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Procurement and Tax—Time to Integrate
Why implementing a third-party tax engine is the best approach

One of the most important functions at which companies must excel is selling goods and services with as little transactional friction as possible—particularly in today’s world of digital commerce. Companies invest significant effort in the sales environment, but an equally necessary value-add for tax is the ability to purchase goods… Read more »

There’s a Mistake on Your Tax Return—Should You Fix It?
Check out this proposed framework for overall compliance

This article proposes a framework for deciding whether to fix a mistake found on a previously filed tax return. Rather than treating mistakes on previously filed tax returns as isolated events to be managed on an ad hoc basis—the usual and less effective approach—the proposed framework views the discovery of… Read more »

OECD Races Toward Completing Final Report on Digital Economy
But two fundamental “pillars” present structural challenges

The Organisation for Economic Co-operation and Development (OECD) is racing toward meeting an ambitious target by the end of the year that could radically change the way all multinational enterprises (MNEs) are taxed. The target—a final report—was set forth in January 2019 under the cover of addressing the digital economy.1… Read more »

Deftly Navigating an MTC Audit: Considerations for Taxpayers
Check out this stat: In the last three years, the MTC Audit Program has recommended state tax assessments in excess of $45 million annually

As recently recognized by Tax Analysts, the Multistate Tax Commission (MTC) has been gaining in prominence and, arguably, effectiveness.1 One of the MTC’s several activities is to administer audits on behalf of states. The MTC’s Joint Audit Program (Audit Program) is authorized by the Multistate Tax Compact and was initiated… Read more »

A More Collaborative Tax Controversy Approach?
Strategies for Exam and Appeals

Tax executives are familiar with the scenario: Internal Revenue Service examiners are in the building and are beginning to issue information document requests (IDRs) on routine and sensitive issues. One typical taxpayer response is to go on the defensive. This approach includes not voluntarily identifying issues and transactions; responding to… Read more »

A Tax Executive’s Guide to Spin-offs: 10 Things You Won’t See in Section 355
Advise board and officers to be careful about certain negotiations or public statements during pendency of the spin

Behind the closed doors of a corporate boardroom somewhere in America, the directors of a publicly traded company are discussing the future of their business. For many years, the company has operated two major divisions that have gradually diverged over time. These divisions (having the remarkably original names Business A… Read more »

Claiming a Foreign Tax Credit—How Exhausted Do You Really Have to Be?
Missteps by taxpayers in this area can be costly and result in avoidable double taxation

The Internal Revenue Service recognizes that “foreign government audits of U.S. taxpayers have become more frequent and, at times, more aggressive.”1 Consequently, the number of foreign tax contests and payments made by taxpayers to resolve those contests are on the rise. The IRS has signaled through its training materials and… Read more »

The Proper Role of the Tax Department in an MNE’s Intercompany Transaction Framework
The tax department typically houses a company’s expertise in transfer pricing and is a major consumer of intercompany transaction details, but its responsibility for nonnative intercompany transaction functions can lead to significant risk and incremental income tax exposure

This article presents the challenges of collecting tax-related intercompany transaction information as well as common functional misalignments of intercompany-transaction-related responsibilities inside the multinational enterprise (MNE). It also identifies key intercompany transaction function subject matter expertise (SME) and aligns these SME units or individuals with specific intercompany transaction operations. This article… Read more »

True, Correct, and Complete: On-time Filing of State and Local Tax Returns Without Clear, Consistent, or Practical Guidance
In a GILTI world, taxpayers need to make their way without a compass

While state and local tax is rife with uncertainty, the signature block of a state or local corporate income tax return is often deceptively simple and definitive. Typically, the signature certifies that the return is “true, correct, and complete.”1 From a practical standpoint, however, state and local corporate tax returns… Read more »

Part V: Section 965 Transition Tax
Yes, some issues are likely to persist for years after you’ve paid the tax

The Tax Cuts and Jobs Act (TCJA) added Section 965 to the Internal Revenue Code to tax earnings held offshore by controlled foreign corporations (CFCs) going back to 1987. In general, this transition tax is the price that U.S. persons who have accumulated earnings in CFCs must pay for the… Read more »

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