Week in Insights: At Least We Don’t Have to Pay Taxes With Beer

Curated by Daniel Xu

The IRS has announced that the new tax filing season officially kicks off on Jan. 29. As we brace ourselves for the long hours, it’s intriguing to look back at how taxes have evolved. Perhaps in doing so, we can cultivate a sense of gratitude for the comparative simplicity of filing taxes in 2024 as opposed to, say, 3100 B.C.E.

In Ancient Egypt, it became necessary to raise a tax for defense and infrastructure maintenance as the unified kingdom flourished along the Nile. The government also sought to address overconsumption of alcoholic beverages and figured a tax on beer might solve two problems at once.

The enacted beer tax was complicated by the fact that Ancient Egyptians used the beverage as a payment method throughout the kingdom. It was so highly valued that it served as a means of transferring value, and evidence of paying for services with beer offers insights into the distribution of responsibilities among workers.

Of course, you can’t pay your employees in beer today. If someone says you can, you may be speaking to a nearly 5,000-year-old client whose information is a bit outdated. On the plus side, as you navigate this year’s tax labyrinth, take heart—at least you’re not trying to figure out how much a cubit of beer in wages is worth in tax payment terms.

Here at Bloomberg Tax, we’re committed to providing you with up-to-date information from tax experts of this millennium. Stick with us as our team diligently stays abreast of the latest changes in laws and regulations, ensuring that our guidance is accurate and applicable to your tax needs in 2024.

—Andrew Leahey

Look for Leahey’s column on Bloomberg Tax, and follow him on Mastodon at @andrew@esq.social

Tanks in a production area at Devil’s Canyon Brewing Company in San Carlos, Calif., on Sept. 26, 2023.

Photographer: Loren Elliott/AFP via Getty Images

State Insights

Catherine Shaw of Cherry Bekaert explains how companies with teleworkers in multiple states should navigate nexus, payroll taxes, and other tax-related complexities.

Federal Insights

Lee Reams of TaxBuzz highlights ways that taxpayers can protect themselves from potential red flags that arise with tax professionals, such as lack of transparency or promises of a larger refund.

Stout’s Justin Elanjian explains common shortfalls in employee retention credit documentation and how business taxpayers can ensure complete documentation.

Learning more about other ETFs’ tax treatment can help dispel confusion over how to tax bitcoin ETFs, Fried Frank’s Libin Zhang says.

Indiana University’s Vivian Fang details the challenges faced by companies that need to adhere to first-of-its-kind accounting rules governing cryptocurrency.

Lathrop GPM’s Jim Thomson and Edward Tully outline several steps that should be taken today to prepare for future gifting and the reduction of the federal estate tax exemption.

An estate tax case before the US Supreme Court underscores the importance of stock-purchase agreements and life insurance arrangements, Goulston & Storrs’ Michelle Porter and Emily Berlin say.

Proposed regulations for obtaining clean energy tax credits for hydrogen production would create procedural headaches for energy producers, says James Chenoweth of Alliant Insurance Services.

Orrick’s Rachel Patterson outlines considerations for law firm partners to assess whether they have been timely, direct, equitable, and transparent when they tell associates they are not being considered for partnership at the firm.

Global Insights

Tulika Lall of BDO Switzerland says the choice whether to adopt the OECD-led Inclusive Framework’s Pillar Two tax rules has parallels with game theory, as it weighs immediate self-interest against potential long-term benefits.

Columnist Corner

A tax on pumped groundwater would be a major step in addressing US groundwater depletion over the last century, Andrew Leahey says in his Technically Speaking column. He argues that a similar policy enacted in Pajaro Valley in California demonstrates a water tax’s potential to conserve a vital resource while funding technology and infrastructure development.

Career Moves

Carrie Michaelis and Andrew Reardon have joined Goulston & Storrs in the private client and trust group in New York.

Evelyne Bagdassarian has joined Stephenson Harwood as a partner with the tax practice in Paris.

Ashley Rowland, Jonathan Clark, and Jaydeep Menon have been named partner at Frazier & Deeter.

Wade Hauser has been promoted to partner at Lathrop GPM in the nonprofit and tax-exempt organizations practice area in Minneapolis.

Robert Marshall has joined Kitson Boyce as a partner on the private client team in Exeter, England.

Mintz & Gold is launching a new tax practice that will be led by partners Howard Topaz and Philip Altman.

Drew Hermiller and Eileen Kuo have joined Lockton as senior vice presidents in the transaction liability team with a focus on tax insurance.

Eckert Seamans has named Raymond C. Vogliano chair of the tax, estates, and employee benefits practice and Deanne M. O’Dell co-chair of the utilities practice group.

Christopher Thompson has joined DLA Piper as a transactions tax and indirect tax partner in Brussels.

Alexander M. Goerss has been elevated to partner at Chartwell Law in Miami.

Jorge Medina has joined Vinson & Elkins as a partner in the tax practice.

Brian McComas has been promoted to principal at Dark Horse CPAs, the firm said Thursday.

If you’re changing jobs or being promoted, email your submission to TaxMoves@bloombergindustry.com for consideration.

News Roundup

It’s been another busy week in tax news from state capitals to Washington. Here are some stories you might have missed from our Bloomberg Tax news team (login required).

• Tax increases on very high incomes and a gas tax hike could replace the revenue that would be lost if Connecticut repealed its car tax, members of a state task force said.
• Language in the corporate alternative minimum tax changes the way gains from federal financial assistance from the Federal Deposit Insurance Corp. are taxed in a way that could blunt future efforts to stave off banking crises such as the one seen last spring.
• Decades-long sentences and close to $1 billion in ordered restitution handed out in federal court this week in a fraudulent charitable deductions and land rights case could finally put the brakes on a controversial tax transaction while making it easier for the IRS to win related cases in US Tax Court.
• The IRS is touting its recent enforcement efforts to collect millions from partnerships, large companies, and wealthy individuals to help close a giant tax gap, even as the agency stares down billions in expected cuts to its supplemental funding.

General view during the grand opening of North American Motor Car in Danbury, Conn., on Sept. 23, 2022.

Photographer: Mark Sagliocco/Getty Images for North American Motor Car

Tax Journals

(Bloomberg Tax login required)

Tax Management International Journal

Nigeria’s Finance Act 2023 is a significant step toward aligning Nigeria’s tax framework with international standards and best practices for transfer pricing and value-added tax administration, KPMG’s Israel Ajayi and Onyenyeonwu Okechukwu Felix say.

Tax Management Memorandum

Two new IRS notices expand on prior guidance regarding the corporate alternative minimum tax, Orrick’s Peter Connors explains.

Even sophisticated taxpayers make costly mistakes dealing with New York’s statutory residency rules on their own, EY’s Yud Harrindranauth and Steven J. Colby find.

Our Team

We talk about tax a lot. But you would hear much more if you popped into one of our Teams meetings. Here’s a quick look at what some of us are watching, reading, and listening to this week.

Watching
Melanie Cohen (Content Editor): Just finished up the finale of “Single’s Inferno,” Season 3!

Reading
Andrew Leahey (Columnist): Truman Capote’s “In Cold Blood,” one of those classics in true crime that I somehow never got around to. For those uninitiated, it’s a 1959 nonfiction novel on the murders of the Clutter family in Holcomb, Kan.

Listening
Daniel Xu (Content Editor): Mitski’s latest album, “The Land Is Inhospitable and So Are We.” It’s very emotional, yet oddly calming.

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