Like many of you, I checked the weather pretty obsessively last weekend. I have family in the Carolinas and friends scattered throughout the Southeast, including Florida, and I was worried. It was a relief to finally hear the stories trickle through. Some had serious storm damage, while others were relieved that all that was required was a few hours of cleanup. My mom finally texted me on Saturday that all was well near Topsail, but they had lost power for six hours. Likewise, my daughter lost power overnight, but it had returned by morning.
I know that they are among the lucky ones. Not everyone fared as well. In Florida alone, state and local authorities have documented 120 deaths. That makes it the deadliest storm since 1935. The scope of property damage is still being tallied, but estimates range from $40 billion to $75 billion.
In response, the IRS announced tax relief for those in Florida and the Carolinas. Those states were hard hit as Ian crossed the Florida Panhandle into the Atlantic before powering up again to slam into South Carolina. The result was widespread flooding in several areas.
The tax relief means taxpayers have until Feb. 15, 2023, to file various federal individual and business tax returns and make tax payments. The relief is available to individuals and businesses in a locality designated by the Federal Emergency Management Agency as a disaster area; the list of eligible places is also available on the disaster relief page on the IRS website.
The relief is automatic, meaning taxpayers don’t need to contact the IRS or file any forms. But, any taxpayer who lives outside the disaster area but whose records are located in the affected area must contact the IRS at 866-562-5227. This also includes those workers assisting with the relief activities affiliated with a recognized government or philanthropic organization.
It’s also important to remember that in years past, taxpayers who suffered an economic loss due to a hurricane could claim a deduction on their federal income tax return. That changed in 2018. Following tax reform, individual losses are only deductible to the extent they are attributable to a federally declared disaster. Additionally, since you can no longer claim miscellaneous itemized deductions, business casualty losses of property used in performing services as an employee cannot be deducted or used to offset gains.
Tax professionals tend to focus on the numbers, including the dollars. I get it. We all do it because it’s a significant part of recovery. But let’s not forget about the people—even though the rains are gone, families and businesses are still feeling the impact.
Florida attorneys who need help can look to the state bar—there is a Hurricane Ian Help page available. The Florida Institute of Certified Public Accountants also has a disaster relief page with tax updates.
If you need assistance, don’t be afraid to ask. I’ve noted before that one of the great things about our profession is community. That’s been apparent over the last week—I’ve watched as our community has reached out to each other, from offering the opportunity to sit in air conditioning to simply asking if everyone is OK. Don’t let that spirit fade away once the headlines do.
At Bloomberg Tax, we’re here to help, too. That can take many forms—from sharing important updates to helping build community. And you can always rely on us for great commentary and insightful analysis on federal, state, and international tax issues on the Exchange–no declarations necessary.
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—Kelly Phillips Erb
Quick Trivia
What is generally regarded as the costliest US disaster year on record?
Answer at the bottom.
State Insights
This November, Massachusetts will ask voters whether to approve an amendment imposing a 4% surtax on individual taxable incomes over $1 million. Sherin and Lodgen’s Matthew A. Morris looks at opposition and support to the bill and delves into the background of what led to the ballot.
Federal Insights
EY’s decision to split its auditing and consulting services should empower its auditing firm to land more business and to double down on lucrative consulting opportunities, which could put pressure on other members of the Big Four to follow suit, says Docyt’s Sid Saxena.
While most crypto and NFT fraud victims will not get their investments back, they may be able to take advantage of some tax benefits. Tax attorney Steven Chung shares how fraud victims can use theft loss deductions to offset ordinary income.
Global Insights
In the third part of a series, Parwin Dina of Global Tax Services considers some interesting aspects of the upcoming corporate income tax regime from the perspective of businesses operating in the UAE mainland or the free zones. If you missed them earlier, you can catch up on part 1 and part 2.
Martins Arogie and Oluwadamilola Daramola of KPMG discuss two recent landmark tax cases in Nigeria that may have a significant impact on the energy sector and consider the questions these rulings have raised.
The finance ministers of France, Germany, Italy, Spain, and the Netherlands have announced their intention to enact global minimum tax legislation regardless of whether other countries do so. Jeff VanderWolk of Squire Patton Boggs discusses whether this will prompt others to follow suit.
Many European sellers are looking to the Asia-Pacific countries to expand their customer base. Aleksandra Bal of Stripe explains the value-added tax and goods and services tax obligations when selling digital services to APAC countries. The first part of this two-part article focuses on how to be tax compliant in India, Indonesia, and Japan. In part 2, Bal explains the value-added tax/goods and services tax obligations when selling digital services to Malaysia, Singapore, South Korea, and Taiwan.
Several states in Brazil have made companies co-liable for taxes on products sold on their marketplaces by independent third-party sellers, potentially opening the door to more litigation and less cooperation by taxpayers. Sharing a state transactions report, known as a DIMP, with authorities is an existing model rule that avoids litigation and increases collection, says Meta Platforms’ Rafael Benevides.
Reader Responses
At The Exchange, we welcome responses from our readers and encourage diversity and civil discussion. We are especially interested in responses that add to the conversation, or introduce a different point of view. If you have a response to one of our published Insights, we’d love to hear from you.
Coming Up
Next week, look for more great Insights and Commentary, including a focus on pass-through entity tax, a different take on whether Phoenix Suns owner Robert Sarver can deduct his NBA fine, and a look at the potential impact on California taxpayers on the 2009 Metropoulos Family Trust decision.
