges against the five men were filed Thursday evening. The government said it planned to open four more such courts in the city.
Prosecutor Rajiv Mohan filed a case of rape, tampering with evidence, kidnapping, murder and other charges against the men. The charge sheet was not released and he asked for a closed trial. A hearing was set for Saturday.
The men charged were Ram Singh, the bus driver; his brother Mukesh Singh, who cleans buses for the same company; Pavan Gupta, a fruit vendor; Akshay Singh, a bus washer; and Vinay Sharma, a fitness trainer. They did not appear in court. Authorities have said they would push for the death penalty for the men.
The victim's father said he supported the death penalty.
"The toughest and the harshest punishment should be given," he said, adding that he thought a new law should be named after his daughter.
A sixth suspect, listed as a 17-year-old, was expected to be tried in a juvenile court, where the maximum sentence would be three years in a reform facility. Police also detained the owner of the bus on accusations he used false documents to obtain permits to run the private bus service.
The Bar Association said its lawyers would not defend the suspects because of the nature of the crime, but the court was expected to appoint attorneys to defend them.
"Strict, strict, strict punishment should be given to them," said Ashima Sharma, an 18-year-old student attending a protest Thursday. "A very strict punishment ... that all men of India should be aware that they are not going to treat the women like the way they treated her."
The woman was attacked Dec. 16 after boarding the bus with a male companion after watching an evening showing of the movie "Life of Pi" at an upscale mall. The vehicle was a charter bus that illegally picked up the two passengers, authorities said.
The pair were attacked for hours as the bus drove through the city, even passing through police checkpoints during the assault. They were eventually dumped naked on the side of the road. The woman, whose name was not released, was assaulted with an iron bar and suffered severe internal injuries that eventually proved fatal.
The attack caused outrage across India, where women are routinely subject to everything from catcalls to assaults. Many say they fear being outside at night.
Outside the court, about 50 woman lawyers held a protest, demanding wholesale changes in the criminal justice system to ensure justice for women. "Punish the police, sensitize judiciary, eradicate rape," read one protester's sign.
Indian Chief Justice Altamas Kabir said the accused should be tried swiftly, but cautioned that they needed to be given a fair trial and not be subjected to mob justice.
"Let us not lose sight of the fact that a person is presumed innocent until proven guilty," he told reporters Wednesday, while inaugurating the new fast-track court. "Let us balance things. Let us not get carried away. Provide justice in a fair but swift manner so that faith of people is once again restored that the judiciary is there behind the common man."
Many cases never even get to court because of intense social pressure against families reporting sexual assaults, which are often blamed on the female victims. When women do report rapes, police often refuse to file charges and pressure the victims to reach a compromise with their attackers.
To try to rectify that, Home Minister Sushilkumar Shinde announced a special recruitment drive for women police officers Thursday and ordered every police station in the capital to be staffed by at least nine female officers to make them more attentive to women's needs.
In a sign attitudes might be changing, and that even powerful men are being held accountable, police in the northeastern state of Assam arrested a leader of the ruling Congress party Thursday on accusations he raped a woman in a village in the early hours of the morning.
Footage on Indian television showed the extraordinary scene of local women surrounding the man, ripping off his shirt and repeatedly slapping him across the face.
Police said the man, Bikram Singh Brahma, was visiting the village of Santipur on the Bhutan border when he entered a woman's house and raped her at 2 a.m. Amid the screams, villagers ran to the home and captured the man, said G.P. Singh, a senior police officer in the area.
"We are taking this issue very seriously," Singh said.
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New law points to Philippine church's waning sway

MANILA, Philippines (AP) — Twenty-six years after Roman Catholic leaders helped his mother marshal millions of Filipinos in an uprising that ousted a dictator, President Benigno Aquino III picked a fight with the church over contraceptives and won a victory that bared the bishops' worst nightmare: They no longer sway the masses.
Aquino last month signed the Responsible Parenthood and Reproductive Health Act of 2012 quietly and without customary handshakes and photographs to avoid controversy. The law that provides state funding for contraceptives for the poor pitted the dominant Catholic Church in an epic battle against the popular Aquino and his followers.
A couple with links to the church filed a motion Wednesday to stop implementation of the law, and more petitions are expected. Still, there is no denying that Aquino's approval of the legislation has chipped away at the clout the church has held over Filipinos, and marked the passing of an era in which it was taboo to defy the church and priests.
