Early in the pandemic, I became interested in mixology. I tended to prefer beer, wine, or a simple gin and soda when out with friends. But when Covid-19 made it impossible to gather in groups, Instagram led me down a rabbit hole. What started as a few bottles on my dining room radiator (don’t worry, it was off) has turned into Mel’s Bar, complete with a fully outfitted liquor cabinet and wine fridge.
Over the past three years, I’ve learned that making cocktails is really an art form. In 2022, I was lucky enough to design a cocktail for a friend’s wedding. And after buying a NutriBullet last summer, I began experimenting with blended drinks—a frozen mango margarita will appear as soon as it gets warm. My most recent favorite is my riff on an old fashioned: almond butter-infused whiskey and blueberry simple syrup—it’s like a classy, drinkable PB&J.
I wouldn’t call myself an expert—I’m nowhere near as learned as the contestants on Netflix’s reality show “Drink Masters.” (The winner, Lauren “LP” Paylor O’Brien, recently crafted cocktails at a Bloomberg event.) But what I do have is a good sense of flavor combinations and a lot of creativity.
At Bloomberg Tax, we hope to inspire creativity and fuel your curiosity to learn new things every day with our commentary and insightful analysis on federal, state, and international tax issues. So let’s raise a glass to you, our hardworking audience of tax and accounting professionals around the world. Cheers!
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Different types of alcohol have different tax rates. What is the federal tax rate for spirits?
Answer at the bottom.
State taxes are complicated, vary by jurisdiction, and change frequently. Foreign companies that do business in the US need to be aware of different states’ requirements for collecting and remitting state and local sales taxes, says Marcum LLP’s John Bonk.
Executives of large companies in Washington state—including Amazon, Microsoft, and Starbucks—will be affected by its new 7% excise tax on net long-term capital gains in excess of $250,000 for individuals. EisnerAmper’s Alyssa Rausch offers guidance on how to comply with the new law while its ultimate fate is before the state’s highest court.
The majority and dissenting opinions in Bittner v. United States relied on traditional canons of statutory construction to reach opposite conclusions, but it left a key issue unanswered—the appropriate standard as to mens rea, say Holland & Knight LLP’s James P. Dawson, Chad M. Vanderhoef, and Alexander R. Olama.
Tax professionals have the difficult job of managing client inquiries about previously filed returns and overdue refunds alongside refund expectations for the current year. AICPA’s Sarah Shannonhouse highlights some developments that practitioners should know about as they prepare their clients’ taxes.
As 2023 progresses, marketplaces and businesses selling through third-party online platforms should prepare for ongoing tax compliance challenges as rules evolve and should expect to see litigation around hot-topic items such as inventory nexus, says Avalara’s Scott Peterson.
While many questions remain on implementation of the clean energy tax credit changes, taxpayers may rely on the initial guidance issued by the IRS for project planning, says Hanson Bridgett LLP’s Nancy Dollar.
Large US corporations that are contemplating restructuring debt in transactions that will trigger financial accounting cancellation of debt income may need to consider the 2023 OECD Pillar Two COD income exclusion rule, says Alan S. Lederman of Gunster, Yoakley & Stewart, P.A.
Lars H. Haverkamp and Simone Kristin Schmalhofer of Eversheds Sutherland discuss Germany’s Platform Tax Transparency Act to implement DAC7, and the circular, recently provided by the German Federal Ministry of Finance, which answers many questions related to the application of the act.
Canada can lead the new low-carbon economy by using existing tax laws to kick-start construction of mineral mines that are essential to producing electric vehicle batteries, says Steve Suarez of Borden Ladner Gervais LLP.
Benjamin Craig of Ayming UK reviews the current research and development funding landscape in the UK and suggests some business-friendly reforms to the R&D tax credit schemes ahead of the upcoming budget.
With the latest installment of the EU’s anti-tax avoidance directive likely to become its next tax focus area, private equity firms should prepare for more questions about whether their structures they are genuine and whether decisions on where to locate holding companies reflect reality, say Orla O’Connor, Alistair Pepper, and Raluca Enache of KPMG LLP.
Jane Mackay of Crowe provides a preview of the upcoming UK budget and suggests some issues the chancellor will need to address to promote economic growth.
The OECD Global Forum is a key international body working on the implementation of global standards for tax transparency. Alfredo Collosa looks at the OECD’s 2023 report outlining the continuing activities of the forum.
Repealing Section 232 tariffs on aluminum and not instituting any new taxes can provide easy relief to American brewers, beer importers, and consumers, says the Beer Institute’s Brian Crawford.
A Closer Look
In what may be a silver lining for most trial lawyers, the IRS’ Generic Legal Advice Memorandum has provided a playbook of what to avoid and why when deferring tax on contingent fees, says Structured Consulting’s Jeremy Babener in our latest installment of “A Closer Look.”
A lot of the discussion surrounding the higher-level problem of for-profit tax preparation software has centered solely on TurboTax. But that isn’t the real problem, says Andrew Leahey—the honor goes to the for-profit tax preparation software industry.
