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The Latest in Tax News: January 2020 Edition

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Textbook Tax presents its monthly tax news update. A quick read discussing various tax news, tax stories, and tax events trending in the world of tax during the month. The following tax topics cover the month of January 2020. The tax topics presented represent my favorites in tax news and tax-related events. Please comment any tax news stories you found interesting for the month of January. Additionally, please email me or connect with me on social media for the monthly tax news update sent straight to you!

Related Posts -- Prior Weeks' Tax News
December 2019

Tax News for January 2020

Tax Topic: Google changes its intellectual property tax-planning strategy

Tax Summary:

  • 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


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