Talking Tax

State policy makers and budget officials are facing a period of greater economic uncertainty as forecasts increasingly point to the likelihood of at least a mild U.S. recession in 2023. Over the past year many states have sought to stay ahead of any downturn by managing their budgets more prudently. Roughly 30 states took some type of permanent tax policy action in 2022 through their legislatures—...

Tax professionals are racing to advise companies on two laws passed this year—the tax-and-climate law and the CHIPS Act—both providing tax credits that can be claimed as soon as Jan. 1. Guidance from IRS and Treasury can't come soon enough as companies try to decipher how they would be affected. On this episode of our weekly podcast, Talking Tax, we discuss one Big Four accounting firm's strategy...

Companies have rushed to apply for an expiring Texas program that offers hefty school district property tax abatements for new manufacturing and renewable energy projects. The Chapter 313 incentive has drawn big investment through its 20-year history, but has been criticized as too expensive and harmful to some schools and populations. It wasn't renewed, and policy makers are determining whether a...

Over the past decade, some of the biggest changes to the international tax framework have come out of the Paris-based OECD—from the worldwide crackdown on base erosion and profit shifting to the two-pillar plan to overhaul global tax rules. Pascal Saint-Amans, the man at the helm of the organization's tax division through those years, recently announced he would be stepping down from his role at t...

The global tax pact that’s been agreed to by nearly 140 countries has run into some obstacles, but the new global vice chair of tax for EY thinks chances are good that the big changes the agreement calls for will ultimately be implemented. EY’s Marna Ricker acknowledges that there’s a lot of work still to be done on both of the key parts of the agreement—Pillar One, which would reallocate a chunk...

An estimated 43 million Americans qualifying for the Biden administration’s student loan debt forgiveness program won’t have to account for the $10,000 benefit on their federal 1040 tax returns next year, but they could face a very different reality when they file their state returns. The federal government and most states are waiving taxes on the cancellation of debt program. According to one ana...

Richard Jones took the helm of the board charged with writing US accounting rules the same year the coronavirus pandemic upended the economy. Jones and the six other members of the Financial Accounting Standards Board had to act quickly to tackle questions on how to use accounting standards during such an uncertain time. Two years later, FASB is plotting its next big moves, including writing rules...

Ernst & Young faces numerous challenges as it tries to gain ground in the competitive advisory market while maintaining its place in the audit industry as its leaders push ahead with a planned breakup of the $40 billion revenue firm. The consequential deal could hinder EY's ability to retain and hire the skilled professionals it needs to deliver in-demand audit and reporting services as a stand-al...

Tax data and technology can be helpful for companies when making projections for tax planning purposes, but companies have to weigh when the best time is to implement them. Data can give more certainty for companies in scenario planning, such as for the Inflation Reduction Act and everyday business decisions, said Greg Engel, vice chair of tax at KPMG LLP. Still, 52% of companies aren’t using tax...

The IRS is seeking to prevent new, potentially abusive transactions from gaining traction with taxpayers. Early this year, the agency launched a group, called the Joint Strategic Emerging Issues Team, so that representatives from a wide range of IRS offices can collaborate to quickly identify areas where there's a high risk of noncompliance and determine how best to address these issues. On this e...

Tax directors around the world are grappling with a two-pillar global tax agreement that will require multinational companies to change where and how much tax they pay. As details of how these complex new rules will work in practice come to light, some companies have begun modeling their effect on their tax bills. Rio Tinto PLC, which is part of the OECD's business advisory group, has had a front...

The accounting world has been shaken up with several high-profile mergers and acquisitions among firms in recent years, reflecting the growing needs of clients. Abe Schlisselfeld of Marks Paneth LLP had a front-row seat to this trend, serving as the firm's managing director during its acquisition by accounting firm CBIZ Inc. in 2021. Schlisselfeld was at the helm to help shepherd the top-50 accoun...