President Joe Biden’s budget proposal to increase Medicare taxes on people making more than $400,000 per year is laudable but almost certainly will never see the light of day, Leahey also noted this week. That has no bearing on the vicariously aggrieved, however. The absence of a tax increase doesn’t tell them that the policy was never implemented, and they’ve heard once again that wealthy Americans—a group they hope to join one day—are being asked to foot the bill.
Norman Hannawa has joined New York-based NODE40 as head of tax and accounting solutions.
Anne-Marie Malley has been appointed as UK sustainability and climate leader of Deloitte, and Smruti Naik-Jones has been appointed as the firm’s first chief sustainability officer.
Raleigh Johnston has joined Alston & Bird as a partner with the federal and international tax group in Dallas.
Paul Patrow has rejoined Faegre Drinker as a partner in the corporate practice in Chicago.
Emma Bradley has been appointed to partner at TLT in the UK-wide corporate and incentives tax team.
Tax attorney Richelle Baptiste has been appointed partner in the Amsterdam office of Greenberg Traurig.
Debbie Dolega has rejoined Simmons Gainsford as a private client tax partner.
If you are changing jobs or being promoted, let us know. You can email your submission to TaxMoves@bloombergindustry.com for consideration.
This week’s Spotlight is on Sahar Zomorodi, an Iranian-American attorney who is partner in Baker McKenzie’s North America Tax Practice Group in New York. She focuses on a wide range of US and international taxation matters, including tax planning and transactions, transfer pricing, and audit defense and controversy for multinational corporations.
It’s been another busy week in tax news from state capitals to Washington. Here are some stories you might have missed from our Bloomberg Tax news team.
*Note: Your Bloomberg Tax login will be required to access Tax News.
- Six Senate Republicans joined the Democrats to confirm Danny Werfel to be the next IRS commissioner on a 54-42 vote. Werfel succeeds acting commissioner Douglas O’Donnell, who has served in that role since former commissioner Chuck Rettig’s term expired last November.
- President Joe Biden’s budget proposal, released Thursday, calls for $14.1 billion for the IRS for fiscal 2024, a 15% increase from the enacted level for this year.
- The IRS is working on a new process for companies applying for advance pricing agreements, to help give them a clearer idea of how the government will view their application.
- Treasury is open to more approaches when determining if a company is within the scope of the corporate alternative minimum tax in merger and acquisition and restructuring transactions.
- Companies preparing for the European Union’s implementation of the global minimum tax should be aware of a number of provisions in other EU laws that could affect the calculation of the effective tax rate, the business group Accountancy Europe said.
Our Wish List
What’s on our Bloomberg Tax Insights wish list right now? For March, we want to know how you’re getting through the busy tax season. It can be anything from ways to relieve stress to advice on managing corporate clients. What changes in the tax code are affecting partnerships and S corps, making their March 15 filing deadline a challenge? And what can tax professionals do today to set themselves up for an easier busy season in 2024?
Our Insights articles—about 1,000 words—are written by tax professionals offering expert analysis on current tax practice and policy issues, tax trends and topics, and tax and accounting firm practice and management. If you have an interesting, never-published article for publication, we’d love to hear about it. You can contact our Insights team at TaxInsights@bloombergindustry.com.
We talk about tax a lot. But there’s much more that you might hear us talking about if you popped into one of our Teams meetings. Here’s a quick look at what some of us are watching, reading, and listening to this week:
- Melanie Cohen (Senior Content Editor, Insights and Commentary, Bloomberg Tax): I’m watching the Netflix documentary series “In the Name of God: A Holy Betrayal.” It’s about four separate religious cult leaders in Korea. And it almost didn’t come out—one group filed for an injunction to stop its release.
- Maria Menezes (Practice Lead, International Tax, Bloomberg Tax): “The Barber of Seville,” Royal Opera House—a fantastically entertaining farce!
- Rebecca Baker (Editor-at-Large, Insights and Commentary, Bloomberg Tax): The “Chris Rock: Selective Outrage” comedy special on Netflix. You may not agree with everything he says, but you’ll laugh out loud more than once.
- Alison Lake (Team Lead, Insights and Commentary, Bloomberg Law): the Quran and Thomas Friedman’s “From Beirut to Jerusalem,” a great analysis of Middle East politics.
- Katharine Butler (Acquisitions Manager, Insights and Commentary, Bloomberg Tax): I visited the parsonage in Haworth a couple of weeks ago (where the Brontë sisters grew up and lived) so I’ve started rereading “The Tenant of Wildfell Hall” by Anne Brontë.
- David Jolly (Senior Content Editor, Bloomberg Tax): I’m listening to the audiobook version of “A Case of Exploding Mangoes,” by the Pakistani writer Mohammed Hanif, a fictionalized version of the events around the plane crash that killed former President General Zia ul-Haq. It’s written in a slyly ironic style about a country that has always fascinated me.
- Andrew Leahey (Columnist, Insights and Commentary, Bloomberg Tax): I have returned to an old favorite podcast, “My Brother, My Brother and Me.” It is supposed to be an “advice show for the modern era” but it’s really just three brothers from West Virginia doing goof-em-ups.
Quick Trivia Answer
Distilled spirits are taxed in the US at $13.50 per proof gallon, which is a liquid gallon that’s 50% alcohol by volume.
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