Afleveringen
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The new chief of the IRS criminal division wants America to know he’s hiring special agents, and they’re fulfilling their mission to investigate tax and financial crimes.
Guy Ficco started his new gig in April following an almost three-decade career at the agency. He comes into the position at the same time the IRS is flush with tens of billions in funding from the Democrats’ 2022 tax-and-climate law.
In fiscal year 2023, CI initiated more than 2,676 criminal investigations and identified over $37.1 billion from tax and financial crimes. The division has an 88.4% conviction rate on cases accepted for prosecution.
Bloomberg Tax reporter Erin Slowey spoke with Ficco about how CI is handling its pandemic-era tax credit cases, what retention at the division looks like, and how the volume of investigation referrals has changed in the past couple of years.
Produced by Matthew S. Schwartz. -
The US Supreme Court brought a muted end last week to its biggest tax case in years, but the arguments that propelled the case are far from over, especially about what the court’s ruling could mean for future attempts to enact a wealth tax.
The court voted 7-2 to uphold the mandatory repatriation tax, a one-time tax on past foreign corporate profits. Washington state residents Charles and Kathleen Moore had challenged the constitutionality of the tax, arguing that it had forced them to pay $14,729 in taxes on the profits of an Indian company in which they’d invested even though the company’s profits were never distributed to them.
But the case’s significance went far beyond the Moores. Many had feared that striking down the tax not only would lead to billions of dollars in refunds to giant multinational companies that were the tax’s primary targets, but also would call into question a host of other taxes based on similar legal principles.
The Supreme Court said the tax was constitutional, and stressed that its ruling was narrow, with any outside issues left for another time. But that left unanswered questions about what the ruling could mean for any future wealth tax. Many such proposals would tax wealthy people’s “unrealized” gains on investments—profits that haven’t actually been distributed or monetized—which was the same issue over which the Moores questioned the repatriation tax.
And while the court’s ruling was narrow and set aside the realization issue, at least four of the nine justices supported the idea that income should have to be realized before it could be taxed, a signal that any future wealth tax could have a hard time passing legal muster before the court.
This edition of Talking Tax has two interviews with two very different perspectives on the Moore ruling. Bloomberg Tax senior reporter Michael Rapoport spoke first with Chye-Ching Huang, executive director of the Tax Law Center at New York University’s law school, who wanted to see the tax upheld, and then with Andrew Grossman and Jeff Paravano, attorneys for BakerHostetler who represented the Moores and wanted to see the tax struck down.
Producer: Matthew S. Schwartz.
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Wealthy taxpayers are rushing to prepare in case a more generous exemption from the estate tax expires at the end of 2025 along with many of the individual tax cuts from the Republicans' 2017 tax overhaul.
In 2024, taxpayers are exempt from the 40% estate tax on the first $13.6 million of assets passed on to heirs.
But the exemption is set to fall by about half, practitioners estimate, if Congress doesn’t act to extend it.
People are moving money into different types of trusts now to take advantage of that higher exemption amount.
Deloitte Managing Director Laura Hinson spoke to Bloomberg Tax reporter Erin Schilling about the most popular trust strategies and how to avoid “donor remorse.”
Hinson also explains how the Supreme Court's recent decision Connelly v. United States will affect estate planning.
Produced by Matthew S. Schwartz.
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Countries are under pressure to finalize and sign the text of the OECD's multilateral tax treaty, one part of the international tax deal known as Pillar One, by the end of June.
Several OECD officials, including Manal Corwin, director of the organization's Center for Tax Policy and Administration, have reported significant progress on finalizing the document. But negotiations have hit a snag.
The problem area is treatment of another part of Pillar One, known as Amount B, that's meant to simplify the way businesses value intercompany marketing and distribution transactions. The US and India, in particular, have butted heads over whether the measure should be mandatory.
In this week's episode of Talking Tax, Bloomberg Tax reporter Lauren Vella sits down with Dr. Santiago Gomez Cifuentes, head of congressional affairs at the Colombian Embassy in Washington, to talk about progress made on the Organization for Economic Cooperation and Development-led deal and what's holding back the completion of Pillar One.
Gomez Cifuentes is in close contact with the Colombian delegation to the OECD, and serves as a go-between representing Colombian interests in conversations with US lawmakers. He spoke with Bloomberg Tax on his own behalf and doesn't represent the official position of the Colombian government.
They also talk about Colombia's interest in the US Inflation Reduction Act and tax incentives that could boost mineral exports from Latin American countries.
Produced by Matthew S. Schwartz. -
Six months into implementation of the new global corporate minimum tax, countries are racing to craft incentives to attract and maintain outside investment. Companies, too, are pouring resources into complying with the tax.