Kathleen Kerrigan is stepping into her new role as the US Tax Court's chief judge with an overarching goal to help the court in living with the Covid-19 pandemic. Kerrigan says her work will include moving to more in-person trials while still maintaining flexibility. In addition, she hopes to increase electronic filing now that DAWSON—the case management system launched by the court in late 2020—m...

The United States ranks first globally for financial secrecy, according to the latest report by the Tax Justice Network and US authorities are trying to do something about it. The Pandora Papers show secretive business structures are thriving in states including Delaware, Nevada, South Dakota, and Wyoming. A few states are taking the problem seriously including New York, which debated but failed t...

The July 8 news that the US was canceling a bilateral tax treaty with Hungary that has been in place since 1979 took a lot of people by surprise. While Treasury pointed to conditions in the treaty it said were unfavorable to the US, the announcement also came amid Hungary's continued opposition at the European Union to the 15% minimum tax the Biden administration has championed. On this week's Tal...

Tax-advantaged land deals known as syndicated conservation easements are under increasingly heavy scrutiny from the IRS and Congress. The transactions involve a tax break under tax code Section 170(h) that is designed to encourage property owners to give away the development rights for land or buildings for conservation purposes. Syndicated deals—which involve multiple parties who buy into a prope...

The Biden administration and Democratic lawmakers are quickly running out of time to move a revamped tax, climate, and health care package before the midterm elections. Biden's broad "Build Back Better" agenda stalled in December when Sen. Joe Manchin (D-W.Va.), a pivotal vote in the evenly split chamber, announced he wouldn't support it. Senate Majority Leader Chuck Schumer (D-N.Y.) has been nego...

The electric vehicle market in the United States is reaching an inflection point as companies look to boost manufacturing at the same time that two more large automakers are on the verge of losing a critical consumer incentive. The $7,500 electric vehicle tax credit begins phasing out at 200,000 vehicles sold per manufacturer, a threshold General Motors Co. and Tesla Inc. hit years ago. Ford Motor...

A sweeping cryptocurrency bill unveiled earlier this month addresses many of the biggest open questions for the young and volatile asset class, from sanctions compliance to stablecoin oversight. When it comes to the taxation of digital assets, the proposal from Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) would give the industry much of what it has been asking for. The bill would...

More countries are turning to temporary windfall taxes targeting the huge profits being made by oil and gas companies as prices continue to climb. The UK, Italy, and Argentina, among other countries, have taken different approaches in designing these new taxes. The UK and Italy want to impose a 25% tax on the profits of energy companies to help people facing a cost-of-living crisis, while Argentin...

One of the hottest issues in the corporate-tax world right now is about when multinational companies can use the taxes they pay in foreign countries to defray their US tax bills. The Treasury Department has made that process tougher. Last December, it tightened US foreign tax credit rules, narrowing the range of taxes that qualify for it. But many companies have complained that Treasury went too f...

A 2015 law promised to streamline the Internal Revenue Service's method for auditing partnerships—a type of "pass-through" business where the partners report their share of the proceeds on their personal tax returns. The Bipartisan Budget Act of 2015 included provisions intended to make it easier for the IRS to scrutinize partnerships. But the law created new concerns and unintended consequences f...

With cash cushions plump with federal pandemic relief dollars and a surge in tax revenues, state legislatures across the country have cut taxes aggressively this year. But several states went further, converting their tiered income tax structures to flat-rate systems. Arizona, Georgia, Iowa, and Mississippi have committed to the flat tax in recent weeks, and Oklahoma is likely to join the group so...

Automation tools increasingly used by seasoned tax professionals are helping to take some of the pain and manual labor out of routine compliance work. That futuristic tech goes beyond robotics process automation and can link together the many programs and platforms that accountants rely on everyday. Those building blocks can automate every step in the tax process from onboarding clients to tax ret...

Some or all of the interest paid on student loans can be deducted from your taxes. But despite the proliferation of these types of loans over the years, many taxpayers don't see a real benefit. That's because, unlike with home mortgage interest, the student loan interest deduction has significant limitations and has changed numerous times over the years. Bloomberg Tax columnist Kelly Phillips Erb...