William Byrnes' Tax, Wealth, and Risk Intelligence

William Byrnes (Texas A&M) tax & compliance articles

Texas A&M’s International Tax Certificate or Master Degree Curriculum – online using Zoom

Posted by William Byrnes on June 15, 2021


The International Tax Certificate and Master Degree is designed for international tax professionals (including lawyers, accountants, economists, and financial leaders) to deliver specialized legal training for an in-depth understanding of the international tax risk management field’s changing complex legal aspects. 

This graduate-level International Tax certificate or Master degree will prepare new and experienced international tax professionals to effectively address complex legal and policy challenges with respect to global tax risk. Specifically, participants will be exposed to (i) important U.S. and international laws, regulations and policies in the international tax risk management field, and (ii) technology, data, and practice, as well as applications of law and regulation through case studies through a weekly based structure. Individuals who complete the program will be able to synthesize scenarios, practice, and legal regulation in the international tax risk management field, providing analysis or judgments for consideration to organizational leadership with a nuanced perspective.

Courses are offered by asynchronous distance learning to provide a flexible schedule for working professionals. Interactive coursework includes case study assignments and regular interaction with classmates & the faculty through twice-weekly zoom meetings (recorded), pre-recorded videos, audio casts, discussion boards, and group breakout sessions.  For more information, please go to law.tamu.edu/distance-education/international-tax.

Example courses:

  • LAW 625 Spring Term A Transfer Pricing l – Methods, Econometrics, and Tangibles
  • LAW 626 Spring Term B Transfer Pricing II – Services and Intangibles
  • LAW 627 International Tax Risk Management I – Data, Analytics, and Technology
  • LAW 647 Fall Term A International Taxation and Treaties – residency issues
  • LAW 649 Fall Term B International Taxation and Treaties – source issues
  • LAW 719 Fall A Domestic Tax Systems Risk Management
  • LAW 720 Fall B International Tax Risk Management II – Data, Analytics, and Technology
  • U.S. International Tax Risk Management – Data and Analytics Spring Term A
  • U.S. International Tax Risk Management – Law and Regulation Summer
  • FATCA, CRS, and AEoI Risk Management – Summer

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Uncategorized | 2 Comments »

Texas A&M Summer Int’l Tax courses: FATCA, CRS, and AoEI/CbCR; U.S. International Tax Law Risk (May 23 – July 10, 2022)

Posted by William Byrnes on February 9, 2021


Based on weekly case studies created by the faculty, supported by reading/text materials, pre-recorded videos with PPTs, and audio podcast files made by the faculty – twice-weekly Zoom live sessions (recorded for persons who cannot attend) of 90 – 120 minutes wherein students in teams work through the case studies generally from an assigned stakeholder perspective. Access to the extensive Texas A&M library for case study research includes by example: Lexis, Westlaw, IBFD, Kluwer-Cheetah, Bloomberg, Thomson OneSource, BvD (Moodys), S&P CapIQ, FITCH, among many others. Apply for Texas A&M’s courses here.

FATCA, CRS, and AEoI (global focus):

Week 1. May 23 Dr. Bruno Da Silva (Asian Development Bank) dasilva.brunoaniceto@gmail.com.

Week 2. May 30 FATCA/CRS and the Asset Management Industry, intermediaries: Denise Hintzke (Deloitte) dhintzke@deloitte.com

Week 3. June 6: FATCA Withholding Compliance, overlap with QI: Denise Hintzke (Deloitte)

Week 4. June 13: Denise Hintzke (Deloitte)

Week 5. June 20: Bruno da Silva

Week 6. June 27: Bruno da Silva

Capstone through July 10

International Tax Risk Management I (U.S. focused Law & Policy) Melissa Muhammad (IRS LB&I) melissamuhammadesq@gmail.com

Week 1 May 23 Outbound Branches

Week 2 May 30 FTCs

Week 3 June 6 CFCs

Week 4 June 13 Interest, thin cap, Debt/Equity

Week 5 June 20 BEAT / FDII

Week 6 June 27 IGAs (other treaty issues)

Capstone through July 10

This image has an empty alt attribute; its file name is 500k-grad-group.jpg
Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Courses | Tagged: , , | Leave a Comment »

U.S. and E.U. International Tax, Transfer Pricing Courses Start Jan 19, 2021

Posted by William Byrnes on November 24, 2020


Based on weekly case studies created by the faculty, supported by reading/text materials, pre-recorded videos with PPTs, and audio podcast files made by the faculty – twice-weekly Zoom live sessions (recorded as well) of 90 – 120 minutes wherein students in teams work through the case studies generally from an assigned stakeholder perspective. Access to the extensive Texas A&M library for case study research includes by example: Lexis, Westlaw, IBFD, Kluwer-Cheetah, Thomson OneSource, BvD (Moodys), S&P CapIQ, FITCH, among several others. Apply for Texas A&M’s courses here.

  • Transfer Pricing Risk Management I Tangibles, Methods, Economics, and Data
  • Transfer Pricing Risk Management II: Intangibles, Services, Pillar 1/Digital, Formulary
  • U.S. Tax Risk Management (Data, Analytics & Technology)
  • E.U. Tax Risk Management

U.S. Tax Risk Management (Data, Analytics & Technology) syllabus

E.U. Tax Risk Management syllabus

  • Week 1 March 8, 2021 E.U. General Framework of Compliance Tax Risk Management Dr. Eva Andrés (Barcelona)
  • Week 2 March 15, 2021 Parent Subsidiary Directive, Interest, Royalties. Dr. Santiago Ibañez Marcilla
  • Week 3 March 22, 2021 The European Union proposal on a carbon border tax and its compatibility with the World Trade Organization rules Dr. Xavier Fernández Pons
  • Week 4 March 29, 2021 Free Movement of Capital (investment funds) and others Fundamental Freedoms. Dr. Eva Andrés & Dr. Andreu Olesti
  • Week 5 April 5, 2021 Cross-Border Losses – Dr. Bruno Da Silva
  • Week 6 April 12, 2021 ATAD, DAC 6, Abuse – Dr. Bruno da Silva
  • Capstone Week April 19-25: Build a client case study, wrap up

Transfer Pricing Risk Management: Tangibles, Methods, Economics, and Data (William Byrnes course materials) syllabus

  • Week 1 January 19 Arm’s Length Standard (v Formulary Approach) Dr. Bruno Da Silva & William Byrnes
  • Week 2 Jan 25 CUP & Comparables Dr. Lorraine Eden
  • Week 3 Feb 1 Cost Plus & Resale Minus Dr. George Salis
  • Week 4 Feb 8: Comparable Profits Method & TNMMDr. George Salis
  • Week 5 Feb 15 Profit Split Dr. George Salis
  • Week 6 Feb 22 Best Method Dr. Lorraine Eden
  • Capstone Week March 1

Transfer Pricing Risk Management: Intangibles and Services (William Byrnes course materials) syllabus

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Courses | Tagged: , | Leave a Comment »

Texas A&M’s International Tax Certificate or Master Degree – online begins August 22

Posted by William Byrnes on June 22, 2022


The International Tax Certificate and Master Degree is designed for international tax professionals (including lawyers, accountants, economists, and financial leaders) to deliver specialized legal training for an in-depth understanding of the international tax risk management field’s changing complex legal aspects. 

This graduate-level International Tax certificate or Master degree will prepare new and experienced international tax professionals to effectively address complex legal and policy challenges with respect to global tax risk. Specifically, participants will be exposed to (i) important U.S. and international laws, regulations and policies in the international tax risk management field, and (ii) technology, data, and practice, as well as applications of law and regulation through case studies through a weekly based structure. Individuals who complete the program will be able to synthesize scenarios, practice, and legal regulation in the international tax risk management field, providing analysis or judgments for consideration to organizational leadership with a nuanced perspective.

Courses are offered by asynchronous distance learning to provide a flexible schedule for working professionals. Interactive coursework includes case study assignments and regular interaction opportunities with classmates & the faculty through twice-weekly zoom meetings (recorded), pre-recorded videos, audio casts, discussion boards, and group breakout sessions.  For more information, please go to law.tamu.edu/distance-education/international-tax.

Example courses:

  • LAW 625 Spring Term A Transfer Pricing l – Methods, Econometrics, and Tangibles
  • LAW 626 Spring Term B Transfer Pricing II – Services and Intangibles
  • LAW 627 International Tax Risk Management I – Data, Analytics, and Technology
  • LAW 647 Fall Term A International Taxation and Treaties – residency issues
  • LAW 649 Fall Term B International Taxation and Treaties – source issues
  • LAW 719 Fall A Domestic Tax Systems Risk Management
  • LAW 720 Fall B International Tax Risk Management II – Data, Analytics, and Technology
  • U.S. International Tax Risk Management – Data and Analytics Spring Term A
  • U.S. International Tax Risk Management – Law and Regulation Summer
  • FATCA, CRS, and AEoI Risk Management – Summer

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.) The law school’s new campus is part of the Texas A&M AggieLand North billion dollar investment.

Posted in Courses | Tagged: | Leave a Comment »

TaxFacts Intelligence: When does COVID-19 Qualifies as a Employee’s Protected Disability?

Posted by William Byrnes on April 25, 2022


The Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

The April 18th tax filing deadline has passed and it’s already time to plan for this tax year of 2022. You’ll want to make sure you are prepared with the most up-to-date tax knowledge as you. We want you to have access to the 2022 Tax Facts books and the weekly intelligence newsletter – the reference solution that helps answer critical tax questions with the latest tax developments. Save 15% off any 2022 Tax Facts print or eBook by using Code TFN15 now through the end of the month.

In tax news, we have a mixed bag of updates for both individual and small business clients this week.  The IRS released proposed regulations offering clarity on what clients who are interested in the MEP option can expect in situations where the “one bad apple” rule might have applied pre-SECURE Act.  The EEOC has clarified whether and when COVID-19 itself can qualify as a disability for ADA purposes. Business clients should also be advised of the return to the Trump-era test for determining independent contractor status.

EEOC Offers Clarity on When COVID-19 Qualifies as a Disability The EEOC has recently introduced clarifying guidance on when COVID-19 will qualify as a disability for federal anti-discrimination law purposes. In some cases, COVID-19 will qualify as a disability under the Americans with Disabilities Act (ADA)–often, based on side effects associated with the virus, rather than the infection itself.  If an employee is diagnosed with COVID-19, experiences symptoms and recovers from those symptoms in a few weeks, the employee would not be considered disabled for ADA purposes (so would not be entitled to reasonable accommodation).  The EEOC also reminds employers that employees aren’t automatically entitled to reasonable accommodation even if they do experience symptoms of “Long COVID” or other COVID-related health issues.  The employee is only entitled to accommodation if the disability requires the accommodation and it is not an undue hardship for the employer.  For more information on the tax credit that is available for employee medical leave, visit Tax Facts Online. Read More

Court Reinstates Trump-Era Independent Contractor Test.  The Trump-era rule was designed to make it easier for employers to classify workers as independent contractors, rather than traditional employees, by focusing on whether workers are economically dependent upon an employer—or in business for themselves.  The Trump-era test prioritizes two key factors, including (1) the worker’s degree of control over the work performed, and (2) the worker’s opportunity for profit or loss.  Under the Biden administration, the DOL stated that prioritizing these factors for determining employment status under the FLSA undermined the longstanding balancing approach of the economic realities test and court decisions requiring a review of the totality of the circumstances related to the employment relationship.  The Trump DOL rule would result in many workers’ losing FLSA protections, including minimum wage and overtime benefits.  Several business groups filed a lawsuit in federal court to challenge the Biden administration’s acts.  The court vacated the Biden administration’s acts and reinstated the Trump-era rule, determining that the DOL’s delay of the effective date for the Trump-era rule violated the Administrative Procedure Act by providing only a 19-day period for notice and comments (rather than the 30-day minimum).  The court also found that the DOL limited the content of the responses to whether the effective date should be delayed (so unduly limited the scope of the comments received, making the decision to rescind the Trump-era rule “arbitrary and capricious”).  The court determined that the Trump rule became effective March 8, 2021.  For more information, visit Tax Facts Online.  Read More

IRS Clarifies Exception to the “One Bad Apple” Rule for MEPs. The IRS proposed a new rule implementing the SECURE Act exception to the one bad apple rule—also known as the unified plan rule.  Under the proposed rule, the MEP must describe the procedures the plan will follow if one participant fails to satisfy the qualification rules.  Those procedures must outline the notices that will be sent and when those notices will be sent. The MEP must also disclose the actions that it will take if the non-qualifying participant fails to take action or initiate a spinoff to separate the MEP within 60 days after the date the final notice is sent. The proposed rules provide that the plan may be required to provide up to three notices to a participating employer that does not respond to the initial notice.  The final notice must be provided to the DOL and all impacted participants.  The non-qualifying employer has two options upon receipt of a notice: (1) take remedial action or (2) initiate a spinoff within 60 days of the final notice.  If the employer does neither, the MEP administrator must stop accepting contributions from the non-compliant employer and participants.  The MEP must also provide notice to the impacted participants and give them an election with respect to the treatment of their accounts.  Participants could elect to remain in the plan or transfer their funds to another retirement plan.  The IRS notes that it intends to publish guidance that contains model language for MEP plan administrators.  For more information, visit Tax Facts Online. Read More 

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence: Wednesday, April 20

Posted by William Byrnes on April 20, 2022


The Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Although many tax changes have not made it through the Democrat’s discussions for a spring or summer final bill to show voters before November’s election, two that seem to have traction are the proposals to impose a minimum tax on corporations with $1 billion in profits and another to impose a minimum tax on wealthy individuals (basically, require mark to market of assets each year, like a wealth tax). Now that tax season is over, time to turn our attention to inflation-adjusted 2022 limits such as health FSAs and qualified transit benefits.

2022 Contribution Limits for FSAs, Transportation Benefits. In 2022, taxpayers will be entitled to contribute a maximum of $2,850 to their health FSAs (up from $2,750 in 2021).  The health FSA carryover amount also increased to $570 (up from $550 in 2021).  For dependent care FSAs, the annual contribution limit will be $5,000 per married couple in 2022 (the limit was temporarily increased to $10,200 for 2021).  The limit on tax-preferred transit/parking benefits also increased from $270 to $280 per month in 2022.  Employers who offer these types of benefits should update their plan documents and communicate the increased limits to employees.  For more information on the types of tax-preferred transportation benefits that employers can offer employees, visit Tax Facts Online. Read More

IRS Updates FAQ on Unemployment Compensation Exclusion and 2020 Tax Credit Eligibility The IRS recently updated its FAQ for the 2020 unemployment compensation exclusion.  As background, many taxpayers file their 2020 income tax returns before the IRS announced that $10,200 in unemployment compensation would be excluded from 2020 taxable income. Because the IRS automatically made the changes to exclude $10,200 in unemployment compensation from taxpayers’ 2020 income, many clients may be eligible for the additional child tax credit or the earned income credit. The IRS announced that it is sending CP08 and CP09 notices to individuals who did not claim the credit on their return but may now be eligible for it. The notices will be sent in November and December of 2021. Receiving the notice is not a confirmation that the taxpayer is eligible for these tax credits—and taxpayers are not required to file an amended return to claim the tax credits if they simply reply to the CP08 notice or CP09 notice. The IRS will calculate the amount available and treat it as an overpayment.  For more information on the available tax credits, visit Tax Facts Online. Read More

Understanding the New Corporate Profits Minimum Tax Proposal

The proposal to revive the corporate alternative minimum tax, that the Tax Cuts & Jobs Act repealed, is now oriented for corporations with at least $1 billion in profits (as reported to shareholders). These corporations would need to pay at least a 15 percent minimum tax on those profits.  If enacted, the tax would be effective in tax years beginning after 2022. The tax would apply to corporate taxpayers (but not to S corporations, RICs or REITs) that satisfy certain annual minimum income requirements over a three-year period.  Income of controlled foreign corporations and non-consolidated entities would also be included—and any deductions for U.S. or foreign income taxes would be removed in calculating income.  It’s estimated that this tax would apply to about 200 corporations and raise hundreds of billions of dollars in revenue.  Like many taxes that start as a thin edge of the wedge, this one may expand to include more taxpayers and at a higher rate, over time. For more information on the current corporate income tax structure, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence: 1040s due today Monday April 18

Posted by William Byrnes on April 18, 2022


The Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

The IRS deadline for 2021 tax returns is today–and, for this year, the IRS is reminding taxpayers about recent changes that will make this year’s filing season a bit different than past years.  Similarly, the DOL has recently introduced changes to Form 5500 that will impact MEPs, PEPs and other small business retirement plans for 2022.  We also have coverage this week on how business owners should proceed now that the Supreme Court has weighed in on OSHA’s “vaccinate-or-test” mandate.

IRS: Tax Tips for a Smooth 2022 Tax Filing Today The IRS’ last day to accept 2021 1040s as filed by the deadline is today – electronically, or by postmark. Because of the Emancipation Day holiday in Washington, D.C., the 2022 tax filing deadline moved this year from April 15 Friday to today April 18 (April 19 for taxpayers who live in Maine or Massachusetts).  The IRS encourages taxpayers to file electronically today to ensure fast processing–and notes that the average refund will be received within 21 days if the taxpayer files electronically, signs up for direct deposit and has no issues with their return.  Taxpayers may need the information from the IRS’ Letter 6419 that provides information about advance child tax credit payments, and the IRS’ Letter 6475 that provides information about the third economic impact payment – these were received by taxpayers in January and February.  Taxpayers who received these funds will need these letters to complete their tax returns today – otherwise, request the automatic extension today (if must be requested today, it cannot be requested afterward).  Taxpayers who received advance child tax credits can also obtain information about those payments using the online portal at irs.gov. Taxpayers who received the child tax credit or earned income tax credit should also remember that the IRS cannot issue their refund before mid-February.  For more information on federal tax filing information, visit Tax Facts Online. Read More

U.S. Supreme Court Reinstates Stay of Enforcement on OSHA ETS Near the end of 2021, the Sixth Circuit ruled to dissolve an existing stay of OSHA’s emergency temporary standard (ETS) that would have required employers with at least 100 employees to require employees to receive the COVID-19 vaccine or submit to weekly testing.  In response, the Supreme Court considered the issue and opted to reinstate the enforcement stay—so that OSHA cannot enforce its ETS until further notice.   The Court reasoned that the ETS was overly broad and failed to consider the risks associated with different industries.  The ETS will now be sent back to the Sixth Circuit for a decision—and, if the Sixth Circuit rules in favor of enforcing the ETS, the Supreme Court may again be asked to review that decision.  For now, employers should begin to comply with state laws on the issue.  If the state requires vaccination-or-testing, employers should comply with that law.  Employers can now also safely comply with state laws that prohibit employers from imposing vaccine mandates–but should stay tuned for the Sixth Circuit’s next ruling.  For more information on the tax credit for employers who offer paid time off for employee vaccination, visit Tax Facts Online. Read More

DOL Introduces Form 5500 Changes for PEPs The SECURE Act created a new kind of multiple employer plan (MEP), called a pooled employer plan (PEP) for employers that didn’t qualify to participate in a MEP under pre-existing rules.  PEPs allow unrelated employers to pool together to offer retirement benefits to employees.  PEPs are required to report their aggregate account balances for every employer-participant starting with the 2021 plan year and must also report certain information about the plan provider.  MEPs are also now subject to new reporting requirements, which they will file in an attachment to Form 5500 for the 2021 plan year.  The MEP must report year-end account balances for each employer-participant, but the DOL has clarified that this requirement doesn’t apply to MEPs that function as defined benefit plans.  The revised Form 5500 provides information on these reporting requirements, and is also updated for post-SECURE Act retirement plans that were adopted retroactively.  For more information on MEPs, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence: Foreign Asset Reporting Obligations Due by Monday April 18

Posted by William Byrnes on April 15, 2022


The Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

The NLRB is considering changing the way independent contractor status is determined, which can impact a host of employment-related issues.  And by Monday, April 18th – help your clients avoid confusion (and penalties) this tax season by brushing up on the reporting rules for foreign assets and accounts and by making last minute IRA contributions still deductible for the 2021 tax year.

FBAR vs. Form 8938: Do Clients Need to File Both? FBAR and Form 8938 are two of the foreign tax filing forms that clients most commonly have to deal with.  The two forms are similar in that both require taxpayers with certain foreign assets and accounts to report information about those accounts to the IRS.  While Form 8938 was introduced later, it doesn’t actually replace the FBAR.  In some situations, a client may have to file both forms.  Form 8938 is actually a part of the client’s federal income tax return, while FBAR is a form that is filed electronically, directly with FinCEN.  Form 8938 is a much more wide-ranging form, meaning that many clients that don’t have FBAR filing obligations may nonetheless be required to file Form 8938 (foreign assets beyond mere financial accounts are included in the Form 8938 reporting obligations).  Taxpayers should be careful to ensure they meet the individual filing deadlines.  Because Form 8938 is part of the client’s tax return, any automatic extension that applies to that tax return will also apply.  The same isn’t true of the FBAR filing, which is subject to its own set of deadlines and extension rules.  For more information on FBAR filing requirements, visit Tax Facts Online. Read More

Deadline for 2021 IRA Contributions is Fast Approaching.  Clients should be reminded that, though it’s hard to believe, the April 18 tax filing deadline for 2021 tax returns is right around the corner.  That also means that April 18, 2022 is the deadline for making 2021 IRA contributions.  The April 18 deadline is not extended even if the client takes advantage of the six-month tax filing extension and files a return by October 15, 2022.  It’s important that clients who are making 2021 contributions in 2022 clearly state that the contribution should be counted for 2021–or risk their IRA custodian reporting the contribution as a 2022 contribution, which can create a tax headache down the road.  If the contribution is a nondeductible contribution, the client must also file Form 8606 with their 2021 tax return (and should be advised to keep track of their tax basis in the account for purposes of determining tax liability on future distributions).  Note also that the deadline for establishing and funding a SEP IRA is the business’ tax filing deadline (which may or may not be the same as the individual deadline).  For more information on the IRA contribution rules, visit Tax Facts Online. Read More

NLRB Considers Implementing New Standard for Determining Independent Contractor Status The National Labor Relations Board (NLRB) recently announced that it will be considering a change to the standard it uses to determine whether a worker is an employee or an independent contractor.  Typically, independent contractors are exempt from protections under most federal employment laws.  For example, independent contractors can’t form or join a union.  The NLRB is considering whether to continue applying the approach developed under the Trump administration in 2020, which generally makes it easier for employers to classify workers as independent contractors.  Many expect that, under the Biden administration, the NLRB will adopt an approach that restricts an employer’s ability to classify workers as independent contractors further.  It’s also expected that the NLRB will determine whether misclassifying a worker as an independent contractor, rather than an employee, can be sufficient to violate the National Labor Relations Act (NLRA).  For more information on the standards used to classify workers as employees or independent contractors, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence: RMDs for 2021 missed? It’s possible to avoid the 50% penalty

Posted by William Byrnes on April 13, 2022


The Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

For clients who missed 2021 RMDs, it’s not too late to fix the mistake and potentially avoid stiff penalty taxes. We also have information on the newly revised forms that plan participants may receive to document retirement distributions beginning in 2022–and a summary of a new case that limits the rights of non-plan participants to sue under ERISA.

Clients Still Have Opportunities to Correct Missed RMDs for 2021 As most clients know, the IRS requires retirement plan participants to begin taking periodic distributions from IRAs and 401(k)s once the owner reaches age 72. Missing an RMD has steep consequences. The owner will be subject to a 50% penalty and the plan could lose its qualified status.If the RMD failures are no more than three years in the past, the owner can use a self-correction program (SCP) to correct the mistake. The SCP is only available until the last day of the third plan year following the plan year when the missed RMD occurred. The RMD will have to be distributed with earnings that accrued on the missed RMD during the failure period. The participant can also use Form 5329 to request a waiver of the penalty tax. In all cases, use of the SCP should be documented and the plan should document steps taken to prevent future missed RMDs. Along with Form 5329, the participant must file a letter stating that the error was due to reasonable cause and that reasonable steps have been taken to prevent future errors. For more information on the penalty for failure to comply with the RMD rules, visit Tax Facts Online. Read more

IRS Releases Revised Form W-4P and Form W-4R for 2022 The IRS recently released a revised Form W-4P (Withholding Certificate for Periodic Pension or Annuity Payments) and a new Form W-4R (Withholding Certificate for Nonperiodic Payments and Eligible Rollover Distributions) for use beginning in 2022. Now, individuals will receive different forms depending on the type of payments involved. Only individuals receiving periodic pension or annuity payments will receive the revised Form W-4P. Plan participants receiving nonperiodic payments, lump sum distributions, IRA distributions or certain rollover distributions will receive the Form W-4R going forward. In the past, those individuals would also have received Form W-4P. The forms can be used beginning in 2022. However, the IRS is not requiring plan administrators to make the change until January 1, 2023. For more information on the withholding requirements for annuity and retirement distributions, visit Tax Facts Online. Read more

Misclassified Independent Contractor Can’t File ERISA Lawsuit A California court recently ruled that a worker who claimed he was misclassified as an independent contractor could not file a lawsuit under ERISA for retirement plan benefits. The worker claimed that he was mistakenly excluded from the defendant’s retirement plans because he should have been properly classified as an employee. The court found that because the worker was not a plan participant, beneficiary or fiduciary, he lacked standing to sue under ERISA. In order to qualify as a plan participant, the plaintiff would must have a colorable claim to plan benefits. Here, the worker merely alleged that he should have been entitled to participate in the employer’s plan. As a result, the court dismissed the worker’s claims entirely without determining whether he should have been classified as an employee. For more information on the consequences of worker misclassification, visit Tax Facts Online. Read more

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence: Properly Reporting Crypto Transactions by April 18

Posted by William Byrnes on April 11, 2022


The Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Within the more than 2,000 pages of the Consolidated Appropriations Act of 2022 is an important provision that allows HSA and HDHP participants to continue accessing remote healthcare services without jeopardizing HSA eligibility.  The DOL also shone a spotlight on cryptocurrency investments this week by making it clear that plan fiduciaries would be asked to justify any decisions related to crypto investments in retirement accounts.  Finally, we have a summary of the IRS’ warning to taxpayers regarding proper reporting of crypto transactions on their 2021 tax returns.  Read on for more.

Consolidated Appropriations Act Extends HDHP Telehealth Relief.  The recently enacted Consolidated Appropriations Act of 2022 (CAA 2022) extends prior CARES Act relief for high deductible health plans (HDHPs) that provide remote care services.  HDHPs will be permitted to provide first-dollar telehealth services from April 2022 through December 2022 (regardless of the plan year) without jeopardizing HDHP status.  The remote services do not have to be related to COVID-19 or preventative in nature in order to qualify.  In other words, HDHPs can waive the deductible for telehealth services without jeopardizing a plan participant’s eligibility to make HSA contributions.  Plans and participants should note that if the HDHP is a calendar year plan, the usual rules regarding the plan deductible will apply between January 2022 and March 2022.  For more information on the HDHP rules, Read More

DOL Releases Warning on Cryptocurrency in 401(k)s.  The Department of Labor (DOL) issued a compliance assistance release that warns retirement plan fiduciaries about allowing participants to invest in either cryptocurrencies or products that are related to cryptocurrency.  The guidance comes in response to President Biden’s executive order that directed agencies to study the risks and benefits of cryptocurrency.  The DOL release warned that in the eyes of the DOL, cryptocurrency poses significant risks and challenges for participants, including the risk of fraud, theft and loss.  The release is clear that plan fiduciaries who allow cryptocurrency investment options should expect to be questioned about how those decisions could comply with their duties of prudence and loyalty.  Plan fiduciaries should pay close attention and carefully evaluate whether allowing crypto-related products in their investment lineup is worth the risk, given the DOL’s sweeping statements and indication that it will presume that a fiduciary who offers cryptocurrency products has acted imprudently.  For more information on the current DOL fiduciary standard and new prohibited transaction exemption, visit Tax Facts Online. Read More 

IRS Reminds Taxpayers of Virtual Currency Reporting Obligations.  The IRS released a reminder for taxpayers who have engaged in virtual currency transactions during the 2021 tax year. The 2021 Form 1040 due next Monday (April 18) contains a question at the top that asks about these virtual currency transactions.  Taxpayers should check “yes” if they have engaged in any disposition, sale or exchange of a financial interest in virtual currency.  That includes the receipt of virtual currency for goods and services, receipt of cryptocurrency for free (if the receipt does not qualify as a bona fide gift), receipt of cryptocurrency through mining or staking activities or hard forks.  Exchanges or trades of cryptocurrency for other cryptocurrency, property goods or services must also be reported, as must sales of virtual currency.  Taxpayers who held the cryptocurrency as a capital asset should use Form 8949 to determine gain or loss (which is reported on Schedule D of Form 1040).  Taxpayers who received cryptocurrency as compensation should report the income as they would any other type of income.  For more information on reporting obligations related to virtual currency transactions, visit Tax Facts Online.  Read More 

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence: Required Minimum Distribution Regs Explained and Analyzed

Posted by William Byrnes on April 7, 2022


The Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

The IRS has released long-anticipated proposed regulations on changes made to the required minimum distribution rules under the SECURE Act.  The proposed regs contained a few surprises that will impact any client who inherits a retirement account–especially those who have inherited an account from an individual who was already taking RMDs.  The regulations are detailed, and it is very possible that they will be modified in response to comments, which are due by May 25, 2022. 