The tax took effect in January in dozens of countries across the globe, with a goal of "raising the floor" tax rate to 15% in every country that a multinational company operates in, to reduce profit shifting to low-tax countries.
In this podcast episode, Bloomberg Tax reporter Lauren Vella talks through all the ways companies and countries are responding to the new global tax regime, and what new guidance companies can expect in the future.
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Talking Tax is on hiatus for a bit while we create some great new episodes for you. Until then, we're pleased to offer a special presentation of our ABA Silver Gavel award-winning series, UnCommon Law.
Generative AI tools are already promising to change the world. Systems like OpenAI's ChatGPT can answer complex questions, write poems and code, and even mimic famous authors with uncanny accuracy. But in using copyrighted materials to train these powerful AI products, are AI companies infringing the rights of untold creators?
This season on UnCommon Law, we'll explore the intersection between artificial intelligence and the law. Episode one examines how large language models actually ingest and learn from billions of online data points, including copyrighted works. And we explore the lawsuits filed by creators who claim their copyrights were exploited without permission to feed the data-hungry algorithms powering tools like ChatGPT.
If you like this episode and want to hear part 2, visit news.bloomberglaw.com/podcasts, or search for UnCommon Law in your podcast app.
Guests:
Matthew Butterick, founder at Butterick Law, and co-counsel with the Joseph Saveri Law Firm on class-action lawsuits against OpenAI and others
Isaiah Poritz, technology reporter for Bloomberg Law
James Grimmelmann, professor of digital and information law at Cornell Tech and Cornell Law School -
The new 15% global minimum tax that took effect this year is turning out to be compliance beast.
The tax, which is part of an international tax deal agreed to by more than 140 countries in 2021, contains a slew of new technical terms, complex rules, and hundreds of pages of administrative guidance.
Now, some of the largest accounting firms in the world have been tasked with interpreting these rules, educating their clients, and building complex data systems to help multinational companies calculate their global minimum tax bills.
In this week's episode of "Talking Tax," reporter Lauren Vella sits down with Danyle Ordway, principal of tax technology and data analytics at Ernst & Young LLP, to talk about how the firm is helping clients adapt to the new levy.
Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690. -
A looming decision from the US Supreme Court on federal agency rulemaking power is fueling chatter on just how much it could upend the regulatory process at these agencies.
Justices in January heard two cases, Relentless v. Dept. of Commerce and Loper Bright Enterprises v. Raimondo, which challenge the decades-old landmark administrative principle known as the Chevron doctrine saying that federal courts should defer to agency interpretation when a law is vague.
Bloomberg Tax reporter Erin Slowey spoke with Kristin Hickman, a University of Minnesota law professor who specializes in tax and administrative issues, on the background of Chevron in the tax context and how the Treasury Department and the IRS are expected to be largely insulated from the ruling, no matter the outcome.
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A seven-year-old lawsuit aimed at forcing overhaul of New York City's complicated property tax system has gotten a new life, after the state's high court ruled last month it could move forward.
Tax Equity Now New York, a broad housing coalition, sued the city and the state in 2017, arguing that the city's method for collecting property taxes favors wealthy, white homeowners at the expense of owners and tenants in lower-income neighborhoods. But the suit was dealt a blow in 2020, when a mid-level state appeals court dismissed it.
But in March, the Court of Appeals, the state's top court, revived two causes of action against the city under the state property tax law and the federal Fair Housing Act, sending the lawsuit back to Manhattan trial court for further proceedings. It held that claims against the state and constitutional claims against the city were properly dismissed.
On this episode of Talking Tax, reporter Danielle Muoio Dunn spoke with Martha Stark, the policy director of TENNY and a former New York City finance commissioner, about the court's findings and how the current tax structure impacts homeowners and renters in different parts of the city. Stark said the ruling not only allows the case to proceed, but shows that "the city can act on its own" to create a fairer property tax system without a rewrite of the state's property tax law.
Nicholas Paolucci, a spokesperson for the New York City Law Department, said the department is "carefully reviewing the court ruling and evaluating next steps."
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While senators quibble over the $78 billion bipartisan tax package, the House is turning to next year, when a swath of tax cuts from the Republicans' 2017 law expire.
Congress returns next week, and it's unclear if the full Senate will vote on the tax bill, which is stalled over GOP objections despite getting an overwhelmingly bipartisan House vote in January. The fate of the package of tax breaks for families and businesses likely has ramifications for 2025 tax talks, as Senate Finance Committee Chair Ron Wyden (D-Ore.) has said retroactivity for the business breaks would be too challenging to do next year.
