Week in Insights: Staying Up-to-Date With Key Tax Information

When tax season formally ends subsequent week within the U.S.—with no extension from IRS this time, as in comparison with 2020 and 2021—it is going to have been 85 days because it started.

Loads has occurred throughout that point.

As of April 1, taxpayers have filed 91,260,000 particular person federal revenue tax returns. Most of these returns have been filed electronically, with simply over half of these ready by tax professionals. And the IRS has issued 63,357,000 corresponding tax refunds totaling $204.45 billion, delivering a median tax refund of $3,226.

These really feel like odd numbers in what has been a most extraordinary 12 months.

However there’s one specific quantity that stands out as not so odd. The IRS has reported 478,849,000 visits to its web site, down greater than 50% from the identical time final 12 months.

It’s tempting to look at the website statistics from previous years and call it a blip—suggesting that the 2021 tax year was smoother sailing for taxpayers. But that would be ignoring issues like the expanded child tax credit, stimulus checks, and cryptocurrency that have confounded taxpayers.

Despite those challenges, it appears that taxpayers aren’t headed to the IRS website as often as they did last year. It’s a curious development. Are taxpayers not checking out the website because they really don’t need more information (unlikely) or because they’re getting their information elsewhere?

Getting timely—and dependable—information is critical for taxpayers and tax professionals. That’s true all over the world.

BRITAIN-LONDON Tower Bridge over The River Thames and, in the distance, the secondary central business district of Canary Wharf are pictured as the sun sets in London on Saturday, May 8, 2021.

Photographer: JUSTIN TALLIS/AFP via Getty Images

Currently, I’m in the Bloomberg offices in London, and I had a chat with my colleagues here about the popularity of cryptocurrency. I joked that I knew it had gone mainstream once my father inquired about picking up bitcoin. And yet, there’s been little formal guidance from the IRS. Yes, we know from 2014 guidance that cryptocurrency is generally treated as property and subject to capital gains treatment in the U.S. But what about mining? Staking? FBAR reporting? There’s still so much that isn’t clear. The IRS website doesn’t offer comprehensive resources on those issues and, as a result, many taxpayers may feel like they’re winging it. But you don’t have to.

One of the things that we do at Bloomberg Tax—and we do it very well—is keep you up to date with the latest developments in tax. We’re fortunate to have a great community of tax professionals willing to offer their insights into pressing issues—from crypto to the OECD-led initiative on global taxation. And this week, as always, our experts will help you stay informed with great commentary and insightful analysis on federal, state, and international tax issues. Our coverage also includes valuable commentary and podcasts, as well as covering tax moves across the globe. It’s all part of our commitment to making sure you never have to wing it: We’ve got you covered.

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—Kelly Phillips Erb

Fast Numbers Trivia

As of April 1, 2022, the IRS had acquired fewer tax returns than it had for a similar interval in 2021. What was the share decline?
Reply on the backside.

Our Roundup

This week, our consultants touched on a variety of matters, from working overseas to escheat and cryptocurrency. For a have a look at what’s making information, right here’s our roundup.

International Economies

The information out of Ukraine has affected the complete world. And as nations reply with help, it raises fascinating questions on tax residency—together with for U.S. navy contractors and staff of such contractors who carry out work overseas. In these instances, the standing of forces settlement, or SOFA, will usually be determinative, says Gunster, Yoakley & Stewart, P.A.’s Alan S. Lederman in U.S. Troop Buildup Calls Polish SOFA to Tax Practitioners’ Attention.

The Zlota 44 tower (2dL) and the Palace of Tradition and Science (R), Poland’s tallest constructing, are seen at sundown in central Warsaw, Poland, June 3, 2014.

Photographer: SAUL LOEB/AFP by way of Getty Photos

The formidable schedule of the OECD-led Inclusive Framework on BEPS for implementing the two-pillar settlement from October 2021 is already slipping, main some to query the viability of the general challenge. In Implementation of GloBE Rules: A Sensible Safe Harbor Is Needed, Jeff VanderWolk of Squire Patton Boggs discusses the significance of a wise and easy secure harbor for the Pillar Two regime.

Cross-border buying is right here to remain, says Digital River’s Adam Coyle in Brands Must Leverage Partners to Tap Into Cross-Border Markets. Overcoming widespread challenges to cross-border e-commerce will assist preserve buyer satisfaction excessive, tax burden easy, and worldwide success achievable.

