Talking Tax

Few of the provisions of the tax code this year have garnered as much attention from industry as the about-to-sunset pass-through deduction.In their 2017 tax overhaul, Republicans allowed owners of pass-through businesses such as partnerships, S-corporations, and LLCs to deduct 20% of certain business income from their taxes. Businesses and their lobbyists say it gives those firms small and large parity with traditional corporations. Critics say its benefits largely flow to the wealthy.That deduction—along with the rest of the individual provisions of that 2017 law known as the Tax Cuts and Jobs Act—expires at the end of 2025 absent congressional action and President Donald Trump's signature.On this episode of Talking Tax, Bloomberg Tax reporter Zach Cohen spoke with two guests about what the deduction does and prospects for renewal by Congress this year. Jeff Brabant is a vice president of federal government relations at the National Federation of Independent Businesss, and Elena Spatoulas Patel is a nonresident senior fellow at the Urban-Brookings Tax Policy Center and the Sorenson Assistant Professor in the Division of Quantitative Analysis of Markets and Organizations at the University of Utah’s David Eccles School of Business.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

The leader of a top US standard-setter wants his board to take the next step in using emerging technology to craft accounting rules for local and state governments.Joel Black, chair of the Governmental Accounting Standards Board, said a key priority for the board this year is shifting gears from monitoring emerging tools such as artificial intelligence to preparing for its future integration. In his final two years as leader, Black said he intends to craft an enduring focus on how technology can make financial reporting more efficient.GASB establishes standards for state and local governments that follow generally accepted accounting principles, or GAAP. Cities and states' staffing shortages and resource constraints have motivated the board to be especially selective about the projects it takes on, Black said.The board is currently working to update how governments should value infrastructure assets such as bridges and tunnels, as well as develop digital classifications for financial reporting.Black, who previously worked at Mauldin & Jenkins LLC and KPMG LLP, has led the board since 2020.Bloomberg Tax reporter Jorja Siemons spoke with Black about his 2025 priorities.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

President-elect Donald Trump's plans to deconstruct the federal workforce would take a bite out of IRS efforts to answer taxpayer phone calls and enforce compliance for tax cheats.After getting billions in funding from the 2022 tax-and-climate law, the IRS started a long-needed rebuild, including bringing on more workers. Between Oct. 1, 2021 and Sept. 30, 2023, the IRS processed nearly 53,000 new hires, the Treasury Inspector General for Tax Administration said in a September report.But Trump's promises to end remote work for federal workers and reinstate a policy that would make it easier to fire certain employees are seen as ways to end the IRS's competitiveness in the job market and ability to keep employees who are flight risks.Bloomberg Tax reporter Erin Slowey spoke with Kelly Reyes, executive director of the Professional Managers Association that represents the interests of IRS managers, about what a presidential transition means for IRS employees and how agency managers are preparing for next tax filing season.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Jan. 3 marks the beginning of the next Congress, where Republicans will lead both chambers and control the White House.Democrats being out of power has big implications for tax policy, as GOP lawmakers heading into the new year debate what to renew from the 2017 GOP tax law, known as the Tax Cuts and Jobs Act.The TCJA was passed with no votes from Democrats and benefits skewed toward the wealthy and corporations. Incoming GOP leaders have proposed breaking their top priorities into two bills and moving them through Congress using the reconciliation process.The first would jump-start President-elect Donald Trump's priorities on immigration and gas drilling, and the second would include tax and other legislative priorities.Republicans say moving tax legislation to later in the year would give them more time to decide what to do about many of the law’s individual provisions that expire at the end of 2025. They also will have to decide what Trump campaign promises to include.On this episode of Talking Tax, Bloomberg Tax reporters Chris Cioffi, Zach Cohen, and Lauren Vella discuss what to expect in the 2025 tax fight, and the policy issues that likely will define the debate.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Online retailers that rely solely on third-party logistics providers like Amazon for tax compliance may still face tax liability for direct sales through their own websites.Many states enacted marketplace facilitator laws in the years since the Supreme Court's 2018 ruling in South Dakota v. Wayfair, shifting tax collection responsibilities to platforms like Amazon or Walmart. But individual vendors can still face additional tax obligations because of direct sales, how their inventory is controlled, or state-specific sales thresholds.As of October, most of the 24 states in the Streamlined Sales and Use Tax Agreement, which aims to simplify sales tax codes, said inventory in a third-party warehouse creates a physical nexus—a connection that triggers tax responsibilities. Rules vary even more outside the Streamlined pact. In New York, for instance, storage alone is sufficient for nexus, while in Arizona, inventory beyond a seller’s control likely doesn't.Bloomberg Tax reporter Angélica Serrano-Román and Diane L. Yetter, founder of the Sales Tax Institute, discussed how businesses using third-party logistics services navigate tax compliance, the inconsistency in court decisions on who is liable for tax collection and remittance, and the contentious issue of retroactivity where states might seek uncollected taxes from before the Wayfair decision.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690