But Senate Republicans—such as Finance Committee Ranking Member Mike Crapo (R-Idaho) and John Cornyn (R-Texas), who's running to replace Minority Leader Mitch McConnell (R-Ky.)—say the GOP may be able to get a better deal in 2025, if they gain control of the White House or the Senate.
Bloomberg Tax reporter Samantha Handler talks with former House Ways and Means Committee Chair Dave Camp (R-Mich.) and Todd Metcalf, former Democratic chief tax counsel for the Senate Finance Committee, about what's next for the deal, how what happens with the legislation now may affect 2025 negotiations, and what the tax committees are already doing to prepare for next year. Camp and Metcalf are both now at PwC's Washington National Tax practice.
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The corporate jet industry is the latest to be targeted by the government's efforts to make the rich pay the taxes they owe.
The IRS began an audit campaign in February to clamp down on executives abusing corporate jet tax breaks for personal use. President Joe Biden's proposed budget would tighten depreciation rules and increase the tax rate on private jet fuel, and Senate Democrats sent a letter urging the Treasury Department and Internal Revenue Service to change how corporate jet owners deduct certain costs.
Bloomberg Tax reporter Erin Schilling spoke with Michael Kaercher, a senior attorney adviser at the Tax Law Center at New York University, about a regulatory change the IRS could pair with its enforcement efforts and why the industry has landed in the spotlight for tax reform.
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Coming soon to corporate financial statements: a lot more tax transparency.
After seven years and three rounds of proposals, the Financial Accounting Standards Board in December published new rules requiring companies to shed light on the income taxes they pay to federal, international, and state governments.
The disclosure rules, which kick in as early as 2025, are a response to years of complaints that current financial reporting rules offer too few details about tax obligations. Soon, companies will have to separately list any jurisdiction that accounts for more than 5% of their total tax obligations. Publicly traded companies will have to further break down how they calculated their effective tax rate, so investors and other financial statement readers can contrast it with their statutory rate.
Bloomberg Tax reporter Nicola M. White spoke with David Gonzales, a vice president at Moody's Investors Service, about what kind of details companies will have to provide and how investors and analysts could use them.
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Many taxpayers with relatively simple returns can now electronically file their returns directly with the IRS for free for the first time.
The IRS, after months of preparing its government-run free e-filing pilot tool, launched the program to the wider public Tuesday. The Treasury Department expects about 100,000 of the millions eligible to use it.
Democrats’ Inflation Reduction Act set aside $15 million for the IRS to issue a report on the feasibility of creating a direct e-filing tax return system. The pilot comes after years of controversy and pushback from Republicans and tax-prep software companies saying the IRS shouldn't be a preparer, collector, and enforcer.
Bloomberg Tax reporter Erin Slowey spoke with Bridget Roberts, chief of Direct File at the IRS, about how the rollout is going, who is eligible, and the fate of a permanent agency-run option.
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Australian authorities continue to crack down on multinational companies it believes are trying to avoid Australian taxes—and a recent court ruling against PepsiCo Inc. gives them a tough weapon.
A judge ruled in November that sales of beverage concentrate from a Singapore Pepsi affiliate to an Australian Pepsi bottler also effectively included royalties for the use of Pepsi trademarks and intellectual property that the company should have been taxed on. But for the first time, the judge also blessed the use of Australia’s “diverted profits tax,” or DPT, which slams companies with a 40% tax rate if they’re orchestrating their transactions to obtain tax benefits.
PepsiCo, which is appealing the ruling, didn’t have to pay the DPT itself, since the judge ruled that royalty withholding taxes apply to it instead. But the harsh tax could be used against other big multinationals that rely on trademarks, patents, and other intellectual property as a key part of their business, like pharmaceutical and technology companies.
Bloomberg Tax senior reporter Michael Rapoport spoke with Angela Wood, a partner at Clayton Utz in Melbourne, about the PepsiCo ruling, its potential effects, and what companies should do to cope with it.
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Sports team owners for decades have seen enormous tax benefits from their team purchases, dispatching squads of accountants to find write-offs on things from equipment and player salaries to TV rights and more. Now the IRS is looking to make sure all of those savings were above board.
The IRS's Large Business and International Division announced the audit campaign last month, making sure the income and deductions taken by sports-related partnerships with large losses are reported in compliance with the tax code.
The campaign comes as sports deals continue to reach new heights and the volume of deals remains hot, Robert Raiola, director of the Sports and Entertainment Group at PKF O’Connor Davies, told Bloomberg Tax, adding that rising values are attracting wealthy buyers and investment firms are getting in on the action.
On this episode of Talking Tax, Bloomberg Tax reporter Caleb Harshberger spoke with Raiola about how owners have made the most of tax benefits for team ownership and what the new audits could mean for the world of sports.