For multinational firms that might be affected by OECD’s BEPS framework, hockey legend Wayne Gretzky’s recommendation to “skate to the place the puck goes to be” with respect to understanding the impacts of efficient tax charges in varied jurisdictions is fairly apt, says Valuation Analysis Company’s Tom Gottfried in Multinationals Should Skate Toward Release of BEPS Model Rules.

Issuing false invoices might happen to cover irregular purchases, cash laundering operations, corruption in public tenders, fee of bribes, monetary help for organized crime and terrorism—and tax evasion. In How Tax Administrations Worldwide Can Combat False Invoices, Alfredo Collosa discusses the issue of false invoicing, considers and evaluates the varied options utilized by tax administrations worldwide to deal with this challenge, and appears at potential options going ahead.

Cryptocurrency

Final month, the general market capitalization of cryptocurrency crossed the $2 trillion mark, making it clear that it’s right here to remain. As the recognition of cryptocurrency rises, it has drastically outpaced the velocity of state and federal companies in finding out and regulating it. In Looking at Unclaimed Property Issues in Cryptocurrency, Alston & Hen’s Michael Giovannini discusses latest and pending payments designed to topic cryptocurrency to state unclaimed property legal guidelines.

Countries worldwide are considering how to react to cryptocurrency, including how best to tax it. In World of Cryptocurrency Continues to Gather Global Momentum, Anshu Khanna of Nangia Andersen appears at latest developments in cryptocurrencies, together with the legislation just lately enacted within the United Arab Emirates suggests key areas that the proposed international framework for crypto property ought to cowl.

U.S. Tax Developments

Calendar-year taxpayers are confronted with the truth that analysis and experimental, or R&E, expenditures, are now not deductible however should be capitalized and amortized below IRC Part 174. Whereas the Home model of the Construct Again Higher Act would have delayed this improvement for 4 years, the invoice has not acquired sufficient help within the Senate. In IRC Section 174: A Tax Department’s Experience and a Wish List, Maxar Applied sciences’ Betty Mak highlights some sensible challenges taxpayers face in complying with Part 174 in early 2022.

An aerial view reveals the skyline of decrease Manhattan, NY city on August 5, 2021.

Photographer: ED JONES/AFP by way of Getty Photos

President Joe Biden’s tax proposal to impose a minimal tax on super-high-net-worth people could seem easy, equitable, and standard with the general public, writes EisnerAmper’s Richard J. Shapiro, but it surely’s difficult and fraught with difficulties. In Taxing the Wealthy: Is Biden’s Minimum Tax the Answer?, Shapiro appears at present legislation and the way it might be impacted by the proposal.

Commentary

Decentralized finance, or DeFi, has gotten more and more standard, however the lack of regulation has offered quite a few alternatives for abuse. In With Decentralized Finance and Sanctions Come Crypto Regulation, MyChargeBack’s Michael B. Cohen appears on the challenges DeFi and cryptocurrency pose for the federal government.

A Nearer Look

Altering settlement language generally doubles what a plaintiff retains with none price to defendants, and language can cut back taxable revenue, enhance deductions, defer tax legal responsibility, and even safe a tax subsidy. However tax methods can fail when defendants object. Within the latest edition of “A Closer Look,” Lane Powell PC’s Jeremy Babener; Don Engels of Ringler Associates, Inc., and the Settlement Tax Group; and C&L Worth Advisors’ Deborah Hresko share the significance of plaintiff tax methods, defendants’ function in effecting these methods, why defendants object, and find out how to overcome their objections.

Columnists

With only a few days till Tax Day, tensions are rising for some taxpayers. Deadlines are sometimes intimidating, however exterior elements, together with inflation and a possible uptick in pandemic numbers, are reminders that whereas tax season is formally again to “regular,” some households face challenges. Listed below are some tips that can assist you get by means of the day—and relaxation simple.

Hear In

The short tempo of consultations into advanced new guidelines from the OECD is protecting tax practitioners busy. The Paris-based establishment has already in 2022 launched 4 consultations into the “constructing blocks” of a brand new worldwide tax system. Pillar One of many plan would reallocate a sliver of the income of the most important and most worthwhile companies to nations the place they make gross sales. Pillar Two would set up a 15% international minimal tax. Tim Sarson Companion, U.Ok. head of tax coverage at KPMG U.Ok., talks with Bloomberg Tax’s Hamza Ali concerning the rising guidelines in the latest episode of Talking Tax.

