Talking Tax

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Crypto Exchanges Enlisted by IRS as Ally in Tax Fight Dec 16, 2021

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Cryptocurrencies had a big year in 2021, with the asset class drawing in over $2.2 trillion of value. However, these gains have drawn scrutiny from tax authorities.

The U.S. in particular has made efforts in recent months to develop rules that would require cryptocurrency exchanges to track the activity of traders to assess their tax compliance.

On today’s episode of our weekly podcast, Talking Tax, we hear from Sulolit "Raj" Mukherjee, head of tax for Binance U.S., the largest cryptocurrency exchange in the world. He talks to Bloomberg Tax's Hamza Ali about what the new rules mean for exchanges and the traders that use them. He also discusses the global effort by the OECD to harmonize reporting requirements for crypto exchanges worldwide.

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

Gun and Ammo Taxes on Shaky Constitutional Footing Dec 09, 2021

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Cities and counties have been using so-called "sin taxes" to disincentivize socially harmful behavior for many years. But can this principle be applied to gun violence?

A few localities think it can and have passed their own excise taxes on guns and ammunition, even though the legal basis for these taxes may be unclear. One of them, Cook County, Ill., recently had its gun tax struck down by the Illinois Supreme Court as a violation of the constitution’s uniformity clause. The high court never reached a decision on whether Cook County’s tax constituted a direct violation of the right to “keep and bear arms” under the Second Amendment— an issue the plaintiff Guns Save Life still wants the court to answer.

On today's episode of our weekly podcast, Talking Tax, we hear two perspectives on this: one from the gun rights attorney who sued Cook County, and another from an economist and gun control advocate. Bloomberg Tax's Michael Bologna spoke to Pete Patterson with the firm Cooper & Kirk about the status of the litigation, and also to Rosanna Smart, a RAND Corporation economist, who supports local gun control measures but questions the value of excise taxes as a strategy for addressing gun violence.

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

Everytown for Gun Safety advocates for universal background checks and other gun control measures. Bloomberg Law is operated by entities controlled by Michael Bloomberg, who serves as a member of Everytown for Gun Safety's advisory board.

Crypto's Wild Swings Are Accountants' Nightmares Dec 02, 2021

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We're now at the stage where companies, not just individuals, are investing in cryptocurrencies. But that means that accountants have to find a way to quantify crypto's famously volatile price swings on their company's financial statements.

There is no specific reference to crypto in U.S. financial accounting rules. But many investors, crypto fans, and even companies themselves want accounting rulemakers to change this—and there are signs the accounting standard-setters may be listening.

On this week’s podcast Talking Tax, Bloomberg Tax's Nicola M. White hears from Vivian Fang, accounting professor at the Carlson School of Management at the University of Minnesota. Fang discusses why investors care about the value of companies’ crypto assets and about what future crypto accounting rules might look like.

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

Unraveling a SPAC Is Harder Than It Seems Nov 26, 2021

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SPACs—Special Purpose Acquisition Companies or "blank check companies"—became a hot commodity in recent years.

The speculative nature and promise of large gains has turned the practice into a major boon for Wall Street—that is, until the SEC announced some rule changes earlier this year that made executing a SPAC a lot more complicated. We have now reached the point where some of the SPACs launched during the boom times now need to be unraveled, creating all kinds of unique tax considerations.

On this episode of our weekly podcast, Talking Tax, Jeff Leon speaks with Victor Hollender, a partner at Skadden in New York who has been advising clients on SPAC trends. He spoke about the "de-SPAC" process and where he sees the trend moving next.

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

Window Open for Tax Measures to Curb Climate Change Nov 18, 2021

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A landmark meeting on curbing climate change didn't do much to address the role that tax measures might play, but financial-climate consultants and academics still think they can contribute to reducing greenhouse gas emissions.

The COP26 conference agreed on long-awaited rules for global emissions trading markets, one key form of carbon pricing meant to help provide financial incentives for reducing emissions. But carbon taxes—direct levies that increase the price of carbon fuels or the emissions that result from them—weren't dealt with in that agreement. And with the U.S. Congress also not taking action on carbon taxes, some advocates are concerned an opportunity to slow climate change with aggressive policies are falling out of reach.

There are still ways taxes could make a difference in the climate arena, however. On this week's episode of Talking Tax, Frank Eich, an economist with U.K. consultancy CRU, spoke to Bloomberg Tax's Michael Rapoport about the COP26 developments and the future of carbon taxes. And Sanjay Patnaik, director of the Brookings Institution's Center on Regulations and Markets, spoke to Bloomberg Tax's David Hood about what's happening in the U.S.