IRS Releases Proposed Regulations on SECURE Act RMD Changes.  The IRS released proposed regulations on changes to the required minimum distribution (RMD) rules effective beginning in 2020.  In a surprise move, the regulations require most designated beneficiaries to take annual RMDs within the ten-year distribution period if the original account owner died after the required beginning date (the SECURE Act is silent with respect to whether annual distributions are required).  However, the IRS has yet to release guidance for clients who inherited accounts after the SECURE Act’s effective date and before the regulations were issued.  In other words, they don’t address whether a client may be required to take a retroactive RMD for 2021.  The proposed regulations themselves are effective January 1, 2022 (the existing regulations must be applied for 2021).  For more information on the RMD rules that apply after an account owner’s death, visit Tax Facts Online.  Read More 

IRS Proposed RMD Regs Clarify Eligible Designated Beneficiary Definitions.  The proposed regulations also clarify a few points with respect to the new definition of “eligible designated beneficiary”.  An eligible designated beneficiary is entitled to continue using the life expectancy distribution method even post-SECURE Act.  Under the proposed regulations, the “age of majority” for eligible designated beneficiaries who are minor children is age 21 (many expected that an age 18 limit would apply).  Defined benefit plans that use the definition of “age of majority” under the existing regulations can continue to do so (meaning that those plans can treat a child as being under the age of majority if that child has not completed a course of education and is under age 26).  Spousal beneficiaries will also be required to elect to treat the deceased spouse’s IRA as their own by the later of (1) December 31 of the year following the year of the owner’s death or (2) age 72.  Additionally, the regulations propose a rule that would treat an account owner as having no eligible designated beneficiary if the owner has multiple designated beneficiaries and one of those beneficiaries is not an eligible designated beneficiary.  In situations involving multiple designated beneficiaries, the life expectancy of the oldest beneficiary will be used (under prior regulations, the shortest life expectancy was used).  For more information on the RMD rules, visit Tax Facts Online.  Read More

Post-SECURE Act Guidance on Trusts as Inherited Account Beneficiaries.  Under the general rule for employees dying on or after January 1, 2020, beneficiaries of a trust may be treated as having been designated as beneficiaries of the employee under a qualified plan for purposes of determining the period over which RMDs must be made.   Beneficiaries of a see-through trust can continue to be treated as designated beneficiaries under regulations proposed in 2022.  The regulations continue to apply the requirement that the trust beneficiaries be identifiable.  Beneficiaries of a valid see-through trust will be taken into account if they could receive amounts in the trust representing the participant’s interest in the retirement plan that are not contingent upon, or delayed until, the death of another trust beneficiary who predeceases the plan participant.  Those beneficiaries with only remote interests will be disregarded.  For more information on the rules governing see-through trust beneficiaries, visit Tax Facts Online. Read More 

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence: Court Defines ‘Retirement’

Posted by William Byrnes on April 4, 2022


Robert and I have an exciting announcement for our Tax Facts subscribers. In February, our publisher ALM will be launching Tax Facts Premium, a new add-on product that provides valuable tools and content, including:

  • calculators (tax, retirement income, investment, personal finance, business, and more)
  • practice aids (buy sell agreements, as well as documents related to business life insurance, estate planning, retirement planning, and employee benefits)
  • soft skills (practical guidance on how to build and maintain clients)
  • archives (archived content including featured articles and the intelligence weekly).

Also, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the typical enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

This week, we have some important IRS and court updates regarding interpreting the definitions of two key terms that apply in the retirement plan context–“retirement” and “compensation.”  The IRS has also released the limitations that apply under IRC Section 280F for taxpayers with certain luxury passenger auto leases and depreciable passenger automobiles.  Read on for more.

Second Circuit Weighs in on “Retirement” Definition for Defined Benefit Plan Purposes.  The Second Circuit recently affirmed a lower court ruling dealing with the definition of “retirement” in a situation involving a multi-employer defined benefit pension plan.  In Metzgar v. U.A. Plumbers & Steamfitters Local No. 22 Pension Fund, the plan set the normal retirement age at 65 but also contained a special early retirement option for employees after their 55th birthdays.  The special option was available if the employee’s combined age and years of service was at least 85.  For many years, the plan interpreted the rule to not require an employee to stop working to receive plan benefits (the employee only had to stop working in a “disqualifying position”).  So, participants could receive benefits and work in management-related positions at the same time.  Later, the plan changed the rules to require employees to stop working to receive benefits.  The court agreed that the reinterpretation was required to protect the plan’s tax-exempt status, and that the plan did not violate the plan participants’ rights by requiring the employee to stop working in order to continue receiving plan benefits.  For more information on the rules governing multi-employer retirement plans, visit Tax Facts Online. Read More

IRS Releases 2022 Depreciation Limits for Certain Passenger Automobiles.  Revenue Procedure 2022-17 provides the depreciation limits for certain passenger automobiles first placed into service during 2022, and also provides the amounts that must be included in income for taxpayers who lease certain automobiles beginning in 2022. For passenger automobiles purchased after September 28, 2017 and first placed in service in 2022, and to which the extra Section 168 depreciation deduction does apply, the first year limitation is $19,200, decreasing to $18,000 in year two and falling to $10,800 in year three.  For all subsequent years, the limit is $6,460.  If no bonus depreciation applies, the limits are $11,200 in year one, $18,000 in year two, $10,800 in year three and $6,460 in all subsequent years.  For taxpayers with a lease term that begins in 2022, the dollar amounts that must be used to determine income inclusion begin at $56,000 and can be found in Table 3 of Rev. Proc. 2022-17.  For more information on the depreciation rules and limits that apply to passenger automobiles, visit Tax Facts on Insurance and Employee Benefits Online. Read More  

Is Your Lump Sum Payout of Unused Vacation Time “Compensation” for Retirement Plan Purposes?  It’s been a strange couple of years in the workplace.  Many American workers have been unwilling or unable to use their vacation time and are now looking at a situation where their employers may be compensating them in the form of a lump sum payout based on company policies.  That can leave clients wondering whether that payout counts as “compensation” for purposes of determining the retirement plan contribution limits.  Lump sum payments of unused vacation are treated as supplemental wages that are subject to Social Security and Medicare taxes.  That means that a lump sum payout of unused vacation should also be included as “compensation” for retirement plan purposes unless the specific retirement plan actually provides otherwise.  So, unless the payout is specifically excluded by the plan, taxpayers should be entitled to include that compensation when determining their permissible retirement plan contributions for the year.  For more information on the definition of “compensation” and relevance for Section 415 contribution purposes, visit Tax Facts Online. Read More 

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school, ranked in the 1st tier, has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence March 31, 2022

Posted by William Byrnes on March 31, 2022


Robert and I have an exciting announcement for our Tax Facts subscribers. In February, our publisher ALM will be launching Tax Facts Premium, a new add-on product that provides valuable tools and content, including:

  • calculators (tax, retirement income, investment, personal finance, business, and more)
  • practice aids (buy sell agreements, as well as documents related to business life insurance, estate planning, retirement planning, and employee benefits)
  • soft skills (practical guidance on how to build and maintain clients)
  • archives (archived content including featured articles and the intelligence weekly).

Also, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications from financial professionals with at least five years of industry experience for the summer. Even though our graduate program has grown to over 750 enrollment, the typical enrollment for a course section is between 20 and the maximum of 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other via teamwork and peer review. Learn more about how we educate and position the industry’s leaders: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

IRA owners are only entitled to limited protection in bankruptcy.  However, the dollar limit is set to increase once again starting Friday. We also have information on the new RMD rules that could have a negative impact on successor beneficiaries –as well as newly proposed DOL rules that could make it much more difficult to obtain a prohibited transaction exemption if finalized.  Read on for more.

IRA Bankruptcy Exemption Set to Increase April 1.  Federal law limits the amount of IRA funds that are protected from creditors when the IRA owner files for bankruptcy (unlike 401(k) funds, which are fully protected from creditors in bankruptcy).  Under current law, up to $1,362,800 in IRA funds are protected from creditors in bankruptcy.  The limit is set to increase to $1,512,350 beginning April 1, 2022.  The dollar amount is adjusted for inflation only every three years, so the new limit will apply through March 31, 2025.  However, it’s important for clients to remember that the laws in their state may also be relevant.  Some states grant creditor protection for all IRA funds.  Others even protect IRAs from being accessed to satisfy a legal judgment.  For more information on the rules that apply to IRAs and inherited IRAs in bankruptcy, visit Tax Facts Online.  Read More 

New RMD Regs Create Confusion for Successor Beneficiaries.  The new proposed RMD regulations could create confusion and problems for successor beneficiaries, who are beneficiaries of an original IRA beneficiary.  Successor beneficiaries are typically subject to the ten-year payout rule post-SECURE Act.  If the original beneficiary was subject to the ten-year rule (so was not an eligible designated beneficiary), the successor must continue payments within the same ten-year window.  If the previous beneficiary was an EDB and was using the life expectancy method, the successor beneficiary obtains a new ten-year window.  A beneficiary using the ten-year window must take annual RMDs if the original beneficiary died after his or her required beginning date (otherwise, no annual RMDs are required).  So, the successor beneficiary must first determine whether the original account owner died before his or her required beginning date to determine whether annual RMDs will be required within the ten-year payout window.  In many cases, that could be difficult, especially if the IRA has changed custodians so that the successor beneficiary may not know how old the original account owner was at death.  For more information on the new proposed RMD regulations, visit Tax Facts Online.  Read More  

DOL Proposed Rule Could Limit Availability of Prohibited Transaction Exemptions.  The DOL has proposed a new rule that would make the process for obtaining a prohibited transaction exemption much more difficult.  If passed, the changes will apply only prospectively, 90 days after the publication of the final regs in the Federal Register.  The proposed regulations would require that communications with the DOL prior to submitting a formal application for exemption will become part of the administrative record that can be requested by the public.  Applicants would not be permitted to approach the DOl on an anonymous basis.  The regulations would impose new terms with respect to the independent fiduciary or appraiser that may be required.  The current regulations provide information about when the fiduciary or appraiser will be considered “independent”, providing that the fiduciary or appraiser is independent if less than 2% of their revenue is derived from parties to the transaction (though its possible that they could achieve independent status if the revenue is less than 5%).  The new rules would make the standard stricter, and require analysis of the revenue from the prior tax year and projected revenue for the current year.  If an appraiser and a fiduciary are required, the appraiser must be independent of both the fiduciary and the applicant.  It’s also possible that the individual could be deemed not “independent” if they have an interest in the transaction or future transactions of a similar type.  For more information on new PTE 2020-02, visit Tax Facts Online.  Read More 

Look in your Tax Facts Online app for our continuing analysis of 2022 legislative and regulatory updates, weekly intelligence, and the impact on planning for a client’s wealth preservation and growth.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is #1 for U.S. public universities, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence February 3, 2022

Posted by William Byrnes on February 3, 2022


Robert and I have an exciting announcement for Tax Facts subscribers. In February, we will be launching Tax Facts Premium, a new add-on product that provides valuable tools and content, including:

  • calculators (tax, retirement income, investment, personal finance, business, and more)
  • practice aids (buy sell agreements, as well as documents related to business life insurance, estate planning, retirement planning, and employee benefits)
  • soft skills (practical guidance on how to build and maintain clients)
  • archives (archived content including featured articles and the intelligence weekly).

As we get closer to launch, we’ll provide you with more information on pricing and how to subscribe.

By the way subscribers, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications for spring. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Supreme Court: ERISA Fiduciaries Must Monitor All Plan Investments Even if Some Investment Options Are Adequate

The U.S. Supreme Court (USSC) recently held that an ERISA fiduciary has a duty to monitor each plan investment option—and can be held liable for a failure to monitor even if some plan investment options are adequate. Hughes v. Northwestern University has garnered significant attention in recent months. Finally, the USSC issued a unanimous opinion holding that ERISA fiduciaries have an ongoing duty to monitor investments and improve imprudent investments. The opinion reversed the 7th Circuit’s holding that this responsibility was satisfied if the plan offered an adequate array of investment choices. Instead, fiduciaries can be held liable if they fail to monitor all investments and remove any imprudent investments from the plan’s menu of investment choices. In other words, identifying well-designed options doesn’t relieve the plan sponsor of liability with respect to poor options and the ERISA fiduciary has a duty to protect participant-employees from making poor investment choices. For more information on issues pertaining to fiduciary liability, visit Tax Facts Online. Read More

Have Your Clients Checked Their Beneficiary Designations Lately?

Updating a plan’s beneficiary designations might seem like a simple process–and it often is. However, it’s a process that’s often overlooked. Clients who participate in ERISA plans should be reminded that they’re required to complete their beneficiary designations in writing, using the procedures and forms established by the specific plan, in order for those designations to become effective. Often, survivors can be surprised by the beneficiary designated by the plan—and may even try to argue that the decedent’s will should govern who receives the account funds. Clients should remember that wills and state intestate laws do not govern who receives plan funds. The only consideration will be who the account owner has designated under plan procedures. It’s important to carefully evaluate the plan’s policies, however—because some plans have exceptions in place to, for example, automatically revoke a beneficiary designation upon divorce. For more information on the importance of checking beneficiary designations and updating on major life events, visit Tax Facts Online. Read More

IRS Modifies Interest Rates for Use in Determining Substantially Equal Periodic Payments

Substantially equal periodic payments (SEPPs) are exempt from the 10% early distribution penalty that applies to traditional retirement account distributions prior to age 59½. However, a SEPP must remain in place for the longer of (1) five years or (2) the date the recipient reaches age 59½. If the SEPP is ended or modified prior to that time, the 10% penalty applies (plus interest). The SEPP payment is calculated based on one of three different options. Two of those options are calculated using an interest rate that’s typically based on the federal mid-term rate in effect for the months prior to the start of the SEPP schedule (the rate cannot typically exceed 120% of the federal mid-term rate). In recent years, that rate has been extremely low. Now, the IRS has released guidance providing that payment schedules beginning in 2022 and thereafter are permitted to use an interest rate that is as high as 5%. This change provides an opportunity for plan participants to use the SEPP option and receive a higher payment (clients with existing SEPPs are not permitted to modify their interest rate). Further, clients with existing SEPPs who use the RMD distribution method (which doesn’t rely on an interest rate) can switch to the new IRS life expectancy tables without “modifying” the SEPP (in fact, they are required to switch beginning in 2023). For more information on SEPPs, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2021 legislative and regulatory updates, and the impact on 2022 client planning, as well as other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, operating budget of $9.6 billion (FY2022) and capital budget of $1.9 billion, is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: | Leave a Comment »

TaxFacts Intelligence November 19, 2021

Posted by William Byrnes on November 19, 2021


Leaders at the G20 summit in Rome endorsed an overhaul of the international tax rules that would impose a 15 percent global minimum tax to companies with revenues of more than $867 million. This deal is designed to discourage companies from avoiding taxes by finding havens with low tax rates. Although the pact probably won’t be fully enacted until 2023, it is something to keep an eye on as it could have implications for the global economy. Back in the United States, we have a mixed bag of retirement-related content this week.  First, the IRS took steps to help pension sponsors rehire workers who may have started receiving pension distributions due to pandemic-related retirements without risking qualified status. Second, the IRS extended its non-enforcement policy for investment advice fiduciaries who provide retirement and rollover-related relief. Third, in a surprise move, Congress dropped all retirement-related changes from the proposed spending legislation. Are your clients up to speed?

By the way subscribers, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications for spring. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

IRS Provides Relief for In-Service Pension Distributions to Help Businesses Rehire Post-COVID

The IRS has updated its FAQs to provide relief for business owners looking to rehire in the wake of the COVID-19 pandemic. Some workers chose to take an early retirement during the height of the pandemic and may have begun receiving distributions from pension plans.  Under the first question, the IRS addressed a situation where a pension did not provide for in-service distributions and began paying benefits to a participant who experienced a bona fide retirement. If the plan sponsor rehires the participant because of unforeseen hiring needs, that individual’s prior retirement will still be treated as a “bona fide retirement”. According to the IRS, a rehire due to unforeseen circumstances that do not reflect any prearrangement to rehire the individual will not cause the individual’s prior retirement to no longer be considered a bona fide retirement under the plan. The IRS has also clarified that a qualified pension can allow individuals to begin in-service distributions if the individual has either attained age 59½ or the plan’s normal retirement age.  However, distributions prior to age 59½can lead to imposition of a 10 percent penalty unless an exception applies.  For more information on pre-retirement distributions from qualified plans, visit Tax Facts Online. Read More

DOL Updates Temporary Enforcement Policy on Prohibited Transaction Rules for Investment Advice Fiduciaries

The Department of Labor (DOL) once again updated its temporary enforcement policy for investment advice fiduciaries to allow firms and advisors more time to comply with new prohibited transaction exemption (PTE) 2020-02. The PTE was set to become fully effective as of December 20, 2021.  Recognizing that allowing the temporary enforcement policy to expire next month would create practical difficulties for financial institutions, the DOL extended the policy through January 31, 2022. As a result, the DOL will not pursue prohibited transactions claims against investment advice fiduciaries who are working in good faith to comply with the impartial conduct standards under PTE 2020-02.  It will also not treat these fiduciaries as violating the prohibited transaction rules during this period. The DOL will not enforce the “specific documentation” and disclosure requirements for rollovers under PTE 2020-02 through June 20, 2022.  Aside from the rollover exception, all other requirements will be subject to full enforcement as of February 1, 2022. For more information on PTE 2020-02 and the new investment advice fiduciary standard, visit Tax Facts Online. Read More

Retirement Proposals Dropped From Framework Legislation

As negotiations over the framework spending legislation stalled last week, Congress took an unexpected turn and dropped all retirement proposals from the spending package. That includes proposals to require certain employers to enroll employees automatically in retirement savings programs and the increased credits for small businesses who adopt a retirement plan or auto-enrollment provision for the first time. All provisions that would close the “backdoor” to Roth IRAs for high earners were also dropped from the proposal, as were the changes that would impose contribution limits on high-income taxpayers with large IRA balances. The earlier proposal would have also changed the Saver’s Credit by turning it into a government-sponsored matching contribution. For more information on the current Roth conversion rules that allow higher income taxpayers to indirectly fund a Roth account, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2021 legislative and regulatory updates, and the impact on 2022 client planning, as well as other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: | Leave a Comment »

TaxFacts Intelligence November 17, 2021

Posted by William Byrnes on November 17, 2021


We all know that the past 18 months have been filled with legislative changes. Laws have been enacted more quickly than ever–and, often, the IRS, DOL and other agencies have stepped in to provide interpretive guidance on a rolling basis. Last week, the IRS announced a change in its official policies when it comes to taxpayer’s ability to rely upon frequently asked questions. Also, as a reminder, employers will no longer benefit from ACA-related “transition relief” starting this year–and, as always, it’s a good time for a 4th quarter withholding checkup.

By the way subscribers, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications for spring. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

IRS Updates Frequently Asked Question (FAQ) Process

The IRS announced updates to its processes and policies for frequently asked questions (FAQs) and has provided guidance on the rules for implementing penalties for taxpayers who rely on FAQs.  FAQs often provide important interpretive guidance for taxpayers attempting to understand how new legislation will be implemented. However, the FAQs are updated frequently and without warning. Going forward, FAQs will be announced in a news release and posted to IRS.gov in a fact sheet. Prior versions of the fact sheet FAQs will now be dated and maintained on IRS.gov so that taxpayers can find the version they relied upon. The IRS also released a statement clarifying that if a taxpayer relies on FAQs in good faith and that reliance is reasonable, the taxpayer has a reasonable cause defense against any accuracy-related penalties and negligence penalties if it turns out that the FAQs were not a correct interpretation of the law given the facts.  However, the law itself will continue to control in the taxpayer’s case (not the FAQs). In the wake of the COVID-19 pandemic, IRS FAQs were often the only interpretive materials available.  For examples of how FAQs have functioned to guide taxpayers in interpreting legislation,, visit Tax Facts Online. Read More

Give Your Withholding a Fourth-Quarter Checkup

While it seems hard to believe, the 2021 tax year is almost at an end. The IRS recently reminded taxpayers that the fourth quarter is always a good time for a withholding checkup. Taxpayers still have time to adjust their withholding to withhold additional amounts (or make an estimated tax payment) to avoid a surprise tax bill in April. For 2021, there are a number of new tax provisions that should be considered when examining withholding choices, including COVID-19 tax relief, natural disaster relief and issues created by moving to another state due to a pandemic-related work-from-home policy. As always, issues such as marriage, divorce or having a child will impact the amount employees should have withheld from their paychecks. The IRS offers a tax withholding estimator that can be helpful. Clients who had an unexpected tax bill for the 2020 tax year can use this tool to ensure they’ve paid accurately in 2021 and avoid surprises come April. For more information on tax withholding obligations, visit Tax Facts Online. Read More

Reminder: No Extension for ACA Reporting for 2021

In prior years, the IRS has permitted transition relief and extended the deadline for providing Form 1095-C to individuals from February to March.  (Typically, the due date to furnish the Forms 1095-B and 1095-C to requisite individuals is extended from February 1 to March 1).  This year, there is no extension, so businesses must provide individuals with Forms 1095-B or 1095-C by January 31, 2022.  Form 1094-C and Form 1095-C that must be provided to the IRS are typically not subject to the extension.  The employer must furnish these filings to the IRS by February 28, 2022 if the filing is on paper and March 31, 2022 if the employer is filing electronically.  Under current law, employers that submit 250 or more of the same form must use electronic filing systems.  However, the IRS has proposed a new rule that would require nearly all employers to file electronically (lowering the threshold to 100 forms in 2022 and ten forms starting in 2023).  Employers would also be required to aggregate all forms that they have submitted.  For more information, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2021 legislative and regulatory updates, and the impact on 2022 client planning, as well as other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: | Leave a Comment »

TaxFacts Intelligence November 15, 2021

Posted by William Byrnes on November 15, 2021


The IRS finally cleared up the issue of when initial COBRA premium payments are due under the extended deadlines provided in various COVID-19 relief laws. The SSA also announced a historic increase in the cost of living adjustment for Social Security recipients–so what does that mean for your taxes in 2022?  Finally, small business clients who are asking questions about vaccination status may want to think twice where job applicants are concerned.

By the way subscribers, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications for spring. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Notice 2021-58 Clarifies Timeline for Making COBRA Premium Payments Under COVID-19 Relief Laws

In May 2020, the DOL and IRS extended certain COBRA timelines so that plans were required to disregard the period beginning March 1, 2020 and ending the earlier of (1) one year from the date relief became available or (2) 60 days after the end of the COVID-19 national emergency (the “outbreak period”). To date, the end of the outbreak period has not been announced.  Last week, the IRS released Notice 2021-58 to provide clarity about the disregarded period and deadlines for COBRA premium payments. Namely, the Notice provides that the tolling periods are to run concurrently. The Notice also provided transition relief so that the COBRA eligible individual cannot be required to make an initial premium payment before November 1, 2021, as long as the individual made the initial premium payment within one year and 45 days after the date of the COBRA election. Generally, with respect to the initial payment, the individual has one year and 45 days after the date of the election to make the payment if the election was made within the typical 60-day deadline. For elections made after that 60-day timeframe, the individual has one year and 105 days from the date the COBRA notice was provided (to reflect the one-year suspension of the 60-day election period and the 45-day grace payment period). For more information on the COBRA payment periods, visit Tax Facts Online. Read More

Social Security Administration Announces 2022 Cost-of-Living Adjustments for Benefit Recipients

The Social Security Administration has announced the cost of living adjustments (COLA) applicable for 2022, including a 5.9 percent increase in monthly benefits paid to Social Security recipients (the COLA increase for 2021 was 1.3 percent). Social Security “COLA” adjustments are tied to the consumer price index each year. Based on the 5.9 percent increase, the SSA also announced that the annual Social Security earnings cap will be increased from $142,800 to $147,000 for 2021. This means that in 2022, each taxpayer’s first $147,000 in earnings will be subject to Social Security taxes. Social Security and SSI recipients should expect to receive information about their new benefit amount by mail beginning in early December (and can find their COLA notice online through their Social Security accounts at www.socialsecurity.gov/myaccount). For more information on the Social Security tax, visit Tax Facts Online. Read More

Asking for Vaccination Status? Remember, Different Laws Apply to Employees Versus Job Applicants

Small business employers can now be confident that they’re legally able to ask employees about vaccination status to protect worker safety.  However, those same clients should remember that different rules apply during the hiring process.  While the specific vaccine issue hasn’t been litigated, under existing law, potential employers are not permitted to ask a potential employee about any medical information during the hiring process under the ADA (employers shouldn’t worry about job applicants who volunteer information about their vaccination status, but they shouldn’t request the information). Even asking about vaccination status could prompt the job applicant to offer other medical information that the employer isn’t permitted to consider during the application process (for example, if it turns out the applicant isn’t vaccinated because of chemotherapy treatments). Once the individual has been offered a conditional employment opportunity, however, the employer is then permitted to ask questions about medical issues, assuming the same information is requested from all individuals receiving the job offer and the information isn’t used to discriminate. For more information on the tax credit for vaccine-related time off work, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of 2021 legislative and regulatory updates, and the impact on 2022 client planning, as well as other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: | Leave a Comment »

TaxFacts Intelligence November 12, 2021

Posted by William Byrnes on November 12, 2021


We’re still waiting for the exact parameters of any new government legislation on retirement plans.  However, one thing is certain: Congress isn’t forgetting about small business owners.  Multiple pieces of legislation focus on increasing access to retirement plans for employees of small businesses.  If your clients are worried about the cost, don’t forget to remind them about the expanded tax credits for plan startup costs.  This week, we also have reminders about the soon-to-be effective PTE 2020-02 and how to handle requests for COVID-19-related reasonable accommodation in the workplace.

By the way subscribers, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications for spring. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Establishing a Retirement Plan?  Don’t Forget Small Business Tax Breaks

Recent legislation has focused small business clients’ attention on retirement plans and their obligations to employees.  Some states already sponsor “auto IRAs” for workers without access to an employer-sponsored retirement plan. The Build Back Better Act would require employers who do not sponsor a retirement plan to automatically enroll employees in either an IRA or a 401(k)-type plan beginning in 2023. The “SECURE Act 2.0” also contains provisions designed to encourage more small businesses to offer retirement plans. Small business clients who are exploring their options in advance of government action should be reminded about valuable tax incentives designed to encourage workplace retirement savings options. The SECURE Act increased the tax credit for retirement plan startup costs so that employers can receive a $250 tax credit for every non-highly compensated employee (up to a maximum of $5,000 per year). The tax credit is available for up to three years and can be applied toward the administrative costs of maintaining the plan (and to participant education). Employers can also receive a $500 tax credit per year (for up to three years) if they add an auto-enrollment feature. For new plans, both tax credits are available. For more information on these tax credits, visit Tax Facts Online. Read More

Reminder: Conditions of New DOL Fiduciary PTE Becomes Fully Effective December 21

The DOL’s new prohibited transaction exemption (PTE) 2020-02 becomes fully effective December 21. Advisors who satisfy the “five prong test” must determine whether their recommendation would create a conflict of interest (for example, most IRAs would result in a prohibited transaction because of the compensation earned). The new PTE provides an exception for certain conflicted advice if the terms of the PTE are satisfied. To date, the DOL has only required a good faith compliance effort from firms and advisors that satisfy the impartial conduct standards. Effective December 21, the rule will be fully effective, meaning that fiduciaries must acknowledge fiduciary status and provide conflicts and services disclosures–and the firm must implement written policies and procedures to ensure compliance with the impartial conduct standards. For certain types of rollover transactions, advisors will also have to provide a written statement outlining the specific reasons why the rollover transaction is in the best interest of the participant or IRA holder. The new fiduciary PTE applies in the case of rollover transactions if the advice is provided in the context of an ongoing relationship or as the beginning of a future relationship between the client and advisor. For more information on PTE 2020-02, visit Tax Facts Online. Read More

Focus on Reasonable Accommodation for Employers Implementing Return-to-Work Policies

In the midst of the ongoing COVID-19 pandemic, employers are more focused than ever on the issue of what constitutes reasonable accommodation for disabilities or religious beliefs in the workplace. As employers re-open workspaces and bring employees back to work, many are facing requests for COVID-19-related “reasonable accommodation” that they’ve never handled before. A recent 10th Circuit case (Brown v. Austin) illustrates a key point: a work-from-home or modified schedule is not a “reasonable” accommodation if the employee is unable to perform essential job functions as a result. The case illustrates the general rule that reasonable accommodation is only required if it doesn’t present an undue hardship for the employer. Employers today should ensure that the essential job functions required of each role are well-documented–remembering that it’s important to evaluate whether the accommodation would truly prevent the employee from performing those job functions. For more information on employers’ options on return to work, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of this bill, the tax reform in the reconciliation bill, and other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: | Leave a Comment »

TaxFacts Intelligence November 10, 2021

Posted by William Byrnes on November 10, 2021


Many small business clients jumped at the opportunity to take advantage of advance payments of the COVID-19 tax credits–often relying on limited and quickly-changing guidance in calculating the value of those credits.  Now, the IRS has announced that it will recapture excess payments of those tax credits as underpayments of tax.  It’s anticipated that this may be particularly problematic for S corporation shareholders who claimed those credits before the IRS released guidance on majority shareholder issues.  Are your clients prepared?

