Talking Tax

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.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Discussing the challenges of taxing the digital economy, former state tax chief Gil Brewer reflects on his career in tax, the complexities of taxing digital products, and the risks of not developing thoughtful tax policies. Brewer highlights Washington State's efforts and the uniformity project to standardize tax approaches across states for digital products.

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.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

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.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.