Watch

Cryptocurrency and NFTs proceed to rise in recognition within the U.S., however many individuals are nonetheless confused about how they’re taxed. In this video, Lisa Zarlenga, a accomplice at Steptoe & Johnson who makes a speciality of tax coverage and cryptocurrency, lays out how completely different crypto transactions are taxed.

Scholar Writing Competitors

Do you’ve an authentic tackle present occasions and points in tax follow and coverage—however you’re not but a tax skilled? Our second annual tax writing competition is the proper alternative to point out off your work: The competitors is meant to focus on the easiest of scholar writing. Our deadline is June 15, 2022.

Our Want Checklist

What’s on our Bloomberg Tax Insights want record proper now?

As April rolls on, we’re looking for hashish items with a tax and accounting focus. We’re additionally searching for inexperienced initiatives/incentives, together with sustainability reporting, renewable vitality incentives, and carbon taxes.

For Might, we’d like to see nonprofit items, together with finest practices for nonprofits and Type 990 updates. We’re additionally searching for good takes on charitable giving incentives, donor-advised funds, donor privateness points, and property and present planning methods. And, after all, we’re occupied with charity and government-related ideas like unrelated enterprise revenue taxes (UBIT) and funds in lieu of tax (PILOT).

Our Insights articles—about 1,000 phrases—are written by tax professionals providing knowledgeable evaluation on present points in tax follow and coverage, tax traits and matters, and tax and accounting agency follow and administration.

If in case you have an fascinating, never-published article for publication, we’d love to listen to about it. You possibly can contact our Insights crew by e-mail (TaxInsights@bloombergindustry.com).

Get Caught Up

It’s been a busy week in tax information from state capitals to D.C. Listed below are among the tales you might need missed from our Bloomberg Tax information crew:

• It isn’t clear when—or if—the Texas comptroller will align his workplace’s rules on taxation of companies with a latest, contradictory state Supreme Court docket ruling. However that shouldn’t cease taxpayers from following the courtroom’s ruling, not the rules, tax professionals said.
• A gaggle of 13 Home Republicans wants the IRS to waive failure-to-pay and failure-to-file penalties for taxpayers who make a great religion effort to adjust to the July 1 re-implementation of the Superfund tax, an excise tax on chemical compounds straight tied to contamination at websites designated by the federal authorities as Superfund websites.
• Hundreds of further New York companies might now be capable to seize on a lucrative tax break after policymakers agreed to make a technical repair as a part of a $220 billion price range deal signed into legislation by Gov. Kathy Hochul.
• Corporations worldwide might collectively pay virtually 14% extra in company revenue taxes yearly if a world tax accord is totally applied, according to new estimates from the Worldwide Financial Fund.
• The U.Ok. remains to be working on legislation geared toward making it easier for firms to maneuver their incorporation to the nation.

*Word: Your Bloomberg Tax login might be required to entry Tax Information.

Highlight

Our Highlight sequence highlights the careers and lives of tax professionals throughout the globe. This week’s Spotlight is on Michael Wiener, a accomplice at Greenberg Glusker Fields Claman & Machtinger LLP in Los Angeles.

Profession Strikes

Kathleen Saunders Gregor has joined Skadden, Arps, Slate, Meagher & Flom LLP as a accomplice within the tax controversy and litigation group in Boston.

Lourenco Miranda has joined EisnerAmper as managing director of environmental, social, governance.

Hilary Lefko has joined Norton Rose Fulbright as a renewable vitality tax accomplice in its Washington, D.C. workplace.

In case you are altering jobs or being promoted, tell us. You possibly can e-mail your submission to TaxMoves@bloombergindustry.com for consideration.

Fast Numbers Reply

The IRS has acquired 91,260,000 particular person federal revenue tax returns in 2022, in comparison with 93,202,000 returns over the identical interval in 2021, a 2.1% decline.

Follow Bloomberg Tax on Twitter, Facebook, Instagram, and LinkedIn—and take a look at Bloomberg Legislation on TikTok.

We even have a rising LinkedIn group the place our authors, contributors, and readers can share tax-related tales and alternate concepts. We hope you’ll be a part of the dialog!

What Did You Suppose?

Your suggestions and strategies are vital to us, so don’t hesitate to succeed in out on social or e-mail me straight at kerb@bloombergindustry.com.