By the way subscribers, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications for spring. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

IRS Releases Regulations Allowing for Recapture of Erroneous COVID-19 Tax Credits

Early in 2020, the IRS created procedures to allow employers to quickly take advantage of the FFCRA and CARES Act tax credits.  Now, the IRS has released temporary regulations that allow the IRS to recapture any of the tax credits credited to an employer in excess of the amount that the employer was actually entitled to receive.  The regulations provide that any amount of the credits for qualified leave wages, credits for qualified health plan expenses under sections 3131(d) and 3132(d), and any amount of the employee retention credit that were erroneously paid or credited to the employer can be recaptured.  Those incorrect tax credits will be treated as underpayments of  taxes and may be administratively assessed and collected in the same manner as the taxes. The temporary regulations also provide that the calculation of any credits erroneously claimed must take into account any amounts that were advanced to the employer under the processes established in 2020.  For more information on the employee retention tax credit, visit Tax Facts Online. Read More

Federal Court Sides With DOL on Form 5500 Statute of Limitations Issue

Recently, in Walsh v. Bowers, the Department of Labor (DOL) convinced a federal court to extend the statute of limitations for a fiduciary breach claim by relying on a Supreme Court interpretation of the “actual knowledge” standard.  Typically, the ERISA statute of limitations that applies for DOL investigations is the earlier of (A) six years after (1) the date of the last action that was a part of the breach or (2) if the case involves an omission, the last date on which the fiduciary could have cured the breach or (B) three years after the earliest date that the plaintiff had actual knowledge of the breach.  Typically, the DOL should have the relevant information in order to have actual knowledge of a breach when a plan files Form 5500 containing that information.  However, the DOL argued that a recent Supreme Court decision interpreting the definition of “actual knowledge” to mean actual knowledge should apply.  Relying on that case, the court allowed the DOL additional time because the DOL had yet to review the Form 5500 in question.  For more information on the current standard for investment advice fiduciaries, visit Tax Facts Online. Read More

December 31 Deadline for Maximizing QOZ Tax Deferral Benefits

December 31, 2021 is the final day for taxpayers to invest in a qualified opportunity zone (QOZ) and maximize the federal tax deferral benefit of these investments.  Taxpayers who invest capital gains according to the QOZ rules are not subject to immediate taxation on the gain.  Capital gains taxes are deferred (and federal income taxes are not required to be paid) until the end of 2026, or upon the individual’s disposition of the qualified opportunity fund (QOF) interest.  When the taxpayer eventually recognizes that gain, if the taxpayer has held the interest for at least five years, 10 percent of the federal income tax liability is eliminated (taxpayers who invested earlier can eliminate an additional 5 percent).  If the taxpayer holds the interest for at least 10 years, the increase in value is not subject to federal income tax when the interest is sold.  In order to hold the interest for the required five-year period, the taxpayer must purchase the interest no later than December 31, 2021.  For more information on the opportunity zone rules, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of this bill, the tax reform in the reconciliation bill, and other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: | Leave a Comment »

Transfer Pricing Risk Management Zoom-Based Case Studies Start Tuesday, Jan 18, 2022 through April 30 (graduation May 6 on campus)

Posted by William Byrnes on November 9, 2021


Based on weekly case studies created by the faculty, supported by reading/text materials, pre-recorded videos with PPTs, and audio podcast files made by the faculty – twice-weekly Zoom (optional) live sessions (recorded for those unable to attend) of 90 – 120 minutes wherein students may work with teams through the case studies generally from an assigned stakeholder perspective. Access to the extensive Texas A&M library for case study research includes by example: Lexis, Westlaw, IBFD, Kluwer-Cheetah, Thomson OneSource, BvD (Moodys), S&P CapIQ, FITCH, among several others. Apply for Texas A&M’s courses here.

Professor William Byrnes’ leverages the expertise of weekly case study experts that draw from a variety of disciplines including accounting, economics, finance, international business, management, and law. The textbook is authored by Professor William Byrnes and provided within the course [William Byrnes, Practical Guide to Transfer Pricing, 4th ed, 2022 version, published by Matthew Bender via LexisNexis and available in the law library in hardcopy].

Transfer pricing is the valuation of cross-border transactions between units of a multinational enterprise. This course introduces students to both theoretical and practical aspects of transfer pricing. This course deep dives into the legal issues (regulations and jurisprudence); accounting systems and variances among (managerial, financial, tax, and public accounting); financial data analytics through the lens of economic methods and profit level indicators; functional analysis and global value chain; contrasts with the OECD Transfer Pricing Guidelines and UN Transfer Pricing Manual. Each week, an industry-based case study is undertaken in a team-based learning approach of student groups generally consisting of three team members each.  The industry case studies include, as examples, agriculture (coffee supply chain), technology services, and petroleum.

Part I and Part II of this course both address strategy, compliance, and risk management.  Transfer Pricing Part I focuses on the topics of comparability, the transfer pricing methods, functional analysis, and global value chain analysis, and transfer pricing analysis for tangibles. Transfer Pricing Part II focuses on the transfer pricing methods and analysis for intangibles and for services. Topics more specifically that are addressed in this course via its textbook, video and audio lectures, weekly team-based case studies, and weekly live sessions, include the arm’s length standard, comparability analysis, risk analysis for tangibles and intangibles, transactional methods (CUP, CUT, Cost Plus, Resale Minus, Commodity), profit methods (e.g. comparable profits method, transactional net margin method, profit level indicators, key performance indicators, commensurate with income), functional analysis (supply chain, global value chain analysis, DAEMPE functions), industry economic data gathering and analysis, cost-sharing arrangements, profit splits and residuals, platform contributions, and safe harbors.  Apply for Texas A&M’s courses here.

Prof. William Byrnes Course Topics and Subject Matter Expert Calendar

Week 1 January 17 Arm’s Length Standard case study by Dr. Bruno da Silva

Jan 18 Tuesday at 9am – 10:30am (2-minute student introductions, orientation to teamwork and case studies, expectations and obligations regarding participation asynchronously or synchronously, discuss the syllabus, set up first-week case study)

2nd live session for 2022 to be determined, for 2021 it was: Friday at 9am – 10:30am (presentations, peer feedback)

  • Review the orientation video and slides
  • Read textbook chapter 40
  • Review the analysis of the historical and more recent arm’s length cases (watch videos and review slides)
  • On Tuesday January 18th, the first day of the course, we will discuss the optional use of teams by students, the case study, the team’s roles for the case study, and how team’s should operate, or how individual students may do the work without using a team approach. Students are not required to join a team and may undertake the work/projects individually. This choice is decided weekly.

Week 2 Jan 25: CUP & Comparables, Eden Hofert – the Christmas Tree case (Canadian)/Compaq by Dr. Lorraine Eden

Jan 26 Tuesday at 9am – 10:00am (2-minute student introductions, orientation to teamwork and case studies, expectations and obligations regarding participation asynchronously or synchronously, discuss syllabus, set up first week case study)

Jan 29 Friday at 9am – 10:30 (presentations, peer feedback)

Week 3 Jan 31: Cost Plus & Resale Minus (Byrnes’ Starbucks case study) by Dr. George Salis

Feb 1 Tuesday at 9am – 10:00am

second session at 9am – 10:30 (presentations, feedback)

  • Watch background and overview videos of big data & econometrics as it is used in transfer pricing.
  • Read textbook Chapter 7 then read chapter 6.
  • Contrast the analysis within the Cost Plus Method and Resale Minus Method cases.
  • Each team has a stakeholder role in Byrnes’ case study of Starbucks cost inclusion and exclusion, agriculture supply chain, and coffee global value chain.

Week 4 Feb 7: Comparable Profits Method & TNMM by Dr. George Salis

Feb 8 Tuesday at 9am – 10:00am (discussion about Byrnes’ case study and the CPM)

second session at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 8 and 9.
  • Watch second set of videos of big data & econometrics.
  • Review the CPM/TNMM examples.
  • Teams prepare the Case Study.

Week 5 Feb 14: functional analysis & global value chain, profit split methods by Dr. George Salis

Feb 15 Tuesday at 9am – 10:00am (discussion about Byrnes’ case study and the CPM, GVC)

second session at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 11 and 12, skim chapters 97 and 98
  • Watch videos about FA and GVC.
  • Review the GVC examples (chapters from textbook regarding coffee, technology, tobacco).
  • Team’s prepare the Case Study.

Week 6 Feb 21 Best Method – Snowin’ and Blowin’ case study by Dr. Lorraine Eden

Feb 22 Tuesday at 9am – 10:30am

second session at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 15 and 16
  • Watch video.
  • Team’s prepare the Case Study.

Week 7 Feb 28 Capstone summation and tax risk technology presentations

March 1 Tuesday at 9am – 10:30am (counsel litigation discussion)

second session to be determined (at 9am – 10:30 (tech provider training))

March 7-11 Spring Break for distance education graduate programs

Week 1 of Course 2 (week 8 of both courses) March 14: Intangibles Royalty Rates CUT and CPM by Dr. Debora Talutto

March 15 Tuesday at 9am – 10:30am (counsel litigation discussion)

second session (presentations, peer feedback)

  • Read textbook chapter 10
  • Analyze the CUT cases
  • Case Study presentation

Week 9 March 21: Intangibles Buy In/Out Cost Sharing Arrangements, Platform Contribution Transactions by Dr. George Salis

March 22 Tuesday at 9am – 10:30am

second session (presentations, peer feedback)

  • Read textbook chapter 13
  • Analyze the CSA/PCT cases
  • Case Study presentations

Week 10 March 28: Digital; Unitary Apportionment; Pillar 1; EU State Aid

by Dr. Bruno da Silva dasilva.brunoaniceto@gmail.com

March 29 Tuesday at 9am – 10:30am

April 1 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 44 and 75
  • Review Pillar One
  • Case Study presentation

Week 11 April 4 Digital –Amazon, Internet of Things (IOT) by Dr. Lorraine Eden and Dr. Niraja Srinivasan

April 5 Tuesday at 9am – 10:30am

April 8 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read OECD Pillar 1 comment letters in the course folder
  • Read Lorraine Eden’s articles
  • Read Chapter 46

Week 12: April 11 Services by Hafiz Choudhury

April 12 Tuesday at 9am – 10:30am

April 15 Friday at 9am – 10:00 (presentations, peer feedback)

Week 13 April 18: Restructuring (and extractive industry experience) by Hafiz Choudhury

April 19 Tuesday at 9am – 10:30am

April 22 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 27, 43
  • In the second week, the investors find out that the state owned off take customer is not utilizing the full capacity of the FSRU

Week 14 April 25 Capstone presentations for comment letters

April 26 Tuesday at 9am – 10:30am

April 29 Friday at 9am – 10:00 (presentations, peer feedback)

  • Review past comment letter submissions
Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Courses, Uncategorized | Tagged: | Leave a Comment »

TaxFacts Intelligence November 8, 2021

Posted by William Byrnes on November 8, 2021


This week, we dig a little deeper into some employment issues that have emerged in recent months–including a deeper dive into vaccine surcharges, employees who aren’t actively at work and the newly-emerging tax issues for employers who give employees the option of receiving wages in cryptocurrency.  Are your clients up to date?

By the way subscribers, the Texas A&M graduate program for tax, wealth, and risk management is accepting applications for spring. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic faculty and renowned professional case study leaders, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

$1.2 Trillion Infrastructure Act to be signed by Biden

The 2,702-page bi-partisan “Infrastructure Investment and Jobs Act of 2021” has been passed by the House and sent to Biden for signature into law. The Act contains approximately $550 billion of new project spending and carries over an additional $650 billion from previously funded projects for a total of over $1.2 trillion in infrastructure spending that will begin in 2021 and most end in 2026.

But the Infrastructure Act 2021 contains many energy provisions and excise taxes as well as fees that will impact all segments of the energy industry. These provisions include billions of dollars for the industry for expenditure and incentives for carbon capture; clean hydrogen R&D; nuclear; among others. By example, $500,000,000 is provided for clean hydrogen technology R&D (see page 1550 at section 40314). The excise taxes and fees include the extensions of the highway-related taxes, superfund excise taxes, and customs user fees.

The major tax reform provisions addressing estate and gift tax, capital gains, carried interests, real estate exchanges, retirement plans, and high-income earners have been reserved to the forthcoming yet-to-be-agreed/released Democratic reconciliation bill. However, the Infrastructure Investment and Jobs Act of 2021 contains some new tax provisions including:

  • Sec. 80501. Modification of automatic extension of certain deadlines in the case of taxpayers affected by Federally declared disasters.
  • Sec. 80502. Modifications of rules for postponing certain acts by reason of service in combat zone or contingency operation.
  • Sec. 80503. Tolling of time for filing a petition with the tax court.
  • Sec. 80504. Authority to postpone certain tax deadlines by reason of significant fires.
  • Sec. 80601. Modification of tax treatment of contributions to the capital of a corporation.
  • Sec. 80602. Extension of interest rate stabilization.
  • Sec. 80603. Information reporting for brokers and digital assets.
  • Sec. 80604. Termination of employee retention credit for employers subject to closure due to COVID–19.

The automatic extension for certain tax deadlines for Federally declared disasters addresses the situation of multiple declarations relating to a disaster area which are issued within a 60-day period. A separate 60-day period shall be determined with respect to each such declaration pursuant to the bill’s language.

The Infrastructure Act 2021 contains hundreds of not-obvious federal grants and contract opportunities for business. By example of one provision related to education and training of workers, section 401513 includes $10 million dollars for FY2022 for government grants of 50 percent of the cost to provide ‘career skills training’ to identify and involve in training programs target populations of individuals who would benefit from training and be actively involved in activities relating to energy efficiency and renewable energy industries; and the ability to help individuals achieve economic self-sufficiency. The program students must concurrently receive classroom instruction and on-the-job training for the purpose of obtaining an industry-related certification to install energy-efficient buildings.

The Act amends the reporting by brokers to include as of 2023 cryptocurrencies. I.R.C. Section 6045(c)(1) is amended to include within the term “broker” any person who (for consideration) is responsible for regularly providing any service effectuating transfers of digital assets on behalf of another person. The Infrastructure Act 2021 amends the information required to be provided the IRS by the broker in the case of securities transactions. A ‘covered security’ is amended to include any ‘digital asset’.

(D) DIGITAL ASSET. The term ‘digital asset’ means any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary. Any broker, with respect to any transfer (which is not part of a sale or exchange executed by such broker) during a calendar year of a covered security which is a digital asset from an account maintained by such broker to an account which is not maintained by, or an address not associated with, a person that such broker knows or has reason to know is also a broker, shall make a return for such calendar year showing the information otherwise required to be furnished with respect to transfers.

The reporting requirement goes into effect on January 1, 2023.

Need to Know on Offering Benefits to Employees Who Aren’t “Actively At Work”

Many employers continued to allow employees to participate in employee benefit programs while the employee was not actually working during the COVID-19 pandemic.  While many employees have now returned to work, in some areas rolling shutdowns may continue to impact the employer’s ability to retain employees on a continuous basis.  It can be risky to allow employees to remain on an employer’s health insurance benefit plan while not actively at work.  In many cases, fully insured plans have “actively at work” clauses that apply in determining the employee’s eligibility for benefits.  Employees typically can continue to participate for up to three months after ceasing work (to comply with FMLA time limits).  For employers with self-insured health plans, stop loss coverage may not apply to cover claims if the employee is not actively working.  Small business clients should check their plans and establish a policy on how employees who are not actively at work will be treated for benefit purposes.  For more information on self-insured plans, visit Tax Facts Online. Read More

Considering a COVID-19 Vaccine Health Surcharge?  How High Can it Be?

Employers subject to the ACA employer mandate should be mindful that the health coverage must continue to be “affordable” even if the employer opts to impose a COVID-19 vaccine surcharge (there is currently no exception for vaccines).  In 2021, health insurance is affordable if the employee’s contribution does not exceed 9.83 percent (9.61 percent in 2022) of household income (three safe harbors exist for purposes of determining “household income”).  Further, total surcharges generally cannot exceed 30 percent of the cost of the employee’s health insurance premiums (considering the cost of self-only coverage) under a HIPAA rule on incentives for employees who participate in wellness programs.  In the end, the amount of the allowable surcharge can vary by employer and employee, considering the cost of employer-sponsored health insurance, the employee’s compensation and the amount of the health insurance premiums that the employer chooses to subsidize.  For more information on vaccine-related incentives, visit Tax Facts Online. Read More

Paying Employees in Cryptocurrency?  Don’t Forget Employment Taxes

The IRS released a reminder last week for business clients who opt to pay employees in cryptocurrency.   Employers who choose to pay wages in cryptocurrency should remember that their choice of payment method is immaterial when it comes to calculating employment taxes.  Employment taxes must be paid on the fair market value of cryptocurrency paid as wages, measured using U.S. dollars on the date the employee receives the payment.  The fair market value is subject to FICA, FUTA and federal income tax withholding–and must be reported on the employee’s Form W-2.  Wages paid in cryptocurrency may also be reportable for state income tax purposes.  Employers are liable for these wages, so it’s important that small business clients who opt to pay employees in increasingly popular virtual currency be aware of their withholding and reporting obligations.  For more information on cryptocurrency paid as wages, visit Tax Facts Online. Read More

Look in your Tax Facts Online app for our continuing analysis of this bill, the tax reform in the reconciliation bill, and other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: | Leave a Comment »

Pandora Papers

Posted by William Byrnes on October 13, 2021


Like many of my subscribers, I’ve been following the Pandora Papers and the previous ICIJ releases (Panama papers, Bermuda-Paradise papers, Lux-Leaks et al..). Read the latest Pandora series of articles of the ICIJ here.

Some of the ICIJ writeups of the stolen documents are sensationalism, some are shocking, some surprising and thus truly shocking, and some are just salacious like a John Grisham novel (but a fun read if you like Grisham novels).

While I am strongly bothered by stolen confidential (by law) documents being glorified (though the relevant law of confidentiality of one jurisdiction is rarely relevant for another jurisdiction), the challenge is that if the confidential documents include information about corruption and other crimes then the confidentiality is waived (and the document drafter is may be part of the conspiracy to commit the crime). Then the ‘informant’ of the papers becomes a ‘whistleblower’ and should be rewarded. The challenge is: who is to decide which documents tend toward whistleblower-like and which tend toward just stolen legal-protected confidential papers that while salacious are really publicly newsworthy (maybe to TMZ)?

We all support the fundamental need for the free press to publish. But is the ICIJ the best positioned to decide the question of what papers may include crimes (and what may not)? I trust the ICIJ to bring to light these stories regardless of the pressure not to (thank goodness the Pentagon Papers were published by example), but journalists are not necessarily experts in the area of writing. I hope that the ICIJ has brought on board for vetting the trove of information a panel of experts that are able to advise on these issues (and probably has done as I think that would be best practice for journalism).

What I think would be interesting is for the ICIJ to keep a running tab on the number of investigations and audits (as best it can gather such information) that each trove of documents (Panama, Lux, Paradise/Bermuda, Pandora, etc) leads to on a country by country basis, and the outcomes (as best ICIJ can gather such information). Are countries acting on such information? For the U.S., are banks meeting their FATCA compliance requirements?

Anyway, glad the ICIJ has put together such a large and robust effort, especially as it regards corruption, sometimes at threat of life in some countries, and we should support the organization.

Transfer Pricing Risk Management Zoom Team-Based Case Studies Start Jan 19, run until May

Course Topics and Calendar

Week 1 January 17 Arm’s Length Standard case study by Dr. Bruno da Silva

Jan 18 Tuesday at 9am – 10:30am (2-minute student introductions, orientation to teamwork and case studies, expectations and obligations regarding participation asynchronously or synchronously, discuss the syllabus, set up first-week case study)

Friday at 9am – 10:30am (presentations, peer feedback)

Week 2 Jan 25: CUP & Comparables, Eden Hofert – the Christmas Tree case (Canadian)/Compaq by Dr. Lorraine Eden

Jan 26 Tuesday at 9am – 10:00am (2-minute student introductions, orientation to teamwork and case studies, expectations and obligations regarding participation asynchronously or synchronously, discuss syllabus, set up first week case study)

Jan 29 Friday at 9am – 10:30 (presentations, peer feedback)

Week 3 Jan 31: Cost Plus & Resale Minus (Byrnes’ Starbucks case study) by Dr. George Salis

Feb 1 Tuesday at 9am – 10:00am

second session at 9am – 10:30 (presentations, feedback)

  • Watch background and overview videos of big data & econometrics as it is used in transfer pricing.
  • Read textbook Chapter 7 then read chapter 6.
  • Contrast the analysis within the Cost Plus Method and Resale Minus Method cases.
  • Each team has a stakeholder role in Byrnes’ case study of Starbucks cost inclusion and exclusion, agriculture supply chain, and coffee global value chain.

Week 4 Feb 7: Comparable Profits Method & TNMM by Dr. George Salis

Feb 8 Tuesday at 9am – 10:00am (discussion about Byrnes’ case study and the CPM)

second session at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 8 and 9.
  • Watch second set of videos of big data & econometrics.
  • Review the CPM/TNMM examples.
  • Teams prepare the Case Study.

Week 5 Feb 14: functional analysis & global value chain, profit split methods by Dr. George Salis

Feb 15 Tuesday at 9am – 10:00am (discussion about Byrnes’ case study and the CPM, GVC)

second session at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 11 and 12, skim chapters 97 and 98
  • Watch videos about FA and GVC.
  • Review the GVC examples (chapters from textbook regarding coffee, technology, tobacco).
  • Team’s prepare the Case Study.

Week 6 Feb 21 Best Method – Snowin’ and Blowin’ case study by Dr. Lorraine Eden

Feb 22 Tuesday at 9am – 10:30am

Feb 25 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 15 and 16
  • Watch video.
  • Team’s prepare the Case Study.

Week 7 Feb 28 Capstone summation and tax risk technology presentations

March 1 Tuesday at 9am – 10:30am (counsel litigation discussion)

March 4 Friday at 9am – 10:30 (tech provider training)

March 7-11 Spring Break for distance education graduate programs

Week 1 of Course 2 (week 8 of both courses) March 14: Intangibles Royalty Rates CUT and CPM by Dr. Debora Talutto

March 15 Tuesday at 9am – 10:30am (counsel litigation discussion)

second session (presentations, peer feedback)

  • Read textbook chapter 10
  • Analyze the CUT cases
  • Case Study presentation

Week 9 March 21: Intangibles Buy In/Out Cost Sharing Arrangements, Platform Contribution Transactions by Dr. George Salis

March 22 Tuesday at 9am – 10:30am

second session (presentations, peer feedback)

  • Read textbook chapter 13
  • Analyze the CSA/PCT cases
  • Case Study presentations

Week 10 March 28: Digital; Unitary Apportionment; Pillar 1; EU State Aid

by Dr. Bruno da Silva dasilva.brunoaniceto@gmail.com

March 29 Tuesday at 9am – 10:30am

April 1 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 44 and 75
  • Review Pillar One
  • Case Study presentation

Week 11 April 4 Digital –Amazon, Internet of Things (IOT) by Dr. Lorraine Eden and Dr. Niraja Srinivasan

April 5 Tuesday at 9am – 10:30am

April 8 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read OECD Pillar 1 comment letters in the course folder
  • Read Lorraine Eden’s articles
  • Read Chapter 46

Week 12: April 11 Services by Hafiz Choudhury

April 12 Tuesday at 9am – 10:30am

April 15 Friday at 9am – 10:00 (presentations, peer feedback)

Week 13 April 18: Restructuring (and extractive industry experience) by Hafiz Choudhury

April 19 Tuesday at 9am – 10:30am

April 22 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 27, 43
  • In the second week, the investors find out that the state owned off take customer is not utilizing the full capacity of the FSRU

Week 14 April 25 Capstone presentations for comment letters

April 26 Tuesday at 9am – 10:30am

April 29 Friday at 9am – 10:00 (presentations, peer feedback)

  • Review past comment letter submissions
This image has an empty alt attribute; its file name is 500k-grad-group.jpg
Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!



Posted in Uncategorized | Leave a Comment »

TaxFacts Intelligence August 16, 2021

Posted by William Byrnes on August 16, 2021


The Supreme Court upheld in June, in a unanimous decision of all nine Justices, a District Court’s injunction against the NCAA. The injunction allows the NCAA to maintain rules limiting undergraduate athletic scholarships and other compensation related to athletic performance. BUT the injunction stops as unlawful NCAA rules limiting the education-related benefits schools may make available to student-athletes.

By the way subscribers, the Texas A&M graduate program for wealth and risk management, including tax risk management, is accepting applications for fall. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic, professional part-time faculty, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Colleges and universities across the country have leveraged sports to bring in revenue, attract attention, boost enrollment, and raise money from alumni. That profitable enterprise relies on “amateur” student athletes who compete under horizontal restraints that restrict how the schools may compensate them for their play. The National Collegiate
Athletic Association (NCAA) issues and enforces these rules, which restrict compensation for student-athletes in various ways. These rules depress compensation for at least some student-athletes below what a competitive market would yield.

Against this backdrop, current and former student-athletes brought this antitrust lawsuit challenging the NCAA’s restrictions on compensation. Specifically, they alleged that the NCAA’s rules violate §1 of the Sherman Act, which prohibits “contract[s], combination[s], or conspirac[ies] in restraint of trade or commerce.”

The Supreme Court upheld, in a unanimous decision of all nine Justices, the District Court’s injunction against the NCAA. The injunction allows the NCAA to maintain rules limiting undergraduate athletic scholarships and other compensation related to athletic performance. BUT the injunction stops as unlawful NCAA rules limiting the education-related benefits schools may make available to student-athletes.

Regarding today’s Supreme Court decision (entire 45-page opinion is available here), first it was expected by industry analysts and court watchers after the Court’s oral arguments March 31, 2021 with a foretelling Q&A session. We are already preparing Tax Facts Intelligence and Q&A for the books/app for financial advisors to leverage the new athletics marketplace and revenue streams and best represent their clients. I know of financial advisory firms that as of Tuesday will be hanging up a ‘sports agent financial advisor shingle’ and trolling SEC high schools, especially Texas, recruiting for tomorrow’s top collegiate athletes to sign up the talent.

Why not? That is how the market already works outside the USA for soccer (what everyone else calls football) and to a lesser extent baseball (albeit not nearly as popular as soccer so we hear much less about baseball camps for Dominican rising star 12 year old players like we hear about for the 12-year-old next Brazilian Pele). 

Interaction with social media followers is the currency of this new era for young athletes and can lead to a couple of hundred thousand during college for the star players, and even millions for the SEC Heisman level types. But, not having the ultimate talent and thus top sports ranking in a field does not also mean that an interactive social media following of millions cannot be created. The Russian tennis star Anna Kournikova, case in point, though she was just a little too early for the modern social media movement. Johnny Manziel, another case in point: had this decision been in place already and had he contracted a great wealth management advisor (thus great personal agent) with social media and promotional background, his life would have been very financially comfortable before his drug abuse ruined him in the pro league (talent or not aside). He certainly could have afforded a stint at the Betty Ford clinic to sober up and cleanout.

Via the advice of a great wealth manager, a personality can be leveraged into millions of dollars before the athlete graduates university, or at least hundreds of thousands.

It is clear from the unanimous ruling and the judges questioning and opinions that this is not a restrictive ruling. NCAA proponents are trying to spin that some restriction remains allowable like direct payments to players. But all it takes is one school that has money that wants to break into the big league to beat ‘Bama and LSU. Kind to think of it, I know that school… and don’t think Bama and LSU are just going to let that happen. Let real market competition begin!

