Rank #1: How Are States Taxing the Income Called GILTI?
The federal tax on a category of income called GILTI—global intangible low-taxed income—has state-level implications for multinational businesses.
Congress created GILTI to stop companies from shifting profits abroad through intangible assets—royalties, patents, and the like. When a company’s total overseas income has been taxed abroad at less than a certain rate, the U.S. applies a tax.
In the U.S., state governments often conform their own tax laws to the federal tax code. But with GILTI, states are all over the map. For most states it means a very modest increase in their corporate tax base, but for companies it can mean dealing with multiple approaches and calculations. And there’s talk of legal challenges.
Talking Tax host Siri Bulusu talked about GILTI with Bruce Fort, counsel to the Multistate Tax Commission, who has an eagle’s-eye view of what the states are doing. They spoke at the American Bar Association tax section’s fall meeting in San Francisco.
Oct 17 2019
Rank #2: Talking Tax- Episode 67- PwC's Pam Olson Provides Status Update on Tax Law Rules
The IRS faces a long list of tasks if it plans to complete all of the items on its priority guidance plan to implement the new tax law.
The Internal Revenue Service has highlighted several projects, including the pass-through deduction under tax code Section 199A and new international base erosion measures, to address by June 30, the end of the agency's business year.
Pam Olson, the U.S. deputy tax leader and Washington National Tax Services practice leader at PricewaterhouseCoopers LLP, joined Talking Tax host Allyson Versprille on April 20 to discuss the status of regulations for the 2017 tax act (Pub. L. No. 115-97) and what taxpayers and practitioners should expect this summer.
Before joining PwC, Olson was assistant secretary for tax policy at the Treasury Department.
It may be difficult for the government to meet that end-of-June target if history is any indication, according to Olson. The IRS and Treasury have made good progress so far with guidance on the repatriation tax on foreign earnings and profits and the new limitation on the deductibility of business interest expense, she said.
Apr 20 2018
Rank #3: Fine Tuning an Estate Plan After Death (Part 1)
Marc Bekerman joins Andrea L. Ben-Yosef in a two-part podcast about post-mortem estate planning. Marc is a solo practitioner in Long Island, New York, and an adjunct professor of law at New York Law School where he formerly served as the Associate Director of its Graduate Tax Program. Marc is also a member of the Estates Gifts and Trusts Advisory Board for Bloomberg BNA.
It may be surprising to know that the death of a person does not end the ability to refine their estate plan. Marc discusses how estate planners can still take actions after a person’s death to maximize the benefit to the beneficiaries. Part 1 covers estate tax considerations, such as whether to elect alternate valuation of assets and where and when to deduct administration expenses. Part 2 will cover income tax planning opportunities.
Jan 09 2019
Rank #4: Talking Tax- Episode 66- Wayfair Tax 'Case of Millennium' to Have Far-Flung Impacts
On April 17, the U.S. Supreme Court heard oral arguments in the biggest state and local tax case in years. South Dakota v. Wayfair is a direct challenge to the high court’s 1992 ruling in Quill Corp. v. North Dakota, which prohibits states from imposing sales tax collection obligation on vendors lacking an in-state physical presence.
The Justices explored a handful of topics during arguments, notably the role of Congress to regular inter-state commerce, the issue of compliance costs faced by small and medium-sized businesses, and how to define a new rule if they were to “kill Quill.” A decision is expected by June.
Harley Duncan, leader of the state and local tax group of the Washington National Tax practice at KPMG LLP, sat down with Bloomberg Tax reporter Ryan Prete to analyze the oral arguments and discuss what sellers and states could face in the coming months while awaiting the decision.
Apr 19 2018
Rank #5: C Corp Conversation: Companies Vet 2017 Tax Law Options
The 2017 tax law lowered the corporate tax rate to 21%. That has some companies taking a look at their corporate structure and asking: Is a C corp better?
"We have the conversation a lot," said Elizabeth Stieff, a tax attorney with Venable LLC in Baltimore. Stieff said clients see this great 21% tax rate and they want to take advantage of it. But, as she explained to Bloomberg Tax's Amanda Iacone, it's only a great opportunity for specific businesses in specific circumstances.
