IRS Response • Severance Alternative • Digital Estate Planning

April 12, 2020, 2:01 PM

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 look at the IRS’s response to the Covid-19 crisis; an alternative to severance packages; digital estate planning; a myriad of transfer pricing issues; opportunity zone possibilities; the EU VAT and the virus; and India’s redefinition of “residency.” We’ll hear from:

  • Robert Chase, Mary Monahan, and Brian Tschosik of Eversheds Sutherland on the government’s response to the coronavirus
  • David Fuller of McDermott, Will & Emery on an alternative to severance plans
  • Sharon Hartung and Jennifer Zegel on dealing with digital assets upon incapacity and death
  • Baker McKenzie tax professionals on multiple transfer pricing issues in the wake of the Covid-19 crisis
  • Blake Christian on opportunity zone investment options—even with the effect of the coronavirus
  • Nicholas Hallam on the VAT in the EU and Covid-19
  • Ravi Sawana on redefining “residency” for globe-trotting, tax-avoiding Indian citizens
Mather Arch Park in Fort Erie, Ontario, on March 21. Multinational businesses may need to revisit their advance pricing arrangements with tax authorities as they evaluate the impact of the Covid-19 crisis.
Photographer: Cole Burston/Bloomberg

As the coronavirus spreads, businesses and individuals are facing numerous challenges. Robert Chase, Mary Monahan, and Brian Tschosik of Eversheds Sutherland look at efforts taken by Congress, Treasury, and the IRS to ease the impact on businesses and individuals. Read: IRS Response to Covid-19 and Tax Considerations for U.S. Corporations

We’ve taken down our paywall to give you access to additional research resources and all tax and law virus news.

Historically, severance plans have disqualified many employees from receiving state unemployment benefits. David Fuller of McDermott Will & Emery explains a financially attractive alternative known as “supplemental unemployment benefit plans.” Read: SUB-Pay Plans—An Alternative to Severance Programs

The proliferation of digital footprints in our online communities raises demand for consumer tools and options for dealing with digital assets upon incapacity and death. Is your business ready? Trust and estate practitioners (TEPs) Jennifer Zegel and Sharon Hartung say retain them while they’re living; make it easy for loved ones when they’re dead. Read: Supporting Your Clients’ Digital Legacy

Baker McKenzie tax professionals examine multiple facets of the effects of the Covid-19 crisis on transfer pricing in Parts 2-6 of a seven-part series.

Read Part 2: Transfer Pricing & Supply Chains—Global Developments Due to Covid-19
Read Part 3: Transfer Pricing Considerations for Remote Workforces
Read Part 4: Impact of Covid-19 on Valuations and Debt
Read Part 5: Advance Pricing Arrangements—The Quest for Certainty in Times of Uncertainty
Read Part 6: Contemplating Force Majeure and Other Contractual Considerations in Intercompany Agreements

Investors have a clearer picture of the opportunity zone program after the release of several hundred pages of taxpayer-friendly regulations. The program provides possibilities beyond real estate investment. Blake Christian of HCVT tells how it will provide a variety of investment opportunities even with the Covid-19 crisis. Read: The Opportunity Zone Program—More Than Just a Real Estate Tool

Nicholas Hallam of Accordance takes a look at what the future holds for the value-added tax in the European Union with the introduction of its one-stop-shop (OSS) VAT e-commerce package drawing closer. Read: VAT and the Virus

Some Indian citizens—typically high net worth individuals—have arranged their living situation so as to avoid paying income tax to any country. Ravi Sawana of Lakshmikumaran & Sridharan outlines the new law intended to tax such individuals on income from an Indian source. Read: India’s Finance Act, 2020—Introducing a New Rule of ‘Residency’

From the Archive

Bloomberg Tax contributors keep up with technology and with how to manage digital assets in the context of an estate.

Traditional estate planning and administration must be revised and adapted to the digital age. Michelle Gitlitz of Crowell & Moring LLP, Mark Shayne of Empire Valuation Consultants LLC, Sean Weissbart of Blank Rome LLP, and Jennifer Zegel of Kleinbard LLC walked through how to include digital assets in an estate plan and what can be done when the holder of such assets dies without making any provisions.

Linda DelaCourt Summers of Ulmer & Berne explained digital assets, digital access, the difference between them, and why both need to be considered in estate planning.

Beyond Tax

What’s happening outside the world of tax?

Patterson Belknap attorneys look at the role and powers of the new Special Inspector General for Pandemic Recovery at the Treasury Department created under the $2 trillion CARES Act and outline the types of investigations that recipients of the federal stimulus package might face. Read: CARES Act Creates New Treasury IG, Ups Enforcement Ante

The coronavirus pandemic has hit the legal profession hard; jurisdictions around the country have essentially suspended civil litigation, with closed courthouses and frozen statutes of limitations. GLG Law’s David Solomon calls on the American Bar Association, along with state bar committees and other relevant decision makers, to release model guidelines for remote litigation. Read: Virtual Litigation’s Time Has Come

The coronavirus pandemic has left law offices shuttering and their occupants shuddering, Epstein Becker Green’s James P. Flynn writes. He says the world needs resilient, optimistic lawyers who can cope with the changes in the profession as well as the many legal issues clients need help addressing. Read: The Practice of Law in the Time of Covid-19

The U.S. Supreme Court continues to resist calls to modernize as courts across the country have moved operations online and use teleconferencing in response to the coronavirus pandemic. Fix the Court’s Dylan Hosmer-Quint says the justices themselves have been using virtual platforms to conference and that allowing attorneys to argue by teleconference, and the American people to watch by video, would present no great technological challenge. Read: The Time Has Come for SCOTUS to Embrace Technology

The coronavirus pandemic and climate change are two threats that insurers say they can’t insure. Paley Rothman attorneys say there is no support for these assertions, and coverage should be determined by examination of the terms of individual policies, specific facts, and governing law, not sweeping conclusions. Read: Climate Change, Covid-19 Are Indeed Insurable Risks

Exclusive Content for Bloomberg Tax Subscribers

(*Note: Your Bloomberg Tax login will be required to read the following content.)

Country-by-country (CbC) reporting was established in 2015 as part of Action 13 of the OECD’s BEPS project. CbC reports provide details of a multinational entity (MNE) group’s revenues, profit before tax, tax accrued, and other information purportedly relevant to a “high-level” risk assessment, for each tax jurisdiction in which the MNE group has a “constituent entity.” The OECD mandated a review of CbC reporting before the end of 2020. David Ernick of PwC says although it’s unclear how, if at all, tax authorities are using the data, CbC reporting won’t be going away.

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.

To contact the reporter on this story: Erin McManus in Washington at emcmanus@bloombergtax.com

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