An interesting question that I think will lead to much future litigation: How this ruling plays out throughout all sports regarding Title IX (such as a school spending money on men’s football, basketball, baseball, must by federal and state law also spend an equal amount on the equivalent sports for women). I am for market opportunity and thus I think it is an exciting proposition that opportunities will open up in all sports for athletes and wealth manager advisors alike (to negotiate the optimum financial rewards for the athletes).

Also, if athletic programs, such as golf or hockey, are forced to ‘come up’ with additional dollars to attract the star players to remain competitive, will the programs themselves start to think like SEC football (the most profitable league and sport) to generate additional income to meet the demands of staying or obtaining high ranking?  After all, whether it be academics or sports, it is all about ranking. Deans and Provosts rise and fall based on academic rankings. Coaches based on league rankings and national championships. Sports rankings and academic rankings have connections via alumni fundraising as of course voter university name/brand awareness and recognition. Basketball in particular through March madness has supported the academic rankings of universities though academic and sports ranking are not directly connected in voting and evaluation scoring, the indirect connection is undeniable.

This Supreme Court decision is great news for wealth managers / financial advisors who subscribe to Tax Facts because we are well-positioned to enter the new market of clientele representation created for the high school athlete seeking to share in the value that the athlete creates for a university and for the athlete through social media leveraged revenues. Understanding that “value”, generating more of it, and ‘sharing’ in the value is the bread and butter of a holistic wealth manager’s representation of athletes and entertainers.

Texas A&M already has education in this regard for our wealth management students and JDs who focus on such emerging artist/athlete/entertainer representation. We even have a law clinic for this emerging artists run by JD students supervised by my colleague that joined me at Texas A&M from our former law school in SoCal.

Look in your Tax Facts Online app for our continuing analysis of this bill, the tax reform in the reconciliation bill, and other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: | Leave a Comment »

TaxFacts Intelligence August 12, 2021

Posted by William Byrnes on August 12, 2021


The Biden administration, the OECD, and the European Union are moving full steam ahead with proposals that will modify the U.S. and international tax systems, significantly impacting clients’ aftertax investment returns and business income. We dig into the administration’s domestic and global tax proposals, including that a U.S. corporation may be required to pay a minimum tax amount to each foreign country where it has clients or investments. Are your clients preparing to adjust their portfolio of investments to maintain their after-tax annual investment returns? 

By the way, Texas A&M graduate program for wealth and risk management, including tax risk management, is accepting applications for fall. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic, professional part-time faculty, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Biden’s Tax Proposals: Two Surprises for Clients Impacting Last Year and 2021 

President Biden’s tax proposals contain two major tax surprises. First, Biden’s tax plans would make any capital gains tax hike retroactive to April 28, 2020. That means clients who have engaged in tax planning strategies to avoid higher rates might wind up subject to the higher rates regardless if this provision makes its way into the final proposal. Second, not only would the stepped-up basis rules be repealed, but taxpayers who inherit property would be required to recognize gain at the time of death—even if the individual doesn’t immediately sell the inherited property. In other words, the property could be immediately subject to both the estate tax and income or capital gains tax. Life insurance proceeds that will remain tax-free under the current proposals will be more valuable than ever in order to cover the tax payments. Click here to get a more in-depth expert analysis of the latest tax proposals. Read More Look in your Tax Facts Online app for our continuing analysis of the impact on your clients from proposed and enacted tax law changes of 2021, especially in the forthcoming reconciliation bill.

Biden’s Tax Proposals: The Biden Administration released its 2021 ‘Green Book’ of legislative tax proposals for Congress to consider.[1] The proposals as published include the following most salient items for clients:

  • Raise the corporate income tax rate from 21 to 28 percent effective for 2022.
  • Impose a 15 percent minimum tax on book earnings of large corporations.
  • Determining global minimum tax inclusion and residual U.S. tax liability on a jurisdiction-by-jurisdiction basis would be a stronger deterrent to profit.
  • Disallow deductions attributable to exempt income, and limit inversions.
  • Repeal the deduction for foreign-derived intangible income (FDII).
  • Replace the base erosion anti-abuse tax (BEAT) with the stopping harmful inversions and ending low-tax developments (SHIELD) rule.
  • Limit foreign tax credits from sales of hybrid entities.
  • Restrict deductions of excessive interest of members of financial reporting groups for disproportionate borrowing in the United States.
  • Reform taxation of foreign fossil fuel income.
  • Eliminate fossil fuel tax preferences.
  • Extend and enhance renewable and alternative energy incentives.
  • Increase the top marginal income tax rate for high earners.
  • Reform the taxation of capital income.
  • Tax carried (profits) interests as ordinary income.
  • Repeal deferral of gain from like-kind exchanges.
  • Make permanent excess business loss limitation of noncorporate taxpayers.
  • Address taxpayer noncompliance with listed transactions (tax shelters).

Regarding the Biden administration’s proposed changes to the minimum tax applicable to U.S. shareholders of controlled foreign corproations (known as “GILTI”), the following three aspects are most impactful for clients:

  • The U.S. shareholder’s entire net CFC tested income will be subject to U.S. tax. The qualified business asset investment (QBAI) exemption that allows 10 percent of the adjusted basis of QBAI to be exempt from GILTI would be repealed.
  • The IRC section 250 deduction of 50 percent of the global minimum tax inclusion would be reduced to 25 percent, thereby generally increasing the U.S. effective tax rate under the global minimum tax to 21 percent under the proposed U.S. corporate income tax rate of 28 percent.
  • The “global averaging” method for calculating a U.S. shareholder’s global minimum tax would be replaced with a “jurisdiction-by-jurisdiction” calculation. Under the new standard, a U.S. shareholder’s global minimum tax inclusion and, by extension, residual U.S. tax on such inclusion, would be determined separately for each foreign jurisdiction in which its CFCs have operations. As a result, a separate foreign tax credit limitation would be required for each foreign jurisdiction. A similar jurisdiction-by-jurisdiction approach would also apply with respect to a U.S. taxpayer’s foreign branch income. These changes mean that foreign taxes paid to higher-taxed jurisdictions will no longer reduce the residual U.S. tax paid on income earned in lower-taxed foreign jurisdictions.

The Biden proposal would repeal the Base Erosion and Anti-Abuse Tax (BEAT), replacing it with a new rule disallowing deductions to domestic corporations or branches by reference to low-taxed income of entities that are members of the same financial reporting group (including a member that is the common foreign parent, in the case of a foreign-parented controlled group). Specifically, under this new Stopping Harmful Inversions and Ending Low-Tax Developments (SHIELD) tax regime, a deduction (whether related or unrelated party deductions) would be disallowed to a domestic corporation or branch, in whole or in part, by reference to all gross payments that are made (or deemed made) to low-taxed members, which is any financial reporting group member whose income is subject to (or deemed subject to) an effective tax rate that is below a designated minimum tax rate. The proposal to repeal BEAT and replace it with SHIELD would be effective from 2023.


[1] General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals, Dept of Treas (May 2021). Available at https://home.treasury.gov/policy-issues/tax-policy/revenue-proposal (last visited August 1, 2021).

U.S. Agrees to Global Minimum Corporate Tax and a Share the U.S. (Tax) Wealth with 180 Other Countries

On June 5, 2021, the G7 Finance Ministers & Central Bank Governors released a communiqué that the Biden Administration fully supports and is seeking to expand (see U.S. Whitehouse release) with concrete actions for a deeper multilateral economic cooperation that includes the OECD’s Pillar One and Pillar Two proposals. The communiqué presented the following actions:

  • The G7 agreed that beneficial ownership registries are an effective tool to tackle illicit finance. In this regard, each of the G7 countries including the U.S. (see below) is implementing and strengthening registries of company beneficial ownership information to provide timely, direct and efficient access for law enforcement and competent authorities to adequate, accurate and up-to-date information, including through central registries. The G7 further noted that beneficial ownership information should be publicly available where possible.
  • The G7 committed to provide additional expertise and funding to support the FATF’s regional bodies (“FSRB’s”) peer assessment programs by at least US$17 million and 46 assessors over 2021-24 because global implementation of the FATF Standards for combatting money laundering, terrorist financing and proliferation financing remains uneven.
  • The G7 reaffirmed its collective developed country goal to mobilize US$100 billion annually for developing countries from public and private sources, in the context of meaningful mitigation actions and transparency on implementation of developing countries’ climate change adaptation and mitigation efforts.
  • committed to that market countries will be awarded taxing rights on at least 20 percent of profit exceeding a 10 percent margin for large multinational enterprises. In exchange, the G7 stated that it would seek removal of all Digital Services Taxes and other relevant similar measures on all companies.  
  • Regarding Pillar Two, the G7, including the U.S. specifically, committed to a global minimum tax of at least 15 percent on a country-by-country basis. The G7 stated that an agreement would be reached at the July meeting of G20 Finance Ministers and Central Bank Governors.

OECD Countries’ Average Tax Due on Employment Income is 34.6%

In 2020, the OECD average of personal income tax and total employee and employer social security contributions (the ‘tax wedge’) on employment incomes for the single worker earning the average wage was 34.6 percent, a decrease of 0.39 percentage points from 2019 reflecting the impact of the COVID-19 crisis on both wages and labor tax systems.[1] The OECD average tax wedge for the one-earner couple with two children also substantially decreased, declining by 1.15 percentage points to 24.4 percent in 2020.

The OECD average tax wedge decreased for the single worker in 2020, due to falls in 29 out of the 37 OECD countries. The decrease was derived for the most part from lower income taxes, linked in part to lower nominal average wages in 16 countries, and in part to policy changes, including tax and benefit measures introduced in response to the COVID-19 pandemic. In Austria, a marginal tax rate within the income tax schedule was reduced; in Lithuania, the tax-exempt amount was increased; in Canada, the decline in the tax wedge resulted from a one-time special payment through the Goods and Services Tax credit that was delivered on April 9, 2020; in the United States, the decrease in the tax wedge was mainly due to the Economic Impact Payment (EIP) that was part of the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act). Seven OECD countries experienced an increase in the tax wedge for the single worker earning the average wage in 2020. The increases in the tax wedge were even smaller than the decreases observed and did not exceed half a percentage point in any country. In all but one country (Korea), they occurred primarily due to wage growth.

European Commission proposes to extend the EU state aid regime to third party countries (i.e. the U.S.) The European Commission has proposed expanding its state aid rules to foreign countries’ actions to address distortions of trade & investment caused by foreign subsidies.[2]  The EU Commission investigated in 2020 whether those subsidies granted by non-EU governments to companies active in the EU may have a distortive effect on the Single Market.[3] Through the subsidy provisions laid down in Free Trade Agreements, the EU is seeking to achieve a level playing field between all companies that operate within the Single Market. Subsidy provisions vary from FTA to FTA and they are adjusted to the trade relationship with the third country in question. Whereas some bilateral agreements seek approximation with the EU State aid acquis with enhanced enforcement mechanisms (e.g. independent state aid authority, recovery, unilateral measures, etc.), other bilateral agreements provide for the prohibition of the most distortive type of subsidies as well as more limited enforcement mechanisms, like transparency, consultations, and a dispute settlement mechanism.

The European Commission proposed May 5, 2021, a new instrument to address the potentially distortive effects of foreign subsidies in its internal market. The new instrument aims at closing the regulatory gap in the internal market whereby subsidies granted by non-EU governments currently go largely unchecked, while subsidies granted by the Member States are subject to state aid scrutiny. EU rules on competition, public procurement, and trade defense instruments play an important role in ensuring fair conditions for companies operating in the EU market. But none of these tools applies to foreign subsidies which provide their recipients with an unfair advantage when acquiring EU companies, participating in public procurements in the EU, or engaging in other commercial activities in the EU. Such foreign subsidies can take different forms, such as zero-interest loans and other below-cost financings, unlimited State guarantees, zero-tax agreements, or direct financial grants.

Under the proposed Regulation, the Commission will have the power to investigate financial contributions granted by public authorities of a non-EU country that benefit companies engaging in an economic activity in the EU and redress their distortive effects, as relevant.

In this context, the proposed Regulation introduces three tools, two notification-based and a general market investigation tool.

  1. A notification-based tool to investigate concentrations involving a financial contribution by a non-EU government, where the EU turnover of the company to be acquired (or of at least one of the merging parties) is €500 million or more and the foreign financial contribution is at least €50 million.
  2. A notification-based tool to investigate bids in public procurementsinvolving a financial contribution by a non-EU government where the estimated value of the procurement is €250 million or more.
  3. A tool to investigate all other market situations and smaller concentrations and public procurement procedures which the Commission can start on its own initiative (ex-officio) and may request ad-hoc notifications.

With respect to the two notification-based tools, the acquirer or bidder will have to notify ex-ante any financial contribution received from a non-EU government in relation to concentrations or public procurements meeting the thresholds. Pending the Commission’s review, the concentration in question cannot be completed and the investigated bidder cannot be awarded the contract. Binding deadlines are established for the Commission’s decision.

Under the proposed Regulation, where a company does not comply with the obligation to notify a subsidized concentration or a financial contribution in procurements meeting the thresholds, the Commission may impose fines and review the transaction as if it had been notified. The general market investigation tool, on the other hand, will enable the Commission to investigate other types of market situations, such as greenfield investments or concentrations and procurements below the thresholds, when it suspects that a foreign subsidy may be involved. In these instances, the Commission will be able to start investigations on its own initiative (ex-officio) and may request ad-hoc notifications. Based on the feedback received on the White Paper, the enforcement of the Regulation will lie exclusively with the Commission to ensure its uniform application across the EU.[4]

If the Commission establishes that a foreign subsidy exists and that it is distortive, it will where warranted consider the possible positive effects of the foreign subsidy and balance these effects with the negative effects brought about by the distortion. When the negative effects outweigh the positive effects, the Commission will have the power to impose redressive measures or accept commitments from the companies concerned that remedy the distortion. With respect to the redressive measures and commitments, the proposed Regulation includes a range of structural or behavioral remedies, such as the divestment of certain assets or the prohibition of certain market behavior. In case of notified transactions, the Commission will also have the power to prohibit the subsidized acquisition or the award of the public procurement contract to the subsidized bidder.

The European Parliament and the Member States will now discuss the Commission’s proposal in the context of the ordinary legislative procedure with a view of adopting a final text of the Regulation.

Estimating Offshore Wealth and International Tax Evasion.[5] A European Commission 2019 report on global offshore wealth estimated USD 7.8 trillion in 2016 (EUR 7.5 trillion) or 10.4 percent of global GDP, a considerable amount. The EU share is valued at USD 1.6 trillion (EUR 1.5 trillion), or 9.7 percent of GDP. The corresponding EU estimated revenue lost to international tax evasion is EUR 46 billion in 2016 (0.32 percent of GDP). Another important finding is that the increase in global offshore wealth is primarily driven by non-OECD countries, with an estimated contribution in dollar terms growing from US$ 1.1 trillion in 2001 to US$ 4.6 trillion in 2016. Among non-OECD economies, the surge of China is especially strong, with a 21-fold increase of offshore wealth held by Chinese residents over the period (from US$ 90 billion in 2001 to US$ 1.9 trillion in 2016).[6]

How Much is U.S. Tax Evasion? Closing the Tax Gap: Lost Revenue from Non-Compliance and the Role of Offshore Tax Evasion.[7] On May 11, 2021, the Treasury Inspector General For Tax Administration (TIGTA) stated that individual

taxpayers are responsible for $245 billion of the underreporting tax gap, the largest share. TIGTA identified 314,586 business taxpayers with $335.5 billion in Form 1099-K income that appeared to have a filing obligation but were not identified as nonfilers by the IRS. The problem is that the IRS cannot use third-party information returns, such as Form 1099-K data, to identify business nonfilers and create cases if the taxpayers’ accounts are coded as not having an open filing requirement, or no tax account exists because the business has never filed a tax return. TIGTA recommended that the IRS fund and implement a programming revision to its process that identifies these types of business taxpayers.

Tax Gap studies have found that self-employed individuals underreported their net income by 64 percent (based on the average for TYs 2008 through 2010), which is up from 57 percent in the TY 2001 estimate. The law did not require third-party settlement organizations to issue Form 1099-K, Payment Card, and Third Party Network Transactions, unless those transacting business earn at least $20,000 and engage in at least 200 transactions annually. TIGTA judgmentally selected eight P2P payment applications and found that these companies appear not to meet the current definition of a third-party settlement organization, and therefore are not required to file Form 1099-K. However, three P2P companies filed 950,965 Forms 1099-K involving $198.6 billion of payments in TY 2017, which included amounts below the reporting thresholds. The IRS did not always take compliance actions on nonfilers of tax returns and underreporters related to P2P payments even when information reporting was available. In total, 169,711 taxpayers potentially did not report up to $29 billion of payments received per Form 1099-K documents issued to them by three P2P payment application companies. Section 9674 of the American Rescue Plan Act changed the exception for de minimis payments by third-party settlement organizations, reducing the exception threshold to $600 annually so that these organizations are subject to the same reporting requirements as other businesses.

TIGTA reported in 2018 that after eight years and spending at least $380 million on IRS systems and efforts to establish international agreements across the globe, the IRS had taken virtually no compliance actions to meaningfully enforce the Foreign Account Tax Compliance Act (FATCA). Withholding agents are required to file Forms 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, to report on an individual taxpayer basis the income and withholding for each foreign person. For Tax Year 2017, the IRS received 6.3 million Forms 1042-S from 49,618 withholding agents. TIGTA reported that IRS processes did not identify 1,919 withholding agents with reporting discrepancies totaling more than $182.7 million. Its review identified 366 withholding agents that claimed $506 million more in credits for tax withheld than was reported on Forms 1042-S.

The Foreign Investment in Real Property Tax Act of 198036 (FIRPTA) imposes an income tax on foreign persons selling U.S. real property interests. Buyers are required to withhold a percentage of the anticipated taxes due on the amount realized from the sale. A foreign seller of U.S. property can claim a credit for the tax withheld by the buyer. If the seller’s tax liability is less than the amount of tax withheld, the seller gets a refund of the difference. TIGTA reported that the IRS’s reconciliation processes do not effectively identify and address FIRPTA reporting and payment noncompliance.

TIGTA identified 2,988 buyers with discrepancies of more than $688 million between the withholding reported on Forms 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests, filed during Processing Year 2017, and the withholding assessed to the buyer’s tax account. Extensive data inaccuracies in the FIRPTA database, incorrect and unclear guidelines and employee errors contributed to these discrepancies. The IRS also has not established processes to use Form 1099-S, Proceeds from Real Estate Transactions, to identify buyers that do not report and pay FIRPTA withholdings. TIGTA’s analysis of Forms 1099-S for TY 2017 identified approximately $22 million in FIRPTA withholding that was not reported and paid to the IRS. Finally, employee errors resulted in 1,835 foreign individuals potentially receiving more than $60 million in FIRPTA withholding credits than they were entitled.

Expatriates are required to file Form 8854, Initial and Annual Expatriation Statement, to certify that they have followed all Federal tax laws during the five years preceding the year of expatriation.[8] However, TIGTA found that the IRS database of expatriates was incomplete for 16,798 expatriates who did not file Form 8854. In addition, TIGTA found instances of potential non-filing, underreporting of income, and/or payment compliance issues by expatriates. From a sample of 26 expatriates who did not file a Form 8854, five had potential unreported income over $6 million. From a sample of 61 expatriates who filed a Form 8854, 15 had potential unreported income over $17 million. Lastly, TIGTA also found that expatriates with high net worth appear to not be paying their exit tax.

All individuals who expatriate are published in the Federal Register quarterly, a requirement established by IRC section 6039G.[9]

American Families Plan Tax Compliance Agenda. The Biden administration proposed an increase in the IRS budget by $80 billion over the next decade, approximately 10 percent annually. The IRS would have these additional resources to invest in large fixed costs like modernizing information technology, improving data analytic approaches, and hiring and training agents dedicated to complex enforcement activities.[10] The administration reported that audit coverage for large corporations was cut in half since 2010 for companies with $20 billion or more in assets, from 98 percent in FY 2010 to around 50 percent currently. During the past 10-year period, the administration found that global high wealth examinations have taken roughly two years on average to complete and have averaged around 284 hours per return. Partnerships audits averages around 333 hours per return.

National Bureau Of Economic Research Working Paper 2021.[11] The authors of an NBER report using IRS audit data estimated that 36 percent of federal income taxes unpaid are owed by the top percent of incomes and that collecting the unpaid federal income tax from this one percent would increase federal revenues by about $175 billion annually. The authors estimate that 21 percent of the income of these earners is unreported of which 6 percentage points correspond to undetected sophisticated evasion. High-income people are then more likely to adopt positions in the “gray area” between legal avoidance and evasion, the team concluded. Under-reporting of Schedule C income comprises 50 percent of all evasion detected, the authors found.[12]

National Taxpayer Advocate Fiscal Year 2022 Report. The National Taxpayer Advocate in her Fiscal Year 2022 report to Congress[13] recognized the importance of international information return (IIR) penalties in fostering voluntary tax compliance. However, the IRS’ systemic assessment of these penalties often produces excessively large penalties disproportionate to any underlying income tax liability. The IRS assesses IIR penalties on returns it considers to be filed late, but more than 55 percent of systemically assessed IRC §§ 6038 and 6038A penalties are abated because the returns were timely because reasonable cause relief was granted, or in situations where the failure-to-file penalty on the related Form 1120 or Form 1065 filing is abated under the First Time Abatement (FTA) provisions or the return has no tax due. Taxpayers and the IRS expend significant time, energy, and money addressing penalties that the IRS should not have assessed. Thus, these systemic assessments are ineffective in promoting taxpayer compliance and do not promote equity and fairness.

Because the penalties are immediately assessed, taxpayers’ recourse is to rely on IRS discretion to grant a reasonable cause abatement of the penalties, request a Collection Due Process proceeding, or pay the assessed penalty and file suit in district court or the Court of Federal Claims seeking a refund. One means of proactively addressing this disadvantage to taxpayers is to send preassessment correspondence, giving potentially impacted taxpayers the opportunity to explain why the IRS should not assess the penalty. This approach would educate taxpayers and minimize the inefficient and burdensome practice of first assessing and then abating these penalties. Further, it would contribute to tax equity by placing the IRS in a better position to distinguish between good-faith mistakes and intentional tax noncompliance.

The Taxpayer Advocate recommended that the IRS send taxpayers a proposed penalty notice to allow them to provide mitigating evidence such as reasonable cause; if timely filed, proof of timely filing; or application of the FTA administrative relief. The Taxpayer Advocate also recommended that the IRS provide taxpayers 60 days to respond to proposed penalty notices and give IRS employees time to review and consider reasonable cause relief, FTA relief, or the issue of timeliness. Finally, the Taxpayer Advocate continues to call for the IRS to reinstitute a penalty-free voluntary disclosure program, similar to the former FAQ 18 of the 2012 Offshore Voluntary Disclosure Program, in which taxpayers will be encouraged to come forward, file delinquent information returns, and be compliant for future years. Specifically address those taxpayers who do not have other tax liabilities besides penalties associated with the missing IIRs, are not under examination, and have not been contacted for the delinquent IIRs.

Nina Olson, the former Taxpayer Advocate, stated that of the current $441 billion gross tax gap estimate by IRS, some portion of the underreporting gap is attributable to errors made as a result of tax law complexity (unknowing noncompliance) and others are attributable to procedural complexity and barriers – for example, where taxpayers are eligible for a deduction or credit but cannot navigate the bureaucracy on their own and cannot afford representation, so they just give up (functional or characteristic noncompliance).[14] She stated that studies estimating the amount of unreported income by the highest-income taxpayers, and proposals to reduce the underreporting component of the tax gap by increased information reporting, along with the Commissioner’s guestimate that the annual tax gap could be as much as $1 trillion, have led policymakers, commentators, and the media to equate the tax gap with tax evasion. She cautioned that the ubiquitous usage of this phrase actually dilutes its meaning and impact because it allows very different types of noncompliance attributable to very different causes to be lumped together. She found that “framing noncompliance as tax evasion not only undermines compliance among the currently compliant, who will begin to feel naïve for complying, but it creates an environment in which tax agency personnel can feel justified in undermining if not outright ignoring taxpayer rights and protections.”

Nina Olson pointed out the IRS’ heavy emphasis on data-matching and rule-based systems, instead of pattern/network recognition algorithms that include feedback loops.[15] The IRS underutilizes financial account data it receives pursuant to FATCA because it cannot match much of it to existing returns. She also uncovered that many IRS systems have high false-positive and abatement rates. The National Taxpayer Advocate has reported that during the 2020 filing season, the IRS “refund fraud filters” selected 3.2 million returns of which approximately 66 percent were false positives. She concluded that the IRS requires a culture shift about how it approaches data and that the IRS must proactively use data to assist taxpayers, avoiding labeling taxpayer returns as “potentially fraudulent” before the IRS has conclusive evidence of fraud because most taxpayer error is not fraud. Regarding the Biden administration’s proposed changes to GILTI, the following three aspects are most impactful: The U.S. shareholder’s entire net CFC tested income will be subject to U.S. tax. The qualified business asset investment (QBAI) exemption that allows 10 percent of the adjusted basis of QBAI to be exempt from GILTI would be repealed.

The IRC section 250 deduction of 50 percent of the global minimum tax inclusion would be reduced to 25 percent, thereby generally increasing the U.S. effective tax rate under the global minimum tax to 21 percent under the proposed U.S. corporate income tax rate of 28 percent. The “global averaging” method for calculating a U.S. shareholder’s global minimum tax would be replaced with a “jurisdiction-by-jurisdiction” calculation. Under the new standard, a U.S. shareholder’s global minimum tax inclusion and, by extension, residual U.S. tax on such inclusion, would be determined separately for each foreign jurisdiction in which its CFCs have operations. As a result, a separate foreign tax credit limitation would be required for each foreign jurisdiction. A similar jurisdiction-by-jurisdiction approach would also apply with respect to a U.S. taxpayer’s foreign branch income. These changes mean that foreign taxes paid to higher-taxed jurisdictions will no longer reduce the residual U.S. tax paid on income earned in lower-taxed foreign jurisdictions.

The Biden proposal would repeal the Base Erosion and Anti-Abuse Tax (BEAT), replacing it with a new rule disallowing deductions to domestic corporations or branches by reference to the low-taxed income of entities that are members of the same financial reporting group (including a member that is the common foreign parent, in the case of a foreign-parented controlled group). Specifically, under the Stopping Harmful Inversions and Ending Low-Tax Developments (SHIELD) rule, a deduction (whether related or unrelated party deductions) would be disallowed to a domestic corporation or branch, in whole or in part, by reference to all gross payments that are made (or deemed made) to low-taxed members, which is any financial reporting group member whose income is subject to (or deemed subject to) an effective tax rate that is below a designated minimum tax rate. The proposal to repeal BEAT and replace with SHIELD would be effective from 2023.

Draft Schedules K-2 and K-3 released to enhance reporting of international tax matters for pass-through entities. The IRS released April 30, 2021, updated early drafts of new Schedules K-2 and K-3 for Forms 1065, 1120-S, and 8865 for tax year 2021 (filing season 2022).[17] The schedules are designed to provide greater clarity for partners and shareholders on how to compute their U.S. income tax liability with respect to items of international tax relevance, including claiming deductions and credits. The drafts of the schedules are intended to give a preview of the changes before final versions are released. The release of an early draft of the instructions for the schedules is planned for later in 2021. The redesigned forms and instructions will also give useful guidance to partnerships, S corporations and U.S persons who are required to file Form 8865 with respect to controlled foreign partnerships on how to provide international tax information. The updated forms will apply to any persons required to file Form 1065, 1120-S or 8865, but only if the entity for which the form is being filed has items of international tax relevance (generally foreign activities or foreign partners). The changes do not affect partnerships and S corporations with no items of international tax relevance. To promote compliance with adoption of Schedules K-2 and K-3 by affected pass-through entities and their partners and shareholders, the IRS intends to provide certain penalty relief for the 2021 tax year.


[1] OECD (2021), Taxing Wages 2021, OECD Publishing, Paris, available at https://doi.org/10.1787/83a87978-en (last visited May 30, 2021).

[2] Proposal for a Regulation of the European Parliament and of the Council on foreign subsidies distorting the internal market, SWD (2021) 99 final – SWD (2021) 100 final – SEC (2021) 182 final (May 5, 2021).

[3] Inception Impact Assessment of Commission proposal(s) for Regulation(s) of the European Parliament and the Council to address distortions caused by foreign subsidies in the internal market generally and in the specific cases of acquisitions and public procurement. Ref. Ares (2020) 5160372 (Oct 1, 2020).

