Week in Insights: The History of Tax Fraud Goes Back Millennia

When it comes to tax evasion, some things never change. Case in point: A recently translated papyrus from the Judean Desert has revealed that two enterprising Romans—Gadalias and Saulos—allegedly were running a proto-tax shelter in about A.D. 130.

If the prosecutor’s notes are accurate, the pair was either falsifying sales to claim tax credits they weren’t owed, or they were forging documents to show they needed to pay lower taxes than their wealth required. Such tactics form the basis of tax frauds to this day, from creative ledger manipulation to the use of offshore tax havens.

An informant reported the scheme to Roman authorities, which isn’t too dissimilar from modern tax enforcement. The prosecutor’s notes don’t indicate the informant’s motivation, but the person could have been anyone from a disgruntled former business associate to someone looking to receive a reward or curry favor with officials.

Given the potentially brutal penalties for tax evasion, it’s also possible the informant was close to the scheme and hoping to cut a deal in exchange for leniency. Roman law on forgery and fiscal fraud was downright draconian. Unlike today’s white-collar criminals, who typically face hefty fines and minimum-security prison sentences, Roman tax evaders could be exiled, executed, or condemned to mines.

It’s remarkable that people have been trying to dodge taxes for millennia using the same core tactics—faking transactions, shifting assets, and hoping not to get caught. The punishments, however, have softened rather significantly.

—Andrew Leahey

Welcome to the Week in Insights for Bloomberg Tax’s latest analysis and news commentary. This week, experts examined what the Loper Bright decision means for microcaptive rules, features of an effective permanent safe harbor for tax reporting, and more.

Insights

Indiana University’s Vivian Fang analyzes the withdrawal of SAB 121, arguing that an ideal regulatory framework would allow entities to tailor their transparency levels.

Bird & Bird’s Giuliana Polacco and Francesco Drago welcome Italy’s penalty protection opportunities for taxpayers, and say accurate documentation is essential in order to benefit.

Kean Miller’s Jaye Calhoun reviews Louisiana HB 7’s business implications, noting that it would make future taxpayer-friendly legislation harder to pass.

Fox Rothschild’s Meeren Amin says the demise of Chevron deference changes the analysis on microcaptive rules, which have already been challenged.

RSM’s Robert Zonenshein says retroactively applying filing rules for partnerships in New York’s proposed budget could prompt an influx of reporting and payments.

Business at OECD’s Alan McLean says a permanent safe harbor for tax reporting would reduce Pillar Two compliance burdens and help create a stable, predictable environment for investing.

Freshfields’ Bob van Kasteren and Viktoria von Abel say most countries likely won’t apply the OECD’s Amount B method, and that the EU is eyeing a bloc-wide digital services tax if the US reverses its stance.

Columnist Corner

Technically Speaking design by Jonathan Hurtarte/Bloomberg Tax

A New Jersey bill to reform property tax benefits for seniors would encourage downsizing and ease housing shortages, but it has flaws other states could address if they introduce similar policies, Andrew Leahey says in his latest Technically Speaking column.

Setting a lower income cap for such benefits than New Jersey’s $500,000 or limiting eligible home value are ways states could “refine their relief programs to target seniors who truly need it,” Andrew writes. Read More

News Roundup

Trump DOJ Forces Out Top Tax Enforcer in Civil Service Purge

The Justice Department’s chief tax official is resigning rather than accepting a forced transfer to a new unit, raising fresh concerns about the Trump administration’s aggressive drive to reshape the agency to fit the president’s agenda. Read More

Michigan Governor Floats Tax Hikes to Fund Road-Building Plan

Michigan Gov. Gretchen Whitmer (D) proposed a long-term plan to inject an additional $3 billion into road improvements through an increase in the corporate income tax, closure of a cannabis tax “loophole,” and a new tax on digital advertising. Read More

UK Floats Mandating E-Invoicing for Business Transactions

The UK is exploring making digital invoicing mandatory for business transactions, according to a consultation document published by the tax authority. Read More

Energy Credit Buyers Commit to 2025 Bids Amid Policy Uncertainty

Buyers of energy tax credits are committing to future purchases, despite fear the Republican-controlled Congress could roll back some of the credits. Read More

Tax Management International Journal

Israel’s tax reform will affect corporate tax planning, and might exceed the territory of Israel, say YETAX’s Amit Gottlieb and Dvir Saadia.

Career Moves

Loren Ponds joined Skadden as a partner in its tax group in Washington.

John Collins III joined Katten as a partner in its private wealth practice in Dallas.

Peter Hardy joined Holland & Knight as a partner in its litigation practice in Philadelphia.

Daniel Badovinac joined Berger Singerman as a partner in its business, finance, and tax team in Miami.

John Woodruff joined Squire Patton Boggs as a partner in its tax practice in Houston.

Matthew Sharp joined Brown Rudnick as a partner in its litigation and dispute resolution practice in London.

Jason Linder, Glenn Vanzura, and Sonali Patel joined Willkie Farr & Gallagher as partners.

If you’re changing jobs or being promoted, send your submission to TaxMoves@bloombergindustry.com for consideration.