Related Posts -- Prior Weeks' Tax News
- December 2019
Tax News for January 2020
Tax Topic: Google changes its intellectual property tax-planning strategy
- In 2020, Google will change its corporate structure to license intellectual property in the U.S.
- Previously, Google licensed its IP from Bermuda.
- This change is the result of pressure from international regulatory bodies like the OECD and EU to combat aggressive tax planning structures.
- Google previously utilized the "double Irish" tax planning strategy to take advantage of hybrid structures and shifting profits to low-tax jurisdictions.
- Hopefully, more companies transfer IP to the United States as a result.
Tax Topic: U.S. digital tax 'opt-out' provision not popular within OECD
- The Organization of Economic Corporation and Development (OECD) is working on its global tax rules, which includes the rules governing digital taxation.
- The OECD hopes to gain support and agreement from 140 countries by the end of 2020.
- Because the proposal targets large tech companies, U.S. executives and politicians are upset.
- The U.S. proposed an optionality proposal, which allowed companies to opt out of first phase of the plan.
- The OECD and country leaders are against the optionality proposal, claiming it creates political and technical issues.
Tax Topic: Cryptocurrency continues to face minimal tax compliance standards
- Cryptocurrency lacks third party information reporting.
- For example, Brokers must issue a Form 1099-B to the IRS and the taxpayer. Doing so, enhances taxpayer compliance as a matching mechanism.
- Because most cryptocurrency exchanges are not registered as brokers, they do not issues the Form 1099-B. Instead, the exchanges face the rules for third-party payment settlement organizations, which only issue 1099-Ks when users exceed the $20,000 transaction amount.
- Because of this, the reconciliation burden falls on the taxpayer, which results inaccurate crypto reporting.
- The IRS will expand its rules governing cryptocurrency to improve compliance in the near future.
- Tax guidance on virtual currency transactions