[4] Commission Staff Working Document Impact Assessment, Accompanying the Proposal for a Regulation of the European Parliament and of the Council on foreign subsidies distorting the internal market, COM (2021) 223 final – SEC (2021) 182 final – SWD (2021) 100 final (May 5, 2021).

[5] Estimating International Tax Evasion by Individuals – Final Report 2019, Taxation Papers, Working Paper No 76 – 2019, European Commission Directorate-General for Taxation and Customs Union (Sept 2019) at 9.

[6] Estimating International Tax Evasion by Individuals – Final Report 2019, Taxation Papers, Working Paper No 76 – 2019, European Commission Directorate-General for Taxation and Customs Union (Sept 2019) at 11.

[7] “Closing the Tax Gap: Lost Revenue from Non-Compliance and the Role of Offshore Tax Evasion”, Testimony Of The Honorable J. Russell George, Treasury Inspector General For Tax Administration, Committee On Finance Subcommittee On Taxation And IRS Oversight, United States Senate (May 11, 2021).

[8] Available at https://www.irs.gov/forms-pubs/about-form-8854 (last visited June 1, 2021).

[9] Quarterly Publication of Individuals, Who Have Chosen To Expatriate, 86 FR 22781 (April 29, 2021). Available quarterly at https://www.federalregister.gov/documents/2021/04/29/2021-08977/quarterly-publication-of-individuals-who-have-chosen-to-expatriate-as-required-by-section-6039g (last visited June 1, 2021).

[10] The American Families Plan Tax Compliance Agenda, Dept of Treas (May 2021).

[11] Tax Evasion at the Top of the Income Distribution: Theory and Evidence, John Guyton, Patrick Langetieg, Daniel Reck, Max Risch, and Gabriel Zucman, NBER Working Paper No. 28542, March 2021 at 3.

[12] Tax Evasion at the Top of the Income Distribution: Theory and Evidence, John Guyton, Patrick Langetieg, Daniel Reck, Max Risch, and Gabriel Zucman, NBER Working Paper No. 28542, March 2021 at 8.

[13] Objectives Report To Congress, National Taxpayer Advocate, Fiscal Year 2022 at p 45.

[14] Statement by Nina E. Olson, Executive Director, Center for Taxpayer Rights, Hearing on Closing the Tax Gap: Lost Revenue from Noncompliance and the Role of Offshore Tax Evasion, Subcommittee on Taxation and IRS Oversight Committee on Finance United States Senate (May 11, 2021) at 9.

[15] Statement by Nina E. Olson, Executive Director, Center for Taxpayer Rights, Hearing on Closing the Tax Gap: Lost Revenue from Noncompliance and the Role of Offshore Tax Evasion, Subcommittee on Taxation and IRS Oversight Committee on Finance United States Senate (May 11, 2021) at 10.

[16] General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals, Dept of Treas (May 2021). Available at https://home.treasury.gov/policy-issues/tax-policy/revenue-proposal (last visited June 1, 2021).

[17] The IRS published draft tax forms at https://apps.irs.gov/app/picklist/list/draftTaxForms.html (last visited June 1, 2021).


Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in international taxation, Taxation | Tagged: , , , , | Leave a Comment »

TaxFacts Intelligence August 9, 2021

Posted by William Byrnes on August 9, 2021


Did Your Clients Properly Report Their Pre-Tax Reform Cryptocurrency Trading Gains? Seven years after the IRS declared cryptocurrency would be taxed as personal property under capital gains rules, it has now announced that pre-tax reform trades won’t qualify for like-kind exchange treatment under Section 1031, creating a potential tax headache for taxpayers with substantial pre-reform crypto gains. Meanwhile, challenges to the IRS’s ability to impose substantial FBAR penalties for failure to report foreign accounts continue to flare up in federal courts despite a clear consensus in both Texas and the 9th Circuit. Read on to make sure you’re up to speed.

By the way subscribers, Texas A&M graduate program for wealth and risk management, including tax risk management, is accepting applications for fall. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic, professional part-time faculty, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

New IRS Guidance Nixes Tax-Free Exchange Treatment for Cryptocurrency Swaps.  New IRS guidance has confirmed that pre-2018 exchanges of Bitcoin, Ether and Litecoin do not qualify for Section 1031 exchange treatment.  Prior to 2018, taxpayers were permitted to defer capital gains taxes under Section 1031 for certain exchanges of personal property (1031 is now limited only to exchanges of real property).  The IRS’s rationale is that these were not exchanges of like-kind property and so were taxable even prior to tax reform.  The IRS found that Bitcoin and Ether each had special roles in cryptocurrency trading because if taxpayers wanted to trade in other types of virtual currency, they had to first exchange the other currency into or from Bitcoin or Ether.  Therefore, exchanges between Litecoin and Bitcoin/Ether did not qualify as “like kind”.  Further, the IRS identified differences in design, intended use and actual use of Bitcoin and Ether.  While this guidance currently only extends to exchanges involving Bitcoin, Ether and Litecoin, it is possible that the IRS could extend the rationale to other types of cryptocurrency.  Taxpayers who trade in cryptocurrency under current tax rules should remember that these trades are taxable events. For more information, visit Tax Facts Online. Read More

Related Questions:

7723. How does a taxpayer identify with bitcoin or other virtual currency are involved in a sale, exchange or other disposal of the virtual currency?

7725. What considerations apply when an employer pays employees or independent contractors using bitcoin or other virtual currency?

Related Questions:

559. What are the rules that allow 401(k) plan sponsors to include deferred annuities in target date funds (TDFs)?

561. Can a taxpayer combine a deferred income annuity (“longevity annuity”) with a traditional deferred annuity product?

New Challenge Posed to Federal Courts’ $10,000 Per-Year Limit on FBAR Penalties.  Several recent federal court decisions have confirmed that the total FBAR penalties that can be imposed on an individual should be limited to $10,000 per year, rather than $10,000 per financial account.  Now, a federal court in Georgia is once again hearing a similar case.  In 2018, the IRS assessed $120,000 in penalties for a three-year period for each of the foreign banks with which the taxpayer had a relationship that she failed to report via FBAR filing.  Federal courts in both Texas and California have confirmed that the IRS must limit penalties for a non-willful failure to file FBAR reports based on the year, not the number of the taxpayer’s foreign accounts.  In the current case, the taxpayer had also participated in an amnesty program where she paid back taxes on the accounts she held with banks in France, Lebanon and Monaco.  For more information on the FBAR filing requirements and penalties for noncompliance, visit Tax Facts Online. Read More

Related Questions:

980. What is the effect of a disposition of Canadian real property in respect of a U.S. citizen that is a Canadian resident for tax purposes?

981. What is the effect of a disposition of Canadian real property in respect of a U.S. individual that is not a Canadian resident for tax purposes?

IRS Extends Relief for Employee Donations of Unused Sick, Vacation & PTO.  The IRS has extended the relief provided in Notice 2020-46 to allow employees to continue to forgo, or “donate”, sick, vacation and personal leave because of the COVID-19 pandemic without adverse tax consequences through the end of the 2021 tax year.  After December 31, 2020 and before January 1, 2022, employers may make cash payments to Section 170(c) charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation or personal leave which their employees gave up.  Those amounts will not be treated as compensation and the employees will not be treated as receiving the value of the leave as income.  While taxable income will not be increased, employees cannot claim a charitable deduction for the leave donated to their employer. Employers, however, may deduct these cash payments as Section 162 business expenses or Section 170 charitable contributions if the employer otherwise meets the respective requirements of either section.  For more information on the deduction for charitable contributions, visit Tax Facts Online. Read More

Related Questions:

8540. What are the income percentage ceilings that limit the income tax deduction for charitable contributions?

8541. How does the income percentage ceilings calculated if charitable contributions of money are made to both public charities and private foundations in the same tax year?

Look in your Tax Facts Online app for our continuing analysis of this bill, the tax reform in the reconciliation bill, and other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: | Leave a Comment »

TaxFacts Intelligence August 6, 2021

Posted by William Byrnes on August 6, 2021


This week’s newsletter is dedicated to helping clients—both employers and employees—maximize their health-related benefits and tax credits (even when those benefits are only available for a limited time). Do you have questions about situation-specific COBRA eligibility, little-known HSA tricks, or the ever-evolving EEOC vaccine guidance for employers? Read on to see if we’ve got the answers in Tax Facts – or ask us to include in the future online/book updates.

By the way subscribers, Texas A&M graduate program for wealth and risk management, including tax risk management, is accepting applications for fall. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic, professional part-time faculty, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

EEOC – Vaccine Incentive Guidance for Employers

The EEOC posted an update about offering incentives to employees to take a COVID vaccine, especially relevant now that the Delta COVID-19 variation has brought hospitalization levels back to record pandemic levels. Under the new guidance, employers are permitted to offer incentives to employees who voluntarily provide confirmation that they have received the COVID-19 vaccine from a third party. Requesting these confirmations will not be treated as disability-related inquiries under the ADA or requests for genetic information under GINA. Employers should be aware that these incentives are treated differently than incentives offered for employer-provided vaccines. If the incentive is actually for the purpose of encouraging an employee to receive the vaccine from the employer or an agent, employers should continue to use caution against offering an incentive that can be construed as “coercive”. That’s because employees must provide certain health information before receiving the vaccine—and employees should not be pressured to disclose medical information to their employers. For more information on the available tax credit for employers who offer paid vaccine leave to employees, visit Tax Facts Online. Read More

Some legal-health experts have raised the issue of whether an employer can require an employee to undergo a treatment that has not yet received approval? The current COVID-19 vaccines are being administered under an Emergency Use Authorization. The FDA, which is empowered by law to authorize an emergency use designation for unapproved vaccinations and other medical treatments, states that:

An Emergency Use Authorization (EUA) is a mechanism to facilitate the availability and use of medical countermeasures, including vaccines, during public health emergencies, such as the current COVID-19 pandemic. Under an EUA, FDA may allow the use of unapproved medical products, or unapproved uses of approved medical products in an emergency to diagnose, treat, or prevent serious or life-threatening diseases or conditions when certain statutory criteria have been met, including that there are no adequate, approved, and available alternatives.

In response to the concerns raised by employers regarding the legal requirement to inform individuals of the “option to accept or refuse administration” of the unapproved product [see 21 U.S. Code § 360bbb–3(e)(1)(A)(ii)(III)- Authorization for medical products for use in emergencies], especially as regards the potential liability, the DOJ released its opinion that employers may require employees to submit to emergency-use vaccines. The DOJ opinion, “Whether Section 564 of the Food, Drug, and Cosmetic Act Prohibits Entities from Requiring the Use of a Vaccine Subject to an Emergency Use Authorization?” concludes that: “… This language in section 564 specifies only
that certain information be provided to potential vaccine recipients and does not prohibit entities from imposing vaccination requirements.” Both public and private employers, according to the DOJ opinion, may require the COVID-19 vaccination of employees. To roughly summarize the reasoning: The applicant or employee has an option to refuse to submit to vaccination, but the employer also has an option to either not offer or continue to offer employment. The DOJ’s legal analysis goes beyond this simplification with arguments why the option to refuse is not applicable. Certainly, these issues and arguments will see substantial litigation in the courts (the DOJ memo references the opening salvo). But the memo does its job in providing reasonable legal cover for employers, employers’ legal counsel, and employers’ insurers to implement vaccination requirements.

A separate issue is whether employers can require employees or applicants for employment to prove via a vaccination card or similar medical record that a COVID-19 vaccination has been administered and when administered? Check your Tax Facts app for the discussion.

Related Questions:

773. What happens when the employee has exhausted the paid time off under the Families First Coronavirus Response Act (FFCRA)? Does the employee have the right to return to work?

8895. What is a “de minimis” fringe benefit?

Am I Eligible for Federal COBRA Assistance? Case-Specific IRS Guidance

The IRS guidance on the availability and implementation of the ARPA 100 percent COBRA premium assistance provides some useful guidance on specific scenarios that employers and employees may now be facing. Generally, individuals remain assistance-eligible individuals (AEIs) during eligibility waiting periods if the period overlaps with the subsidy period. For example, the individual will be an AEI during periods outside the open enrollment period for a spouse’s employer-sponsored health coverage. Employers who change health plan options must place the AEI in the plan that’s most similar to their pre-termination plan, even if it’s more expensive (and the 100 percent subsidy will continue to apply). Importantly, employers who are no longer covered by federal COBRA requirements may still be required to advance the subsidy (for example, if the employer terminated employees so that the federal rules no longer apply). If the employer was subject to COBRA when the individual experienced the reduction in hours or involuntary termination, the employer must offer the subsidy. For more information on the COBRA premium subsidy, visit Tax Facts Online. Read More

Related Questions:

0121. COBRA Subsidies Back on the Table for 2021

371. When must an election to receive COBRA continuation coverage be made?

Maximizing Post-Pandemic HSA Benefits

HSAs and other tax-preferred health benefits have taken on a whole new meaning in the wake of the pandemic. It’s important that clients fully understand the rules so that they aren’t leaving valuable benefits on the table. In 2022, annual HSA contribution limits will rise to $3,650 for self-only coverage or $7,300 for family HDHP coverage. (HDHPs are health insurance plans that have a minimum annual deductible of $1,400 for self-only coverage ($2,800 for family coverage).). Taxpayers aged 55 and up can contribute an extra $1,000 per year. Taxpayers don’t have to fund an employer-sponsored HSA. Even if the client has been laid off or furloughed, clients with HDHP coverage can open an HSA at their bank and fund the account independently. Additionally, clients who have lost their jobs continue to have access to the funds in their old HSA, and can even transfer that HSA to a new provider. In other words, as long as the client remains covered by a HDHP, there is no “use it or lose it” rule. The funds simply roll over from year to year and continue to grow tax-free. For 2021, that same benefit has been extended to health FSAs. With an HSA, however, the rollover benefit is even more substantial because once the participant reaches age 65, the account can be accessed without penalty for any reason—much like a typical retirement account. The funds are simply taxed as ordinary income upon withdrawal, like a 401(k) or IRA. For more information on HSA advantages, visit Tax Facts Online. Read More

Related Questions:

388. What is a Health Savings Account (HSA) and how can an HSA be established?

391. Who is an eligible individual for purposes of a Health Savings Account (HSA)?

IRS Extends Relief for Employee Donations of Unused Sick, Vacation & PTO.  The IRS has extended the relief provided in Notice 2020-46 to allow employees to continue to forgo, or “donate”, sick, vacation, and personal leave because of the COVID-19 pandemic without adverse tax consequences through the end of the 2021 tax year.  After December 31, 2020, and before January 1, 2022, employers may make cash payments to Section 170(c) charitable organizations that provide relief to victims of the COVID-19 pandemic in exchange for sick, vacation, or personal leave which their employees gave up.  Those amounts will not be treated as compensation and the employees will not be treated as receiving the value of the leave as income.  While taxable income will not be increased, employees cannot claim a charitable deduction for the leave donated to their employer. Employers, however, may deduct these cash payments as Section 162 business expenses or Section 170 charitable contributions if the employer otherwise meets the respective requirements of either section.  For more information on the deduction for charitable contributions, visit Tax Facts Online. Read More

Related Questions:

8540. What are the income percentage ceilings that limit the income tax deduction for charitable contributions?

8541. How does the income percentage ceilings calculated if charitable contributions of money are made to both public charities and private foundations in the same tax year?

Look in your Tax Facts Online app for our continuing analysis of this bill, the tax reform in the reconciliation bill, and other weekly intelligence.

Wealth & Risk Management Degree for Industry Professionals – learn about the graduate degree here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Employment Benefits | Leave a Comment »

TaxFacts Intelligence August 5, 2021

Posted by William Byrnes on August 5, 2021


It’s been another busy week for the IRS and DOL.  Both agencies have responded to taxpayer questions on various issues–the DOL, by providing helpful clarifications on plan sponsors’ obligations under the new SECURE Act lifetime income disclosure rules, and the IRS by expanding the availability of tax credits for employers who offer paid leave to encourage COVID-19 vaccination.  On another note, the IRS reminds taxpayers: remember your substantiation when claiming reimbursement from tax-preferred health savings accounts!

By the way subscribers, Texas A&M graduate program for wealth and risk management, including tax risk management, is accepting applications for fall. Maximum enrollment for a course section is 30 so that each student receives meaningful feedback throughout the course from the full-time academic, professional part-time faculty, and each other. Learn more about it here: https://law.tamu.edu/distance-education

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

A Reminder for Clients: IRS Emphasizes Need for Health FSA Substantiation

Recent IRS activity indicates that the agency is paying attention to whether or not clients are properly substantiating items reimbursed through tax-preferred health savings accounts.  In IRS Information Letter 2021-13, the IRS restated that flexible spending account (FSA) items paid using an FSA debit card must have substantiation containing all of the information required for claims submitted through other means.  A simple receipt is usually not sufficient.  Substantiation from a third-party must include: (1) the name of the person receiving the services, (2) the date the service was provided, (3) a description of the service or item purchased, (4) the name of the provider or merchant and (5) the claim amount.  The only exception is for certain merchants and providers that can be automatically substantiated by the Merchant Category Code (MCC) on the provider’s debit card machine and the actual item/service via identification by an Inventory Information Approval System (IIAS) from non-healthcare providers.  For more information on the health FSA rules, visit Tax Facts Online. Read More

Related Questions:

8888. What is a dependent care flexible spending arrangement (FSA)?

DOL Releases FAQ on SECURE Act Lifetime Income Illustrations

The DOL issued a temporary set of FAQ to implement the interim final rule on the SECURE Act lifetime income illustration provisions.  Under the SECURE Act, plan sponsors must disclose a participant’s account balance as both a single life annuity and joint and survivor annuity income stream.  Plans must furnish lifetime income illustrations annually (or more frequently).  The FAQ clarifies that the earliest statement for which the illustrations are required is a statement for a quarter ending within 12 months of the rule’s effective date (September 18, 2021) if the plan issues quarterly statements.  Therefore, the illustrations can be incorporated into any quarterly statement up to the second calendar quarter of 2022.  For non-participant-directed plans, the lifetime income illustrations must be included on the statement for the first plan year ending on or after September 19, 2021 (or, no later than October 15, 2022, which is the last day for filing the annual return for a calendar year plan that year).  The FAQ also clarifies that plans are permitted to provide additional lifetime income illustrations as long as the required illustrations are also provided, recognizing that some plans have been including illustrations for many years.  For more information on the lifetime income disclosure rules, visit Tax Facts Online. Read More

Related Questions:

559. What are the rules that allow 401(k) plan sponsors to include deferred annuities in target date funds (TDFs)?

561. Can a taxpayer combine a deferred income annuity (“longevity annuity”) with a traditional deferred annuity product?

IRS Updates FAQ on ARPA Paid Sick and Family Leave Tax Credits

The IRS updated its frequently asked questions on the American Rescue Plan Act (ARPA) paid sick and family leave credits.  Now, employers are entitled to claim the tax credits if they provide paid leave for employees to accompany family, household members and certain others to obtain a COVID-19 vaccine or to care for someone recovering from immunization.  The new eligibility requirement also applies to self-employed taxpayers.  Generally, employers are no longer obligated to provide employees with paid sick and family leave.  However, those who choose to offer paid leave for qualifying reasons may claim a tax credit for wages paid.  To date, the tax credits for leave have been extended through September 30, 2021.  For more information on the FFCRA paid leave tax credits for sick and family leave, visit Tax Facts Online. Read More

Related Questions:

768. What initial guidance has the Department of Labor (DOL) provided to help employers and employees understand their rights and duties under the Families First Coronavirus Response Act (FFCRA)?

769. What documentation should employers request and keep with respect to the Families First Coronavirus Response Act (FFCRA) COVID-19 paid leave? Are there any reporting requirements? How does the employee request leave?

$1.2 Trillion Infrastructure Bill

The 2,702-page bi-partisan “Infrastructure Investment and Jobs Act of 2021” has been released by the Senate. The bill may be downloaded from the U.S. Senate website here. The bill contains approximately $550 billion of new project spending and carries over an additional $650 billion from previously funded projects for a total of over $1.2 trillion in infrastructure spending that will begin in 2021 and most end in 2026.

But the bill contains many energy provisions and excise taxes as well as fees that will impact all segments of the energy industry. These provisions include billions of dollars for the industry for expenditure and incentives for carbon capture; clean hydrogen R&D; nuclear; among others. By example, $500,000,000 is provided for clean hydrogen technology R&D (see page 1550 at section 40314). The excise taxes and fees include the extensions of the highway-related taxes, superfund excise taxes, and customs user fees.

The major tax reform provisions addressing estate and gift tax, capital gains, carried interests, real estate exchanges, retirement plans, and high-income earners have been reserved to the forthcoming yet-to-be-agreed/released Democratic reconciliation bill. However, the Infrastructure Investment and Jobs Act of 2021 contains some new tax provisions including:

  • Sec. 80501. Modification of automatic extension of certain deadlines in the case of taxpayers affected by Federally declared disasters.
  • Sec. 80502. Modifications of rules for postponing certain acts by reason of service in combat zone or contingency operation.
  • Sec. 80503. Tolling of time for filing a petition with the tax court.
  • Sec. 80504. Authority to postpone certain tax deadlines by reason of significant fires.
  • Sec. 80601. Modification of tax treatment of contributions to the capital of a corporation.
  • Sec. 80602. Extension of interest rate stabilization.
  • Sec. 80603. Information reporting for brokers and digital assets.
  • Sec. 80604. Termination of employee retention credit for employers subject to closure due to COVID–19.

The automatic extension for certain tax deadlines for Federally declared disasters addresses the situation of multiple declarations relating to a disaster area which are issued within a 60-day period. A separate 60-day period shall be determined with respect to each such declaration pursuant to the bill’s language.

The bill will resurrect energy industry-related tax credits (expired IRC Section 48C) worth up to 30 percent of expenditure for converting fossil energy production into green energy production. Senator Joe Manchin is doing his job of representing his West Virginia coal industry constituency!

The bill’s cryptocurrency reporting regime (Sec. 80603. Information reporting for brokers and digital assets) is marked to raise $28 billion from current non-compliance and tax evasion regarding taxpayers’ either ignorance or purposeful oversight of including gross income derived from investments or trading digital currency. The reporting threshold will only be lowered to $10,000 which is still rather high in our personal opinion. It creates a potential perspective (or perhaps incentive among cheaters) that only digital currency income of at least $10,000 is reportable for gross income. On the other hand, it is often better to build out first then and scale up an operation, tweaking it. For example, the $10,000 reporting amount will capture a substantial pool of taxpayers, and that threshold can be lowered in the future (with grossly overstated estimates of the ‘evasion’ income it will bring in to pay for an extension or some new program in next year’s budget bills).

The bill contains hundreds of not-obvious federal grants and contract opportunities for business. By the example of one provision related to education and training of workers, section 401513 includes $10 million dollars for FY2022 for government grants of 50 percent of the cost to provide ‘career skills training’ to identify and involve in training programs target populations of individuals who would benefit from training and be actively involved in activities relating to energy efficiency and renewable energy industries; and the ability to help individuals achieve economic self-sufficiency. The program students must concurrently receive classroom instruction and on-the-job training for the purpose of obtaining an industry-related certification to install energy-efficient buildings.

Look in your Tax Facts Online app for our continuing analysis of this bill, the tax reform in the reconciliation bill, and other weekly intelligence.

Wealth & Risk Management Studies for Industry Professionals

Check out the graduate program here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation | Tagged: , | Leave a Comment »

TaxFacts Intelligence August 2, 2021

Posted by William Byrnes on August 2, 2021


This week’s newsletter offers the download to the Infrastructure Investment and Jobs Act of 2021 plus insight into different issues that may be important to clients who sponsor employee benefit plans. It’s time to file annual Form 5500—and this year, potential penalties for noncompliance may be higher than ever. We also offer analysis of the newly-popular retirement plan auto-enrollment features—and a reminder that small business clients may now benefit from a new post-SECURE Act tax credit for adopting the feature—as well as information about the ARPA pension relief law. Read on for more!

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

$1.2 Trillion Infrastructure Bill Released Sunday night (August 1, 2021)

The 2,702-page bi-partisan “Infrastructure Investment and Jobs Act of 2021” has been released by the Senate. The bill may be downloaded from the U.S. Senate website here. The bill contains approximately $550 billion of new project spending and carries over an additional $650 billion from previously funded projects for a total of over $1.2 trillion in infrastructure spending that will begin in 2021 and most end in 2026.

But the bill contains many energy provisions and excise taxes as well as fees that will impact all segments of the energy industry. These provisions include billions of dollars for the industry for expenditure and incentives for carbon capture; clean hydrogen R&D; nuclear; among others. By example, $500,000,000 is provided for clean hydrogen technology R&D (see page 1550 at section 40314). The excise taxes and fees include the extensions of the highway-related taxes, superfund excise taxes, and customs user fees.

The major tax reform provisions addressing estate and gift tax, capital gains, carried interests, real estate exchanges, retirement plans, and high-income earners have been reserved to the forthcoming yet-to-be-agreed/released Democratic reconciliation bill. However, the Infrastructure Investment and Jobs Act of 2021 contains some new tax provisions including:

  • Sec. 80501. Modification of automatic extension of certain deadlines in the case of taxpayers affected by Federally declared disasters.
  • Sec. 80502. Modifications of rules for postponing certain acts by reason of service in combat zone or contingency operation.
  • Sec. 80503. Tolling of time for filing a petition with the tax court.
  • Sec. 80504. Authority to postpone certain tax deadlines by reason of significant fires.
  • Sec. 80601. Modification of tax treatment of contributions to the capital of a corporation.
  • Sec. 80602. Extension of interest rate stabilization.
  • Sec. 80603. Information reporting for brokers and digital assets.
  • Sec. 80604. Termination of employee retention credit for employers subject to closure due to COVID–19.

The automatic extension for certain tax deadlines for Federally declared disasters addresses the situation of multiple declarations relating to a disaster area which are issued within a 60-day period. A separate 60-day period shall be determined with respect to each such declaration pursuant to the bill’s language.

The bill contains hundreds of not-obvious federal grants and contract opportunities for business. By example of one provision related to education and training of workers, section 401513 includes $10 million dollars for FY2022 for government grants of 50 percent of the cost to provide ‘career skills training’ to identify and involve in training programs target populations of individuals who would benefit from training and be actively involved in activities relating to energy efficiency and renewable energy industries; and the ability to help individuals achieve economic self-sufficiency. The program students must concurrently receive classroom instruction and on-the-job training for the purpose of obtaining an industry-related certification to install energy efficient buildings.

Look in your Tax Facts Online app for our continuing analysis of this bill, the tax reform in the reconciliation bill, and other weekly intelligence.

Reminder: It’s Time to File Form 5500 for Employee Benefit Plans

It’s that time of year again. The deadline for filing Form 5500 for health plans and retirement plans with the IRS and DOL is July 31 for most calendar-year plans. The deadline is seven months after the end of the plan year. However, clients who aren’t yet ready to file should be advised that they may obtain a filing extension of up to 2.5 months. Penalties for failure to file Form 5500 on time have increased in recent years—and can equal as much as $2,000 per day in some cases. The forms are used by the IRS and DOL to identify potential compliance issues, so small business clients with employment benefits offerings should be advised to prepare the forms carefully and expect scrutiny. Form 5500 is filed under the penalty of perjury—for the employer who signs the document, not the service provider who prepared the document. For more information on Form 5500 filing requirements and increased penalties under the SECURE Act, visit Tax Facts Online. Read More

Related Questions:

3774. What requirements apply to matching contributions in the context of a 401(k) safe harbor plan?

3777. What are the requirements for a SIMPLE 401(k) plan?

Auto-Enrollment Popularity Soars Post-COVID

According to recent surveys, the majority of workers who have been automatically enrolled in employer-sponsored retirement savings plan have indicated that they are pleased with the decision. On the other hand, only about 30 percent of U.S. employers currently provide an auto-enrollment option. When asked whether they hoped their employer would offer financial wellness programs to help them better understand savings options, 80 percent of employees surveyed answered “yes”. At least one version of the “SECURE Act 2.0” bill would require a minimum 3 percent auto-enrollment rate for most newly adopted 401(k)s. Under the existing SECURE Act, small business owners may be entitled to a tax credit for adopting a plan that automatically enrolls employees. For more information on the tax credit, visit Tax Facts Online. Read More

Related Questions:

8553. When does a taxpayer qualify for the tax credit for the elderly and the permanently and totally disabled and how is the credit computed?