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Jun 13 2019
Rank #6: Talking Tax- Episode 50- AMT Survival and Pass-Through Provisions: EY Talks Tax Reform
Lawmakers will need to hash out final details on the individual side of the tax code if they want to meet their end-of-the-year deadline to pass tax reform legislation.
Ernst & Young LLP's U.S. tax reform leader Justin Shafer co-hosts an episode of Talking Tax with Bloomberg Tax reporter Allyson Versprille. They are joined in discussing the individual aspects of the House and Senate tax bills by David Kirk and Elda Di Re, both partners in the Private Client Services practice within EY’s National Tax Department.
Kirk and Di Re lay out the differences in the House and Senate bills, controversial proposals related to the state and local tax deduction and the alternative minimum tax, and the planning challenges that individual taxpayers face.
This episode was recorded the morning of Dec. 8. The legislation is subject to change.
Dec 11 2017
Rank #7: Talking Tax- Episode 52- Bitcoin: Investment and Trading Tax Issues
Jim Calvin, of Deloitte LLP, joins Talking Tax with host Andrea L. Ben-Yosef to discuss bitcoin and how to view it from a tax perspective.
Calvin explains how bitcoin works; addresses the most common questions he gets from clients about issues such as classification, wash sale and short sale rules, and how to determine which bitcoin has been sold; and discusses the new futures market in bitcoin from an investor and trader tax perspective.
Dec 21 2017
Rank #8: IRS Readies Updated Shutdown Staffing Plan
Thousands of furloughed employees could soon be called back to join the Internal Revenue Service’s skeleton staff as the partial government shutdown enters its third week. The IRS is poised to release an updated contingency plan for the tax filing season, when more employees will be considered essential and allowed to work during a funding lapse.
Bloomberg Tax’s Lydia O’Neal joins host Amanda Iacone to discuss the shutdown and the latest developments on Capitol Hill.
Last week, the Senate Finance Committee added some new members, while House Democrats introduced legislation that would require presidential candidates to disclose 10 years of tax returns. In the coming days, watch out for a decision on who will fill open spots on the tax legislation-writing House Ways and Means Committee under new Chairman Richard Neal (D-Mass).
Host: Amanda Iacone.
Producer: Nicholas Anzalotta-Kynoch.
Jan 07 2019
Rank #9: Hill Roundtable- Episode 56- Federal Tax Priorities for the Coming Year
Congress now has a host of smaller tax issues to contend with after passing legislation overhauling many aspects of the Internal Revenue Code.
The Republican-led House Ways and Means and Senate Finance committees are looking at ways to make corrections to, and address issues omitted from, the new tax law (Pub. L. No. 115-97). Tax writers will consider overhauling the Internal Revenue Service, streamlining tax-favored savings accounts for education and retirement, and passing legislation to extend some expired tax breaks.
These goals will face headwinds now that tax isn't the No. 1 agenda item in Congress. Politics, negotiations over funding the government, and competing policy priorities could all waylay the tax writers' plans.
Reporters Kaustuv Basu, Allyson Versprille, and Laura Davison spoke with Talking Tax host Matthew Beddingfield on Jan. 22 about what’s next for lawmakers in 2018.
Jan 22 2018
Rank #10: Talking Tax- Episode 62- More Answers to Come on Interest Deduction Limitation
New guidance on a tax law change limiting interest deductibility tells taxpayers that the IRS is making progress in helping businesses deal with the change, but some of the more challenging issues have yet to be broached.
Tony Nitti, a tax partner at WithumSmith+Brown PC in Aspen, Colo., joins Talking Tax host Allyson Versprille to discuss the guidance—Notice 2018-28—and what it means for businesses.
The amended tax code Section 163(j) limits the business interest deduction to 30 percent of a company’s earnings before interest, taxes, depreciation, and amortization for four years starting in 2018. Beginning in 2022, the deduction will be limited to 30 percent of earnings before interest and taxes.
