There are lots of things that I didn’t inherit from mom.
She is often quiet and still has her Southern drawl, while I am much louder and, according to my mom, sound “just like a Yankee.”
She loves to watch bull riding on TV, while I prefer to listen to baseball on the radio.
And when it comes to wardrobe, I prefer black with clean lines, while she has never met a bedazzled shirt she didn’t love.
But even though it sometimes feels like we come from different worlds, I am always aware of how much she has taught me over the years—about everything. And on Mother’s Day, I thought I’d share some of her wisdom with you. Her truths are pretty universal—and they apply to tax and law just as much as they do to everyday life.
Have a plan. When I was a kid, money was tight. Every two weeks, my mom tackled a shopping plan. She organized a grocery list by store and aisle, consulted sales papers, and clipped coupons. And then, she quickly and efficiently did her shopping with a chunky calculator in hand. When the cashier rang her up, there was never a moment when she worried that she couldn’t afford what was in the cart. She already knew.
The same strategy works with tax. Know what resources are available and plan ahead. Preparation pays off in efficiency and economy. Having a plan and sticking to it helps prevent unhappy surprises at the end of a transaction.
Show your work. I enjoyed math as a kid, and I was good at it. I could do a lot of figures in my head which came in handy on the math team. But my teachers insisted that I show my work, and I found it annoying. But my mom, like my teachers, made me show my work. “How else,” she would query, “will you know that you’re right?”
(For the record, “I just do” was never an acceptable answer.)
The IRS is on the same page. Guessing isn’t good enough. And posturing alone—even when you know you’re right—isn’t a viable strategy. Take a position and be able to support it with appropriate research and documentation.
Keep learning. My mom is smart and well-read. But she is the youngest daughter in a family of eight children in the rural South, and opportunities to go to college were limited. But my mom didn’t give up on education just because she wasn’t in school anymore—and neither should you.
It’s true that tax laws can sometimes be daunting and are constantly changing. But fortunately, there are loads of ways to keep up—from continuing education courses to portfolios and journals. Take time to review your area of focus for updates, and maybe even dip your toes into an emerging practice area like crypto or cannabis.
At Bloomberg Tax, we take the idea that you should keep learning to heart every week. Our goal is to help you stay informed with great commentary and insightful analysis on federal, state, and international tax issues—and hopefully encourage you to pass along some wisdom of your own.
The Exchange… It’s where great ideas intersect.
—Kelly Phillips Erb
Quick Numbers Trivia
What’s the average cost of raising a child in the U.S. through age 17?
Answer at the bottom.
Our Roundup
Our experts touched on a wide range of topics, from tax fraud to tax-exempt organizations. For a look at what’s making news, here’s our roundup.
Nonprofits & Charitable Giving
A recently released congressional report hints that there may soon be greater scrutiny of political and lobbying activity by 501(c) organizations. As the deadline for filing Forms 990, 990-EZ, and 990-PF approaches, such organizations should take extra care when analyzing and reporting lobbying activity, says Mayer Brown attorney George Haines in Reporting Political, Lobbying Activities of 501(c) Organizations.
Tax season might not be the time of year that most people associate with giving, but donating your refund to charity can make a huge impact, says the United Healthcare Children’s Foundation in Returning Your Refund: Ways to Get Back Something When You Give.
Global Economies
In Portugal—Implications of Landmark Ruling on Outbound Dividends to Collective Investment Undertakings, Diogo Bernardo Monteiro and Bruno Arez Martins of Eversheds Sutherland FCB consider the implications of a recent landmark decision of the Court of Justice of the European Union ruling that Portugal’s tax treatment of dividends paid by foreign collective investment undertakings was restrictive of free movement of capital and contrary to EU law.
The Covid-19 pandemic has significantly impacted business models and global supply chains and created a huge shift in working patterns. In Post-Covid Transfer Pricing Issues and How to Manage the Risks, Christine Schwarzl of DFDL Singapore discusses the potential transfer pricing risks and what taxpayers can do to manage them.
In Analysis of Pillar Two Primary Rule IIR—and Comparison With CFC Rules, Christos Theophilou of Taxand Cyprus looks at the similarities and differences between the OECD Income Inclusion Rule and controlled foreign company rules and considers the six building blocks provided by the OECD BEPS Action 3 for designing a CFC regime which are useful for comparison purposes.
Federal Issues
Fewer than half of U.S. workers are aware of the saver’s credit, a tax credit available to low- to moderate-income taxpayers who contribute to tax-advantaged accounts. In The Saver’s Credit: A Tax Credit to Promote Retirement Security, Transamerica Institute CEO and President Catherine Collinson shares how this credit can play an even greater role in helping people save for retirement.
Tax fraud has been around for nearly as long as there has been a federal income tax. And until the IRS is better funded, tax advisers should be vigilant for scams, says KFB Rice, LLP’s Bruce Givner in For Nearly 110 Years, There’s Been a Tax Fraud Parade.
The installment method is the first suggestion on every tax planner’s tongue, but sometimes it does not work. In Deferring Tax With IRC 453, Without Crossing the Line, Andrew Gradman of the Law Office of Andrew L. Gradman discusses those situations.
President Joe Biden’s Billionaire Minimum Income Tax would force wealthy households to pay taxes on unrealized capital gains from assets like stocks, bonds, or privately-held companies. But the proposed tax is a pre-payment of estate taxes, just in another form, and it would be superimposed over the estate tax, bringing an additional tax burden, says Engineered Tax Services’ Julio Gonzalez in Biden’s Billionaire Tax: Slaying the Golden Goose.
