Earlier this month, I had the opportunity to sit in on a roundtable discussion of tax professionals. The roundtable, which was hosted by Avalara, focused on education and transformation in the tax and accounting profession.
As I listened to the conversation filled with observations and personal anecdotes, I was struck by a common theme: These professionals are finding joy in what they do.
I’m not kidding. You could feel it in the room—er, Zoom.
And even as the discussion turned to what could be improved in the profession, the question was, “How can we do better?”
Even as the workload picks up, there is a genuine concern that tax professionals are leaving the profession, and that the next generation may not consider it at all. So we talked about opportunities for change, including an increased focus on getting into schools at younger ages, like high school mentorships and educational programs. We also discussed increasing options for specialization within the tax and accounting profession and introducing tech into career training at earlier stages.
It was thoughtful. And I wish you all could have been there. Regular readers know that I’ve been worried about the profession—months of uncertainty and frustrations created what the National Taxpayer Advocate Erin Collins called “a perfect storm” in her report to Congress earlier this year. In her introductory remarks, Collins referred to last year as “surely the most challenging year taxpayers and tax professionals have ever experienced.”
It was clearly not an encouraging start to the tax filing season. And if we had all simply braced for the worst, it would have been understandable. But the tax profession is resilient. And, there is joy to be found when you love what you do—as I was reminded at the roundtable discussion. So we dug in our heels. We focused on our clients. And we helped each other. And with a few weeks left in the tax filing season, it feels like we’re rediscovering our joy. I sure hope so.
At Bloomberg Tax, we aim to do our part. This week, as always, our experts help you stay informed with great commentary and insightful analysis on federal, state, and international tax issues. It’s all part of our commitment to being a resource to the community—and giving you the chance, I hope, to find time to rediscover your joy.
The Exchange… It’s where great ideas intersect.
—Kelly Phillips Erb
Quick Numbers Trivia
Which states report the highest employment level for accountants and auditors?
Answer at the bottom.
You can always find the latest in tax and accounting news on The Exchange home page. This week, our experts touched on a wide range of topics, from foreign trust rules to DAC8. Here’s our weekly roundup:
The Corporate Transparency Act, or CTA, was passed in 2020, marking a sea change in collecting beneficial ownership information from U.S. entities. In Foreign Trusts Could Feel the Impact of New U.S. Regulatory Developments, Miller & Chevalier’s Ian Herbert explores the CTA’s impact on foreign trusts during a period of increased focus on transparency and illicit finance enforcement in the United States.
Major League Baseball and its players association have been trying to come to terms on several issues—one being the competitive balance tax or CBT. In The MLB Competitive Balance Tax Reimagined—A Wealth Tax for Teams, tax and technology attorney Andrew Leahey looks at the possible effects of the CBT, which is intended to place a soft salary cap on teams and disincentivize teams in larger markets with higher capacity to pay players from simply “buying their way” into the playoffs.
Three federal income tax credits were expanded for the tax year 2021. And although the new rules apply broadly to the American public, millions of unmarried women can benefit, say Jill Gianola and Margaret Price, in Single Women and Taxes: What to Know When Filing This Year.
Some U.S. lawmakers allege that Russia is subverting sanctions with the use of cryptocurrencies, which could force the IRS to focus more closely on crypto tax filers in the U.S. In Russian Conflict Could Spur Greater IRS Scrutiny of Crypto Use, Cointelli’s Mark Kang shares tips for tax filers on how to stay on the good side of the IRS.
In India’s New Regime for Taxing Virtual Digital Assets, Stella Joseph and Yash K. Desai of Economic Laws Practice analyze India’s new regime for taxing virtual digital assets announced in the Union Budget 2022 and set out in the Finance Bill, 2022.
In DAC8 is Coming—What Crypto Stakeholders Need to Know and Do, Rodrigo Calleja of the TMF Group examines how the European Commission’s proposed Directive on Administrative Cooperation (DAC8) will affect the growing crypto market and recommends some steps crypto stakeholders should take to prepare for its implementation.
The renewable energy tax credit, or RETC, provisions are the least controversial of the Build Back Better energy proposals, and there is optimism that some form of updated RETCs may become law. In Tax Credits Will Refuel the Growth of Solar Installations, Stinson LLP’s Micah J. Revell and Kevin P. Savory examine the existing and proposed RETCs, addressing the implications of expanded RETCs for the solar market.