The IRS's notice provides a handful of answers on how the limitation will work. It confirms, for example, that interest payments on debt held by members of a consolidated group—a group of corporations with a shared parent company that is treated as a single entity for tax purposes—would be allocated at the consolidated group level, rather than on a member-by-member basis. Government officials had been hinting at this clarification for the last several months.
While the notice is a step in the right direction, the Internal Revenue Service and Treasury Department still have a lot of work ahead, Nitti says.
Apr 06 2018
Rank #11: Portfolio Podcast- The Minefields of Estate Planning and Carried Interest
Navigating the complexities of estate planning with carried interest can quickly become a daunting task.
N. Todd Angkatavanich, David A. Stein, and Andrew Haave of Withers Bergman LLP authored a Bloomberg BNA portfolio on the topic that walks readers through this complex area of wealth planning.
Reporter Allyson Versprille spoke with Angkatavanich and Stein about what practitioners need to know when it comes to navigating carried interest planning under tax code Section 2701, avoiding pitfalls, and understanding the impact of potential tax reform changes.
Aug 17 2017
Rank #12: Talking Tax- Episode 51- Deloitte Talks Major Shifts in International Tax Policy
The GOP's final tax bill includes significant changes in international tax policy.
Jon Traub, managing principal for tax policy at Deloitte Tax LLP, and Chris Trump, a principal at Deloitte Tax who specializes in international taxation, join Talking Tax host Allyson Versprille to discuss the changes and how they will impact multinational companies.
Traub is a former House Ways and Means Committee staff director and minority chief tax counsel. Before joining Deloitte Tax, Trump—no relation to President Donald Trump—worked in the Internal Revenue Service's Office of the Associate Chief Counsel (International).
The conversation covers planning opportunities as well as challenges multinationals will face in complying with the new law.
This episode was recorded the evening of Dec. 19.
Dec 20 2017
Rank #13: Retirement Plan Provisions That Could Finally Make Their Way Through Congress
Michael Hadley and Adam McMahon of Davis & Harman join Andrea L. Ben-Yosef to talk about the key provisions in the Family Savings Act, how it was influenced by RESA, and its prospects for enactment after the mid-term elections.
With the Congress racing to stop a government shutdown, does Congress have the attention span to focus on bipartisan retirement plan reforms?
For more information, see their Daily Tax Report Insight: Are We on the Verge of the Next Big Pension Bill? A Review of the House-Passed Family Savings Act.
Dec 07 2018
Rank #14: IRS Top Attorney Names Priorities Post-2017 Tax Law
Michael Desmond became the Internal Revenue Service’s chief counsel earlier this year as the agency was well into implementing the complex 2017 tax code overhaul.
In a wide-ranging conversation with senior editor Colleen Murphy June 27 at the Bloomberg Tax Leadership Forum in New York, Desmond expressed encouragement at the hiring of “energized attorneys” to implement the law.
He recommended that companies pay attention to interrelationships among various provisions, especially in the international arena. He talked about non-tax overhaul priorities, too—including strengthening partnership audits and figuring out long-term streamlining of controversies over syndicated conservation easements.
Listen to their conversation—plus a bit of Q&A with the forum audience—on a special episode of Talking Tax.
Jun 27 2019
Rank #15: Talking Tax- Episode 61- Tax Cases at the Supreme Court
It's not every day the U.S. Supreme Court agrees to take on a tax case.
The Supreme Court on March 21 decided a major tax case dealing with the obstruction of an IRS investigation when it ruled in Marinello v. United States that the Internal Revenue Service can only convict a taxpayer on obstruction charges when it can prove the taxpayer was aware of a pending tax-related proceeding, such as an investigation or audit, or that the taxpayer could "reasonably foresee that such a proceeding would commence."
Another significant tax case, Wisconsin Central Ltd v. United States, currently being reviewed by the high court, involves the taxation of stock given to employees by a railroad company. The Supreme Court is scheduled to hear oral arguments on April 16.
Bloomberg Tax's Carolina Vargas talked to practitioners to discuss the cases and their significance.