State and Local Tax
Texas has a robust process to contest property taxes, and state taxpayers could benefit from understanding the appraisal process as well as options for administrative and judicial challenges, writes tax controversy attorney Pete Lowy of Chamberlain, Hrdlicka, White, Williams & Aughtry in How to Contest Your Property Taxes Deep in the Heart of Texas.
Technology
Automated technology can help ease the burden of itemizing, monitoring, and reporting that accounting professionals feel year-round. In Four Ways Automation Could Help Accountants Multiply Their Output, Digits’ Wayne Chang outlines what tax preparers should know about the growing shift toward automation.
A Closer Look
With the heightened gift and estate tax exclusion amount seemingly safe for the next four years, and with interest rates and inflation running hot, should clients and their advisers think differently about the exclusion in 2022 than they did in 2021? In our latest edition of “A Closer Look,” Bernstein Private Wealth Management’s Andrea Kushner and Thomas Pauloski share their thoughts on the gift and estate tax exclusion.
Columnists
Scammers don’t take a break in the off-season—I can confirm that firsthand. With that in mind, I wrote about some steps you can take to protect your company and your clients’ data from thieves.
Also a hot topic this week? Student loans. Earlier this week, my daughter committed to college for neuroscience. She was delighted to get into one of the best schools in the country. And we turned it down. One of the main reasons? Cost. I’ve thought about that a lot this week as Biden considers student loan forgiveness. Here’s my look at the escalating cost of college and a history of the student loan interest deduction.
Listen In
Historically, Brazil’s transfer pricing rules have relied on a system of fixed margins. But officials have now committed to moving Brazil to the arm’s length standard, the basis of the Organization for Economic Cooperation and Development and most countries’ approaches to transfer pricing. In this week’s episode of Talking Tax, Romero Tavares, a partner at PwC in Brazil, talks to Bloomberg Tax’s Isabel Gottlieb about what the changes mean for multinationals operating in Brazil, the biggest challenge companies will face under the new system, and what to watch for as the government moves ahead with the project.
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 tax writing competition is the perfect opportunity to show off your work: The competition is intended to highlight the very best of student writing. The deadline is June 15, 2022.
Our Wish List
What’s on our Bloomberg Tax Insights wish list right now?
We’d love to see nonprofit pieces for May, including best practices for nonprofits and Form 990 updates. We’re also looking for smart takes on charitable giving incentives, donor-advised funds, donor privacy issues, and estate and gift planning techniques. And, of course, we’re interested in charity and government-related concepts like unrelated business income taxes (UBIT) and payments in lieu of tax (PILOT).
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 by email (TaxInsights@bloombergindustry.com).
Get Caught Up
It’s been a busy week in tax news from state capitals to Washington. Here are some of the stories you might have missed from our Bloomberg Tax news team:
- Taxpayers will have to wait at least six months to get refunds on paper tax returns filed this year, National Taxpayer Advocate Erin Collins said.
- Sen. Elizabeth Warren (D-Mass.) said all 50 Senate Democrats would vote for a dramatic overhaul of corporate taxes.
- The Treasury Department is holding open the possibility of making changes to address concerns about whether foreign withholding taxes on royalties will continue to be eligible for U.S. foreign tax credits.
- A proposed tweak in how regulators define a type of insurance income could unintentionally trigger higher taxes for some U.S. investors, the insurance industry fears.
- The top tax official at the OECD signaled his uncertainty over whether national governments will keep to the agreed timetable for implementing a historic global tax agreement, yet he warned there was no going back on the deal if officials wanted to avoid a further breakdown of international tax rules.
*Note: Your Bloomberg Tax login will be required to access Tax News.
Spotlight
Our Spotlight series highlights the careers and lives of tax professionals across the globe. This week’s focus is on Sylvia Dion, a certified public accountant who is the founder and managing partner of PrietoDion Consulting Partners LLC, a state and local tax (SALT) advisory firm.
Lunch and Learn
Are you dreaming about getting a better job? One with higher compensation, better benefits, and greater fulfillment?
Don’t let a poorly written or badly organized resume block your path to the next step in your career. Let us help!
Bloomberg Tax Insights is relaunching its virtual Lunch & Learn series with “How to Firm Up Your Resume as a Tax Professional” on May 19 from Noon to 1 p.m. ET. Tax lawyers and general counsel are also encouraged to participate.
We’re bringing in two experts from Robert Half, a global talent solutions and business consulting firm with more than 300 locations worldwide. They’ll share the latest news about the job market, what tax firms are looking for, and how you can position yourself through your resume to get noticed.
Our free, virtual event will be held on May 19 from Noon to 1 p.m. Learn more here.
Join Us
This tax season has been, well, taxing. But now that it’s over, maybe you can use that extra energy for the Bloomberg Tax Insights Virtual 5k. Run, walk, or run/walk 5k (that’s 3.1 miles!) any time between June 6 and June 12 to support a great cause. For the second year in a row, we’re donating the proceeds to World Central Kitchen, which works to fight hunger worldwide and is serving meals to Ukraine families in need. You can sign up here.
Career Moves
Tax attorney Geoffroy Galéa has been promoted to partner at Fieldfisher Belgium.
Hunton Andrews Kurth LLP has promoted tax attorney Michelle Lewis to counsel in Washington.
Tax attorney Sharon Shachar has joined Ballard Spahr LLP as a partner in its New York office.
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 Department of Agriculture, married parents with a middle-income can expect to spend $233,610 to raise a child born in 2015 through age 17—excluding the cost of college. Including projected inflation, that figure could increase to $284,570.
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What Did You Think?
Your feedback and suggestions are important to us, so don’t hesitate to reach out on social or email me directly at kerb@bloombergindustry.com.
