Alphabet Soup • Tax Planning Ethics • Data-Driven Audits

This is a weekend roundup of Bloomberg Tax Insights, which are written by practitioners featuring expert analysis on current issues in tax practice and policy. The articles featured here represent just a handful of the many Insights published each week. For a full archive of articles, browse by jurisdiction at Daily Tax Report, Daily Tax Report: State, and Daily Tax Report: International.

This week we take another look at what the latest proposed opportunity zone regulations did and did not cover, the IRS’s new transfer pricing model, sports betting, how the IRS plans to target corporate audits using data analytics, and the complications with bringing moral judgments into tax planning. The lineup this week includes:

• Theresa Kolish, Mark Martin, Tracy Gomes, and Thomas Bettge of KPMG on the IRS’s new Advance Pricing and Mutual Agreement program
• David Levy, Nick Gianou, and Diana Lopo of Skadden on opportunity zone guidance
• Stéphane Gelin and Rosemary Billard-Moalic of CMS Francis Lefebvre Avocats on ethics and aggressive tax planning
• Carina Federico and David Blair of Crowell & Moring on the IRS’s plan to best identify which large and corporate taxpayers to audit

The IRS’s new Advance Pricing and Mutual Agreement program adds to the alphabet soup of transfer pricing acronyms.

Photographer: Chris Goodney/Bloomberg

The language of transfer pricing is a muddled alphabet soup of a seemingly never-ending collection of acronyms. Theresa Kolish, Mark Martin, Tracy Gomes, and Thomas Bettge of KPMG sort through the acronyms to make sense of the IRS’s new Advance Pricing and Mutual Agreement program. Read: The Alphabet Soup of Value—Making Sense of IRS’s New Transfer Pricing Model

Skadden’s David Levy, Nick Gianou, and Diana Lopo in a two-part series analyze the recently issued second set of proposed opportunity zone regulations. Part one includes an explanation of the 90% test, partnership basis issues, and the working capital safe harbor. Read: Second Wave of Opportunity Zone Guidance Addresses Many Key Issues, Leaves Open Questions for Future Guidance (Part 1)

In part two, Levy, Gianou, and Lopo walk through safe harbors for the 50% income test, the new capital redeployment rules, potential inclusion events, and secondary market acquisitions of fund interests. Read: Second Wave of Opportunity Zone Guidance Addresses Many Key Issues, Leaves Open Questions for Future Guidance (Part 2)

CMS Francis Lefebvre Avocats’ Stéphane Gelin and Rosemary Billard-Moalic look at the questions around the morality and ethics of corporate tax planning that now confront tax advisers. Read: Are Ethics Really what the Doctor Ordered to Cure Aggressive Tax Planning?

Businesses use data analytics to target their online ads at likely customers. Now the IRS’s LB&I Division will use that tool to determine which large and complex corporate taxpayers to audit. Carina Federico and David Blair of Crowell & Moring explain how and why. Read: Automation and Data Analytics to Drive LB&I Audit Selection

From the Archive

Bloomberg Tax Insights contributors have been analyzing the benefits and problems with opportunity zone legislation since Treasury and the IRS gave them something to work with in the first round of proposed regulations last October. Other authors have explained how the IRS’s advance pricing agreement program works. A professor has shown how to use artificial intelligence to refine legal research and predict outcomes better. Catch up on expert analysis you might have missed with these practitioner articles:

Lisa Starczewski of Buchanan Ingersoll & Rooney detailed the second round of proposed opportunity zone regulations in a three-part series.

Steven Wrappe and Matthew Kramer of Grant Thornton highlighted the advantages of an advance pricing agreement for multinationals.

Benjamin Alarie of the University of Toronto in a five-part series worked through several common tax fact patterns to how show machine learning could predict the outcome in court.

Beyond Tax

What’s happening outside of the world of tax?

Private companies need to be prepared for new lease accounting standards that take effect in December. Kevin Oles and Jim Balthaser of Thompson Hine walk through the steps of determining whether a lease exists, separating lease and non-lease components, and forward- and backward-looking standards. Read: Lease Accounting Changes Present More Than Accounting Problems

Since the Supreme Court overturned a ban on sports betting last year, all but nine states have passed or proposed sports betting legislation. Jeffrey S. Moorad, David A. McManus, Joseph J. Mammone Jr., and Elizabeth C. Polido of Morgan Lewis say this trend will continue and discuss legal, regulatory, and political challenges associated with this rapidly expanding industry. Read: Sports Betting in States Races on a Year After SCOTUS Overturns Ban

The Supreme Court is increasingly placing itself at the center of our most critical and divisive policy debates, removing any doubt that the third branch is as political as the other two. Tyler Cooper of the nonprofit Fix the Court says this is a problem in need of fixing. Read: Fixed Terms for Supreme Court Justices Checks Constitutionality Boxes

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The proposals on the table in the OECD’s Inclusive Framework project regarding addressing the tax challenges of the digitalized economy have the potential to significantly change the international tax framework. Gary Sprague of Baker & McKenzie examines the three proposals for discussion under the so-called Pillar 1 heading in the consultation document issued by the OECD in February.

But Wait, There’s More

Following last week’s release of the OECD’s blueprint for how to rewrite global tax rules, Bloomberg Tax reporter Siri Bulusu spoke with Martin Kreienbaum, director general of international taxation of Germany’s finance ministry. Listen to the most recent episode of Talking Tax here.

Bloomberg Tax Insights articles are written by experienced practitioners, academics, and policy experts discussing developments and current issues in taxation. To contribute, please contact Erin McManus at emcmanus@bloombergtax.com.