Talking Tax

U.S. Supreme Court justices turned their attention this term to a long-standing federal common law rule—the Bob Richards rule—that courts have used to determine who gets a tax refund in cases involving a parent company’s bankruptcy. Bloomberg Tax legal reporter Aysha Bagchi sits down with host Siri Bulusu to describe the controversy and walk through the lively Dec. 3 oral arguments in the case, Ro...

David Kautter, assistant Treasury secretary for tax policy, discussed international digital tax issues, regulations stemming from the 2017 tax law, and more in an exclusive interview at the Bloomberg Tax Leadership Forum Nov. 19. Background reading:  The Treasury Department is planning to issue regulations restricting how hedge fund managers can claim a valuable tax break by early next year. IRS O...

Patricia Cummings, chief risk officer and a managing partner at accounting and consulting firm Citrin Cooperman, discusses how technology is transforming the accounting and auditing environment. Artificial intelligence, data analytics, and blockchain are changing what aspiring auditors should know—as the industry looks for “critical, strategic thinkers.”

In the U.S., religious practices have an unclear relationship to the tax code. Sam Brunson, a professor at Loyola University Chicago School of Law, has an idea to give some structure to the way policy makers deal with that relationship. Congress historically writes religious accommodations into the tax code on a case-by-case basis: A group of people appears with a specific tax problem, and lawmake...

Kate Barton has been navigating unprecedented change in tax systems around the planet since becoming EY’s global vice chair for tax and legal services in early 2018. Trade wars and Brexit are roiling markets and expectations, and countries are scrambling for their share of corporate revenue while trying to transform their tax regimes for the digital-commerce age. The OECD aims for consensus by 202...

A new U.S. accounting standard is about to make a huge difference in what banks’ financial statements and earnings look like—and for some of them, what their future lending practices could be. The standard is known as CECL—for current expected credit losses. It’s considered accounting rulemakers’ chief response to the 2008 financial crisis. Starting in 2020 banks have to venture into new territory...

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....

It’s a major theme for a burgeoning number of investors: concern for sustainability and social values as drivers of financial decisions. That means boom time for ESG investing—driven by examination of businesses’ environmental, social, and governance positions. Companies are disclosing more and more about their environmental footprints, how they treat their employees, how their leadership operates...

Businesses are watching India closely as the Modi government cuts taxes and takes other steps to woo investors into the enormous market. One place to watch is the Hague, where a longstanding dispute between India and Cairn Energy is playing out. Cairn Energy is fighting a big tax bill—$1.6 billion plus interest and penalties—that India delivered retroactively for a 2006 internal restructuring tran...

Micro-captive insurance companies play a useful role for relatively small businesses that need to insure risks they can't buy coverage for elsewhere. The businesses self-insure, setting up companies that are captive to their owners. Because Congress allowed micro-captive owners a tax advantage, some companies have abused the structures in ways that induced the Internal Revenue Service to put them...

Wads of cash. That’s how owners of recreational marijuana businesses haul in their taxes, because big banks are reluctant to work with the industry while marijuana is still illegal under federal law. U.S. states may pull in as much as $1.6 billion in taxes from recreational marijuana sales this year—that’s not including medical marijuana—so that’s a lot of wrinkled bills from the register. A numbe...

“Relax a bit,” Pascal Saint-Amans advised countries that may fear losing a lot of revenue under a new global approach being developed to tax cross-border business—especially digital business. The OECD-led project toward agreement on a plan aims not to create big revenue winners or losers, Saint-Amans said in a Sept. 11 interview at the International Fiscal Association meeting in London. He’s the O...

Many states and cities offer tax breaks and other incentives to lure businesses and jobs—often raising questions about the actual benefit of the expensive measures. California communities have a unique version, one that Bloomberg Tax’s Laura Mahoney shed light on this year. In extensive data research and reporting, Mahoney uncovered Cupertino’s payment of nearly $70 million to Apple through the ye...

U.S. Tax Court Judge Mark Holmes is one of those judges who can make a person glad to be reading a legal opinion. His judgments are often marked by wit, clarity, and pointed references to literature that illuminate a plaintiff’s plight or a point of law. He once explored Buffalo wings and other cuisine in a decision about a tax dispute involving “material participation.” In this episode, Holmes re...

Some complicated tax issues face Congress when lawmakers return after Labor Day. Extenders—those expired or about-to-expire temporary tax breaks for specific groups—remain in play big-time in both House and Senate. The House Ways and Means Committee has passed an extenders package, and Sen. Chuck Grassley (R-Iowa) says he will make the issue a Finance Committee priority in September. Meanwhile, th...

The National Philanthropic Trust calls donor-advised funds the most popular method of charitable giving—nearly a half-million accounts hold $110 billion in assets. Now a court fight between a wealthy family and a fund to which they donated stock may offer a look into how these funds work. Universities and community foundations run their own charitable funds, but big-name investment managers like J...

Countries around the world are talking about taxing the revenue of giant digital-business companies. In July, France became the first European country to enact a digital services tax—immediately drawing the ire of U.S. officials. The U.S., home of digital giants like Amazon.com Inc., wants France and other countries to wait for a global agreement on digital taxation, which could rewrite the rules...

The Supreme Court in June threw out North Carolina’s taxation of a family trust’s income because the trust didn’t have enough of a connection to the state. The decision, in the case of the Kimberley Rice Kaestner 1992 Family Trust, didn’t give trust and estate attorneys as much instruction as many wanted with respect to state taxation of trusts. Justice Sonia Sotomayor’s opinion was narrowly drawn...

Effective auditing of companies' financial statements is important for investor confidence, but Chinese companies traded in the U.S. don't get U.S. oversight of their audits as other companies do. And that could be a risk for investors. The Public Company Accounting Oversight Board, the U.S. audit regulator created to restore confidence in financial reporting after accounting scandals of the early...

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...

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...

The U.S. Supreme Court’s 2018 South Dakota v. Wayfair decision upended a 26-year precedent that limited a state’s authority to tax goods being sold across state lines. A year later, states have amended their laws to target remote sellers and online sales platforms like Amazon.com Inc. Bloomberg Tax reporter Ryan Prete spoke with Diane Yetter, founder of the Sales Tax Institute and president of con...

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...

The OECD released a blueprint for how to rewrite global tax rules. The group hopes to get international consensus around proposals to set a global minimum tax and reallocate more of companies’ taxable profits to countries where their consumers are located. The Organization for Economic Cooperation and Development wants to get 129 countries to agree to the plan by 2020. Martin Kreienbaum, director...

American workers are cashing in on their side hustle, picking up small jobs through Task Rabbit, driving for Lyft, or selling jewelry on Etsy. But they owe taxes on that work. And many of these self-employed workers are under-reporting their income to the IRS. It’s contributing to an estimated $450 billion tax gap. Annette Nellen, who directs the graduate tax program at San Jose State University,...