Talking Tax

Join Zach C. Cohen, a Bloomberg Tax reporter who analyzes IRS operations and funding, alongside Erin Durkin, a Bloomberg Government health reporter focusing on healthcare subsidies. They discuss the impact of the recent government shutdown on the IRS, highlighting staffing uncertainties and substantial backlogs. Erin sheds light on the fate of pandemic-era premium tax credits, predicting a spike in average premiums if not extended. With potential legislative hurdles ahead, they unpack the chances of another shutdown looming around these critical subsidies.

Jeremy Gove, a state and local tax attorney at Eversheds Sutherland, shares insights on the tax implications of New York City Mayor-elect Zohran Mamdani's ambitious affordability agenda. He discusses the calls and emails from anxious clients after the election. Gove emphasizes the legal hurdles the mayor faces in raising taxes, cautions against hasty decisions for high-net-worth individuals contemplating relocation, and mentions the potential benefits of increased audit staff to address the Department of Finance's backlog.

Ron Messenger, CEO of Grant Thornton's audit business, shares insights on navigating the firm’s shift to a private equity-backed structure. He discusses the innovative two-part legal framework designed to protect audit integrity while leveraging investment. The conversation highlights the crucial services agreement that outlines governance and resource sharing. Ron emphasizes the importance of maintaining high audit quality amidst profit pressures and the role of regulators in safeguarding independence. His advice to firms considering outside capital focuses on collaboration and strategic planning.

Steve Soter, vice president at Workiva and expert in financial compliance, discusses the implications of potentially shifting from quarterly to semiannual 10-Q filings. He warns that this change could undermine AI models that analysts rely on for accurate reporting. Soter explains the benefits of XBRL structured data for machine readability and the risks associated with relying on unstructured text. He advises C-suite leaders on proactive measures to maintain data integrity and ensure transparency, emphasizing the critical need for more frequent, accurate reporting.

Beth Bell, a former Treasury official with extensive experience in multilateral tax negotiations, now serves as a principal at PwC's National Tax Service. In this discussion, she reveals the Treasury's efforts to implement GOP tax law despite the government shutdown. Bell analyzes the timeline for the U.S. Pillar Two coexistence and cautions companies to adhere to current rules until final legislation emerges. She also addresses the potential reintroduction of Section 899 and what factors might influence congressional actions on tax policy.

Ryan Hogg, a Bloomberg Tax reporter specializing in Irish fiscal policy, dives into the complexities of Ireland's tax landscape. He discusses the challenge of maintaining competitiveness amid Donald Trump's tax policies and the looming 15% global minimum tax. Hogg explores the government's plan to increase the R&D tax credit and the creation of a sovereign wealth fund to stabilize against future shocks. He also highlights the reliance on foreign multinationals, which pay a staggering 88% of the corporation tax, raising concerns about fiscal sustainability.

Pete Sepp, President of the National Taxpayers Union, shares insights on the recent appointment of Frank Bisignano as IRS CEO. He expresses concerns over the vacancy of top IRS positions and the need for a permanent commissioner. Sepp delves into governance questions related to the new CEO role and the plight of the dormant oversight board. He highlights potential privacy risks from merging the IRS and Social Security leadership and stresses the importance of robust data security measures. Sepp advocates for legislative clarity in IRS operations.

In this engaging discussion, Stephen Lusch, a University of Kentucky professor specializing in accounting and transfer pricing, tackles the challenges of NIL deals for student athletes. He explores how transfer pricing can help establish fair valuations, ensuring these agreements aren't merely disguised pay-for-play. Lusch discusses the metrics needed to assess athlete value, the current lack of policing in NIL transactions, and potential tax implications. He also considers the complexities of a future where athletes might be classified as employees, presenting insights into a rapidly evolving landscape.

About three months have passed since Treasury Secretary Scott Bessent announced that the US, along with its Group of Seven allies, agreed to work on a system that would exempt American companies from parts of the global minimum tax. In that time, the US proposed a technical solution to separate its tax system from the global minimum tax. But other countries have raised concerns about what the US position means for their own tax sovereignty and whether their companies will be left at a competitive disadvantage compared to their American counterparts. In this episode of Talking Tax, Bloomberg Tax reporters Saim Saeed and Lauren Vella hash out these countries' frustrations and discuss the feasibility of coming to an agreement on a "side-by-side" system by Dec. 31, the deadline suggested by the Trump administration. Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Michael Rapoport, a senior reporter at Bloomberg Tax, dives into the significant exodus of IRS and DOJ attorneys since 2017. He reveals how this staffing crisis could stretch tax litigation timelines and force the IRS into less favorable settlements. Rapoport explores how job frustrations and uncertain hiring prospects are driving this trend, shedding light on its impact on high-profile cases and taxpayer interactions. His insights provide a crucial understanding of the shifting landscape in tax disputes.