Talking Tax

“Relax a bit,” Pascal Saint-Amans advised countries that may fear losing a lot of revenue under a new global approach being developed to tax cross-border business—especially digital business.The OECD-led project toward agreement on a plan aims not to create big revenue winners or losers, Saint-Amans said in a Sept. 11 interview at the International Fiscal Association meeting in London. He’s the OECD’s top tax official, heading work on the plan that would give more taxing rights to countries where companies’ consumers are.Saint-Amans brought Bloomberg Tax’s Siri Bulusu up to date on the latest expectations for the project, which gained even more political urgency this summer when France enacted a 3% tax on some digital business revenue of big companies, including U.S. giants like Facebook Inc. and Alphabet Inc.'s Google. Other countries are eyeing such taxes of their own.Listen and subscribe to Talking Tax from your mobile device: Via Apple Podcasts | Via Stitcher | Via Overcast | Via Spotify

Many states and cities offer tax breaks and other incentives to lure businesses and jobs—often raising questions about the actual benefit of the expensive measures. California communities have a unique version, one that Bloomberg Tax’s Laura Mahoney shed light on this year.In extensive data research and reporting, Mahoney uncovered Cupertino’s payment of nearly $70 million to Apple through the years. It started when the company was in trouble in 1997, and it continues with monthly payments to the now-giant global enterprise. Defenders say agreements like this help the economy of job-hungry cities; critics call them an unwarranted tax giveaways. Other companies have similar arrangements—Best Buy, for example, has one with the city of Dinuba.The money comes from a special California mechanism that shares sales tax revenue with communities where companies are located or that are designated as points of sale. Bloomberg Tax team leader Jeff Harrington spoke with Mahoney about the issue and her reporting.Listen and subscribe to Talking Tax from your mobile device: Via Apple Podcasts | Via Stitcher | Via Overcast | Via Spotify

U.S. Tax Court Judge Mark Holmes is one of those judges who can make a person glad to be reading a legal opinion. His judgments are often marked by wit, clarity, and pointed references to literature that illuminate a plaintiff’s plight or a point of law.He once explored Buffalo wings and other cuisine in a decision about a tax dispute involving “material participation.”In this episode, Holmes reveals that he will write an “interesting and very long opinion” in probably his biggest pending case: the Michael Jackson estate’s battle with the Internal Revenue Service.Bloomberg Tax’s Siri Bulusu talked with Holmes about his writing, his serendipitous landing in the tax law arena, procedural challenges the IRS is facing, and the “parade of humanity” he enjoys dealing with at the court.Listen and subscribe to Talking Tax from your mobile device: Via Apple Podcasts | Via Stitcher | Via Overcast| Via Spotify

Some complicated tax issues face Congress when lawmakers return after Labor Day.Extenders—those expired or about-to-expire temporary tax breaks for specific groups—remain in play big-time in both House and Senate. The House Ways and Means Committee has passed an extenders package, and Sen. Chuck Grassley (R-Iowa) says he will make the issue a Finance Committee priority in September.Meanwhile, the outlook for passage of technical corrections to the 2017 tax law remains unclear. There’s the so-called retail glitch—an inadvertent blow to stores and restaurants that make renovations—and what’s known as the church parking tax problem.Amanda Iacone talked about the Capitol Hill tax picture with Bloomberg Tax reporters Stu Basu and Colin Wilhelm.Listen and subscribe to Talking Tax from your mobile device: Via Apple Podcasts | Via Stitcher | Via Overcast | Via Spotify

The National Philanthropic Trust calls donor-advised funds the most popular method of charitable giving—nearly a half-million accounts hold $110 billion in assets. Now a court fight between a wealthy family and a fund to which they donated stock may offer a look into how these funds work.Universities and community foundations run their own charitable funds, but big-name investment managers like JP Morgan, Vanguard, and Fidelity operate them, too. They often convert complex donations—art, stock, or cryptocurrency, for example—into cash that can be given to charities over a period of years, often with tax advantages.The Fairbairns sued Fidelity Charitable, saying the fund violated contract law by promising a sophisticated liquidation and then selling their donated stock too quickly. That caused the value of the stock to plunge, lowering the value of their $100 million donation and the tax deduction they had hoped to receive along with it.Ohio State University professor Brian Mittendorf has been researching donor-advised funds. He spoke with Bloomberg Tax reporter Aysha Bagchi about the Fairbairn case and the tax and policy ramifications of these funds.Listen and subscribe to Talking Tax from your mobile device: Via Apple Podcasts | Via Stitcher | Via Overcast | Via Spotify 