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

Tax Deal Needs Buy-In From Developing Nations Nov 10, 2021

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After years of negotiations led by the Organization for Economic Cooperation and Development, more than 130 jurisdictions backed a deal last month to overhaul how and where multinational companies are taxed. Now countries are gearing up to implement a deal that will reallocate the profits of some of the world's largest companies and set a 15% minimum global tax rate.

For the deal to succeed, it will need the support of not just the world's biggest economies but also from developing nations. And that may require politicians in these countries to be willing to nix existing tax treaties with their neighbors that violate the new deal's tenets.

That's according to Mary Baine, director of tax projects at the African Tax Administration Forum, an intergovernmental organization that coordinates tax policy across the continent. She spoke to Bloomberg Tax’s Hamza Ali for our weekly podcast Talking Tax about what developing countries countries will need to do to get ready for the new rules over the next two years.

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

For Global Tax Deal, Dust Beginning to Settle: Now What? Nov 04, 2021

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Last month saw the resolution of years-long negotiations over a global tax deal. Nearly 140 countries signed an agreement to create a 15% global corporate minimum tax rate and reallocate a portion of the largest multinationals’ profits.

But the work doesn’t stop there. Now governments are facing the challenge of implementing the new rules over the next two years—which means deciding on a number of details still left open under both parts of the plan—known as pillars. For multinationals, the implementation of the plan could bring significant change to the global landscape they’re operating in.

For this week's episode of our podcast, Talking Tax, Isabel Gottlieb speaks about the international deal with Manal Corwin, the principal in charge of KPMG's Washington National Tax practice. Corwin looks ahead to what’s next for the global plan, how companies may be affected and what they’re doing now to prepare.

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

Netflix in Tax Crosshairs as Cable Revenue Dries Up Oct 28, 2021

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The growth of so-called "cord cutters" canceling their cable TV subscriptions has had an unintended consequence for local governments: their revenue from the right-of-way fees they impose on the cable companies is drying up.

The solution some municipalities have devised for this problem is to levy an equivalent tax on Netflix, Hulu, and the other streaming services that are replacing cable TV in the homes of these cord cutters.

On today's episode of Talking Tax, our weekly news podcast, Bloomberg Tax reporter Michael Bologna speaks with an excise tax specialist and a communications law attorney and finds they have very different views on whether imposing local taxes on streamers is a legitimate way to increase public coffers.

Breaking Down Facebook's $9 Billion Tax Fight With IRS Oct 21, 2021

Show notes

Facebook's long-running tax dispute with the IRS finally resumed this month after a lengthy delay caused by the Covid-19 pandemic.

The social media giant is fighting IRS allegations that the company undervalued intangible assets that were allocated to its Irish subsidiary. It is one of a string of high-profile cases the IRS is fighting against multinationals over transfer pricing—the value of assets transferred among related corporate entities.

The U.S. Tax Court recently heard five days of in-person testimony in Washington and the case is scheduled to shift back to San Francisco early next year. Although the trial focuses only on Facebook's 2010 tax returns, the company has estimated a loss could result in an overall tax liability in the neighborhood of $9 billion, plus interest and penalties.

On this episode of our weekly Talking Tax podcast, reporters Jeffery Leon and Aysha Bagchi talk with a pair of tax attorneys who are tracking the Facebook case. Loren Ponds, former majority tax counsel to the House Ways and Means Committee, is now a member with Miller & Chevalier in Washington. Irina Pisareva, a partner with Crowell & Moring LLP in New York, has a quarter-century of experience advising on transaction tax and cross-border tax issues.

Our guests dig into the Facebook case, how it differs from a high-profile IRS loss against Amazon.com Inc., and what the court might decide on this long-running legal dispute.

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

Global Tax Pact Gets G-20 Boost, Implementation Awaits Oct 14, 2021

Show notes

The Group of 20 finance ministers have formally backed a global plan to overhaul where and how multinationals are taxed and set a minimum 15% corporate tax rate.

The OECD-brokered deal—backed by 136 countries— has been years in the making. It now heads into a new phase: Implementation.

Officials will next have to tackle a plan to carry out the deal, including rolling back unilateral digital tax measures and drafting model treaties and legislation for countries to use to implement the new rules.

On this episode of our weekly Talking Tax podcast, reporter Hamza Ali talks about the latest developments and what's ahead as countries look to implement the historic agreement.

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

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