OECD Digital Tax Negotiations • IRA Myths • Donor-Advised Funds

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 OECD’s Inclusive Framework’s extension of the deadline to reach a consensus; the myths about traditional vs. Roth IRAs and 401(k)s; donor-advised funds in the new decade; the evolution of digital tax; SECURE Act re-planning; and state controlling interest transfer taxes. We’ll hear from:

Jeff VanderWolk of Squire Patton Boggs on the OECD’s agreement to keep trying to reach an agreement on digital taxation

William Wang of U.C. Hastings on the myths about Roth vs. traditional retirement accounts

Eileen Heisman of National Philanthropic Trust on donor-advised funds as the giving vehicle in the new decade

Christiaan van der Valk of Sovos on the evolution of digital tax

Henry Montag of the Toli Center East and Brett Goldstein of The Pension Department Inc. on re-planning after the SECURE Act

Miriam Song of Gannett on state controlling interest transfer taxes

Fishing at the St. Johns River in Green Cove Springs, Fla.

Photographer: Hector Retamal/AFP via Getty Images

The OECD issued a statement last week on the status of the Inclusive Framework’s efforts on the tax challenges of digitalization. Jeff VanderWolk of Squire Patton Boggs says the big news is that the IF agreed to continue its negotiations under Pillar One dealing with tax nexus and global profit allocation. The author outlines the key takeaways from the document. Read: Highlights of the OECD/Inclusive Framework’s Jan. 31 Statement on Pillars One and Two

There are many misconceptions about the traditional and Roth 401(k) and individual retirement accounts. William K.S. Wang of U.C. Hastings College of Law walks through nine myths about the two types of retirement accounts and explains how people may not be using them to their best advantage. Read: Myths About the Traditional and Roth 401(k)/IRA That Affect How People Use Them

What lies ahead for the fastest-growing giving vehicle in the 2020s? Eileen Heisman of National Philanthropic Trust forecasts four key things to watch. Read: Donor-Advised Funds in the New Decade

Country-specific systems of digital tax reporting and collection are developing rapidly. Christiaan van der Valk of Sovos considers what business leaders need to do to ensure they understand and adhere to, and take advantage of, increasingly complex international rules and regulations. Read: The Evolution of Digital Tax—to Continual Transaction Controls and Beyond

Despite its title, the SECURE Act may have made your client’s retirement nest egg anything but secure. Henry Montag of the Toli Center East and Brett Goldstein of The Pension Department Inc. explain the good, the bad, and what adjustments to consider in retirement and estate planning. Read: Planning Considerations Regarding the SECURE Act

In 2019 Vermont became the 17th state to apply a controlling interest transfer tax (CITT) to transfers of real property. Miriam Song of Gannett Co. explains the types of transfers that are subject to the tax and that mergers and acquisitions qualifying for deferred or nonrecognition treatment under the federal tax code may still incur a state CITT. Read: Controlling Interest Transfer Taxes—16 Going on 17

From the Archive

Bloomberg Tax contributors have been keeping up with the OECD’s efforts to reach multinational consensus on taxing the digital economy.

U.S. multinational corporations had much to say about the OECD’s “Unified Approach” during the organization’s Nov. 21-22 public consultation meeting. Glenn DeSouza of Dentons highlighted the MNCs’ comments and what they agreed and didn’t agree on. Read: Fortune 500 Speak Out on Unified Approach

Lorraine Eden of Texas A&M and Oliver Treidler of TP&C offered six policy recommendations designed to move the global economy onto the BEPS 2 path, a path appropriate for 21st century digital multinationals that will benefit both developed and developing countries. In Part I of a two-part analysis of the Pillar One proposals, the authors provided a summary and analysis of the proposals. Read: Taxing the Digital Economy—Pillar One Is Not BEPS 2 (Part I) In Part II, the authors examined the implications of the proposals and provided some recommendations. Read: Taxing the Digital Economy—Pillar One Is Not BEPS 2 (Part II)

The OECD’s May 2019 proposals on the taxation of the digital economy—frequently referred to as “BEPS 2.0"—are potentially a considerable departure from existing international taxation norms. Simon Webber of Duff & Phelps looked at some the approaches being considered and what the author viewed as the short-sighted focus on U.S. Internet companies. Read: Considering Some of the Issues and Proposals in the Digitalizing Economy Tax Debate

Beyond Tax

What’s happening outside the world of tax?

The law firm of the future will be different, as value-based pricing replaces antiquated billing methods, “swarm intelligence” will become the norm, and firms will have very lean staffs with most services outsourced to professional third parties, predicts TGO Consulting’s Jaap Bosman. Read: Fundamental Changes Coming to the Legal Industry This Decade

Most U.S. Supreme Court justices are registered with a political party. But does that call into question their independence, especially in this election year? Gabe Roth, director of Fix the Court, discusses his group’s new research on the justices and suggests renouncing party affiliation would separate them from politicians. Read: Why Are Supreme Court Justices Registered as Democrats and Republicans?

The fourth quarter of 2019 included significant regulatory and policy developments related to economic sanctions and export controls. Kirkland & Ellis attorneys discuss these actions and what they may indicate about trends and takeaways in 2020. Read: Economic Sanctions and Export Controls Update Q4 2019

Baker McKenzie Global Chair Milton Cheng attended the World Economic Forum in Davos, Switzerland, for the first time this year and shares his takeaways for the legal profession. Sustainability, corporate responsibility, and the importance and growth of technology top his list. Read: What Baker McKenzie’s Global Chair Learned at Davos

New proposed vertical merger guidelines from the FTC and DOJ essentially codify the informal lore in the antitrust bar that vertical mergers generally pose less of a potential anticompetitive threat than certain horizontal mergers, Cadwalader attorneys write. They say the guidelines reserve wide latitude for the government to justify almost any outcome of a vertical merger investigation. Read: Proposed Vertical Merger Guidelines—Increased Transparency or Opaque Glass?

The technology underlying cryptocurrencies has saturated the enterprise market for the past year, but even outside of Fortune 500s, blockchain is also disrupting social spaces—including that of criminal and civil justice, writes Greg Forst, director of marketing for the Factom Protocol. He provides examples of key features of blockchain that make a good case for its integration into legal proceedings. Read: Blockchain Sits on the Cusp of Transforming the Courtroom

Contracts in the digital age have many hidden, interrelated elements that attorneys must detect and understand. Parley Pro’s CEO Olga V. Mack offers five ways contract management software helps you work smarter by improving clarity, efficiency, and scalability. Read: Work Smarter With the Right Contract Management Software

Exclusive Content for Bloomberg Tax Subscribers

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New York fiduciaries pay a lot of New York income taxes. Thus, for 2014 (the latest year for which figures have been released), 59,685 resident estates and trusts paid approximately $342 million of New York income tax. This is remarkable because clear rules for avoiding the taxation of trusts have existed for many years. Richard Nenno of Wilmington Trust Co. surveys the pertinent authorities and offers planning ideas.

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.