A Closer Look
Remote work can make a company look more attractive to current and future employees, but it’s also a gateway into an intricate maze of tax rules. In this edition of “A Closer Look,” Baker McKenzie’s Erik Christenson and Imke Gerdes look at the international cross-border taxation issues posed by remote work.
Columnists
The IRS is required by law to follow specific procedures. But what happens when taxpayers allege that the IRS didn’t follow the rules? There are processes for that, too, which may include filing suit to right the purported wrong. That’s precisely what happened in a recent jeopardy assessment case where billionaire Robert T. Brockman alleged that the IRS overstepped. The court, however, disagreed. Here’s my summary of what happened.
When it expired in January 2022, the temporary expansion of the child tax credit, which has been effective at lifting children out of poverty, illustrated why it never should have been temporary in the first place. But until it’s restored, there are some things that can be done. Andrew Leahey takes a look in his latest column.
Get Caught Up
It’s been a busy week in tax news from state capitals to Washington. Here are some stories you might have missed from our Bloomberg Tax news team.
*Note: Your Bloomberg Tax login will be required to access Tax News.
- The OECD’s final crypto-asset reporting framework, a blueprint for global regulation, includes a $50,000 threshold for crypto service providers, organization officials said.
- A company that provides tracking and analytics information to sales teams isn’t liable for tax on the sales of its services, a New York administrative law judge ruled.
- The IRS and Treasury Department issued notices for comment on six energy provisions in President Joe Biden’s tax-and-climate law.
- A federal appeals court in Boston signaled that FedEx Corp. drivers’ bid to FedEx Tax Wage Theft Argument Centers on Alleged Harm to Drivers revive their lawsuit alleging the company engaged in wage theft by not paying their tax withholdings to the government will turn on whether they suffered an actual injury.
Spotlight
Our Spotlight series highlights the careers and lives of tax professionals all over the world. This week’s Spotlight is on Orumé Hays, the founder and CEO of Hays CPA LLC in New York City.
Career Moves
Ross McKinney and Ron Shackelford have joined Global Tax Management as managing directors of international tax and tax automation services, according to the firm.
Abigail Rosen Earthman and Stephanie Loomis-Price have joined Perkins Coie as partners in the personal planning practice in Dallas and Austin, Texas, and will co-chair the firm’s tax and fiduciary litigation group, according to the firm.
Noelene Sheridan has joined EisnerAmper as a tax partner in its private client services group, the firm announced.
Eight tax attorneys in eight different cities were among 193 attorneys promoted to partner by Kirkland & Ellis LLP, the law firm announced.
Diego Avolio has been named a partner with the tax practice of McDermott Will & Emery in Milan, according to a news release.
Greensfelder, Hemker & Gale, P.C. has added Patrick Schoshinski as counsel and Chloe Cummings and Anna Rudoi as associates in the trusts and estates practice group at its St. Louis office, the firm announced.
Todd Smith has joined Morgan Lewis as a tax partner in the London office, the firm said.
Luisella Perri has joined the tax practice group and health care and life sciences sector of Foley & Lardner LLP in Washington, DC, the firm said.
Darrell Smelcer has rejoined Hunton Andrews Kurth LLP as special counsel in Atlanta, the firm said Thursday.
If you are changing jobs or being promoted, let us know. You can email your submission to TaxMoves@bloombergindustry.com for consideration.
Events
Tax Foundation, which bills itself as the nation’s leading independent tax policy nonprofit, will host its annual “Tax Prom” starting at 6 p.m. on Nov. 17 at the National Building Museum in Washington, D.C.
If you’re hosting an industry-wide event, let us know. You can email your submission to TaxEvents@bloombergindustry.com for consideration.
Don’t Miss Out
Bloomberg Tax Insights has rescheduled the latest installment of its virtual Lunch & Learn series. Zoom with us on Oct. 12 from noon to 1 p.m. EDT for “What Tax and Legal Pros Need to Know About Retirement.”
We’ve recruited a top financial adviser who can help you prepare for your post-professional life. Matthew Grieb is a certified financial planner with Raymond James in the Washington, D.C., area. His practice focuses on sophisticated wealth management planning for business owners creating generational wealth, as well as for high-income specialty professions.
Quick Trivia Answer
2017—the year of Hurricane Harvey—is considered the most expensive storm season on record. It’s estimated to have cost nearly $100 billion (yes, with a b) more than 2005—the year of Hurricane Katrina.
Our Team
We talk about tax a lot. But there’s a lot more that you might hear us talking about 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—maybe you’ll be inspired!
Watching
- Kelly Erb (Team Lead, Insights and Commentary): “Derry Girls!” The third and, sadly, final season is back on Netflix in the US as of Friday, Oct. 7, 2022. It’s already aired in the UK—no spoilers!
- Don Griswold (Columnist): “Reservation Dogs” (FX)—I love “slice of life” shows set in any milieu with which I’m unfamiliar; hoping this one doesn’t get canceled/postponed like “Blindspotting” did.
Reading
- Rachael Daigle (News Director, Tax): Just finished “The Lonely Polygamist” (an oldie) and next up is “Cloud Cuckoo Land"—you caught me on an Idaho kick!
- Melanie Cohen (Editor, Insights and Commentary): “The Ruin” by Dervla McTiernan, an Irish noir looking into the death of a supposed suicide.
Listening
- Andrew Leahey (Columnist): I’m listening to the album “Bellybutton” by Jellyfish owing to this article. They were all set to be the Beatles of the ‘90s, but infighting led to their breakup. Their first album came out in 1990 but could easily be mistaken for early ‘00s indie rock. Their music videos are a sight to see as well.
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