Mar 23 2018
Rank #16: Talking Tax- Episode 65- What FY Corporations Need To Know About Tax Code Section 15
For tax years beginning after December 31, 2017, the corporate tax rate under §11(b) was amended to remove the graduated rates in favor of a flat 21%. Additionally, for tax years beginning after December 31, 2017, §55(a) was amended, repealing the corporate alternative minimum tax. This led to questions regarding the applicable tax rates for a corporation whose tax year began before January 1, 2018 but after December 31, 2017.
George Manousos and Jason Black of PricewaterhouseCoopers LLP’s Federal Tax Services out of Washington-National Tax Services joins talking tax’s host Joe Hagedorn to discuss the application of Internal Revenue Code’s §15 and how it applies to determine the applicable tax rate and alternative minimum tax rate for a fiscal year corporation. Additionally, George, Jason and Joe discuss the recently released IRS Notice 2018-38 which provides clarification on the application of §15.
Apr 19 2018
Rank #17: SALT Cap Workarounds: States Try Pass-Through Taxes
When Congress put a $10,000 cap on the amount of state and local taxes individuals can deduct from their federal income taxes, high-tax states tried to fight for their residents in a couple of different ways.
One way—charitable funds that earned people state tax credits for donations—got shot down by the IRS.
But states have tried another kind of workaround. Because the deduction cap applies only to individuals, not to businesses, some states have instituted new taxes on pass-through businesses, like LLCs and partnerships. These entities normally don’t pay taxes. Instead, their individual owners pay tax on the business income.
Bloomberg Tax team lead Jeff Harrington explored the state workarounds with Cannon-Marie Green, the managing editor overseeing Bloomberg Tax’s editorial coverage of state corporate income tax and pass-throughs.
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Jul 11 2019
Rank #18: How the IRS is Using AI and Big Data
Artificial Intelligence and Big Data are terms that are in the news. Tax practitioners should be aware that the IRS is using these methods to mine for information, and that could impact whether and how their clients are audited.
Carina Federico of Crowell Moring, Michelle Schwerin of Capes Sokol, and Travis Thompson of Sideman & Bancroft join Bloomberg Tax’s Andrea L. Ben-Yosef to talk about where IRS is getting its data, how the use of AI will impact enforcement, and what practitioners should be doing now.
Host: Andrea Ben-Yosef
Nov 09 2018
Rank #19: Talking Tax- Episode 58- Takeaways From the Recent ABA Tax Section Meeting
The American Bar Association Section of Taxation meeting in San Diego this month was all about how IRS and Treasury officials view the new tax law.
The tax reform bill becoming law is only the first step: the Internal Revenue Service and Treasury Department will be providing guidance on the statute's provisions for years to come. During the meeting, Bloomberg Tax reporters spoke with government officials about how they plan to prioritize regulations as they implement changes to complex areas of the 2017 tax act (Pub. L. No. 115-97), such as changes to international taxation, tax accounting, and transfer pricing.
Reporters Laura Davison, Allyson Versprille, Alison Bennett, and Isabel Gottlieb spoke with Talking Tax host Matthew Beddingfield on Feb. 12 about how the IRS and Treasury plan to tackle the law's changes.
Feb 12 2018
Rank #20: What Are the Opportunities in Opportunity Funds?
Opportunity zones and opportunity funds were created by the 2017 tax act to encourage business investment in low-income communities. They have attracted a lot of interest because of the tax incentives, including exclusion and deferral of capital gains. IRS released proposed regulations on October 19 that gave practitioners some answers.
Bradley T. Borden, a professor of law at Brooklyn Law School, and Alan S. Lederman, a shareholder at the Florida law firm of Gunster, join Bloomberg Tax’s Andrea L. Ben-Yosef in describing these opportunity zones and funds, how practitioners can take comfort in going forward with many of these transactions, what the IRS still needs to address. They also examine how these proposed regulations may influence a taxpayer’s decision to use qualified opportunity funds as a way to replace real estate that is sold on a tax-deferred basis, instead of using a Section 1031 like-kind exchange.
For more information, see the article in the Bloomberg Tax Real Estate Journal, Rolling Real Estate Gain into a Qualified Opportunity Fund: Comparison with §1031, by Alan S. Lederman and and Bradley T. Borden (Sept. 5, 2018).
Oct 29 2018