8554. When is a taxpayer entitled to claim the child tax credit?

PBGC Issues Interim Guidance on ARPA Special Financial Assistance for Multiemployer Pension Plans

The PBGC issued an interim final rule implementing the special financial assistance (SFA) rule for multiemployer pension plans in the American Rescue Plan Act. Eligible plans may apply to receive a lump-sum payment from a new Treasury-backed PBGC fund. Under the new rules, eligible plans are entitled to amounts that are sufficient to pay all benefits for the next 30 years. According to the PBGC interpretation, that means sufficient funds to forestall insolvency through 2051 (but not thereafter). Plans are entitled to receive the difference between their obligations and resources for the period. Surprisingly, the PBGC rule provides that SFA funds will be taken into account when calculating a plan’s withdrawal liability. However, plans are required to use mass withdrawal interest rate assumptions published by the PBGC when calculating withdrawal liability until the later of (1) 10 years after the end of the year in which the plan received the SFA or (2) the time when the plan no longer holds SFA funds. For more information on multiemployer pension plan withdrawal liability, visit Tax Facts Online. Read More

Related Questions:

3740. Are there any limitations on a pension plan’s ability to reduce participant benefit levels under the Multiemployer Pension Reform Act of 2014?

3741. What procedures and notices are required in order for a pension plan to reduce participant benefit levels under the Multiemployer Pension Reform Act of 2014?

Wealth & Risk Management Studies for Industry Professionals

The Texas A&M graduate programs for risk management for areas like wealth management, tax risk management, financial risk, economic crimes, ESG risk, are accepting applications for fall. Over 500 candidates are currently enrolled in the graduate courses yet maximum enrollment per course section is maintained at 30 so that each student receives meaningful feedback throughout the course from the full-time academic and professional part-time faculty. Check out the graduate program here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Retirement Planning, Taxation, Uncategorized | Leave a Comment »

TaxFacts Intelligence June 24, 2021

Posted by William Byrnes on June 24, 2021


Both the Courts and the IRS have had a busy week. The Supreme Court rejected the latest challenge to the Affordable Care Act and the ACA remains the law of the land–although the next ACA challenge has already been filed in Texas. On the IRS side, we have a new online tool designed to help lower-income taxpayers take advantage of the advance child tax credit benefits for 2021. Read on to make sure you’re up to date on the latest news.

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Supreme Court Dismisses Latest ACA Challenge

In a 7-2 vote, the Supreme Court dismissed the latest challenge to the constitutionality of the Affordable Care Act (ACA). Rather than addressing the case on the merits, the Court determined that the plaintiffs did not have standing to sue–meaning that the plaintiffs had no legal right to launch the challenge in the first place. Because the individual mandate was reduced to $0 by the 2017 tax reform legislation, the plaintiffs would suffer no adverse consequences if they simply chose to not purchase health insurance. Therefore, there was no government action connected to their injury. However, yet another constitutional challenge to the ACA has already been filed. The next lawsuit challenges the law’s zero dollar coverage for preventative services–including vaccines, contraceptives and other preventative services. For more information on the ACA employer mandate, visit Tax Facts Online. Read More

Related Questions:

8845. How does an employer that has been in existence for less than one year determine whether it is subject to the ACA shared responsibility provisions?

8846. How does an employer that has a common owner with another employer determine whether it is subject to the ACA shared responsibility provisions?

Considerations for Resuming RMDs in 2021

The 2020 CARES Act suspended all RMD requirements for the 2020 tax year. That relief was not extended into 2021, although taxpayers have no obligation to “make up” their skipped 2020 RMDs. However, many taxpayers may be surprised to see that the amount they’re required to withdraw in 2021 is larger than distributions prior to the pandemic. The amount of a client’s RMD is determined based upon their account balance and life expectancy factor. Strong market performance means that many clients will have larger retirement account balances, meaning that the percentage of withdrawal required has also increased. Taxpayers who reached age 70½ in 2019 are required to resume taking RMDs. However, taxpayers who had not reached age 70½ in 2019 are not required to begin RMDs until April 1 of the year after they reach age 72. These RMD rules apply to traditional retirement accounts and inherited accounts—but not to Roth IRAs. For more information on the RMD rules, visit Tax Facts Online. Read More

Related Questions:

3683. What can be done before the IRA required beginning date in order to minimize required minimum distributions?

3684. How are minimum distribution requirements calculated if an individual owns more than one IRA?

IRS Releases New Online Tool to Help Taxpayers Register for Monthly Child Tax Credit Payments

The IRS has launched a new online tool to help taxpayers who may not be required to file a federal income tax return register to receive installment payments for the 2021 child tax credit. The tool provides a way for eligible people who don’t make enough income to have an income tax return-filing obligation to provide the IRS the basic information to figure and issue their Advance Child Tax Credit payments beginning next month. Eligible individuals can visit IRS.gov to access the tool and provide their name, address, Social Security numbers and direct deposit information so that the IRS can deposit their installment payments. Taxpayers who have already filed a return are not required to take any other action to receive installment payments of the child tax credit. The IRS release noted that these are the only two options to sign up for advance payment benefits–any other method offered is a scam. For more information on the child tax credit in 2021, visit Tax Facts Online. Read More

Related Questions:

756. What credits may be taken against the tax?

757. Who qualifies for the tax credit for the elderly and the permanently and totally disabled and how is the credit computed?

758. Who qualifies for the child tax credit?

Wealth & Risk Management Studies for Industry Professionals

The Texas A&M graduate programs for risk management for areas like wealth management, tax risk management, financial risk, economic crimes, ESG risk, are accepting applications for fall. Over 500 candidates are currently enrolled in the graduate courses yet maximum enrollment per course section is maintained at 30 so that each student receives meaningful feedback throughout the course from the full-time academic and professional part-time faculty. Check out the graduate program here: https://law.tamu.edu/distance-education

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Uncategorized | Leave a Comment »

TaxFacts Alert June 21, 2021 for wealth managers representing NCAA athletes

Posted by William Byrnes on June 22, 2021


The Supreme Court upheld, in a unanimous decision of all nine Justices, the District Court’s injunction against the NCAA. The injunction allows the NCAA to maintain rules limiting undergraduate athletic scholarships and other compensation related to athletic performance. BUT the injunction stops as unlawful NCAA rules limiting the education-related benefits schools may make available to student-athletes.

Colleges and universities across the country have leveraged sports to bring in revenue, attract attention, boost enrollment, and raise money from alumni. That profitable enterprise relies on “amateur” student athletes who compete under horizontal restraints that restrict how the schools may compensate them for their play. The National Collegiate
Athletic Association (NCAA) issues and enforces these rules, which restrict compensation for student-athletes in various ways. These rules depress compensation for at least some student-athletes below what a competitive market would yield.

Against this backdrop, current and former student-athletes brought this antitrust lawsuit challenging the NCAA’s restrictions on compensation. Specifically, they alleged that the NCAA’s rules violate §1 of the Sherman Act, which prohibits “contract[s], combination[s], or conspirac[ies] in restraint of trade or commerce.”

The Supreme Court upheld, in a unanimous decision of all nine Justices, the District Court’s injunction against the NCAA. The injunction allows the NCAA to maintain rules limiting undergraduate athletic scholarships and other compensation related to athletic performance. BUT the injunction stops as unlawful NCAA rules limiting the education-related benefits schools may make available to student-athletes.

Regarding today’s Supreme Court decision (entire 45-page opinion is available here), first it was expected by industry analysts and court watchers after the Court’s oral arguments March 31, 2021 with an foretelling Q&A session. We are already preparing Tax Facts Intelligence and Q&A for the books/app for financial advisors to leverage the new athletics marketplace and revenue streams and best represent their clients. I know of financial advisory firms that as of Tuesday will be hanging up a ‘sports agent financial advisor shingle’ and trolling SEC high schools, especially Texas, recruiting for tomorrow’s top collegiate athletes to sign up the talent.

Why not? That is how the market already works outside the USA for soccer (what everyone else calls football) and to a lesser extent baseball (albeit not nearly as popular as soccer so we hear much less about baseball camps for Dominican rising star 12 year old players like we hear about for the 12-year-old next Brazilian Pele). 

Interaction with social media followers is the currency of this new era for young athletes and can lead to a couple of hundred thousand during college for the star players, and even millions for the SEC Heisman level types. But, not having the ultimate talent and thus top sports ranking in a field does not also mean that an interactive social media following of millions cannot be created. The Russian tennis star Anna Kournikova, case in point, though she was just a little too early for the modern social media movement. Johnny Manziel, another case in point: had this decision been in place already and had he contracted a great wealth management advisor (thus great personal agent) with social media and promotional background, his life would have been very financially comfortable before his drug abuse ruined him in the pro league (talent or not aside). He certainly could have afforded a stint at the Betty Ford clinic to sober up and clean out.

Via the advice of a great wealth manager, a personality can be leveraged into millions of dollars before the athlete graduates university, or at least hundreds of thousands.

It is clear from the unanimous ruling and the judges questioning and opinions that this is not a restrictive ruling. NCAA proponents are trying to spin that some restriction remains allowable like direct payments to players. But all it takes is one school that has money that wants to break into the big league to beat ‘Bama and LSU. Kind to think of it, I know that school… and don’t think Bama and LSU are just going to let that happen. Let real market competition begin!

An interesting question that I think will lead to much future litigation: How this ruling plays out throughout all sports regarding Title IX (such as a school spending money on men’s football, basketball, baseball, must by federal and state law also spend an equal amount on the equivalent sports for women). I am for market opportunity and thus I think it is an exciting preposition that opportunities will open up in all sports for athletes and wealth manager advisors alike (to negotiate the optimum financial rewards for the athletes).

Also, if athletic programs, such as golf or hockey, are forced to ‘come up’ with additional dollars to attract the star players to remain competitive, will the programs themselves start to think like SEC football (the most profitable league and sport) to generate additional income to meet the demands of staying or obtaining high ranking?  After all, whether it be academics or sports, it is all about ranking. Deans and Provosts rise and fall based on academic rankings. Coaches based on league rankings and national championships. Sports rankings and academic rankings have connection via alumni fundraising as of course voter university name / brand awareness and recognition. Basketball in particular through March madness has supported the academic rankings of universities though academic and sports ranking are not directly connected in voting and evaluation scoring, the indirect connect in undeniable.

This Supreme Court decision is great news for wealth managers / financial advisors who subscribe to Tax Facts because we are well-positioned to enter the new market of clientele representation created for the high school athlete seeking to share in the value that the athlete creates for a university and for the athlete through social media leveraged revenues. Understanding that “value”, generating more of it, and ‘sharing’ in the value is the bread and butter of a holistic wealth manager’s representation of athletes and entertainers.

Texas A&M already has education in this regard for our wealth management students and JDs who focus on such emerging artist/athlete/entertainer representation. We even have a law clinic for this emerging artists run by JD students supervised by my colleague that joined me at Texas A&M from our former law school in SoCal.

Byrnes & Bloink’s Tax Facts Offers a Complete Web, App-Based, and Print Experience: Reducing complicated tax questions to understandable answers that can be immediately put into real-life practice, Tax Facts works when and where you need it….on your desktop, at home on your laptop, and on the go through your tablet or smartphone.

  • all Tax Facts books
  • Tax Facts Intelligence weekly newsletters
  • weekly strategy articles for client advisory
  • weekly transcribed debate discussion for client soft-skill discussion
  • among other weekly client advisory critical updates

Questions? Contact customer service: TaxFactsHelp@alm.com800-543-0874

Posted in Uncategorized | Leave a Comment »

TaxFacts Intelligence June 17, 2021

Posted by William Byrnes on June 22, 2021


Taxpayers have a number of valuable tax planning opportunities in 2021. One of the recent changes allows more taxpayers to take advantage of the often-overlooked child and dependent care tax credit for work-related childcare expenses. Another lets clients leverage historically low tax rates to mitigate the impact of future estate tax changes. Are your clients taking advantage of these and other limited-time planning strategies?

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

IRS Issues FAQ on Child and Dependent Care Tax Credit for 2021

Last week, the IRS released new FAQ to help taxpayers understand the expanded child and dependent care tax credit in 2021. For 2021, eligible taxpayers can claim qualifying work-related expenses up to $8,000 for one qualifying person, or $16,000 for two or more qualifying persons (up from $3,000 and $6,000 in prior years). To claim the credit, taxpayers are also required to have earnings. The FAQ is clear that the amount of qualifying work-related expenses claimed cannot exceed the taxpayer’s earnings. Additionally, the taxpayer must subtract employer-provided dependent care benefits, including those provided through a flexible spending account, from total work-related expenses when calculating the credit. As in prior years, the more a taxpayer earns, the lower the percentage of work-related expenses that are taken into account in determining the credit. However, the credit is fully refundable for the first time in 2021. This means eligible taxpayers can receive the credit even if they owe no federal income tax. To be eligible for the refundable credit, a taxpayer (or the taxpayer’s spouse on a joint return) must reside in the United States for more than half of the year. For more information on the credit, visit Tax Facts Online. Read More

Related Questions:

757. Who qualifies for the tax credit for the elderly and the permanently and totally disabled and how is the credit computed?

758. Who qualifies for the child tax credit?

Roth IRA Planning Now for Higher Estate Taxes Later

With tax rates at historic lows, many clients have already evaluated the Roth conversion strategy as a retirement income tax minimization strategy. However, high net worth clients who anticipate estate tax liability in the future might also be attracted to the Roth strategy. IRAs are generally included in calculating the taxable estate. If the estate is subject to estate taxes, that reduces the value of assets left to beneficiaries. Once a beneficiary receives the IRA (after taxes), they generally must deplete the funds within 10 years under the SECURE Act. That means beneficiaries will be required to quickly pay income taxes after the estate taxes have been levied. Distributions from inherited Roth IRAs are not taxable. Further, because the client has paid income taxes during life, they’ve presumably reduced the value of the taxable estate in the process. Given current uncertainties about Biden’s estate tax plans, high net worth clients may be particularly interested in this strategy. For more information on Roth conversions, visit Tax Facts Online. Read More

Related Questions:

3661. Can a taxpayer whose income level exceeds the limitations for Roth IRA contributions maintain a Roth IRA?

3662. Can an individual roll over or convert a traditional IRA or other eligible retirement plan into a Roth IRA?

3664. Can an individual correct a Roth conversion? What is a recharacterization?

RMD Rules Might See Big Changes in Next Round of Retirement Reform

The latest round of retirement reform provisions might include big changes for required minimum distributions (RMDs). Most taxpayers must start taking distributions from traditional retirement accounts when they turn 72. Under the new proposal, the RMD beginning age would increase to age 75. Further, the law would exempt taxpayers with account balances under $100,000 from the RMD rules entirely. In other words, those taxpayers would not be required to take annual distributions from 401(k)s and IRAs. The law would also reduce the penalty for incorrect RMDs from 50 percent of the shortfall amount to 25 percent—and as low as 10 percent if the taxpayer took advantage of the IRS self-correction procedures to correct the mistake. Access to qualified longevity annuities would also be expanded—giving taxpayers an option to minimize their RMDs in future years by purchasing a deferred annuity within their retirement plan. For more information on the current RMD rules, visit Tax Facts Online. Read More

Related Questions:

3683. What can be done before the IRA required beginning date in order to minimize required minimum distributions?

3684. How are minimum distribution requirements calculated if an individual owns more than one IRA?

The Texas A&M graduate programs for risk management for areas like wealth management, tax risk management, financial risk, economic crimes, ESG risk, is accepting applications for fall. Over 500 candidates are currently enrolled in the graduate courses yet maximum enrollment per course section is maintained at 30 so that each student receives meaningful feedback throughout the course from the fulltime academic and professional part-time faculty. Check out the tax risk management program here as an example of the curriculum and courses: https://law.tamu.edu/distance-education/international-tax

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in Uncategorized | Leave a Comment »

TaxFacts Intelligence June 14, 2021

Posted by William Byrnes on June 14, 2021


The Texas A&M graduate programs for risk management for areas like wealth management, tax risk management, financial risk, economic crimes, ESG risk, is accepting applications for fall. Over 500 candidates are currently enrolled in the graduate courses yet maximum enrollment per course section is maintained at 30 so that each student receives meaningful feedback throughout the course from the fulltime academic and professional part-time faculty. Check out the tax risk management program here as an example of the curriculum and courses: https://law.tamu.edu/distance-education/international-tax

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

ARPA Expands Child Tax Credit for 2021 

The ARPA expanded and enhanced the child tax credit for the 2021 tax year.  For tax years beginning after December 31, 2020 and before January 1, 2022, the child tax credit amount increased from $2,000 to $3,000 per qualifying child.  The credit amount is also fully refundable for the 2021 tax year only (under TCJA, $1,400 was refundable).  The $3,000 amount is also further increased to $3,600 per qualifying child under the age of six years old as of December 31, 2021.  For more information on the child tax credit, visit Tax Facts Online. Read More

Eligibility for 2021 Child Tax Credit and Advance Child Tax Credit Payments

A taxpayer can receive advance Child Tax Credit payments even if earning zero income in 2020 or 2021, if eligible for the credit otherwise. 

IRS online tool to help low-income families register for monthly Child Tax Credit payments

The IRS unveiled an online Non-filer Sign-up tool designed to help eligible families who don’t normally file tax returns register for the monthly Advance Child Tax Credit payments. The IRS will begin disbursing advance Child Tax Credit payments on July 15. After that, payments will be disbursed on a monthly basis through December 2021. In June 2021, the IRS will send each eligible taxpayer a “Letter 6417” that informs the amount of the estimated Child Tax Credit monthly payments.

This tool, an update of last year’s IRS Non-filers tool, is also designed to help eligible individuals who don’t normally file income tax returns register for the $1,400 third round of Economic Impact Payments (also known as stimulus checks) and claim the Recovery Rebate Credit for any amount of the first two rounds of Economic Impact Payments they may have missed.

The IRS will automatically determine eligibility for most families

Eligible families who already filed or plan to file 2019 or 2020 income tax returns should not use this tool. Once the IRS processes their 2019 or 2020 tax return, the information will be used to determine eligibility and issue advance payments. Families who want to claim other tax benefits, such as the Earned Income Tax Credit for low- and moderate-income families, should not use this tool and instead file a regular tax return.

Posted in Uncategorized | Leave a Comment »

TaxFacts Intelligence June 10, 2021

Posted by William Byrnes on June 10, 2021


The Biden administration is moving full steam ahead with proposals to modify the U.S. and international tax systems. Some proposals would create a huge benefit for taxpayers–while others could leave clients on the hook for a surprise tax bill. This week, we dig a little deeper into the proposals–and outline a few surprises contained in the newly-released Green Book. Are your clients ready for what’s to come?

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Biden’s Latest Tax Proposals: Two Big Surprises for Tax Professionals 

More details about President Biden’s tax plan have emerged—and the latest proposal contains two major tax surprises. First, Biden’s tax plans would make any capital gains tax hike retroactive to April 28, 2020. That means clients who have engaged in tax planning strategies to avoid higher rates might wind up subject to the higher rates regardless, if this provision makes its way into the final proposal. Second, not only would the stepped-up basis rules be repealed, but taxpayers who inherit property would be required to recognize gain at the time of death—even if the individual doesn’t immediately sell the inherited property. In other words, the property could be immediately subject to both the estate tax and income or capital gains tax. Click here to get a more in-depth expert analysis of the latest tax proposals. Read More

Related Questions:

692. How is the tax basis of property acquired from a decedent determined?

G-7 Announces Support for Global Minimum Corporate Tax

Democrats have often advocated for imposition of a global minimum corporate tax rate—and the latest Biden tax plan would increase the U.S. corporate income tax rate from 21% to 28%. Over the weekend, top international finance officials in the Group of Seven (G-7) indicated broad support for a worldwide minimum corporate income tax of at least 15%. If implemented, the global minimum tax would ensure that large corporations pay a minimum tax on their earnings, regardless of where the entity is located. International support could be a critical turning point for President Biden’s corporate tax increase proposals. After all, a key criticism of increasing U.S. corporate income taxes is that it puts U.S. corporations at a global disadvantage and incentivizes techniques to shift income to lower tax jurisdictions. With a worldwide minimum tax in place, U.S. corporations would lose incentive to move their income elsewhere. Of course, it remains to be seen whether the proposals will come to fruition, and advisors should continue to monitor the evolving situation closely when advising on corporate tax issues. For more information on the U.S. corporate income tax structure, visit Tax Facts Online. Read More

Related Questions:

797. How is a corporation taxed on capital gains?

798. How was a corporation’s alternative minimum tax calculated prior to repeal by the 2017 Tax Act?

When Can an Employer Require All Employees to be Vaccinated: The Details

The EEOC recently clarified the incentive issue when it comes to employers who wish to encourage vaccination in the workplace. The guidance also addresses whether employers can strictly require employees to be vaccinated for COVID-19 before they re-enter the workplace. Generally, employers can require vaccination if vaccination is job-related and a business necessity given COVID-19 safety concerns. However, if an employee has a disability or sincerely-held religious belief that would prevent vaccination, the employer must offer reasonable accommodation—unless the accommodation requested would create an undue hardship. The employer generally cannot require those employees with medical reasons or religious objections to choose between obtaining the vaccine and returning to work unless allowing the unvaccinated employee to return to work would pose a “direct threat” to the health and safety of the workforce. For more information on the employer tax credit for vaccine-related leave, visit Tax Facts Online. Read More

Related Questions:

0101. Mandatory COVID Vaccination

We want your feedback on TaxFacts Q&A for the future? Email me at williambyrnes-gmail

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space! The law school has the #1 bar passage in Texas, and #1 for employment in Texas (and top 10 in U.S.)

Posted in BEPS, Retirement Planning, Taxation | Leave a Comment »

TaxFacts Intelligence June 3, 2021

Posted by William Byrnes on June 4, 2021


Happy Summer, readers! This week’s newsletter is dedicated to helping clients—both employers and employees—maximize their health-related benefits and tax credits (even when those benefits are only available for a limited time). Do you have questions about situation-specific COBRA eligibility, little-known HSA tricks or the ever-evolving EEOC vaccine guidance for employers? Read on to see if we’ve got the answers this week. 

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

EEOC Updates Vaccine Incentive Guidance for Employers

The EEOC has posted an update to its vaccine guidance for employers. Under the new guidance, employers are permitted to offer incentives to employees who voluntarily provide confirmation that they have received the COVID-19 vaccine from a third party. Requesting these confirmations will not be treated as disability-related inquiries under the ADA or requests for genetic information under GINA. Employers should be aware that these incentives are treated differently than incentives offered for employer-provided vaccines. If the incentive is actually for the purpose of encouraging an employee to receive the vaccine from the employer or an agent, employers should continue to use caution against offering an incentive that can be construed as “coercive”. That’s because employees must provide certain health information before receiving the vaccine—and employees should not be pressured to disclose medical information to their employers. For more information on the available tax credit for employers who offer paid vaccine leave to employees, visit Tax Facts Online. Read More

Related Questions:

773. What happens when the employee has exhausted the paid time off under the Families First Coronavirus Response Act (FFCRA)? Does the employee have the right to return to work?

8895. What is a “de minimis” fringe benefit?

Am I Eligible for Federal COBRA Assistance? Case-Specific IRS Guidance

The IRS guidance on the availability and implementation of the ARPA 100 percent COBRA premium assistance provides some useful guidance on specific scenarios that employers and employees may now be facing. Generally, individuals remain assistance-eligible individuals (AEIs) during eligibility waiting periods if the period overlaps with the subsidy period. For example, the individual will be an AEI during periods outside the open enrollment period for a spouse’s employer-sponsored health coverage. Employers who change health plan options must place the AEI in the plan that’s most similar to their pre-termination plan, even if it’s more expensive (and the 100 percent subsidy will continue to apply). Importantly, employers who are no longer covered by federal COBRA requirements may still be required to advance the subsidy (for example, if the employer terminated employees so that the federal rules no longer apply). If the employer was subject to COBRA when the individual experienced the reduction in hours or involuntary termination, the employer must offer the subsidy. For more information on the COBRA premium subsidy, visit Tax Facts Online. Read More

Related Questions:

0121. COBRA Subsidies Back on the Table for 2021

371. When must an election to receive COBRA continuation coverage be made?

Maximizing Post-Pandemic HSA Benefits

HSAs and other tax-preferred health benefits have taken on a whole new meaning in the wake of the pandemic. It’s important that clients fully understand the rules so that they aren’t leaving valuable benefits on the table. In 2022, annual HSA contribution limits will rise to $3,650 for self-only coverage or $7,300 for family HDHP coverage. (HDHPs are health insurance plans that have a minimum annual deductible of $1,400 for self-only coverage ($2,800 for family coverage).). Taxpayers aged 55 and up can contribute an extra $1,000 per year. Taxpayers don’t have to fund an employer-sponsored HSA. Even if the client has been laid off or furloughed, clients with HDHP coverage can open an HSA at their bank and fund the account independently. Additionally, clients who have lost their jobs continue to have access to the funds in their old HSA, and can even transfer that HSA to a new provider. In other words, as long as the client remains covered by a HDHP, there is no “use it or lose it” rule. The funds simply roll over from year to year and continue to grow tax-free. For 2021, that same benefit has been extended to health FSAs. With an HSA, however, the rollover benefit is even more substantial because once the participant reaches age 65, the account can be accessed without penalty for any reason—much like a typical retirement account. The funds are simply taxed as ordinary income upon withdrawal, like a 401(k) or IRA. For more information on HSA advantages, visit Tax Facts Online. Read More

Related Questions:

388. What is a Health Savings Account (HSA) and how can an HSA be established?

391. Who is an eligible individual for purposes of a Health Savings Account (HSA)?

DOL Released Final Rule on Considering Non-Financial Factors in Selecting Retirement Plan Investments The DOL released a final rule on whether environmental, social and governance (ESG) factors can be considered when retirement plan fiduciaries are selecting plan investments without violating their fiduciary duties.  Plan fiduciaries are obligated to act solely in the interest of plan participants and beneficiaries when making investment decisions.  The final rule confirms the DOL position that plan fiduciaries must select investments based on pecuniary, financial factors.  Fiduciaries are required to compare reasonably available investment alternatives–but are not required to scour the markets.  The rule also includes an “all things being equal test”–meaning that fiduciaries are not prohibited from considering or selecting investments that promote or support non-pecuniary goals, provided that they satisfy their duties of prudence and loyalty in making the selection.  For more information, visit Tax Facts Online. Read More We are curious for your feedback on the rule and its impact on your function as a financial advisor, if any? Email me at williambyrnes-gmail

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Uncategorized | Tagged: , , , | Leave a Comment »

Transfer Pricing Risk Management Zoom-Based Case Studies Start Tuesday, Jan 18, run until May 5 (graduation May 6 on campus)

Posted by William Byrnes on January 8, 2021


Based on weekly case studies created by the faculty, supported by reading/text materials, pre-recorded videos with PPTs, and audio podcast files made by the faculty – twice-weekly Zoom (optional) live sessions (recorded for those unable to attend) of 90 – 120 minutes wherein students may work with teams through the case studies generally from an assigned stakeholder perspective. Access to the extensive Texas A&M library for case study research includes by example: Lexis, Westlaw, IBFD, Kluwer-Cheetah, Thomson OneSource, BvD (Moodys), S&P CapIQ, FITCH, among several others. Apply for Texas A&M’s courses here.

Professor William Byrnes’ leverages the expertise of weekly case study experts that draw from a variety of disciplines including accounting, economics, finance, international business, management, and law. The textbook is authored by Professor William Byrnes and provided within the course [William Byrnes, Practical Guide to Transfer Pricing, 4th ed, 2022 version, published by Matthew Bender via LexisNexis and available in the law library in hardcopy].

Transfer pricing is the valuation of cross-border transactions between units of a multinational enterprise. This course introduces students to both theoretical and practical aspects of transfer pricing. This course deep dives into the legal issues (regulations and jurisprudence); accounting systems and variances among (managerial, financial, tax, and public accounting); financial data analytics through the lens of economic methods and profit level indicators; functional analysis and global value chain; contrasts with the OECD Transfer Pricing Guidelines and UN Transfer Pricing Manual. Each week, an industry-based case study is undertaken in a team-based learning approach of student groups generally consisting of three team members each.  The industry case studies include, as examples, agriculture (coffee supply chain), technology services, and petroleum.

Part I and Part II of this course both address strategy, compliance, and risk management.  Transfer Pricing Part I focuses on the topics of comparability, the transfer pricing methods, functional analysis and global value chain analysis, and transfer pricing analysis for tangibles. Transfer Pricing Part II focuses on the transfer pricing methods and analysis for intangibles and for services. Topics more specifically that are addressed in this course via its textbook, video and audio lectures, weekly team-based case studies, and weekly live sessions, include the arm’s length standard, comparability analysis, risk analysis for tangibles and intangibles, transactional methods (CUP, CUT, Cost Plus, Resale Minus, Commodity), profit methods (e.g. comparable profits method, transactional net margin method, profit level indicators, key performance indicators, commensurate with income), functional analysis (supply chain, global value chain analysis, DAEMPE functions), industry economic data gathering and analysis, cost-sharing arrangements, profit splits and residuals, platform contributions, and safe harbors.  Documentation, advance pricing agreement procedures, and mutual agreement procedures are topics addressed in the courses of “International Tax Risk Management I” and of “FATCA, CRS, and CbCR”. Apply for Texas A&M’s courses here.

