Talking Tax

Michael Plowgian, who in December left his role as deputy assistant secretary for international affairs at the Treasury Department, had an eventful stint at the department.The former top OECD negotiator for the US started at Treasury in October 2021 as a counselor right around the time over 140 countries agreed to the global tax deal. Since then, Plowgian has been a part of large steps in the deal's progression—from tranches of Pillar Two rules to the release of a draft multilateral treaty text that would reallocate large multinational companies' residual profits to market jurisdictions.The international tax pact consists of two parts: a reallocation of large multinational companies' residual profits, known as Pillar One, and a 15% global minimum tax, known as Pillar Two.The work at the Organization for Economic Cooperation and Development, and therefore the Treasury, isn't done. Plowgian talked to Bloomberg Tax reporter Lauren Vella about what's next for the deal, how the multilateral treaty might fare in Congress, and what red lines the US won't cross in further negotiations with other countries.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Leaders of the House and Senate tax-writing committees unveiled a bipartisan framework this week that pairs business breaks with an expansion of the child tax credit, but a path toward passage remains rocky.Despite having the blessing of Senate Finance Chair Ron Wyden (D-Ore.) and Ways and Means Chair Jason Smith (R-Mo.), the panels' ranking members aren't yet sold. And while the framework has support from Senate Majority Leader Charles Schumer (D-N.Y.), it's not certain whether Speaker Mike Johnson (R-La.) will back the deal, too.The agreement—paid for by ending the troubled employee retention tax credit program after a public notice—evenly splits roughly $80 billion between the business tax benefits and an enhanced child credit. It also includes the extension of a tax deduction for disaster victims and expansion of a low-income housing tax break for developers.Reporter Chris Cioffi talks through what's in the deal and the political dynamics with Anna Taylor, deputy managing principal of Deloitte LLP's Tax Policy Group in Washington. Taylor spent nearly two decades working on the Hill, leaving her post as Schumer's tax and economic policy principal adviser to join the firm in 2023.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

In a Congress where lawmakers are divided on an overwhelming set of issues, helping to alleviate double taxation for businesses operating in both the US and Taiwan is one with rare bipartisan unity.House Ways and Means Committee members voted in unison to send a bill to the House floor aimed at providing treaty-like benefits to the island democracy. Leaders of both the House and Senate tax-writing committees gave the bill their bipartisan blessing and say they're pushing for speedy passage.A way to provide tax benefits to Taipei without angering China is seen as integral to the US goal of boosting semiconductor manufacturing and research in the US."This is about expanding and accelerating inbound investment into the United States in critical areas, particularly the semiconductor space in the context of the Chips and Science Act and what the Trump and Biden administrations have been doing since 2017 on the semiconductor front," said Rupert Hammond-Chambers, president of the US Taiwan Business Council.Hammond-Chambers talks with Bloomberg Tax's Chris Cioffi about where the two countries go from here.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Over the past six months, the OECD has released multiple documents with more details on parts of the international tax deal agreed to by over 140 countries in 2021.But even with the additional clarity from the Organization for Economic Cooperation and Development, there are still fundamental questions about key parts of the deal—such as a simplified transfer pricing method, known as Amount B—that remain.The tax agreement comprises two parts: a reallocation of large multinationals' residual profits, known as Pillar One, and a 15% global minimum tax, known as Pillar Two.Alan McLean, chair of Business at OECD's tax committee, talked to Bloomberg Tax's Lauren Vella about how the deal's developments impact some of the world's largest multinational corporations, and what's most concerning to companies as the world moves forward with parts of the tax pact in 2024.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

The union that represents about 65,000 IRS employees is teaming up with the agency to help attract new talent amid a hiring spree.The Democrats' tax-and-climate law gave the IRS tens of billions to dollars to modernize and go after taxpayers who haven't been paying what they owe. To do that, the IRS needs to build up its workforce, but it is competing with the more-lucrative private sector. That's where the National Treasury Employees Union is stepping in.Bloomberg Tax reporter Erin Slowey spoke with NTEU National President Doreen Greenwald about what the union is doing to negotiate benefits and flexibilities that make it more attractive to come work at the IRS, and why it's important to have a fully funded agency. She also warned about what a possible shutdown in early 2024 would do to the current and prospective workforce.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

