Talking Tax

As part of its bid to join the OECD, Brazil is working on a major overhaul of its rules governing transfer pricing—the way a group’s related entities value transactions between themselves. Historically, Brazil’s transfer pricing rules have relied on a system of fixed margins. But officials have now committed to moving Brazil to the arm’s length standard, the basis of the Organization for Economic...

Have you noticed digital works of art with names like Cool Cats, CryptoPunks, and Bored Ape Yacht Club while surfing the web or posting a snarky tweet? They’re all examples of non-fungible tokens, or NFTs, unique digital assets serving as certificates of authenticity for digital products including works of art, music, and collectibles. NFTs are also a surging new industry, expected to reach global...

The IRS is struggling. As millions of Americans completed their annual tradition of filing taxes earlier this week, they again connected with a sprawling government agency besieged by issues that money alone can't solve. The IRS is still working through a backlog of unprocessed tax returns and can't keep up with a flood of phone calls from taxpayers looking for help. Bloomberg Tax took a deep dive...

The quick pace of consultations into complex new rules from the OECD is keeping tax practitioners busy. The Paris-based institution has already in 2022 launched several consultations into the “building blocks” of a new international tax system. Pillar One of the plan would reallocate a sliver of the profits of the largest and most profitable businesses to countries where they make sales. Pillar Tw...

The OECD's Inclusive Framework on Base Erosion and Profit Shifting is aiming to help developing countries implement a global agreement to change how multinational companies are taxed, according to the co-chair of its steering committee. The agreement, which more than 130 countries signed up to in October, has two pillars. Pillar One reallocates a portion of the largest multinationals’ profits to m...

The OECD released a draft framework March 22 that would standardize how global tax authorities regulate and share tax information related to cryptocurrency assets. The draft—called the Crypto-Asset Reporting Framework, or “CARF”—includes model technical rules and a commentary written for wide adoption and data-sharing among tax administrations. Countries that adopt the Organization for Economic Co...

Recent court rulings striking down two Internal Revenue Service reporting requirements suggest the agency may need to change its procedures so that its rules will hold up in court. The U.S. Court of Appeals for the Sixth Circuit struck down a tax reporting requirement on March 3 in Mann Construction, Inc. v. United States. That decision was cited by the U.S. District Court for the Eastern District...

Gasoline prices have reached record highs in recent weeks, spurring lawmakers across the country to look for ways to offer some relief. A popular target: the excise taxes the federal government and states collect to fund transportation programs. Some congressional Democrats have floated a suspension of the 18.3 cent-per-gallon federal gas tax, while many governors are pursuing state holidays that...

The accounting profession offers career options that go beyond working for a CPA firm or corporate finance. George Azih found that his years of working in both arenas built the perfect launch pad to start his own business, and solve some complex financial accounting problems along the way. Azih is the founder and CEO of LeaseQuery, an Atlanta-based company that provides lease accounting software t...

Courts in Canada have been making high-profile rulings on a key area of corporate tax law in recent years and the federal government could be making even more changes. Transfer pricing—the rules governing how entities within the same corporate group must make transactions as if they were arm’s length—represents a sizable chunk of the money the Canada Revenue Agency collects in tackling aggressive...

Corporations and wealthy taxpayers breathed a sigh of relief when Democrats' economic agenda stalled in the Senate late last year. The roughly $2 trillion package—which the Biden administration branded "Build Back Better"—included a variety of tax hikes, including major changes for pass-through entities. While corporations and high earners may have dodged anticipated tax increases last year, they...

The European Union wants to harmonize how companies issue electronic value-added invoices across the bloc as part of a broader push to make VAT easier to pay. The EU is hoping e-invoicing will help ease complexity and close the gap between expected VAT revenue and what countries actually collected. Lost VAT revenue reached 135 billion euros ($152 billion) in 2019 alone, according to the European C...

