Italy may have good reason to take a closer look at Julia “Julie” Jenkins Fancelli’s finances to decide whether she should be taxed as an Italian resident. The daughter of the founder of Publix Super Markets Inc. does spend some time in Italy, and cross-border enforcement is a major part of modern tax administration.
Her summons from the IRS stems from a request made by the Italian government through a US-Italy tax treaty, which allows either country to request information when trying to determine a taxpayer’s liability.
But the procedure was haphazard in this case. The IRS first sent Fancelli a notice referencing a different taxpayer’s Israeli tax liabilities. The named bank wasn’t Fancelli’s, and the form seemed recycled from an unrelated case.
After those errors were flagged, the IRS issued a corrected notice—but with the same issue and compliance dates as the original, raising the possibility that the approval was backdated without fresh authorization. The Italian official on the case reportedly expressed surprise at what the IRS was asking for, noting her case was dormant.
The IRS shouldn’t be operating as a mere conduit for foreign governments. It’s a US agency bound by US law, and it owes US taxpayers more than clerical errors and rubber-stamped signatures.
When basic facts such as the taxpayer’s name or country of inquiry can’t be reliably handled, how much scrutiny can we expect is being applied to necessity, scope, or relevance? Treaty-based enforcement by foreign governments is only as credible as the process behind it. When that process breaks down, legitimacy takes a hit.
—Andrew Leahey
Welcome to the Week in Insights for Bloomberg Tax’s latest analysis and news commentary. This week, experts analyzed Oracle Australia’s court victory, Texas’ plan to ban securities taxes, and more.
The Exchange—It’s where great ideas on tax and accounting intersect.
Insights
Texas Plan to Ban Securities Taxes Would Bolster Business Image
Proposition 6 would amend the Texas Constitution to permanently ban taxes on securities transactions and occupation taxes on registered market operators. This would make Texas the only state in the US with a constitutional ban on securities-transfer taxes.
Oracle Australia’s Victory Protects MAPs, Tax Treaty Obligations
The Oracle decision is another setback for the Australian Taxation Office, proving that it can’t trample on treaty obligations in its quest for domestic case law precedents to resolve royalties disputes.
Gap in German Tax Law Hinders OECD Profit Allocation Approach
Two recent German rulings highlight how challenging it can be for countries to implement the OECD authorized approach to profit allocation.
Businesses Navigate Changing Import Rules in Global Trade Shift
Countries are revising their de minimis rules for low-value imports. E-commerce retailers will need to review their supply chains, pricing strategies, and compliance obligations.
Accounting Firm Mergers Driven by Need to Grow Tech, Talent Pool
Mergers and acquisitions have become a popular path for growth-minded accounting firms due to a need for cutting-edge technology, centralized business operations, and enough employees to offer a variety of services.
Canada’s Budget Modernization Will Cause Headaches for Tax Pros
The Canadian government’s goal to modernize its budgeting process shows good intentions, but a seemingly innocuous change of its budget release date may create some headaches in the Canadian tax community.
Stablecoin Accounting Treatment Requires More Than Semantics
The debate over the accounting treatment of stablecoins matters not only to companies, accountants, and auditors, but also to investors, regulators, and markets. Clear financial reporting underpins investor confidence and financial stability by extension.
CFA, CPA Exams Prove Valuable Skills—Regardless of AI’s Progress
The skills and dedication that CPA and CFA exams require will continue to differentiate certified professionals from their competition, even given large language models’ improvements.
Trump Meta Tax Giveaway $16 Billion Less Thanks to Biden-Era Law
Meta announced its quarterly income was lowered by $16 billion due to income taxes, an earnings setback that’s entirely attributable to an important tax reform championed by the Biden administration in 2022.
Columnist Corner
Italy’s plan to raise its flat tax on wealthy new residents by 50% reveals the downsides of relying on tax policies aimed at short-term benefits, Andrew Leahey writes in his latest Technically Speaking column.
The US has embarked on its own version of this playbook via the recently enacted fiscal package and the 2017 Tax Cuts and Jobs Act, Andrew says, arguing that a smarter approach would be to implement automatic sunset provisions for all preferential income-based tax breaks. Read More
News Roundup
Trump’s Signature Tax Law Funds Political Goals During Shutdown
President Donald Trump is tapping money Congress approved in the massive tax and spending package earlier this year to cover his political priorities during the government shutdown.
OECD Sees Boom in New Tax Dispute Resolution Cases Worldwide
Tax authorities worldwide saw a surge in demand last year from multinational companies seeking help resolving tax disputes, according to new data from the OECD.
Massachusetts Targets Offshore Corporate Gains After GOP Tax Law
Massachusetts lawmakers see an opportunity in this year’s GOP federal tax law to levy a greater share of multinational corporations’ foreign income, drawing opposition from pro-business groups who argue the law is incompatible with state tax codes.
How IRS Partnership Campaign Succumbed to Rich Taxpayer Pushback
Agency efforts to crack down on taxpayers’ use of partnerships and other so-called passthroughs to get more, and bigger, deductions was just starting to pick up speed. That work has been crippled by blowback from influential taxpayers affected and angered by the effort and staff reductions that have reached more than 25% of the IRS under President Donald Trump.
Tax Management International Journal
MNEs Face Transfer Pricing True-Up Challenges in Time of Tariffs
Tariffs may cause MNEs to need to make true-up adjustments to ensure transfer pricing compliance.
Mexico’s Supreme Court Clarifies Tax Refund Procedures, Deadlines
Mexico’s Supreme Court has provided guidance on requesting a tax refund.
How Does OBBBA Affect Canada-US Business Tax Comparisons?
Business tax laws in Canada and America are compared.
Tax Management Memorandum
How Plan Sponsors Can Defend Against Increased 401(k) Litigation
Plan sponsors have some options for protecting themselves from the rise of class action lawsuits.
Career Moves
EisnerAmper Names Jack Azagury as Advisory Group Chair
Jack Azagury was named chair of the board of Eisner Advisory Group, EisnerAmper announced Monday.
Baker McKenzie Brings Victoria Lanyon to Sydney Office
Victoria Lanyon has joined Baker McKenzie as a partner in the tax practice in Sydney. the firm announced Tuesday.
DLA Piper Australia Hires Three Tax Partners From Clayton Utz
Angela Wood, Brendon Lamers, and Andy Bubb joined DLA Piper as tax partners in Australia, the firm announced Tuesday.
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