Course Topics and Calendar

Week 1 January 17 Arm’s Length Standard case study by Dr. Bruno da Silva

Jan 18 Tuesday at 9am – 10:30am (2-minute student introductions, orientation to teamwork and case studies, expectations and obligations regarding participation asynchronously or synchronously, discuss the syllabus, set up first-week case study)

Friday at 9am – 10:30am (presentations, peer feedback)

Week 2 Jan 25: CUP & Comparables, Eden Hofert – the Christmas Tree case (Canadian)/Compaq by Dr. Lorraine Eden

Jan 26 Tuesday at 9am – 10:00am (2-minute student introductions, orientation to teamwork and case studies, expectations and obligations regarding participation asynchronously or synchronously, discuss syllabus, set up first week case study)

Jan 29 Friday at 9am – 10:30 (presentations, peer feedback)

Week 3 Jan 31: Cost Plus & Resale Minus (Byrnes’ Starbucks case study) by Dr. George Salis

Feb 1 Tuesday at 9am – 10:00am

second session at 9am – 10:30 (presentations, feedback)

  • Watch background and overview videos of big data & econometrics as it is used in transfer pricing.
  • Read textbook Chapter 7 then read chapter 6.
  • Contrast the analysis within the Cost Plus Method and Resale Minus Method cases.
  • Each team has a stakeholder role in Byrnes’ case study of Starbucks cost inclusion and exclusion, agriculture supply chain, and coffee global value chain.

Week 4 Feb 7: Comparable Profits Method & TNMM by Dr. George Salis

Feb 8 Tuesday at 9am – 10:00am (discussion about Byrnes’ case study and the CPM)

second session at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 8 and 9.
  • Watch second set of videos of big data & econometrics.
  • Review the CPM/TNMM examples.
  • Teams prepare the Case Study.

Week 5 Feb 14: functional analysis & global value chain, profit split methods by Dr. George Salis

Feb 15 Tuesday at 9am – 10:00am (discussion about Byrnes’ case study and the CPM, GVC)

second session at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 11 and 12, skim chapters 97 and 98
  • Watch videos about FA and GVC.
  • Review the GVC examples (chapters from textbook regarding coffee, technology, tobacco).
  • Team’s prepare the Case Study.

Week 6 Feb 21 Best Method – Snowin’ and Blowin’ case study by Dr. Lorraine Eden

Feb 22 Tuesday at 9am – 10:30am

Feb 25 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 15 and 16
  • Watch video.
  • Team’s prepare the Case Study.

Week 7 Feb 28 Capstone summation and tax risk technology presentations

March 1 Tuesday at 9am – 10:30am (counsel litigation discussion)

March 4 Friday at 9am – 10:30 (tech provider training)

March 7-11 Spring Break for distance education graduate programs

Week 1 of Course 2 (week 8 of both courses) March 14: Intangibles Royalty Rates CUT and CPM by Dr. Debora Talutto

March 15 Tuesday at 9am – 10:30am (counsel litigation discussion)

second session (presentations, peer feedback)

  • Read textbook chapter 10
  • Analyze the CUT cases
  • Case Study presentation

Week 9 March 21: Intangibles Buy In/Out Cost Sharing Arrangements, Platform Contribution Transactions by Dr. George Salis

March 22 Tuesday at 9am – 10:30am

second session (presentations, peer feedback)

  • Read textbook chapter 13
  • Analyze the CSA/PCT cases
  • Case Study presentations

Week 10 March 28: Digital; Unitary Apportionment; Pillar 1; EU State Aid

by Dr. Bruno da Silva dasilva.brunoaniceto@gmail.com

March 29 Tuesday at 9am – 10:30am

April 1 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 44 and 75
  • Review Pillar One
  • Case Study presentation

Week 11 April 4 Digital –Amazon, Internet of Things (IOT) by Dr. Lorraine Eden and Dr. Niraja Srinivasan

April 5 Tuesday at 9am – 10:30am

April 8 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read OECD Pillar 1 comment letters in the course folder
  • Read Lorraine Eden’s articles
  • Read Chapter 46

Week 12: April 11 Services by Hafiz Choudhury

April 12 Tuesday at 9am – 10:30am

April 15 Friday at 9am – 10:00 (presentations, peer feedback)

Week 13 April 18: Restructuring (and extractive industry experience) by Hafiz Choudhury

April 19 Tuesday at 9am – 10:30am

April 22 Friday at 9am – 10:30 (presentations, peer feedback)

  • Read textbook chapters 27, 43
  • In the second week, the investors find out that the state owned off take customer is not utilizing the full capacity of the FSRU

Week 14 April 25 Capstone presentations for comment letters

April 26 Tuesday at 9am – 10:30am

April 29 Friday at 9am – 10:00 (presentations, peer feedback)

  • Review past comment letter submissions
Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Courses, Uncategorized | Tagged: | Leave a Comment »

TaxFacts Intelligence December 16, 2020

Posted by William Byrnes on December 16, 2020


There have been a number of challenges to the requirement for physical damages in business interruption insurance policies, and this week we see a court ruling in North Carolina that CVOID-related restrictions were enough to meet the test for physical damages because they prevented the policyholder from using their property. More on this in Tax Facts, and also at our sister site FC&S.  Also, if you missed the late November webinar on “The Biggest Tax Implications for 2021” you can still register and view the recording at the link below. William Byrnes and Robert Bloink walked us through an hour of what the CARES Act and FFCRA changes may look like in 2021. Tune in!

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

ACA Likely To Withstand Latest Challenge The U.S. Supreme Court recently heard oral arguments that will be instrumental in determining the fate of the Affordable Care Act.  Since the 2017 tax reform legislation reduced the individual mandate to $0, many challenged whether the ACA was constitutional–in other words, whether it could be considered a valid exercise of Congress’ power to tax.  Confirmation of new Supreme Court justice Amy Barrett created the real possibility that the ACA could be overturned.  However, after hearing oral arguments, two conservative justices–Roberts and Kavanaugh–indicated their support for severance.  If that happens, the individual mandate portion of the ACA would be severed from the remainder of the law.  For more information on the ACA, visit Tax Facts Online.  Read More. Read More

State Court Rules in Favor of Restaurants in Business Interruption Insurance Case A North Carolina court has ruled in favor of a group of restaurants and required the insurance company to provide business interruption coverage.  The court agreed with the plaintiffs that government stay-at-home orders and travel restrictions caused the restaurants to suffer a physical loss because they lost physical use and physical access to their businesses.  The policy at issue defined “loss” as “accidental physical loss or accidental physical damage,” but did not define “direct”, “physical loss”, or “physical damage.”  The court agreed that the businesses lost the full use and advantage of their business premises.  The court rejected the insurance company’s argument that tangible physical loss was required because, even if true, that rendered the policy language ambiguous.  Despite the fact that this was a state-level case, other courts may find the reliance on standard contract interpretation principles persuasive.  For more information on business insurance issues, visit Tax Facts Online. Read More

DOL Releases Final Rule on Considering Non-Financial Factors in Selecting Retirement Plan Investments The DOL has released a final rule on whether environmental, social and governance (ESG) factors can be considered when retirement plan fiduciaries are selecting plan investments without violating their fiduciary duties.  Plan fiduciaries are obligated to act solely in the interest of plan participants and beneficiaries when making investment decisions.  The final rule confirms the DOL position that plan fiduciaries must select investments based on pecuniary, financial factors.  Fiduciaries are required to compare reasonably available investment alternatives–but are not required to scour the markets.  The rule also includes an “all things being equal test”–meaning that fiduciaries are not prohibited from considering or selecting investments that promote or support non-pecuniary goals, provided that they satisfy their duties of prudence and loyalty in making the selection.  For more information, visit Tax Facts Online. Read More

Texas A&M, an annual budget of $6.3 billion (FY2020) and $1 billion of research grants/budget, is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Retirement Planning, Taxation, Wealth Management | Tagged: | Leave a Comment »

TaxFacts Intelligence December 14, 2020

Posted by William Byrnes on December 14, 2020


Looks like we have more guidance from the IRS on PPP forgiveness and deductibility of expenses. This is getting more complicated as we approach the end of the year and many taxpayers are anticipating, but have not yet received, the forgiveness of their PPP loans. The new guidance helps deal with a couple of potential types of situations that companies may find themselves in while they wait for forgiveness applications to be reviewed.

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

IRS Releases Safe Harbors to Allow Certain PPP Loan Recipients to Deduct Business Expenses One controversial element of the PPP loan rules involves whether taxpayers who receive loan forgiveness qualify to deduct otherwise deductible business expenses.  To date, IRS’ guidance has confirmed that otherwise eligible deductions will be denied.  However, the agency has now released a safe harbor for certain taxpayers whose application for forgiveness was denied or who opted to forgo applying for forgiveness.  The safe harbors allow a taxpayer to claim a deduction in the 2020 tax year for certain otherwise deductible eligible expenses.  For more information on the safe harbor requirements, visit Tax Facts Online. Read More

IRS Confirms Position on Non-Deductibility of Business Expenses for PPP Loan Recipients Who Expect Loan ForgivenessThe IRS has released guidance confirming that PPP loan recipients who have a reasonable expectation that they will have loan amounts forgiven cannot deduct otherwise eligible business expenses.  A taxpayer that received a covered loan guaranteed under the PPP and paid or incurred certain otherwise deductible expenses may not deduct those expenses in the tax year in which the expenses were paid or incurred if, at the end of such taxable year, the taxpayer reasonably expects to receive forgiveness of the covered loan on the basis of the expenses it paid or accrued during the covered period.  That’s true even if the taxpayer has not yet submitted an application for forgiveness of the covered loan by the end of the tax year.  For more information on the implications of PPP loan forgiveness, visit Tax Facts Online. Read More

Complex Contribution Limits for Employees Participating in Multiple Employer-Sponsored Retirement PlanAs we approach the end of the year, many taxpayers may have questions about their 2020 retirement plan contribution limits.  Employees who participate in more than one plan are subject to two sets of limits: the annual additions limit and the deferral limit.  The deferral limit maxes out at $19,500, or $26,000 for clients 50 and older, in 2020.  Each participant is limited in contributing $19,500 across all retirement plans.  The annual additions limit in 2020 is $57,000 ($63,500 for those 50 and up).  The annual additions limit includes all employer and employee contributions.  Each employer-based plan gets its own annual additions limit.  Therefore, if you have two employers, each employer can contribute up to the $57,000 limit.  In other words, contributions from unrelated employers aren’t aggregated.  For more information on the 401(k) contribution limits, visit Tax Facts Online. Read More

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Retirement Planning, Taxation, Wealth Management | Tagged: | Leave a Comment »

U.S. / E.U. International Tax Risk Management Zoom Team-Based Case Studies Start Jan 19 – April 25 (14 weeks)

Posted by William Byrnes on December 9, 2020


Based on weekly case studies created by the faculty, supported by reading/text materials, pre-recorded videos with PPTs, and audio podcast files made by the faculty – twice-weekly Zoom live sessions (recorded as well) of 90 – 120 minutes wherein students in teams work through the case studies generally from an assigned stakeholder perspective. Access to the extensive Texas A&M library for case study research includes by example: Lexis, Westlaw, IBFD, Kluwer-Cheetah, Thomson OneSource, BvD (Moodys), S&P CapIQ, FITCH, among several others. Apply for Texas A&M’s courses here.

  • Transfer Pricing Risk Management I Tangibles, Methods, Economics, and Data
  • Transfer Pricing Risk Management II: Intangibles, Services, Pillar 1/Digital, Formulary
  • U.S. Tax Risk Management (Data, Analytics & Technology)
  • E.U. Tax Risk Management

U.S. Tax Risk Management (Data, Analytics & Technology) syllabus

E.U. Tax Risk Management syllabus

  • Week 1 March 8, 2021 E.U. General Framework of Compliance Tax Risk Management Dr. Eva Andrés (Barcelona)
  • Week 2 March 15, 2021 Parent Subsidiary Directive, Interest, Royalties. Dr. Santiago Ibañez Marcilla
  • Week 3 March 22, 2021 The European Union proposal on a carbon border tax and its compatibility with the World Trade Organization rules Dr. Xavier Fernández Pons
  • Week 4 March 29, 2021 Free Movement of Capital (investment funds) and others Fundamental Freedoms. Dr. Eva Andrés & Dr. Andreu Olesti
  • Week 5 April 5, 2021 Cross-Border Losses – Dr. Bruno Da Silva
  • Week 6 April 12, 2021 ATAD, DAC 6, Abuse – Dr. Bruno da Silva
  • Capstone Week April 19-25: Build a client case study, wrap up

Transfer Pricing Risk Management: Tangibles, Methods, Economics, and Data (William Byrnes course materials) syllabus

  • Week 1 January 19 Arm’s Length Standard (v Formulary Approach) Dr. Bruno Da Silva & William Byrnes
  • Week 2 Jan 25 CUP & Comparables Dr. Lorraine Eden
  • Week 3 Feb 1 Cost Plus & Resale Minus Dr. George Salis
  • Week 4 Feb 8: Comparable Profits Method & TNMMDr. George Salis
  • Week 5 Feb 15 Profit Split Dr. George Salis
  • Week 6 Feb 22 Best Method Dr. Lorraine Eden
  • Capstone Week March 1

Transfer Pricing Risk Management: Intangibles and Services (William Byrnes course materials) syllabus

Texas A&M, an annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Courses, Uncategorized | Tagged: , | Leave a Comment »

TaxFacts Intelligence Dec. 7, 2020

Posted by William Byrnes on December 7, 2020


Well, it looks like there will be a work-around for the SALT cap that was enacted under the Trump tax reform bill, at least for taxpayers who own pass-throughs. The IRS has officially announced that those pass-through entities can pay (and then deduct) the SALT taxes above the $10,000 limit.  Also, those who took our PPP loans for $2 million or more are getting a rather detailed questionnaire from the SBA inquiring about the economic necessity of those loans. Recall that PPP loans of less than $2 million are presumed to be requested in good faith, so this doesn’t apply to those borrowers. Happy Thanksgiving (or Zoomsgiving)!

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

IRS Offers Guidance on Covid-19 Era Qualified Transportation BenefitsWith so many employees working from home for the bulk of 2020, employees have begun to question whether they will lose their unused qualified transportation benefits.  Some employees are driving rather than using public transit–and others aren’t commuting at all.  The IRS recently released an information letter explaining that unused qualified transportation benefit amounts can be rolled over to subsequent periods and used for future commuting expenses.  To qualify, the employee must have made a valid compensation reduction election and remain employed by the employer in the subsequent period.  Further, the IRS confirmed that unused amounts could be applied to other types of qualified transportation benefits, including parking, if the employer offers that benefit.  On the other hand, the IRS noted that refunds of unused qualified transportation benefits are not permitted if those benefits are provided through a compensation reduction agreement.  For more information on qualified transportation benefits, visit Tax Facts Online.  Read More

SBA Issues PPP Loan Necessity Questionnaires to PPP Loan RecipientsIn a surprise move, the SBA has begun asking paycheck protection program (PPP) lenders to issue loan necessity questionnaires to recipients of loans of at least $2 million.  The questionnaires are detailed and request significant information, and were issued without warning or fanfare.  It’s expected that these information requests might be used in enforcement of PPP loan requirements or in determining eligibility for forgiveness.  According to the SBA, the forms will be used to evaluate whether a recipient’s loan was made necessary by economic uncertainty.  Information provided in the forms must be certified under threat of criminal action for false statements.  The questions essentially ask borrowers to certify actual detrimental economic impact.  Borrowers will also have to provide information about local Covid-19 shutdown orders, other CARES Act aid, financial information and compensation to highly compensated owners and employees.  Upon receipt, the borrower has only 10 days to complete the questionnaire and submit supporting documents.  For more information on the PPP loan program, visit Tax Facts Online.  Read More

IRS Regs Bless SALT Cap Workarounds for Pass-Through EntitiesThe IRS has released regulations confirming that partnerships and S corporations who pay entity-level taxes at the state level can deduct those taxes on their federal income tax returns.  By now, most people are familiar with the $10,000 SALT deduction cap created by the 2017 tax reform legislation.  High-tax state governments have attempted to create workarounds that would allow taxpayers to get around this cap.  At the individual level, the IRS has responded to shut those efforts down.  The recent regulations confirm, however, that the entity is permitted the deduction for state-level taxes even if the entity could have elected to pass the tax liability through to the actual individual owners.  For more information on the SALT cap, visit Tax Facts Online.  Read More

Texas A&M University School of Law’s online wealth and international tax risk management graduate curricula for industry professionals has attracted over 160 enrollment this fall semester. Apply now for courses that begin on January 19 spring semester. See the international tax course list by > weekly topic here. <

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Retirement Planning, Taxation, Wealth Management | Tagged: | Leave a Comment »

TaxFacts Intelligence December 3, 2020

Posted by William Byrnes on December 3, 2020


This week, we examine the new October regs (subscribers received this analysis the next day) on the process of establishing an ABLE account. The new rules provide increased flexibility in terms of who can establish the account, which may be an important factor when support for the beneficiary comes from multiple family members. We also have additional clarification on the Small Business Exemption to the Business Interest Deduction rules and a new online resource from the IRS that assists those who are closing a business. . .

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Final ABLE Account Regulations Offer New Flexibility

The IRS final ABLE account regulations broaden the range of parties who are eligible to establish an account.  Under the new rules, the beneficiary can designate any person to establish an account on their behalf.  If the beneficiary is unable to designate a person, the account can be set up by an agent under a power of attorney, a conservator, legal guardian, spouse, parent, sibling, grandparent or representative payee appointed by the Social Security Administration (in that order of priority).  The ABLE program itself is entitled to rely upon the person’s certification that he or she is authorized to set up the account for the benefit of a disabled person, and that there is no person with a higher priority who is willing and able to set up the account.  Similarly, the person who establishes the account will generally have signature authority over the account.  For more information on the ABLE Account rules, visit Tax Facts Online. Read More

IRS Clarifies Small Business Exemption to Business Interest Deduction Rules

The 2017 tax reform legislation changed the general rules for deducting business interest.  While the 2020 CARES Act relaxed the new limitations, the new rule generally limits the business interest deduction.  Small businesses that are not tax shelters are not subject to the new limits if they pass the gross receipts test (by having average annual gross receipts of no more than $26 million for the past three tax years).  Related entities are generally aggregated if they’re aggregated for other tax code purposes.  In past years, some small businesses were uncertain whether they fell into the definition of “tax shelter” because there was some uncertainty in the way “syndicate” was defined–multiple definitions apply in different tax code sections.  The IRS clarified this by releasing proposed regulations specifying that “syndicate” is defined using the Treasury Regulation Section 1.448-1T(b)(3) definition.  Because of this, only small businesses that have passive investors who are actually allocated losses are treated as tax shelters that are ineligible.  For more information, visit Tax Facts Online. Read More

IRS Creates Online Resource for Closing a Business

Unfortunately, many small business owners have been forced to close due to the economic fallout of the Covid-19 pandemic.  The IRS has now created an online resource giving business owners step-by-step information about how to close a business.  The website reminds taxpayers that they are required to file a final tax return for the year the business closes.  The relevant form will depend upon the type of business entity involved.  Employers are also required to pay employees all compensation that they’re owed—and must pay related employment taxes on those wages.  They must also report any payments in excess of $600 made to independent contractors.  The business should also close all business accounts and cancel their EIN by sending a letter to the IRS.  For more information on the tax obligations of employers, visit Tax Facts Online. Read More

Texas A&M University School of Law’s online wealth and international tax risk management graduate curricula for industry professionals has attracted over 160 enrollment this fall semester. Apply now for courses that begin January 11 spring semester. See the international tax course list by > weekly topic here. < Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Pensions, Retirement Planning, Taxation, Wealth Management | Leave a Comment »

TaxFacts Intelligence December 1, 2020

Posted by William Byrnes on December 1, 2020


This week we analyze important end of tax year issues for businesses and Social security recipients. First, the SBA has announced a new streamlined forgiveness application for PPP loans of $50,000 or less (which is most of them). This is important for both the businesses that received the PPP funds and for the banks that will have to process the forgiveness applications; both should see their workloads greatly reduced. We also see the new Social Security COLA numbers for 2021, which as expected do not contain any dramatic changes.

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Streamlined PPP Loan Forgiveness for Small Loans

Many small businesses that received Paycheck Protection Program (PPP) loans are now near or past the end of their “covered period”–meaning that it’s time to apply for loan forgiveness.  Determining eligibility for loan forgiveness is much more complex than expected.  The Small Business Administration (SBA) has released a streamlined application that can be used by business owners who borrowed $50,000 or less.  For more information on the PPP loan program, visit Tax Facts Online. Read More

2021 Inflation-Adjusted Limit for Excepted Benefit HRAs

In 2019, the IRS created a new “excepted benefit” HRA structure.  Unlike the also-new individual coverage HRAs, employers can offer both the excepted benefit HRA and group health insurance coverage to the same employee.  The employee is not required to actually enroll in the group health coverage. For 2021, the contribution limit for these savings vehicles is $1,800 per year. For more information on the new HRA rules, visit Tax Facts Online. Read More

2021 Cost-of-Living Adjustments for Social Security Recipients

The Social Security Administration has announced the cost of living adjustments applicable for 2021, including a 1.3 percent increase in monthly benefits paid to Social Security recipients (the COLA increase for 2020 was 1.6 percent). Social Security “COLA” adjustments are tied to the consumer price index each year.  Based on the 1.3 percent increase, it is estimated that the annual Social Security earnings cap will be increased from $137,700 to $142,800 for 2021.  For more information on the Social Security tax, visit Tax Facts Online. Read More

Texas A&M University School of Law’s online wealth and international tax risk management graduate curricula for industry professionals has attracted over 160 enrollment this fall semester. Apply now for courses that begin on January 18 spring semester. See the international tax course list by > weekly topic here. < Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

  • Rank 11th “Best Public Colleges” Money’s Best Colleges Report, 2019
  • Texas A&M ranks #1 in Texas, #1 in the SEC, and #12 in the U.S. in Washington Monthly’s 2020 overall college rankings based on the quality of education, accessibility, graduation rates, student involvement, and research: see tx.ag/WashMonth20

Posted in Uncategorized | Leave a Comment »

TaxFacts Intelligence Nov 25, 2020

Posted by William Byrnes on November 25, 2020


This week we analyze the proposed regulations from the DOL on determining who is (and is not) an independent contractor. This has become a hot issue in light of the new rules that California has passed for companies operating there and the impact that they may have on “gig economy” companies. California’s rules are still tied up in litigation, and it remains to be seen how the new DOL rules might affect them. We also have updates on new rules for bonus depreciation for partnerships and withholding on periodic retirement and annuity payments.

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

DOL Proposes New Test for Determining Independent Contractor Status

The DOL released a proposed rule that would address when a worker will be treated as an independent contractor for tax purposes. A new economic reality test would apply and consider (1) the nature and degree of the worker’s control over the work and (2) the worker’s opportunity for profit or loss. If the worker sets their own schedule, chooses assignments, works with little or no supervision and can work for others, the circumstances weigh in favor of independent status. For more information on employment classification, visit Tax Facts Online. Read More

Final Bonus Depreciation Rules Give Partnerships a Valuable Tax Break

The IRS final bonus depreciation rules made one change that could prove valuable to partnerships. The 2017 tax reform legislation allows certain used property to qualify for bonus depreciation. However, anti-churning rules apply to prevent abuse. Under the 2019 proposed rules, a partner was treated as having a prior interest in property if the partner was a partner in a partnership at any time that the partnership owned the property. The final regulations revoked the look-through rule because of the administrative burden of enforcement. Under the final rules, taxpayers are not considered to have previously owned property if that property is disposed of within 90 days of its placed-in service date, as long as the asset is not purchased and placed in service again within the same tax year. For more information on the bonus depreciation rules, visit Tax Facts Online. Read More

IRS Releases Final Regs on Withholding on Periodic Retirement and Annuity Payments

The IRS has finalized regulations that clarify tax withholding rules for periodic retirement and annuity payments. Pre-tax reform, the default withholding rate was based on a married taxpayer with three withholding exemptions. Post-reform, the personal exemption has been suspended and Congress directed the Treasury to provide updated withholding rules The IRS has also announced that it intends to release a revised 2021 Form W-4P. The regulations apply to payments made after December 31, 2020. For more information, visit Tax Facts Online. Read More

Texas A&M University School of Law’s online wealth and international tax risk management graduate curricula for industry professionals has attracted over 160 enrollment this fall semester. Apply now for courses that begin on January 18 spring semester. See the international tax course list by > weekly topic here. <

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Ranked in top 20 public universities by Wall Street Journal / Times Higher Education (2020)

#1 endowment for U.S. public universities, #7 overall

#1 of U.S. public universities for a superior education at an affordable cost

#1 for most CEOs employed by Fortune 500

Rank 11th “Best Public Colleges” Money’s Best Colleges Report, 2019

Texas A&M ranks #1 in Texas, #1 in the SEC, and #12 in the U.S. in Washington Monthly’s 2020 overall college rankings based on the quality of education, accessibility, graduation rates, student involvement, and research: see tx.ag/WashMonth20

Posted in Uncategorized | Leave a Comment »

TaxFacts Intelligence Nov 23, 2020

Posted by William Byrnes on November 23, 2020


This week we analyze two updates on how the CARES Act is impacting retirement plans. First, we have additional information about re-contributing COVID hardship distributions for qualified plans. Recall that the CARES Act offers a generous window in which to make those re-contributions, so this may be an important topic for end-of-the year tax planning. We also see an update for single-employer defined benefit plans, including some important deadlines. Happy tax reading for Thanksgiving week!

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Clearing up Confusion About Re-Contributing Coronavirus-Related Retirement Distributions

The CARES Act relaxed the hardship distribution rules so that plan participants suffering hardships because of the coronavirus pandemic could access their retirement savings. The law also allows participants to re-contribute those funds within three years of the distribution without penalty. Employer-sponsored plans, however, are only able to accept rollovers from participants (and sometimes new hires). Therefore, if an employee takes their entire account balance as a coronavirus-related hardship distribution and later stops working for the employer, the person is no longer a participant or new hire. For more information on the rules regarding CRDs, visit Tax Facts Online. Read More

Agencies Offer New CARES Act Contribution Relief for Single-Employer Defined Benefit Plans

Sponsors of defined benefit plans are generally required to pay premiums annually to the PBGC. Calculating the premium amount is complex. The first factor imposes a flat-rate, per-participant amount. The second portion is variable, and is based on the plan’s unfunded vested benefits. In calculating this amount, the sponsor is allowed to include any contributions made up to the filing due date. The CARES Act extended the deadline for making a 2019 defined benefit contribution until January 1, 2021. For more information on the defined benefit plan funding rules, visit Tax Facts Online. Read More

IRS Issues Final Regs on Post-TCJA Deductions for Estates and Non-Grantor Trusts

The IRS has released final regulations to clarify that estates and non-grantor trusts are entitled to take certain deductions even after the 2017 tax reform legislation eliminated miscellaneous itemized deductions and suspended the personal exemption for 2018-2025. Generally, non-grantor trusts are entitled to deduction otherwise deductible expenses that would not be incurred but for the fact that the property or assets are held in trust. For more information on the taxation of trusts and estates, visit Tax Facts Online. Read More

Texas A&M University School of Law’s online wealth and international tax risk management graduate curricula for industry professionals has attracted over 160 enrollment this fall semester. Apply now for courses that begin on January 18 spring semester. See the international tax course list by > weekly topic here. <

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Pensions, Retirement Planning, Taxation, Wealth Management | Tagged: , , | Leave a Comment »

TaxFacts Intelligence Nov 20, 2020

Posted by William Byrnes on November 20, 2020


This week we look at the three sets of updates from the IRS regarding various SECURE Act changes (subscribers will find our coverage the same week as the release in Tax Facts Online). First, we have guidance for employers on vesting schedules for long-term part-time employees. Next is an update on how QCDs are affected by (newly) deductible qualified plan contributions made after age 70½. Finally, we have guidance that accepting contributions from plan holders who are past age 70½ is not mandatory, and may be disallowed by financial institutions.