The Biden administration made headlines last year with its plan to provide $80 billion to the IRS to bolster audit and enforcement activities, and tackle the so called “tax gap”—the difference between the amount taxpayers owe and how much they actually pay. It's estimated at $600 billion annually. But what about the states? State revenue departments will face some significant challenges, such as y...

The tax filing season that just kicked off is the third that is being affected by the coronavirus pandemic. Kelly Phillips Erb, Bloomberg Tax editor and host of the Tax Girl podcast, says we haven't yet returned to the way things worked pre-pandemic. In addition to a paper return backlog and understaffed IRS, this year's returns will also be complicated by stimulus checks and advance child tax cre...

Companies operating in the EU are facing a changing tax landscape in the years ahead, which means they must prepare now to set up systems to report and comply with the new measures. The European Union is targeting 2023 to implement the OECD’s 15% minimum tax. Companies will have to overhaul the way they collect information internally to be able to accurately calculate their effective tax rate for...

Kevin Brady, the top Republican on the powerful House Ways and Means Committee, is planning one final legislative push before he retires at the end of this Congress. During the Trump administration, the Texan was instrumental in shepherding the Republican-led 2017 tax law and working across the aisle on a retirement policy overhaul. An outspoken fan of the Houston Astros, Brady has also been a lon...

Tax preparers are bracing for another frustrating filing season as the IRS warns of unprecedented challenges driven by the pandemic and staffing shortages. The IRS is facing some major issues ahead of the Jan. 24 launch of tax season. The agency entered the new year with millions of unprocessed paper tax returns and has long struggled to keep up with a deluge of phone calls from people and tax pro...

A severe talent shortage caused by the "Great Resignation" will be the most important issue affecting accounting work in 2022, according to three senior accountants. Labor shortages, along with a loss of institutional knowledge, will cause problems not only at the firms accountants are auditing, but within the accounting firms themselves. Given how widespread this phenomenon is across different se...

Tax pros are keeping a close eye on Capitol Hill negotiations, with the Internal Revenue Service's 2022 enforcement agenda dependent on how much money Congress gives it to do the job. The Biden administration wants to give the IRS a funding increase for fiscal 2022, plus an additional $80 billion in funding over a decade as part of its stalled tax and social spending package. The goal: give the ag...

Corporate tax departments and accounting firms haven't had much success in diversifying their workforce in recent years, a recent Bloomberg Tax survey shows. The survey data show that while corporate tax departments have seen an increase in the number of female managers over the past four years, overall the tax industry's race and gender demographics still aren't representative of the general popu...

Cryptocurrencies had a big year in 2021, with the asset class drawing in over $2.2 trillion of value. However, these gains have drawn scrutiny from tax authorities. The U.S. in particular has made efforts in recent months to develop rules that would require cryptocurrency exchanges to track the activity of traders to assess their tax compliance. On today’s episode of our weekly podcast, Talking Ta...

Cities and counties have been using so-called "sin taxes" to disincentivize socially harmful behavior for many years. But can this principle be applied to gun violence? A few localities think it can and have passed their own excise taxes on guns and ammunition, even though the legal basis for these taxes may be unclear. One of them, Cook County, Ill., recently had its gun tax struck down by the Il...

We're now at the stage where companies, not just individuals, are investing in cryptocurrencies. But that means that accountants have to find a way to quantify crypto's famously volatile price swings on their company's financial statements. There is no specific reference to crypto in U.S. financial accounting rules. But many investors, crypto fans, and even companies themselves want accounting rul...

SPACs—Special Purpose Acquisition Companies or "blank check companies"—became a hot commodity in recent years. The speculative nature and promise of large gains has turned the practice into a major boon for Wall Street—that is, until the SEC announced some rule changes earlier this year that made executing a SPAC a lot more complicated. We have now reached the point where some of the SPACs launche...

A landmark meeting on curbing climate change didn't do much to address the role that tax measures might play, but financial-climate consultants and academics still think they can contribute to reducing greenhouse gas emissions. The COP26 conference agreed on long-awaited rules for global emissions trading markets, one key form of carbon pricing meant to help provide financial incentives for reduci...