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For more than a decade, states have had to grapple with the challenge of taxing the digital economy. Peering into cyberspace, tax administrators were often left with more questions than answers. What online products and services should be taxed? How does a state source a virtual creation to a specific jurisdiction? Can states even tax digital products and services in the face of federal limits on discriminatory taxes on electronic commerce?
State tax authorities now have to answer these questions without Gil Brewer, who retired at the end of January from his position as assistant director of tax policy at the Washington State Department of Revenue and stepped down as chairman of the Multistate Tax Commission’s digital products work group. Brewer assisted with Washington’s pioneering efforts to equitably and efficiently tax digital goods and services dating back to 2009. He lobbied the tax commission in 2021 to launch an ambitious project aimed at uniform digital economy tax policies across the states.
On this episode of Talking Tax, Bloomberg Tax senior reporter Michael J. Bologna caught up with Brewer to discuss his career in tax, his views on state taxation of digital products, and the risks the states and taxpayers face if they fail to develop thoughtful and legally defensible policies taxing digital products and services.
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State film tax credit programs are increasingly financing advertisements for some of the world’s largest consumer product companies, some of which subsequently sell the credits to other companies looking to reduce their state tax liabilities.
Twenty-eight states and Puerto Rico allow such incentives for production of commercials. Major companies, including McDonald’s Corp., Kellanova, and AbbVie Inc., receive these to promote products such as burgers, cereal, and prescription drugs. Tax credits are sometimes obtained by ad agencies or production companies, while in other cases the brands obtain them directly. And productions aren't always required to be filmed entirely within the jurisdiction offering the credit.
Some states allow recipients with minimal or no tax obligations to sell the credits for cash, enabling major corporations like Walmart Inc., Apple Inc., and Bank of America Corp. to buy them up and lower their state tax bills, despite having no involvement in the productions.
In this episode of Talking Tax, host David Schultz spoke with Bloomberg Tax reporter Angélica Serrano-Román about her recent deep dive into state film tax incentive programs, the companies receiving these benefits, and the buying and selling of credits.
Data obtained from Georgia, Illinois, New Jersey, and Puerto Rico, which provided insight for the Feb. 5 story, is now available on GitHub.
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More than 146 million individual tax returns are expected to be filed before the end of the 2024 tax filing season.
The IRS, with the help of the tens of billions of dollars in supplemental cash from the Democrats' 2022 tax-and-climate law, built up its call centers, expanded its online options, and is now offering more hours at its taxpayer assistance centers to help make a smoother tax filing season for taxpayers and tax professionals.
It also launched a controversial free agency-run filing tool for low- and moderate-income taxpayers filing simple returns, though access to the tool won't be more widely available to the general public until mid-March.
Bloomberg Tax reporter Erin Slowey spoke with Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals, about what's different this tax filing season, what's happening in Congress, and why taxpayers shouldn't rush to file once the season opens.
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For decades, states’ authorities to tax the earnings of multinational corporations have ended abruptly at the “water’s edge.” Frustration with this limitation, however, has grown in recent years as large, sophisticated businesses employ accounting techniques and asset transactions to shift their domestic earnings offshore.
Mandatory worldwide combined reporting—an apportionment method requiring the calculation of taxes based on global income attributable to a particular jurisdiction—is one possible solution gaining attention in state capitals. Lawmakers in Minnesota came close to enacting a worldwide system last year and the New Hampshire House debated, but failed to approve, the calculation method earlier this month. Legislators in other states have also discussed this tax calculation method.
On this episode of Talking Tax, Bloomberg Tax senior reporter Michael J. Bologna discusses worldwide combined reporting with two Democratic state lawmakers committed to reforms that would limit income shifting by multinationals. Minnesota Rep. Aisha Gomez is chair of the state's House Taxes Committee and Rep. Emilie Kornheiser is chair of the Vermont House Ways and Means Committee.
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Michael Plowgian, who in December left his role as deputy assistant secretary for international affairs at the Treasury Department, had an eventful stint at the department.
The former top OECD negotiator for the US started at Treasury in October 2021 as a counselor right around the time over 140 countries agreed to the global tax deal. Since then, Plowgian has been a part of large steps in the deal's progression—from tranches of Pillar Two rules to the release of a draft multilateral treaty text that would reallocate large multinational companies' residual profits to market jurisdictions.
The international tax pact consists of two parts: a reallocation of large multinational companies' residual profits, known as Pillar One, and a 15% global minimum tax, known as Pillar Two.
The work at the Organization for Economic Cooperation and Development, and therefore the Treasury, isn't done. Plowgian talked to Bloomberg Tax reporter Lauren Vella about what's next for the deal, how the multilateral treaty might fare in Congress, and what red lines the US won't cross in further negotiations with other countries.
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