Talking Tax

The clock is ticking on Gov. Kathy Hochul (D) to take action on legislation that would make New York the first state to publicly list the owners behind limited liability companies.The bill, A3484A, would require LLCs to disclose their beneficial owners and other identifying information, such as their business street address. Those who fail to comply for more than two years would be shown as “delinquent” on state records and subject to a $250 penalty. Entities with “significant privacy interests” could apply for a waiver to not appear in the state registry.On this episode of Talking Tax, Bloomberg Tax spoke with state Sen. Brad Hoylman-Sigal, the Manhattan Democrat who sponsored the bill, and Chelsea Lemon, director of government affairs for the Business Council of New York, which opposes the legislation."The LLC Transparency Act doesn't minimize or alter the legal structure or protections of LLCs, but it provides necessary transparency for the public's benefit, as well as our law enforcement," Hoylman-Sigal said.Other proponents, including state Attorney General Letitia James and Comptroller Thomas DiNapoli, have said the opaque structure of LLCs allow corrupt actors to hide their financial dealings and contribute to issues like tax evasion and money laundering. Opponents, such as real estate groups, have raised privacy concerns with it and said it will hurt the state's economic competitiveness.A spokesperson for Hochul said she's "reviewing the legislation." She has until Dec. 31 to act on the bill. Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

A Supreme Court case challenging the constitutionality of the mandatory repatriation tax provision could have broad implications on the tax code. The potential outcome could result in refunds to multinational companies and disrupt other taxes on foreign income. The arguments in the case focus on the distinct nature of the mandatory repatriation tax and whether it can be struck down without affecting the rest of the tax code. The podcast also explores the impact on partnership taxation, LLCs, and mark to market regimes, as well as the potential consequences on revenue, litigation, and tax policy.

Sam Bankman-Fried, accused of federal fraud charges for siphoning customer funds from FTX, and Donald Trump, accused by NY AG of inflating real estate values, are discussed in this podcast. The role of accountants in these trials and their evolving responsibilities in fraud cases are explored, including the challenges in hiring expert witnesses. The decline of accountants and the challenges faced in the profession, such as increased SEC enforcement and decreased accounting graduates, are also addressed.

Legislation and proposed regulations on cryptocurrency have the potential to answer some open questions about the taxation of digital assets, though not all of the possible changes may be welcomed by industry.A bill from Sens. Cynthia Lummis (R-Wyo.) and Kirsten Gillibrand (D-N.Y.) touches on a variety of crypto tax issues. It would provide a narrow definition of broker for tax reporting, require the marking of crypto assets to market for year-end accounting purposes, and closea tax loophole that may upset some in the industry. The Senate Finance Committee also asked for more information on those crypto taxation issues earlier this fall.On this episode of Talking Tax, Lisa Zarlenga, the head of Steptoe & Johnson LLPs tax policy practice and a former tax legislative counsel at the Treasury Department, spoke to Bloomberg Tax about that legislation and new proposed regulations on tax reporting rules for crypto brokers.Closing a tax loophole that allows investors to claim losses by quickly selling and repurchasing their digital assets, for example, may be difficult to implement as some investors would trigger the rule unintentionally, she said.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

The IRS's new unit to tackle pass-through entity tax-law enforcement could take years to stand up fully and for businesses to feel its impact in the form of tougher audits.The push comes after years of concern among IRS officials that the agency lacked the expertise and resources to enforce laws around pass-through entities such as large partnerships, sparking fears some companies were manipulating the rules to pay less than they owed. But setting up and staffing up the new unit won't be easy.On this episode of Talking Tax, Mary McNulty, a partner at Holland and Knight LLP, spoke to Bloomberg Tax about the purpose of the new unit and what it has to do to be successful."The wild card here is funding," she said. "So if Congress continues to cut the $80 billion of additional funding to the IRS and reduces the resources again to low levels then the IRS will lack the resources to carry out this strategic initiative, so time will tell.”Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Experts discuss the challenges of taxing cryptocurrencies and NFTs, the reliance on voluntary compliance, and the limited enforcement. IRS initiatives to tackle the tax gap in virtual currencies and the lack of clarity in state taxation of digital assets are also discussed. The chapter highlights the volatility of markets for NFTs and cryptocurrencies, the need for regulatory and tax clarity, and the potential of the digital assets space. The necessary adaptations that states should make in terms of regulation and taxation for cryptocurrencies and digital assets over the next five years are emphasized.

Overhauling how the IRS audits low-income taxpayers is a critical step toward more fair audits, many in the industry acknowledged following the agency's announcement earlier this month.The IRS promised that it would "substantially" reduce audits on refundable tax credits that benefit low-income taxpayers, such as the earned income tax credit. That change follows a study released in January that found Black taxpayers claiming the EITC were audited at higher rates than non-Black taxpayers claiming the credit.Former National Taxpayer Advocate Nina Olson, now executive director of the Center for Taxpayer Rights, spoke with Bloomberg Tax's Erin Slowey about the impact the audit shift will have on low-income taxpayers and the landscape for claiming the EITC leading up to this announcement."It is the difference between being able to have medical care or being able to pay rent or even if you're homeless, putting a deposit down and first month's rent on an apartment," Olson said. "It's life-changing funds."Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

The new CEO of Deloitte's tax practice is grappling with many of the same challenges as the Big Four firm's clients: rapid shifts in how tax practitioners work thanks to artificial intelligence, a shortage of skilled staff, and reforms that will impose a new global minimum tax.Companies are starting to get their arms around the new rules that will impose a 15% global minimum tax and whether they should tackle implementation in-house or seek outside help, said Carin Giuliante, chair and CEO of Deloitte Tax LLP.Giuliante, the first woman to lead the firm’s US tax practice, took the helm in June and pledged to provide a “digital experience” to clients and to invest in training and career development for the firm’s professionals.She spoke to Bloomberg Tax & Accounting senior reporter Amanda Iacone about new Internal Revenue Service regulations for cryptocurrency assets, how artificial intelligence is reshaping the tax practice, and the firm’s ongoing commitment to diversify and support its workforce.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Sports betting is in more states than ever, with new gamblers every day wagering in person and over the internet. And the new NFL season is expected to drive up tax revenue even more in the 30 states—plus Puerto Rico and Washington, D.C.—that have legalized sports betting since a 2018 US Supreme Court ruling overturning a federal ban.States collected an estimated $3.62 billion in direct gaming taxes generated in the second quarter, a 9.6% increase over the second quarter of 2022, according to a recent report from the American Gaming Association. While most states impose taxes ranging from 10% to 15%, some, like New York, take as much as 51% from sportsbooks.SportsHandle senior analyst Chris Altruda spoke with Bloomberg Tax reporter Angélica Serrano-Román about the approaches states have taken to taxing sports betting and those allowing operators to deduct so-called "free bets," which some states are starting to limit.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.

Congress' tax writers return to Capitol Hill with several priorities that remain unaddressed, as September shapes up to be a busy month with tax policy firmly in the mix.On the second part of a two-part podcast series looking at Congress as it returns from its August recess, we discuss the status of House Republicans' tax package and what would have to happen to get a bipartisan pact extending business tax breaks and enhancing the child tax credit. We also talk about GOP lawmakers' trip to Europe to meet with financial officials from the OECD and Germany, and the progress being made on a bipartisan Taiwan tax bill in September.Host David Schultz breaks down all this and more with Bloomberg Tax Congress reporters Chris Cioffi and Samantha Handler, running through the tax items on lawmakers' agenda.Do you have feedback on this episode of Talking Tax? Give us a call and leave a voicemail at 703-341-3690.