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Weekend Insights: Tax Planning Without a Crystal Ball

May 23, 2021, 2:00 PM

In the early minutes of the classic film “The Wizard of Oz,” Dorothy stumbles upon Professor Marvel, whose wagon boasts, “Let Him Read Your PAST - PRESENT and FUTURE In His Crystal.” Dorothy, desperate for clarity, asks the professor a question. He pauses before offering, “I never do anything without consulting my crystal first.”

A crystal—or a crystal ball—is said to find answers by allowing its owner to peer into the future. It sounds like a marvelous idea and I have to confess that, like Dorothy, there have been times that I wished I could see what’s coming courtesy of a crystal ball. That’s never felt more true than in 2021: As tax professionals, we want to know what’s coming so that we can better assist our clients.

But maybe we don’t need a crystal ball. After all, Dorothy didn’t get the answers she wanted from the crystal, but from herself, after reflecting on the professor’s words.

Ray Bolger, Jack Haley, Judy Garland, and Bert Lahr, all in costume as they dance along the yellow brick road in a publicity still from “The Wizard of Oz,” 1939.
Photo by Silver Screen Collection/Getty Images

So while our ability to see into the future may be in short supply, we can offer expert analysis to get you on the road to tax planning-related answers in this week’s Insights Roundup.

Quick Numbers Trivia

How much did the crystal ball used in “The Wizard of Oz” sell for at auction in 2011?
(Answer at the bottom.)

Our Roundup

Amid a twister of a year, it can be hard to stay on the right road to tax planning. From tax abatements to wealth planning, our tax professionals have what you need:

A degree may not provide you all the knowledge you need to get ahead when it comes to practical advice. Tax advisers can find themselves in the position of being asked to provide more than tax advice to their clients. Bryan Kesler outlines Seven Financial Planning Hacks Only the Pros Know to help your clients when they ask money-related questions outside of taxes.

Earlier this year, many tax professionals wished that the Treasury Department and IRS would have a heart and extend filing deadlines. Fortunately, they did. In Tax Deadline Extension–A Boon for Finance Functions, Krishnan Raghunathan of WNS shows how an extension can benefit finance and accounting teams if they use the extra time to rethink their operating model.

Actor Bert Lahr’s Cowardly Lion costume from “The Wizard of Oz,” on display at Bonham’s in New York, 2014.
Photographer: Don Emmert/AFP via Getty Images

Are courageous tax moves needed to encourage development and stimulate the economy? Erin Sykes of Nest Seekers writes about The Return of the Tax Abatement in New York City and how the program works.

Wondering what’s just down the road? 2021 is shaping up as a year of economic growth and recovery. Mimi Song of CrossBorder Solutions looks at predictions for U.S. and international tax policy measures in Planning For Post-Pandemic Economy: Multinational Group Outlook and Tax Strategies.

Is the Base Erosion and Anti-Abuse Tax (BEAT) destined to be not merely dead but really, most sincerely dead? Cutting it may be on the agenda, to be replaced by “Stopping Harmful Inversions and Ending Low-Tax Developments” (SHIELD). In U.S. Tax Reform 2.0—BEAT Down, SHIELD Up?, Danielle Rolfes, Jonathan Galin, and Marcus Heyland of KPMG examine the proposed provision and its prospects for enactment.

When tackling a problem, it’s always best to start at the beginning. The Biden administration has begun to engage with other countries in the OECD tax discussions. In OECD Tax Negotiations Offer Chance for New Approach, David Morse of the Coalition for a Prosperous America Education Fund sees a viable path forward for Pillar One and a more understandable Pillar Two, albeit with a divergence from transfer pricing rules.

Bloomberg Tax’s Isabel Gottlieb also focused on the impact of the new U.S. administration on the global talks in the most recent Talking Tax podcast episode.

When it comes to understanding tax policy, there may be no place like home. President Joe Biden recently unveiled proposals for significant changes to the tax code. In Strategy Spotlight: Preparing for New Tax Laws, Pam Lucina, Trust & Advisory Practice Leader for Northern Trust Wealth Management, highlights the areas that could be impacted and the corresponding wealth planning strategies.

Finally, Dorothy didn’t find her way on her own—she needed help along the way. That’s true for tax professionals, too. In the most recent Taxgirl podcast, industry leader Kate Barton, the global vice chair for Tax at EY, talks about mentors, sponsors, and how important it is for women in business, especially in high-level positions, to surround themselves with good people.

Write for Us

Bloomberg Tax Insights articles are written by tax professionals offering expert analysis on current issues in tax practice and policy, tax trends and topics, and tax and accounting firm practice and management. If you have an interesting, never-published article for publication, we’d love to hear about it. You can contact our Insights team by emailing TaxInsights@bloombergindustry.com.

Beyond Tax

Increasing access to legal services for people of modest means isn’t just a dream. Jason Solomon, executive director of the Stanford Center on the Legal Profession, and Noelle Smith, a third-year Stanford Law student, argue in A Promising Path to Increase Access to Justice that it can happen by creating the equivalent of nurse practitioners in the legal profession. Several states are considering this, they say, and the result will improve the way the legal system functions.

Student Writing Competition

Think you have the “write” stuff for Bloomberg Tax Insights? We’re excited about our inaugural Bloomberg Tax Insights writing competition, intended to highlight the very best of student writing.

Happening This Week

Everyone loves a great review, but what happens when reviews aren’t so terrific? In a world where online reviews can be key to attracting—or losing—potential clients, it’s critical to understand when and how to respond to negative reviews.

Gina F. Rubel, Esq., Founder and CEO of Furia Rubel Communications, Inc., will share what you need to know about online reputation management in a virtual event on May 26 at 12:00 pm EST. You can listen in here, no registration required.

Your Quick Numbers Answer

The ball was sold at a Hollywood auction for $126,500. All of the proceeds—after the costs of sale—were donated to charity.

Exclusive Content for Bloomberg Tax Subscribers

“The Wizard of Oz” slippers worn by Judy Garland in 1939 on display at the Plaza Athenee in New York City, 2011.
Photographer: Astrid Stawiarz/Getty Images

From ruby slippers to a well-placed bucket of water, having the right tools to get the job done is important. Our Interactive Workflow Tools make it easy. Each workflow tool will lead you through a series of questions related to a transaction, guiding you through key considerations/facts required to make a determination. Definitions, descriptions, and links to additional guidance and relevant source material are displayed at each step, providing more detail on the question at hand. At the end of the workflow, links to associated documents such as election statements and forms are provided for easy access.
*Note: Your Bloomberg Tax login will be required to read Interactive Workflow Tools.

More Great Tax Content

This is a weekend roundup of Bloomberg Tax Insights, written by practitioners and featuring expert analysis on current issues in tax practice and policy. For a full archive of articles, browse by jurisdiction at Daily Tax Report, Daily Tax Report: State, Daily Tax Report: International, Transfer Pricing Report, and Financial Accounting.

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What Did You Think?

We hope you’re enjoying the new format—and the new look—of the newsletter. We’d love to hear what you think. Here’s our email: TaxInsights@bloombergindustry.com.

To contact the reporter on this story: Kelly Phillips Erb in Washington at kerb@bloombergindustry.com

To contact the editors responsible for this story: Rachael Daigle at rdaigle@bloombergindustry.com; Kathy Larsen at klarsen@bloombergtax.com

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