A new White House administration and Republican-led Congress are slated to disrupt how the IRS operates.Republicans' taste for cuts to the agency's annual appropriations and the tens of billions of added funding from the 2022 tax-and-climate law is putting the IRS and the Treasury Department on offense, as they make a case for why a well-funded IRS is good for everyone.The Treasury Department has warned that further clawbacks would mean customer service—a bipartisan concern—as well as enforcement efforts, would take a hit.Bloomberg Tax's Erin Slowey spoke with Charles Rettig, a shareholder at Chamberlain Hrdlicka, on why the IRS needs its funding and how a new commissioner could shake up the agency. Rettig, who served as commissioner during the first Trump administration, also addressed what he is telling his clients amid the uncertainty.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Fuel producers are trying to prepare for a tax credit regime change, even though the Treasury Department has failed to issue rules around those credits.The clean fuel production tax credit under Section 45Z takes effect next year, replacing a longstanding blenders credit. The new credit gives tax breaks to fuel according to its carbon intensity score. But the yet-to-be-released Treasury and IRS rules will explain how to calculate that score.Debbie Gordon, leader of RSM US LLP's excise and energy tax practice, told reporter Erin Schilling on this week's episode of Talking Tax podcast that fuel producers are still trying to prepare for the new credit, even amid that uncertainty. It's unclear when the clean fuel production tax credit rules will come out, though a Treasury spokesperson said the Biden administration expects to put out some guidance before the administration change in January.Many also are trying to push to start construction on clean fuel projects before the end of this year to qualify for the current credits. Gordon gives insight on what fuel producers are doing to safeguard their projects, how they're preparing for the new credit, and what the new administration means for the future of the credit.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690

US companies are ramping up their efforts to lobby Congress on the international tax provisions they'd like to see in a comprehensive 2025 tax bill.  Among their priorities is retaining the current rates on foreign income, which were included in Republicans' 2017 tax law and are poised to increase in 2026.But there are open questions about how lawmakers can pay for these extensions and make good on President-elect Donald Trump's domestic corporate tax proposals.On this week's episode of "Talking Tax," reporter Lauren Vella sits down with Rohit Kumar, co-leader of PwC's National Tax Office, to discuss which international tax provisions could be addressed in a 2025 bill. He also offers insight into how companies are thinking about the 15% global minimum tax with Republicans taking full control of the White House and Congress.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690

Zach C. Cohen, a tax reporter at Bloomberg, dives into the implications of the GOP's election wins for Trump's tax cuts. He discusses the possibility of extending the 2017 tax cuts, exploring challenges like the fast-track reconciliation process. With John Thune taking the helm as Senate majority leader, Cohen highlights how his extensive experience could influence future tax legislation. The conversation also touches on potential conflicts within the GOP regarding the SALT deduction cap and the evolving dynamics in the House Ways and Means Committee.

The IRS is winning more cases in the US Tax Court over companies' valuation of intangible assets, such as patents and trademarks, through transfer pricing.The wins have caught the attention of companies and practitioners as they mull the growing risks of transfer pricing, which governs transactions between related companies that are part of the same multinational group.Disputes between the IRS and companies such as Coca-Cola and 3M have showcased the agency's newfound ability to audit their positions and win in Tax Court when challenged. Both cases are being appealed.In addition, a new IRS policy to assess more penalties when documentation is lacking could make companies' transfer pricing positions much riskier than in the past, practitioners say, and taxpayers may have to start factoring that in.In this week’s Talking Tax podcast, Bloomberg Tax reporter Caleb Harshberger spoke with Grant Thornton LLP Transfer Pricing Technical Leader Steve Wrappe and Greenberg Traurig LLP shareholder Sharon Katz-Pearlman about how the IRS has changed its approach and what additional funding from the 2022 Inflation Reduction Act means for taxpayers moving forward. Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.