Stepped-up basis is the vehicle for families to continually pass prosperity from one generation to the next untouched, and because it avoids payment of gain on the appreciation of the assets, inherited wealth grows exponentially, says Rep. Bill Pascrell Jr. (D-N.J.) in ‘Swiss Cheese’ Tax Code Loophole Language Could Use an Overhaul. The Treasury Department can use existing law to help close this loophole.
While transfer pricing regulations have been in place for nearly three decades in the U.S. and other countries within the OECD, and in broad statutes and case law dating over a century, the pace of regulatory change in the past decade has been dramatic. In The Future of Transfer Pricing: A Practitioner’s View, PwC’s Philip Borders looks at how traditional transfer pricing models will be affected.
A Closer Look
Changing settlement language sometimes doubles what a plaintiff keeps without any cost to defendants, and language can reduce taxable income, increase deductions, defer tax liability, and even secure a tax subsidy. But tax strategies can fail when defendants object. In the March 2022 edition of A Closer Look, Increasing Plaintiffs’ Payoff by Pushing Defendants on Taxes, Lane Powell PC’s Jeremy Babener; Don Engels of Ringler Associates, Inc., and the Settlement Tax Group; and C&L Value Advisors’ Deborah Hresko share the importance of plaintiff tax strategies, defendants’ role in effecting those strategies, why defendants object, and how to overcome their objections.
On Feb. 25, President
Recent court rulings striking down two Internal Revenue Service reporting requirements suggest the agency may need to change its procedures so that its rules will hold up in court. On the latest episode of Talking Tax, Bloomberg Tax’s Aysha Bagchi and Jeff Leon talk with Melissa Wiley, a member in Caplin & Drysdale’s D.C. office, and Kristin Hickman, a law professor at the University of Minnesota, discuss what the decisions could signal about how courts will approach federal tax rulemaking procedures.
How could the impact of inflation affect your tax bill? In this week’s episode of the Taxgirl podcast, I spoke with Tim Speiss about the effects of inflation and rising prices on taxes and tax planning in 2022. Speiss is the CPA and partner of EisnerAmper LLC’s wealth advisory group.
Student Writing Competition
Do you have an original take on current events and issues in tax practice and policy—but you’re not yet a tax professional? Our second annual student writing competition is the perfect opportunity to show off your work: The competition is intended to highlight the very best of student writing. It kicks off this week.
Get Caught Up
It’s been a busy week in tax news from state capitals to D.C. Here are some of the stories you might have missed from our Bloomberg Tax news team:
- The billionaire facing the most significant U.S. tax-evasion case against an individual slammed the IRS for emptying his wife’s bank account as it seeks to collect $1.45 billion from him.
- Canadian apartment stocks have underperformed their peers for the past seven months, and investors now face a new risk: Prime Minister
Justin Trudeau‘s attempt to cool the scorching cost of housing.
- Countries are deciding the key design features of the part of the 2021 global tax pact that aims to streamline transfer pricing, a Treasury official said.
- Poland plans to cut personal income tax and allow some health insurance contributions as tax-deductible costs under a broad plan to soften the blow of high inflation and the war in Ukraine, the government announced Thursday.
- EBay is launching a coalition to lobby for 1099-K fairness in response to the decrease in the business transaction threshold established by the American Rescue Plan Act last year, the company announced in a media briefing Thursday.
*Note: Your Bloomberg Tax login will be required to access Tax News.
Our Spotlight series highlights the careers and lives of tax professionals across the globe. This week’s Spotlight is on Sabrina Cook, who started her own accounting firm in Hickory, N.C., in 2018 and now has three employees and 300 clients.
Kevin Zubor has joined Grant Thornton as the audit, tax, and advisory firm’s new chief financial officer, assuming the role from interim CFO Jim Peko, who will continue his role as the firm’s chief operating officer.
We’ve added tax and accounting career news to our coverage. If you are changing jobs or being promoted, let us know. You can email your submission to TaxMoves@bloombergindustry.com for consideration.
Quick Numbers Answer
According to the most recent report from the U.S. Bureau of Labor Statistics, Occupational Employment and Wages, as of May 2020, California, New York, Texas, Florida, and Pennsylvania are the states with the highest employment level in Accountants and Auditors. The places with the highest concentration of jobs and location quotients in Accountants and Auditors are the District of Columbia, Colorado, New York, South Dakota, and Virginia.
We also have a growing LinkedIn group where our authors, contributors, and readers can share tax-related stories and exchange ideas. We hope you’ll join the conversation!
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