Talking Tax

Morris Pearl is somewhat encouraged by all the talk about wealth taxes these days. The Patriotic Millionaires, which he chairs as a volunteer job, has “made a lot of progress in moving the needle” toward its argument for taxing the rich more and paying people more equitably.Pearl, who made his wealth initially at BlackRock Inc., talks with Bloomberg Tax’s Amanda Iacone about the wealth tax proposals, legislation to tax investment income at the same rate as earned income, the “ridiculous” carried interest tax benefit for fund managers, and more.

House committees, among others, have been trying to get President Donald Trump’s tax returns and other financial documents, and have turned to the courts to enforce the effort. Why doesn’t Congress use its own enforcement?Cornell law professor Josh Chafetz thinks the legislative branch has ceded too much power to the judicial branch. He points to the Nixon tapes effort in the 1970s as a significant turning point, when Congress went to courts for the first time in an information dispute with the executive branch. He talks with Bloomberg Tax legal reporter Aysha Bagchi about the arguments he makes in his book, Congress’s Constitution, and speculates on how the cases may play out.

Talking Tax embarks on the 2020s with a lively conversation about how tax policy evolved through the 2010s.Bloomberg Tax law analyst Mary Gillmarten, a veteran of government and private-practice work, reviews the decade’s major developments—especially how the U.S. and other countries started tackling globalization and the digitalized economy. And she has thoughts about implications for our future.

The Organization for Economic Cooperation and Development is going into 2020 with some of its most complex work ever: shepherding efforts for a global rewrite of corporate taxation systems in the digital economy.Host Siri Bulusu spoke with Bloomberg Tax reporter Isabel Gottlieb about issues the OECD is facing and implications for countries and companies.

U.S. Supreme Court justices turned their attention this term to a long-standing federal common law rule—the Bob Richards rule—that courts have used to determine who gets a tax refund in cases involving a parent company’s bankruptcy.Bloomberg Tax legal reporter Aysha Bagchi sits down with host Siri Bulusu to describe the controversy and walk through the lively Dec. 3 oral arguments in the case, Rodriguez v. FDIC.

David Kautter, assistant Treasury secretary for tax policy, discussed international digital tax issues, regulations stemming from the 2017 tax law, and more in an exclusive interview at the Bloomberg Tax Leadership Forum Nov. 19.Background reading:  The Treasury Department is planning to issue regulations restricting how hedge fund managers can claim a valuable tax break by early next year. IRS Office Carrying Out 2017 Tax Law No Longer Exists: Kautter

Patricia Cummings, chief risk officer and a managing partner at accounting and consulting firm Citrin Cooperman, discusses how technology is transforming the accounting and auditing environment. Artificial intelligence, data analytics, and blockchain are changing what aspiring auditors should know—as the industry looks for “critical, strategic thinkers.”

In the U.S., religious practices have an unclear relationship to the tax code. Sam Brunson, a professor at Loyola University Chicago School of Law, has an idea to give some structure to the way policy makers deal with that relationship.Congress historically writes religious accommodations into the tax code on a case-by-case basis: A group of people appears with a specific tax problem, and lawmakers decide whether to write a fix.But what if there were a framework that would help them consider the problems consistently and fairly? Brunson proposes such a framework in his book, “God and the IRS: Accommodating Religious Practice in United States Tax Law.”Discussing it with Bloomberg Tax legal reporter Aysha Bagchi, he says the government will surely continue to grant accommodations. The question is “will they be thoughtful, or will they continue to be ad hoc?”

Kate Barton has been navigating unprecedented change in tax systems around the planet since becoming EY’s global vice chair for tax and legal services in early 2018.Trade wars and Brexit are roiling markets and expectations, and countries are scrambling for their share of corporate revenue while trying to transform their tax regimes for the digital-commerce age.The OECD aims for consensus by 2020 in its project on tax system modernization, but as Barton points out, “these are in fact guidelines, and then 140 countries have to read these and then legislate their own country legislation.” Interesting, she says, especially “in a world right now where we seem to be a little more nationalistic.”Talking Tax host Amanda Iacone talked with Barton about all of that and more, including EY’s legal managed services business and diversity.

A new U.S. accounting standard is about to make a huge difference in what banks’ financial statements and earnings look like—and for some of them, what their future lending practices could be.The standard is known as CECL—for current expected credit losses. It’s considered accounting rulemakers’ chief response to the 2008 financial crisis.Starting in 2020 banks have to venture into new territory, factoring future economic developments into expectations for credit losses, and put aside loan loss reserves for them. That means impacts on earnings, stock prices, and capital. Some critics say it could affect banks’ appetites for anything but the safest loans.Bloomberg Tax reporter Nicola White spoke with Talking Tax host Amanda Iacone about how the standard works, what challenges banks face, and the latest developments from the Financial Accounting Standards Board.