Week in Insights: The Next 122,400 Minutes

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The IRS will officially open tax season this week, Monday, January 24, 2022, with tax professionals and taxpayers hoping it will be as close to normal as possible. With an individual income tax reporting period deadline of April 18, 2022 (April 19 for Maine and Massachusetts taxpayers), the reporting period for federal income tax purposes will be 85 days (86 days for Maine and Massachusetts taxpayers).

A technician checks hanging clocks at a workshop of a clock company in Yantai, east China’s Shandong Province, Dec 15, 2020.

Photographer: STR/AFP via Getty Images

It doesn’t seem long. But, to put things into perspective, in the same time frame, you could:

  • Go 14 round trips to the moon – it takes a spacecraft about 3 days to travel at least 240,000 miles to reach the moon;
  • Watch the entire Harry Potter film series 102 times, if you skip any breaks;
  • Ride the 2022 Tour de France route three times, in accordance with race guidelines;
  • Learn basic fluency in two FSI Group 1 languages ​​(French, German, Indonesian, Italian, Portuguese, Romanian, Spanish, and Swahili), assuming you study ten hours a day; Where
  • Read the world’s longest novel, ‘In Search of Lost Time’—or ‘In Search of Lost Time’—by Marcel Proust, cover to cover 17 times.

And over that same period, taxpayers will submit 160 million individual federal tax returns — take it or leave it a few million taxpayers filing on the extension.

This number does not include corporate returns, partnership returns, charity returns, estate and gift returns, international tax returns, and excise returns filed throughout the year. year, nor national and local statements.

You get the picture: tax professionals are sure to be busy in 2022.

At Bloomberg Tax, we know that there are only a limited number of hours in the day and a limited number of days during tax season. And this week, as always, our experts have the latest federal, state and international tax analysis to help you stay ahead of the game.

The exchange… This is where great ideas intersect.

—Kelly Phillips Erb

Speed ​​Dial Quiz

What was the federal income tax rate for most taxpayers in 1913, the year of the first modern tax filing in the United States?
Answer below.

Our overview

This week, our experts covered a wide range of topics, from transfer pricing to indirect taxation. For an overview of what’s making the news, here’s our roundup:

In Italy — Transfer pricing adjustments and their impact on VAT and CAD6, Giuliana Polacco and Annarita DeCarne from Bird & Bird review recent decisions from the Italian Revenue Agency to provide guidance and clarification in response to taxpayer inquiries regarding the VAT and DAC6 implications of transfer pricing adjustments.

Transfer pricing seems to be a key issue this year. In a three-part series, Danny Beeton of Arendt & Medernach SA, summarizes some critical transfer pricing cases from 2021 and analyzes them in context to each other to identify themes and trends.

In the coming year in global indirect taxation, Alex Baulf from Avalara looks at the global indirect tax developments and trends we might expect in 2022.

In Determining the buyer’s VAT status in EU e-commerce transactions, Koert Bruins from Deloitte Netherlands explains the robust processes required for a supplier to determine a customer’s VAT status to ensure the correct tax treatment of each transaction and avoid potential losses and penalties.

In case you missed it

Preparing for tax season can be a bit of a blur. Here are some past updates you may have missed:

Reporting rules are changing for some businesses starting in 2022. In the new 1099 reporting form coming in 2022, Debbie Pflieger from EY’s financial services organization, highlights what you need to know about Form 1099-K, Payment Card Transactions and Third-Party Network.

In many US cities, large hospitals, health centers, universities and nonprofit colleges — “doctors and eds” — pay little or no property taxes. That could change. At a “non-charitable” non-profit hospital ordered to start paying property taxes, Bill Kennedy and Jared Johnson of White and Williams, LLP warn that litigation is now challenging their nonprofit nature.

An inheritance tax deduction is not always guaranteed, especially when there are questions about the amount that may ultimately be distributed to charity. In a recent case highlights the risk of denial of inheritance tax deduction, Richard L. Fox from Buchanan Ingersoll & Rooney looks at a recent case that focuses on this issue.

Reviews and comments

In Puerto Rico’s exit from bankruptcy is not the finish line, Brian Chapatta reflects on news that Puerto Rico’s bankruptcy judge had approved his debt restructuring plan. The island has had a long struggle with its creditors, Chapatta recalls, since helping chronicle its financial meltdown on Bloomberg News’ municipal bond team in the mid-2010s.

In that Timothy O’Brien Calls “a victory for the rule of law and the separation of federal powers,” the Supreme Court says a bipartisan congressional committee investigating the Jan. 6 insurrection may review some of the White House’s records of the former President Donald Trump. O’Brien reviews the case in The Jan. 6 Committee Scores Victory Over Trump.

Columnists and contributors

While I know many of my fellow tax professionals would say that tax season never officially ended last year, the new tax filing season will begin soon. From start dates to extension dates, here’s what you need to know.

To listen

Rep. Kevin Brady (R-Texas), the top Republican on the powerful House Ways and Means Committee, plans one last legislative push before retiring at the end of this Congress. In the latest episode of our weekly Talking Tax podcast, Brady discusses his impending retirement with Bloomberg Tax reporter Kaustuv Basu, the legislation he hopes to push forward before he leaves, and shares his thoughts on how to make the IRS more customer-friendly.

To catch up

It’s been a busy week when it comes to tax news from state capitals to DC. Here are some of the stories you may have missed from our Bloomberg tax news team:

  • President Joe Biden has said his $2 trillion economic package will need to be split so a scaled-down version can pass Congress in the face of resistance from his own party which blocked the sweeping package.
  • What should states do with extra money? A 7% pay rise for teachers in New Mexico, a record increase in education spending in Kentucky and bonuses for school bus drivers in South Carolina are just a few of the ambitious spending plans of the American governors.
  • The Comptroller of Maryland has issued a tax alert regarding a new extended deadline for individual tax returns and payments granted due to the COVID-19 pandemic.
  • Canada’s plans to introduce a tax credit for carbon capture in the country’s oil patch would amount to a fossil fuel subsidy for inefficient technology, a group of academics say in a letter to the deputy prime minister .
  • House lawmakers introduced a bipartisan bill that would strip the International Olympics Committee of its tax-exempt status.
  • Texas billionaire Robert Brockman, who is currently on trial fighting felony tax charges, sued the government on Thursday to end a special proceeding to immediately impose more than $1.4 billion in taxes, penalties and interest against him.

*Note: Your Bloomberg Tax ID will be required to access Tax News.

Projector

Our Spotlight series sheds light on the careers and lives of tax professionals around the world. This week, Spotlight on Gerry McCarthy, Managing Director of CBIZ MHM, LLC in Boston. McCarthy has over 36 years of public accounting and industry experience, and is focused on providing tax advisory and compliance services to all segments of the insurance market.

Get noticed

At Bloomberg Law, we pride ourselves on our ongoing efforts to showcase the next generation of leaders in the legal profession.

We are delighted to announce our 2022 call for nominations for “They’ve Got Next: The 40 Under 40,” Bloomberg Law’s special report recognizing the achievements of outstanding young lawyers nationwide.

Here are the nomination and submission criteria instructions.

Quick Answer Numbers

The tax rate for taxable income up to $20,000 ($563,236.36 in today’s dollars) was 1% for the 1913 tax year. The additional tax—or supertax—on amounts over $20,000 were calculated on a graduated scale of up to 6%.

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