Catholic leaders consider the law an attack on the church's core values — the sanctity of life — saying that contraceptives promote promiscuity and destroy life. Aquino and his allies see the legislation as a way to address how the poor — roughly a third of the country's 94 million people — manage the number of children they have and provide for them. Nearly half of all pregnancies in the Philippines are unwanted, according to the U.N. Population Fund, and a third of those end up aborted in a country where abortion remains illegal.
Rampant poverty, overcrowded slums, and rising homelessness and crime are main concerns that neither the church nor Aquino's predecessors have successfully tackled.
"If the church can provide milk, diapers and rice, then go ahead, let's make more babies," said Giselle Labadan, a 30-year-old roadside vendor. "But there are just too many people now, too many homeless people, and the church doesn't help to feed them."
Labadan said she grew up in a God-fearing family but has defied the church's position against contraceptives for more than a decade because her five children, ages 2 to 12, were already far too many for her meager income. Her husband, a former army soldier, is jobless.
She said that even though she has used most types of contraceptives, she still considers herself among the faithful. "I still go to church and pray. It's a part of my life," Labadan said.
"I have prayed before not to have another child, but the condom worked better," she said.
The law now faces a legal challenge in the Supreme Court after the couple filed the motion, which seems to cover more ideological than legal grounds. One of the authors of the law, Rep. Edcel Lagman, said Thursday that he was not worried by the petition and expected more to follow.
"We are prepared for this," he said. "We are certain that the law is completely constitutional and will surmount any attack on or test of its constitutionality."
Over the decades, moral and political authority of the church in the Philippines is perceived to have waned with the passing of one its icons, Cardinal Jaime Sin. He shaped the role of the church during the country's darkest hours after dictator Ferdinand Marcos imposed martial law starting in 1972 by championing the cause of civil advocacy, human rights and freedoms. Sin's action mirrored that of his strong backer, Pope John Paul II, who himself challenged communist rulers in Eastern Europe.
Three years after Aquino's father, Benigno Aquino Sr., a senator opposing Marcos, was gunned down on the Manila airport tarmac in 1983, Sin persuaded Aquino's widow, Corazon, to run for president. When massive election cheating by Marcos was exposed, Sin went on Catholic-run Radio Veritas in February 1986 to summon millions of people to support military defectors and the Aquino-led opposition. Marcos fled and Aquino, a deeply religious woman, was sworn in as president.
Democracy was restored, but the country remained chaotic and mired in nearly a dozen coup attempts. The economy stalled, poverty persisted and the jobless were leaving in droves for better-paying jobs abroad as maids, teachers, nurses and engineers. After Aquino stepped down, the country elected its first and only Protestant president, Fidel Ramos. He, too, opposed the church on contraceptives and released state funds for family planning methods.
Catholic bishops pulled out all the stops in campaigning against Ramos' successor, popular movie actor Joseph Estrada, a hero of the impoverished masses who made little attempt to keep down his reputation for womanizing, drinking and gambling.
But few heeded the church's advice. Estrada was elected with the largest victory margin in Philippine history. Halfway through his six-year presidency, in January 2001, he was confronted with another "people power" revolt, backed by political opponents and the military, and was forced to resign.
His successor, Gloria Macapagal Arroyo, styled herself as a devout Catholic and sought to placate the church by abolishing the death penalty and putting brakes on the contraceptives law, which languished in Congress during her nine years in power.
It mattered little. Arroyo's mismanagement and corruption scandals set the stage for Aquino's election on a promise to rid the Philippines of graft, fix the economy and lift millions out of poverty. The scion of the country's democracy icon took power several years after Sin's death, but it was a different era in which the church was battered by scandals of sexual misconduct of priests and declining family values.
The latest defeat of the church "can further weaken its moral authority at a time when this is most badly needed in many areas, including defense of a whole range of family values," said the Rev. John J. Carroll, founding chairman of the Jesuit-run John J. Carroll Institute on Church and Social Issues. He said he wondered how many Catholics have been "turned off" by incessant sermons and prayers led by the church against the contraceptives law, and how much it contributed to rising anticlericalism and the erosion of church authority.
"People today are more practical," said Labadan, the street vendor. "In the old days, people feared that if you defy the church, it will be the end of the world.
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