Countries around the world are talking about taxing the revenue of giant digital-business companies. In July, France became the first European country to enact a digital services tax—immediately drawing the ire of U.S. officials.The U.S., home of digital giants like Amazon.com Inc., wants France and other countries to wait for a global agreement on digital taxation, which could rewrite the rules that determine where and how multinationals in many industries are taxed. In the meantime, Washington has opened a trade investigation.President Donald Trump tweeted that taxing French wine might be a way to retaliate. But he has another option, buried in the tax code. The provision—Section 891, which has never been used—stems from another tax dispute between the U.S. and France, more than 80 years ago.Bloomberg Tax’s Isabel Gottlieb spoke with Itai Grinberg, professor of international tax at Georgetown University. Previously an attorney in the Treasury Department’s Office of International Tax Counsel and in private practice, Grinberg also consults with multilateral institutions on international tax issues.Listen and subscribe to Talking Tax from your mobile device: Via Apple Podcasts | Via Stitcher | Via Overcast | Via Spotify

The Supreme Court in June threw out North Carolina’s taxation of a family trust’s income because the trust didn’t have enough of a connection to the state.The decision, in the case of the Kimberley Rice Kaestner 1992 Family Trust, didn’t give trust and estate attorneys as much instruction as many wanted with respect to state taxation of trusts. Justice Sonia Sotomayor’s opinion was narrowly drawn.But lawyers still can draw some guidance from it as they advise wealthy clients how, and where, to structure trusts that will minimize tax burdens.Bloomberg Tax’s Aysha Bagchi spoke with attorney Bob Kleinknecht of Oakstone Law in Florida about how trusts work and what the Kaestner ruling may mean for estate planning. Kleinknecht has experience not only with Florida estate and trust practice but with New York and Massachusetts as well.Listen and subscribe to Talking Tax from your mobile device: Via Apple Podcasts | Via Stitcher | Via Overcast | Via Spotify

Effective auditing of companies' financial statements is important for investor confidence, but Chinese companies traded in the U.S. don't get U.S. oversight of their audits as other companies do. And that could be a risk for investors.The Public Company Accounting Oversight Board, the U.S. audit regulator created to restore confidence in financial reporting after accounting scandals of the early 2000s, isn't allowed to inspect the work of China-based accountants.That lack of access is a concern to the PCAOB, the Securities and Exchange Commission. and some members of Congress. They have introduced legislation to crack down on China if it doesn't let audit inspectors in.Bloomberg Tax's Amanda Iacone spoke with Paul Gillis, who teaches at Peking University’s school of management in Beijing, about the significance of the problem and what may lie ahead.Listen and subscribe to Talking Tax from your mobile device: Via Apple Podcasts | Via Stitcher | Via Overcast | Via Spotify

When Congress put a $10,000 cap on the amount of state and local taxes individuals can deduct from their federal income taxes, high-tax states tried to fight for their residents in a couple of different ways.One way—charitable funds that earned people state tax credits for donations—got shot down by the IRS.But states have tried another kind of workaround. Because the deduction cap applies only to individuals, not to businesses, some states have instituted new taxes on pass-through businesses, like LLCs and partnerships. These entities normally don’t pay taxes. Instead, their individual owners pay tax on the business income.Bloomberg Tax team lead Jeff Harrington explored the state workarounds with Cannon-Marie Green, the managing editor overseeing Bloomberg Tax’s editorial coverage of state corporate income tax and pass-throughs.Listen and subscribe to Talking Tax from your mobile device: Via Apple Podcasts | Via Stitcher | Via Overcast | Via Spotify

Michael Desmond became the Internal Revenue Service’s chief counsel earlier this year as the agency was well into implementing the complex 2017 tax code overhaul.In a wide-ranging conversation with senior editor Colleen Murphy June 27 at the Bloomberg Tax Leadership Forum in New York, Desmond expressed encouragement at the hiring of “energized attorneys” to implement the law.He recommended that companies pay attention to interrelationships among various provisions, especially in the international arena. He talked about non-tax overhaul priorities, too—including strengthening partnership audits and figuring out long-term streamlining of controversies over syndicated conservation easements.Listen to their conversation—plus a bit of Q&A with the forum audience—on a special episode of Talking Tax.