More of the supply chain that helps create semiconductor chips wants in on a lucrative new tax credit aimed at boosting US competitiveness against China.As of now under IRS proposed rules, companies that manufacture materials or chemicals supplied to the manufacturing of semiconductors or equipment don't qualify for the 25% tax credit from the 2022 CHIPS Act.Bloomberg Tax’s Erin Slowey speaks with Tymon Daniels, vice president of tax for Corning Inc., a US materials science company that is the parent company of Hemlock Semiconductor, about the congressional intent of who should be able to qualify and the importance of have the direct pay option— where the industry can get cash in lieu of the tax credit.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

African countries face several challenges in negotiating the global tax deal involving more than 140 countries at the Organization for Economic Cooperation and Development.The agreement includes reallocation of the residual profits of large multinational companies to market jurisdictions, known as Pillar One, and a 15% global minimum tax, known as Pillar Two.On this week’s episode of Talking Tax, Bloomberg Tax senior reporter Danish Mehboob speaks with Logan Wort, executive secretary at the African Tax Administration Forum, about why developing countries feel they don't have a seat at the table for these negotiations and why some would prefer to have the project play out at the United Nations rather than the OECD.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Marita Sciarrotta, the new acting director of New Jersey's Division of Taxation, will have a busy year ahead as she settles into the role.Sciarrotta, who spent 40 years in the tax division before taking over as acting director in September, said in an interview that she wants to modernize the state's property tax relief programs—an endeavor that likely will require legislation to make needed changes. She also plans to increase hiring as state revenue agencies across the nation grapple with a growing number of vacancies that can impede their abilities to provide financial oversight.On this episode of Talking Tax, reporter Danielle Muoio Dunn spoke with Sciarrotta about her plans as the division takes on lawmakers’ overhaul of New Jersey’s corporate tax system and the creation of StayNJ, a property tax relief program for seniors. Sciarrotta also discussed her long tenure in the division and the sexism she's faced over the years."There are some people that kind of tend to be siloed off and one of the things I found to be most advantageous in my career is that I get like a morbid curiosity and I will ask about anything to anyone and stick my nose in a lot of different places," Sciarrotta said.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

(Note: This episode originally aired June 1, 2023)What does it mean to be a good tax leader, as an in-house tax professional or as a tax adviser who wants to make the tax functions of your clients better? How do you build a great team?Bloomberg Tax Insights editor Rebecca Baker sat down with Jared Dunkin, the vice president of tax and senior tax counsel at FTI Consulting, and Dunkin’s mentor and former boss, Todd Davis, the executive vice president and senior tax counsel for Warner Bros. Discovery, to find some answers to these questions.Dunkin and Davis discuss how to handle the ambiguity of tax when corporate executives—their bosses—demand certainty, how to wage the war for talent, and how to set priorities for their tax teams, particularly when it comes to cross-border tax work.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

For more than a year, a group of wealth management advisers met regularly to devise strategies to defend their wealthy clients' keeping their riches in individual retirement arrangements based in Malta.The pension plans—which emerged out of a loophole in a 2011 tax treaty between the US and the Mediterranean island nation widely seen as a tax haven—involved a cottage industry of advisers, accountants, and attorneys to facilitate transactions that allowed cash, business interests, and several types of income to go untaxed.The plans were added to IRS's "Dirty Dozen" list of dubious tax schemes in July 2021. But participants in the participants' monthly Zoom meetings felt "the IRS was too simple, too lazy, or too stupid to figure out what we were doing," according to one wealth adviser who attended them. That changed in June, when the IRS served hundreds of criminal summonses on taxpayers and Malta pension plan promoters. While no charges have been filed yet, IRS Commissioner Danny Werfel has been vocal about cracking down on abusive tax schemes, especially now that his agency is infused with billions in new funding from last year's tax-and-climate law.In this week's episode of Talking Tax, host David Schultz talks to Bloomberg Tax reporter Michael J. Bologna about his story digging into the wealth advisers' meetings, how these Malta plans were marketed to high-net-worth individuals, and what's next for the IRS investigation.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.