Outlook Features Roundtable with Leading Tax Practitioners Weighing Tax Cuts and Job Act’s Impact
ARLINGTON, Va., Jan. 25, 2018 /PRNewswire-USNewswire/ — Bloomberg Tax today issued its 2018 Tax & Accounting Outlook, which focuses on the effect the new tax law will have on how tax and accounting professionals do business in the upcoming year and beyond.
A complimentary copy of the special report is available for download here.
“The new tax law is so massive and has so many unintended consequences that tax practitioners and corporate executives have no choice but to pay attention in 2018,” said Cheryl Saenz, news director for Bloomberg Tax. “Our annual outlook, devoted to tax reform, focuses on the areas of greatest impact in the year ahead that resulted from the Tax Cuts and Jobs Act of 2017. We will continue to examine the effect of the law on companies, pass-through businesses, industries, and states, while also keeping Bloomberg Tax subscribers abreast of the latest news and developments in the wake of the changes.”
Highlights of the Outlook include:
Federal Tax: Congressional tax writers say they aren’t done yet with tax reform and will turn to issues such as overhauling the IRS, updating taxation of education and retirement benefits in the coming year, and correcting mistakes in the new tax law. The IRS will be kept busy in an attempt to provide as much guidance as quickly as possible on the first major tax overhaul in three decades. However, the IRS may face legal challenges as it issues regulations, and budgetary constraints and staff shortages may increase chances of the agency running afoul of the Administrative Procedure Act (APA).
European Union finance ministers face critical tax issues, including how to tax profits from large internet companies, but the cloud hanging over all EU tax deliberations will be the new U.S. tax law and how the bloc should respond. The new tax law is also expected to affect upcoming EU digital taxation legislation due in March, including a possible turnover tax aimed at tech companies, such as Google, Facebook, and Amazon.com.
Taxpayers operating in multiple states may find the next few years challenging as states are examining the implications of the new federal tax law on their revenue and tax administration, including, most pressingly, whether and how to conform to all the changes. A number of states are proposing policy changes to bypass federal tax law changes that eliminate many deductions and alter the way businesses are treated. In general, states want to prevent taxpayers from paying more as a result of federal base broadening — at the same time they want to want to protect state revenue for public services.
Companies need to prepare for the financial reporting effects of the new tax law by establishing a good accounting plan to find answers to questions as they arise, paying close attention to developments regarding repatriation tax and re-measuring their deferred tax assets and liabilities at the new rate. A wide range of overseas businesses with U.S. operations will see profound effects — including to near-term accounting — from the new U.S. tax law, with most foreign companies with a U.S. footprint standing to benefit from the reduced corporate tax rate.
The Outlook features a roundtable discussion with leading tax professionals about their expectations for corporations, states, and foreign countries in the wake of the Trump administration’s tax cut package. The new law made sweeping changes to the tax code and created as many opportunities for corporations to plan as it has questions about its effects. Bloomberg Tax advisory board members shared their insights into what to expect during the next year—and beyond. Participating practitioners included:
- William Alexander, Of Counsel, Skadden, Arps, Slate, Meagher & Flom LLP
- Richard S. Franklin, Member, Franklin Karibjanian &Law PLLC
- John L. Harrington, Partner, Dentons
- Joe Huddleston, Executive Director, National Indirect Tax Group, Ernst & Young LLP
- Lisa M. Starczewski, Shareholder, Buchanan Ingersoll & Rooney PC
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