Regulatory and monetary policies meet "too big to fail"

In 2010, the U.S. economy has been showing signs of pulling out of its tailspin. But questions remain about why it took so much monetary policy firepower to deal with the crisis.Global financial crisis ; Monetary policy ; Regulation ; Bank failures ; Financial institutions

Should APB 23 Indefinite Reinvestment Be Repealed?

A recent letter to FASB suggested that APB 23 should be repealed. Although there is a clear lack of application guidance surrounding APB 23, repeal is not justified. Instead, FASB should address several practical uncertainties that have effectively allowed U.S. MNCs to make whatever APB 23 assumption best suits their needs. Given that many U.S. MNCs have shifted substantial amounts of income to low-tax foreign jurisdictions and may need those foreign earnings back in the U.S. relatively soon, it is important for FASB to address these issues. If not, aggressive MNCs may continue to assert indefinite reinvestment when in fact they are likely to repatriate some portion of their low-taxed foreign earnings

Should the States Piggyback on Federal Schedule UTP?

There has been much written about Schedule UTP since its announcement by IRS commissioner Shulman in January 2010. However, little has been written about issues other tax administrators may need to consider if they plan on adopting some version of Schedule UTP for their own purposes. State tax administrators are definitely thinking about Schedule UTP. In addition, the Australian Taxation Office has published a draft form for 2012 that is based, in large part, on the IRS Schedule UTP. Although corporations are hoping that most other tax administrators do not adopt some version of Schedule UTP, corporations will likely be disappointed. However, some state tax administrators believe it will be a simple process to adopt Schedule UTP for their purposes. They also could be disappointed. This article discusses several issues surrounding Schedule UTP that state tax administrators may need to consider if they are seriously planning to pursue Schedule UTP. Issues discussed include: Will the IRS Schedule UTP be of much benefit to state tax administrators, or should states consider a state specific Schedule UTP? If a state specific Schedule UTP is adopted, should the states follow the IRS model for Schedule UTP? If not, where might they want to deviate? Will states be able to defend a state specific Schedule UTP against privilege/work product challenges? Should states adopt a specific penalty for failing to adequately complete Schedule UTP

Testimony of J. Richard (Dick) Harvey, Jr. Before the U.S. Senate Permanent Subcommittee on Investigations May 21, 2013

Apple is an iconic US multinational corporation. In addition to demonstrating excellence in designing, building, and selling consumer products, Apple has been very successful at minimizing its global income tax burden. This expert testimony describes how Apple: • allocates approximately two-thirds of its global income to Ireland, a country where only 4% of its employees and 1% of its customers are located, • minimizes Irish tax by creating an Irish entity that is managed and controlled in the US, and • avoids the US Subpart F rules. More generally, the testimony illustrates techniques used by US MNCs to shift income overseas and avoid the US Subpart F rules designed to tax passive income. Finally, the testimony makes several tax policy recommendations

Schedule UTP - Two Major Issues

Although Corporate America is not happy about Schedule UTP, most corporations seem resigned to the schedule’s existence and are now attempting to comply. In the process, Corporations have been addressing many technical questions, but two seem to be receiving the most attention: the definition of a “tax reserve”, and the application of the transition rule to pre-2010 NOL carryforwards. The current definition of tax reserve is circular and it is not clear whether it includes certain scenarios (e.g., deferred tax reserves). The application of the transition rule is of significant importance to corporations that incurred NOL carryforwards during the recession from 2007 to 2009 and expect to utilize those carryforwards in 2010 and later years. The author addresses these two issues in depth and offers various alternative approaches

Testimony of J. Richard (Dick) Harvey, Jr. Before the U.S. Senate Permanent Subcommittee on Investigations May 21, 2013

Apple is an iconic US multinational corporation. In addition to demonstrating excellence in designing, building, and selling consumer products, Apple has been very successful at minimizing its global income tax burden. This expert testimony describes how Apple: • allocates approximately two-thirds of its global income to Ireland, a country where only 4% of its employees and 1% of its customers are located, • minimizes Irish tax by creating an Irish entity that is managed and controlled in the US, and • avoids the US Subpart F rules. More generally, the testimony illustrates techniques used by US MNCs to shift income overseas and avoid the US Subpart F rules designed to tax passive income. Finally, the testimony makes several tax policy recommendations

Should the States Piggyback on Federal Schedule UTP?

There has been much written about Schedule UTP since its announcement by IRS commissioner Shulman in January 2010. However, little has been written about issues other tax administrators may need to consider if they plan on adopting some version of Schedule UTP for their own purposes. State tax administrators are definitely thinking about Schedule UTP. In addition, the Australian Taxation Office has published a draft form for 2012 that is based, in large part, on the IRS Schedule UTP. Although corporations are hoping that most other tax administrators do not adopt some version of Schedule UTP, corporations will likely be disappointed. However, some state tax administrators believe it will be a simple process to adopt Schedule UTP for their purposes. They also could be disappointed. This article discusses several issues surrounding Schedule UTP that state tax administrators may need to consider if they are seriously planning to pursue Schedule UTP. Issues discussed include: Will the IRS Schedule UTP be of much benefit to state tax administrators, or should states consider a state specific Schedule UTP? If a state specific Schedule UTP is adopted, should the states follow the IRS model for Schedule UTP? If not, where might they want to deviate? Will states be able to defend a state specific Schedule UTP against privilege/work product challenges? Should states adopt a specific penalty for failing to adequately complete Schedule UTP