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

IRS Offers Guidance on Vesting Rules for Long-Term, Part-Time Employees Post-SECURE Act

The SECURE Act generally amends the 401(k) qualification rules to allow participation for certain long-term, part-time employees. IRC Section 401(k)(15)(B)(iii) provides special vesting rules for employees who become eligible to participate solely by reason of having completed three consecutive 12-month periods where the employee completed at least 500 hours of service (long-term, part-time employee). The rule providing that 12-month periods beginning before January 1, 2021 are not taken into account does not apply for purposes of the vesting rules. Generally, all years of service with the employer maintaining the plan must be taken into account for purposes of determining a long-term, part-time employee’s nonforfeitable right to employer contributions under the special vesting rules in § 401(k)(15)(B)(iii). For purposes of determining whether a long-term, part-time employee has a nonforfeitable right to employer contributions (other than elective deferrals), each 12-month period for which the employee has at least 500 hours of service is treated as a year of service. For more information, visit Tax Facts Online. Read More

IRS Provides Details on Reducing Excludable QCDs Caused by Deductible Post-70½ Contributions

The SECURE Act amended the rules governing qualified charitable distributions (QCDs), which are distributions from an individual’s IRA, made directly to charity on or after age 70½. The amendment provides that the excludable amount of QCDs for a taxable year is reduced by the aggregate amount of IRA contributions deducted for the year and any earlier taxable years in which the individual was age 70½ or older by the last day of the year (post-age 70½ contributions). The excludable amount of QCDs for a taxable year is not reduced by the amount of post-age 70½ contributions that caused a reduction in the excludable amount of QCDs for earlier taxable years. For more information on the IRS guidance, visit Tax Facts Online. Read More

IRS Provides Clarity on SECURE Act Post-70½ IRA Contributions

The IRS has released guidance clarifying that while the SECURE Act removed the age 70½ restriction on making traditional IRA contributions, the provision is not mandatory. In other words, financial institutions can choose whether or not to accept IRA contributions after the account owner has reached age 70½. If the financial institution does choose to accept post-70½ contributions, the institution must amend its contracts to provide for the change. The IRS has announced that it plans to release revised model IRAs and prototype language to help reflect these changes. Further, the IRS guidance clarifies that post 70½ contributions cannot be used to offset RMDs—the contributions and distributions are treated as separate transactions. For more information on the IRA contribution rules, visit Tax Facts Online. Read More

Texas A&M University School of Law’s online wealth and international tax risk management graduate curricula for industry professionals has attracted over 160 enrollment this fall semester. Apply now for courses that begin on January 18 spring semester. See the international tax course list by > weekly topic here. <

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Retirement Planning, Taxation, Wealth Management | Tagged: , , | Leave a Comment »

TaxFacts Intelligence Nov 19, 2020

Posted by William Byrnes on November 19, 2020


There is an updated self-certification process for taxpayers who miss the 60-day rollover deadline. The new process is easier than obtaining a PLR, but it is still only available in a limited set of circumstances. Notably, one of those circumstances is an extreme illness of the taxpayer or a family member, so there may be some COVID-related relief available. Also, we have the new 2021 inflation-adjusted tax numbers! Many of them stayed the same in our current low-inflation environment, but the estate tax exemption is up to $11.7 million.

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Retirement Plan Contribution Limits for 2021 Remain Steady; Estate Tax Exemption Soars

The IRS has released the 2021 inflation-adjusted figures to be used for determining deductible retirement plan contributions, tax brackets and a number of other relevant figures.  In the retirement arena, contribution limits will remain steady–401(k) pre-tax contribution limits remain at $19,500 and catch-up limits remain at $6,500.  IRA contribution limits similarly remain at $6,000.  For 2021, every individual can exempt up to $11.7 million from the federal estate tax (up from $11.58 million).  The annual $15,000 gift tax exclusion remained unchanged.  For more information on the rules on deductible retirement contributions, visit Tax Facts Online. Read More

Instructions for 2020 Forms 1094/1095 Contain New ICHRA Reporting Information

The instructions for Forms 1094 and 1095 contain reporting information for clients who have decided to offer individual coverage health reimbursement arrangements (ICHRAs) beginning in 2020.  ICHRAs allow employers to reimburse employees for the cost of individual health insurance premiums without violating the ACA market reform rules.  Forms 1095-B and 1095-C are provided to both the IRS and the employee who receives coverage.  The employee’s ICHRA contributions now count for purposes of determining whether the employee’s contribution is affordable.  For more information on ICHRAs, visit Tax Facts Online. Read More

IRS Updates Self-Certification Process for Taxpayers Who Miss Retirement Plan Rollover Deadline

Missing the 60-day rollover deadline for tax-free transfers between retirement accounts can cause considerable problems for a client.  In the past, the only way to correct a delayed rollover was to obtain a private letter ruling (PLR) directly from the IRS.  Now, certain clients are eligible to self-certify to avoid the time and expense of obtaining a PLR.  Circumstances that qualify for a waiver via self-certification include: (1) an error was committed by the financial institution, (2) the distribution check was misplaced and never cashed, (3) the taxpayer’s principal residence was severely damaged, (4) a member of the taxpayer’s family died, (5) the taxpayer or a member of his or her family was severely ill, (6) a postal error occurred or (7) restrictions were imposed by a foreign country.  For more information, visit Tax Facts Online. Read More

Texas A&M University School of Law’s online wealth and international tax risk management graduate curricula for industry professionals has attracted over 160 enrollment this fall semester. Apply now for courses that begin on January 18 spring semester. See the international tax course list by > weekly topic here. <

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Retirement Planning, Taxation, Wealth Management | Tagged: | Leave a Comment »

Free Webinar Today | What will be the biggest tax implications for 2021?

Posted by William Byrnes on November 18, 2020


New RMD tables! SECURE Act 2.0? Should you defer SALT expenses until 2021? Tune into Tax Facts Online this week for these exciting updates! Also, check it out, we’re having a webinar today at 2pm CST (Dallas/Chicago time)

Free Webinar | What will be the biggest tax implications for 2021?

Between an election year and a worldwide pandemic, 2020 has left tax and financial planners with a LOT to consider, and the new year is just around the corner. Join the expert-authors behind Tax Facts in this free, live webinar as they discuss important questions many will have about the state of tax in 2021, including potential changes, implications, and more. Register Here

Prof. William H. Byrnes         Robert Bloink, J.D., LL.M.

Bipartisan Retirement Legislation Dubbed “SECURE Act 2.0”

New retirement legislation with bipartisan support would expand upon the changes made by the 2019 SECURE Act to promote more options and greater retirement security for millions of Americans.  Importantly, if passed, the law would increase the required minimum distribution age from 72 to 75.  It would promote auto-enrollment in new employer retirement plans and also provide an expanded tax credit for small business owners who offer a retirement savings option.  The law would provide more options for clients approaching retirement age by allowing greater “catch up” options for clients who are at least 60.  Employers would also be able to provide an employer matching contribution to employees who are unable to contribute to retirement accounts, but instead use funds to pay down student loans.  The law would also ease the burden for clients who make honest mistakes while managing their own IRAs.  For more information about some of the sweeping changes made by the SECURE Act late in 2019, visit Tax Facts Online. Read More

Updated RMD Tables

Although RMDs were waived for 2020, the IRS recently released final and updated tables that are used in calculating taxpayers’ required minimum distributions (RMDs) from traditional retirement accounts.  However, the IRS has also announced that the new tables won’t apply in calculating 2021 RMDs (existing tables remain in effect for 2021).  Starting in 2022, savers who have reached age 72 (up from age 70 1/2 prior to 2020) will be entitled to use the updated life expectancy tables.  For more information on the RMD rules, visit Tax Facts Online. Read More

Defer SALT Expenses Until 2021?

By this point, we’re all familiar with the cap on the deduction for state and local taxes (SALT) that was put into place for 2018-2025.  With the uncertainty of an election year looming, some taxpayers might wonder whether they can take any steps to maximize the value of these deductions.  The answer is: maybe.  For more information on the SALT cap, visit Tax Facts Online. Read More

Byrnes & Bloink’s Tax Facts Offers a Complete Web, App-Based, and Print Experience: Reducing complicated tax questions to understandable answers that can be immediately put into real-life practice, Tax Facts works when and where you need it….on your desktop, at home on your laptop, and on the go through your tablet or smartphone. All four volumes of Tax Facts in print PLUS

  • Tax Facts Intelligence weekly newsletters
  • weekly strategy articles for client advisory
  • weekly transcribed debate discussion for client soft-skill discussion
  • among other weekly client advisory critical updates

Questions? Contact customer service: TaxFactsHelp@alm.com800-543-0874

Posted in Retirement Planning, Taxation, Wealth Management | Tagged: , | Leave a Comment »

What will be the biggest tax implications for tax season 2021 for your financial advisory clients? free TaxFacts webinar

Posted by William Byrnes on November 17, 2020


Wed, Nov 18, 2020 1:00 PM – 2:00 PM CST (Dallas time) Register for the Webinar Here


Between an election year and a worldwide pandemic, 2020 has left tax and financial planners with a LOT to consider, and the new year is just around the corner. Join the expert-authors behind Tax Facts in this free, live webinar as they discuss important questions many will have about the state of tax in 2021, including potential changes, implications, and more.

It can be difficult to keep up with the latest industry changes – make sure you’re prepared for next year and how certain policies may affect your clients and their retirement plans, both immediately and long-term!

If you have questions about the webinar, please contact Dana Wan at dwan@alm.com. Register for the Webinar Here

Byrnes & Bloink’s Tax Facts Offers a Complete Web, App-Based, and Print Experience: Reducing complicated tax questions to understandable answers that can be immediately put into real-life practice, Tax Facts works when and where you need it….on your desktop, at home on your laptop, and on the go through your tablet or smartphone. All four volumes of Tax Facts in print PLUS

  • Tax Facts Intelligence weekly newsletters
  • weekly strategy articles for client advisory
  • weekly transcribed debate discussion for client soft-skill discussion
  • among other weekly client advisory critical updates

Questions? Contact customer service: TaxFactsHelp@alm.com800-543-0874

From Tax Facts Online Q3757. What is the limit on elective deferrals to employer-sponsored plans?

By way of example, here is the recently updated Tax Facts Q&A on the 2021 retirement plan contribution limits. Look for more great updates from Tax Facts soon! Read More

From Tax Facts Weekly September 10, 2020: The Trump payroll tax deferral has been announced, and we have details below. It’s optional, and there are a lot of questions about how it will work now and in early 2021 when the deferred payroll taxes would be due (assuming no legislative changes occur between now and then). We also have an interesting update from the DOL on how schools’ reopening plans might impact employees’ right to paid leave under the Families First Coronavirus Response Act (FFCRA). Given the wide variety in schools’ opening plans there may be some interesting scenarios to play out related to staff paid leave if they are affected by the Corona virus.

Trump Payroll Tax Deferral Program Now Available

Beginning September 1, employers have the option of deferring the employee portion of the payroll tax through December 31, 2020. Employers can choose to stop withholding the 6.2% employee portion of the Social Security tax for employees who earn less than around $4,000 bi-weekly (pre-tax), but are required to continue contributing the employer half. However, employees should note that under current IRS guidance, deferred payroll taxes must be repaid during the period beginning January 1, 2021 and ending April 30, 2021. Taxes that are not repaid during that period will accrue interest and penalties, and employers can pass those amounts on to employees who have not repaid their deferral amounts. While it remains possible that Congress could pass legislation to forgive any payroll taxes that are deferred during 2020, it is far from certain. For more information on payroll tax relief provided in response to COVID-19, visit Tax Facts Online. Read More

DOL Releases New Guidance in Response to School Reopening Plans

The DOL has released additional FAQ on how a school’s reopening plans might impact employees’ right to paid leave under the Families First Coronavirus Response Act (FFCRA). The IRS examined various scenarios and provided clarification on each. If the child’s school remains closed to in-person instruction (so that only remote learning is offered), the employee has a qualifying reason to take FFCRA leave. If the school offers a hybrid program, so that students attend school in-person on certain days and receive remote instruction on other days, employees have a qualifying reason, but only with respect to the days that their children are not eligible for in-person instruction. If it is completely up to the family whether to send the child to school every day or keep the child home for remote instruction, the employee does not have a qualifying FFCRA leave reason. This is true regardless of whether the family keeps the child home out of fear of contracting COVID-19. For more information on the availability of FFCRA leave, visit Tax Facts Online. Read More

IRS Provides Relief for Victims of Hurricane Laura

The IRS has extended various deadlines for victims of Hurricane Laura. Victims located in FEMA-designated disaster areas qualify to extend tax filing and payment deadlines that occurred starting August 22, 2020 through the end of the year. Taxpayers who extended their 2019 federal income tax filing deadline to October 15 now have until December 31, 2020. For information on the casualty loss rules, visit Tax Facts Online. Read More

Posted in Retirement Planning, Taxation, Uncategorized | Tagged: , | Leave a Comment »

Earn your Texas A&M Transfer Pricing certificate w/ live team-based weekly case studies starting January 19

Posted by William Byrnes on November 11, 2020


Transfer Pricing Risk Management I and II: Tangibles, Methods, Economics, and Data, Intangibles, and Services

The back-to-back courses are limited to a maximum 30 certificate participants and degree seekers: Application HERE

William Byrnes, author of the leading transfer pricing treatise, leads a team of hands-on transfer pricing professionals and professors (see links below) who created weekly case studies for teams to work through, facilitated by Zoom on Tuesday at 9am Central (Dallas) time and Fridays at 9am (live session lasts at least 90 minutes and is recorded, available to students until May 1 (then deleted in compliance with FERPA and other rights). The Teams present their proposals and results critiqued and discussed by the teams and professors. See example live session on YouTube here

  • Week 1 January 19 Arm’s Length Standard (v Formulary Approach) Dr. Bruno Da Silva
  • Week 2 Jan 25 CUP & Comparables Dr. Lorraine Eden
  • Week 3 Feb 1 Cost Plus & Resale Minus Dr. George Salis
  • Week 4 Feb 8: Comparable Profits Method & TNMMDr. George Salis
  • Week 5 Feb 15 Profit Split Dr. George Salis
  • Week 6 Feb 22 Best Method Dr. Lorraine Eden
  • Week 7 Capstone March 1 (Hands-On Week with Financial Databases for Comparables Management) Dr. Debora Correa Talutto Thomson OneSource, BvD (Moodys), and CrossBorder AI Solutions Dr. Debora Correa Talutto
  • Week 8 March 8 Intangibles Royalty Rates CUT, CPM Dr. Debora Correa Talutto
  • Week 9 March 15 CSA Intangibles Buy In/Out Dr. George Salis
  • Week 10 March 22 Digital Business Unitary Apportionment Dr. Bruno Da Silva
  • Week 11 March 39 Digital Value Chain, Internet of Things Dr. Lorraine Eden
  • Week 12 April 5 U.S. v OECD v UN Manual case study Extractive Industries, Financing Hafiz Choudhury
  • Week 13 April 12 Restructuring the Business, Services case study Hafiz Choudhury
  • Week 14 Capstone April 19 Hand-On Week with Tax Technology to Manage Risk William Byrnes
  • Other guest experts/professors will be joining with case studies

Weekly course materials include in the tuition: the Lexis textbook and supplement materials, pre-recorded videos with PPTs, and audio podcast files made by the faculty (listen at the gym or when driving). Access to the extensive Texas A&M library for case study research includes as some examples: Lexis, Westlaw, IBFD, Kluwer-Cheetah, Thomson OneSource, BvD (Moodys), and S&P CapIQ.

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

Posted in Courses | Tagged: | Leave a Comment »

International Tax Risk Management course descriptions

Posted by William Byrnes on November 5, 2020


Courses are limited to maximum 30 participants: Application HERE

Texas A&M, annual budget of $6.3 billion (FY2020), is the largest U.S. public university, one of only 60 accredited U.S. universities of the American Association of Universities (R1: Doctoral Universities – Highest Research Activity) and one of only 17 U.S. universities that hold the triple U.S. federal grant of Land, Sea, and Space!

FALL COURSES

Int’l Taxation & Treaties I

Course description: This course, focused on residency-based taxation, and its companion focused on source-based taxation, is the primer for the concentration area of risk management addressing the tax function within a multinational enterprise (thus, aptly named international tax risk management). This course and the others within the tax risk management concentration provide a comparative overview of the tax law and accounting of significant trade nations, an overview of the application of tax treaties among countries, and a global holistic perspective for multinational tax risk planning. The course is taught synchronously twice weekly using Zoom. Each week teams of 3-4 students, each with a chosen team role (e.g. develop PPT, develop presentation notes, make presentation), are assigned by the professor a stakeholder role to develop in the context of a case study.  The professors moderate the teams that discuss and moot with each other during a weekly live presentation session.  Teams generally use PPT and other presentation aids. The primary purpose of the course is to allow students to work through real world tax scenarios considering the planning risks and management of those risks. This course is co-taught by Professor William Byrnes who authored the course materials and Dr. Bruno da Silva.

Int’l Taxation & Treaties II

Course Description: This second course in a series of two courses is focused on sourced based taxation. The first course is focused on residency-based taxation. Together these courses are the primer for the concentration area of risk management addressing the tax function within a multinational enterprise(thus, aptly international tax risk management).This course and the others within the tax risk management concentration provide a comparative overview of the tax law and accounting of significant trade nations, an overview of the application of tax treaties among countries, and a global holistic perspective for multinational tax risk planning. The course is taught synchronously twice weekly using Zoom. Each week teams of 3-4 students, each with a chosen team role (e.g. develop PPT, develop presentation notes, make presentation), are assigned by the professor a stakeholder role to develop in the context of a case study.  The professors moderate the teams that discuss and moot with each other during a weekly live presentation session.  Teams generally use PPT and other presentation aids. The primary purpose of the course is to allow students to work through real world tax scenarios considering the planning risks and management of those risks. This course is co-taught by Professor William Byrnes who authored the course materials and Dr. Bruno da Silva.

Domestic Systems International Tax Risk Management  

Course Description: Tax Risk Management: Domestic (Inbound) addresses the interaction of international taxation risk management and domestic systems.  This course continues with the tax diagnostic process started in International Tax & Treaties I and II, and the tax data risk analytics exposed to in International Tax Risk Management I, bringing tax data analytics into the domestic system diagnostic, and how technology supports the inbound tax investment analysis. The course is taught synchronously twice weekly using Zoom. Each week teams of 3-4 students, each with a chosen team role (e.g. develop PPT, develop presentation notes, make presentation), are assigned by the professor a stakeholder role to develop in the context of a case study.  The professors moderate the teams that discuss and moot with each other during a weekly live presentation session.  Teams generally use PPT and other presentation aids. The primary purpose of the course is to allow students to work through real world tax scenarios considering the planning risks and management of those risks. This course is co-taught by a team of professors including Dr. Susana Bokobo, Dr. Maji Rhee, Elis Prendergast, Carson Le, and Hafiz Choudhury, supported by the authored materials of Professor William Byrnes.

Int’l Tax Risk Management II (Data, Analytics & Technology)

Course description: Int’l Tax Risk Management II Data, Analytics & Technology addresses the interaction of international taxation risk management, data, technology, and analytics.  Tax Risk Management II addresses the following issues: global supply chain and value allocation/apportionment, DEMPE, customs, taxation of IP and technology, and tax technology.  This course completes the trilogy of tax risk management courses and overlays the tax diagnostic process learned in International Tax & Treaties I and II, bringing tax data analytics into the diagnostic, and how technology supports a risk-based approach to managing the tax burden of a multinational. This course is co-taught by Dr. Niraja Srinivasan and Dr. Brigitte Muehlmann.

SPRING COURSES

Transfer Pricing Risk Management I: Tangibles, Methods, Economics, and Data

Course description: This course introduces students to both theoretical and practical aspects of transfer pricing.  Topics include: valuation of cross-border transactions between units of a multinational enterprise; includes internal and external motivations for transfer pricing, managerial and economic approaches, estimates of transfer manipulation, arm’s length standard, U.S. and OECD rules and procedures, tax court cases, and ethical dilemmas. The expanding influence of the UN Manual’s approach to transfer pricing issues is contrasted throughout the main topics. Each week, an industry-based case study is undertaken in a team-based learning approach of student groups consisting of three team members each.  The industry case studies by example include Coffee, Technology, and Petroleum.

This course (Part I) is meant to be taken as the introduction with Transfer Pricing Part II as the advanced perspective.  Part I and Part II topics address strategy, compliance, and risk management.  Transfer Pricing Part I focuses on the topics of comparability, functional analysis and global value chain analysis, and the transfer pricing methods for tangibles and on data documentation (e.g. CbCR). Transfer Pricing Part II focuses on the transfer pricing methods applicable for intangibles and services. This course is led by Professor William Byrnes who has assembled a team including Dr. Lorraine Eden, Dr. George Salis, and Dr. Bruno Da Silva.

Transfer Pricing Risk Management II: Intangibles and Services

Course description: Topics include: valuation of cross-border transactions between units of a multinational enterprise; includes internal and external motivations for transfer pricing, managerial and economic approaches, estimates of transfer manipulation, arm’s length standard, U.S. and OECD rules and procedures, tax court cases, and ethical dilemmas. The expanding influence of the UN Manual’s approach to transfer pricing issues is contrasted throughout the main topics. Each week, an industry-based case study is undertaken in a team based learning approach of student groups consisting of three team members each.  The industry case studies by example include Coffee, Technology, and Petroleum.

This course is meant to be taken with Transfer Pricing Part I.  Part I and Part II topics address strategy, compliance, and risk management.  Transfer Pricing Part II focuses on the topics of comparability, functional analysis and global value chain analysis, and the transfer pricing methods for tangibles and services. Transfer Pricing Part II focuses on the transfer pricing methods applicable for intangibles, and on documentation (e.g. CbCR).  This course is led by Professor William Byrnes who has assembled a team including Dr. Lorraine Eden, Dr. George Salis, Dr. Debora Correa Talutto, Dr. Bruno Da Silva, and Hafiz Chouhury.

EU Tax Risk Management

Course description: The primary focus of the course will be on the E.U. general framework of compliance tax risk management. This includes: Parent Subsidiary Directive, Interest, Royalties, The European Union proposal on a carbon border tax and its compatibility with the World Trade Organization rules, Free Movement of Capital (investment funds) and others Fundamental Freedoms, Cross-Border Losses, ATAD, DAC 6, and Abuse of Law. The course is taught synchronously twice weekly using Zoom. Each week teams of 3-4 students, each with a chosen team role (e.g. develop PPT, develop presentation notes, make presentation), are assigned by the professor a stakeholder role to develop in the context of a case study.  The professors moderate the teams that discuss and moot with each other during a weekly live presentation session.  Teams generally use PPT and other presentation aids. The primary purpose of the course is to allow students to work through real world tax scenarios considering the planning risks and management of those risks. This course is taught by a team that includes Dr. Eva Andrés, Dr. Santiago Ibañez Marcilla, Dr. Xavier Fernández Pons, Dr. Andreu Olesti, and Dr. Bruno da Silva.

U.S. International Tax Risk Management

Course description: This course considers the basic principles and policies governing the US taxation of international transactions using a risk management case-study approach addressing data.  Consideration will be given to both inbound (foreign investment in the US) and outbound (US investment abroad) transactions. We will analyze the US tax rules and the interaction between US and foreign tax systems through the operation of the tax credit and tax treaties, and more. Topics include: Outbound / FDII, Inbound / BEAT, Form 1120 Documentation and Check the Box, Subpart F & GILTI, PTEP, Form 5471, M&A and finally, FTCs. The course is taught synchronously twice weekly using Zoom. Each week teams of 3-4 students, each with a chosen team role (e.g. develop PPT, develop presentation notes, make presentation), are assigned by the professor a stakeholder role to develop in the context of a case study.  The professors moderate the teams that discuss and moot with each other during a weekly live presentation session.  Teams generally use PPT and other presentation aids. The primary purpose of the course is to allow students to work through real world tax scenarios considering the planning risks and management of those risks. This course is co-taught by Melissa Muhammad and Neelu Mehrotra.

SUMMER COURSES

FATCA, CRS, AEoI and Tax Data Analytics

Course description: This course addresses the tax and compliance issues, then data collection, remediation, maintenance, and analytics issues of FATCA, CRS, and other types of AEoI.  The course is taught synchronously twice weekly using Zoom. Each week teams of 3-4 students, each with a chosen team role (e.g. develop PPT, develop presentation notes, make presentation), are assigned by the professor a stakeholder role to develop in the context of a case study.  The professors moderate the teams that discuss and moot with each other during a weekly live presentation session.  Teams generally use PPT and other presentation aids. The primary purpose of the course is to allow students to work through real world tax scenarios considering the planning risks and management of those risks. The course materials are excerpted from William Byrnes’ treatise on FATCA and CRS. Learnings aids include weekly Camtasia videos covering the weekly PPT and case studies, supported by recorded audio podcasts. The professor team for this course includes: Professor William Byrnes who has prepared the course based on his treatise materials, Denise Hintzke, Melissa Muhammad, and Haydon Perryman.

Int’l Tax Risk Management I (Data, Analytics & Technology)

Course description: Int’l Tax Risk Management I introduces the Data, Analytics & Technology addresses the interaction of international taxation risk management, data, technology, and analytics.  Tax Risk Management II addresses the following issues: global supply chain and value allocation/apportionment, DEMPE, customs, taxation of IP and technology, and tax technology.  This course completes the trilogy of tax risk management courses and overlays the tax diagnostic process learned in International Tax & Treaties I and II, bringing tax data analytics into the diagnostic, and how technology supports a risk-based approach to managing the tax burden of a multinational. The course is taught synchronously twice weekly using Zoom. Each week teams of 3-4 students, each with a chosen team role (e.g. develop PPT, develop presentation notes, make presentation), are assigned by the professor a stakeholder role to develop in the context of a case study.  The professors moderate the teams that discuss and moot with each other during a weekly live presentation session.  Teams generally use PPT and other presentation aids. The primary purpose of the course is to allow students to work through real world tax scenarios considering the planning risks and management of those risks. This course is co-taught by a team of professors including Dr. Knut Olson, Dr. Bruno Da Silva, David Deputy, Dr. Paula de Witte, Melissa Muhammad and Dr. Debora Correa Talutto.

Customs, Excise, VAT, GST, Sales and Risk Management

Course description: This course focuses on indirect taxation and its risk management.  The course will address importation of good, services, and intangibles from the perspective of a customs and a VAT regime. VAT sourcing rules, inputs and outputs will be described, and management of the tax risks emanating from overlapping regimes and complex supply chains.  The course is taught synchronously twice weekly using Zoom. Each week teams of 3-4 students, each with a chosen team role (e.g. develop PPT, develop presentation notes, make presentation), are assigned by the professor a stakeholder role to develop in the context of a case study.  The professors moderate the teams that discuss and moot with each other during a weekly live presentation session.  Teams generally use PPT and other presentation aids. The primary purpose of the course is to allow students to work through real world tax scenarios considering the planning risks and management of those risks.

International Tax Risk Management III (Planning)

Course description: This course represents the capstone of the curriculum of tax risk management. This course presents complex MNE scenarios that require multiple tax mitigation scenarios, and thus corresponding risk assessment for each scenario. Multiple tax issues will overlap, the foundation of those issues addressed in the previous courses. The course is taught synchronously twice weekly using Zoom. Each week teams of 3-4 students, each with a chosen team role (e.g. develop PPT, develop presentation notes, make presentation), are assigned by the professor a stakeholder role to develop in the context of a case study.  The professors moderate the teams that discuss and moot with each other during a weekly live presentation session.  Teams generally use PPT and other presentation aids. The primary purpose of the course is to allow students to work through real world tax scenarios considering the planning risks and management of those risks.

Posted in Courses | Tagged: | Leave a Comment »

Estate Planning Update 2020-21 (Lexis)

Posted by William Byrnes on October 22, 2020


Texas Estate Planning Publication Update (2020) [Lexis permalink is here]

Highlights

Current Developments: In this Release 27 of Texas Estate Planning, Prof. William Byrnes analyzes the latest developments and decisions in the federal and Texas courts, including the 2017 Tax Cuts and Jobs Act, the Bipartisan Budget Act of 2018, the SECURE Act of 2019, as well as legislation and consideration resulting from the 2020 COVID-19 pandemic that impact estate planners.

Release 27 of Texas Estate Planning includes 21 chapter revisions of the latest rulings, regulations, cases, and inflationary adjustments, as well as the amendments and additions to law by the biennial 2019 86th Texas legislative session, the Tax Cuts and Jobs Act, the Bipartisan Budget Act of 2018, the SECURE Act of 2019, and CARES Act of 2020. Highlights of this release include:

The SECURE Act. The SECURE Act that took effect in 2020 specifically targets estate planning opportunities for individual retirement accounts. The impact is analyzed in Chapter 1.

T.D. 9884; Treas. Reg. § 20.2010-1(c)The I.R.S. confirmed that gifts made during 2018 through 2025 will attach the transfer tax exemption amount applicable on the date of the gift, and thus allow credit for the higher pre-2026 amount post-2026 even though the transfer tax exemption will have reverted to the pre-2018 amount (adjusted for inflation). The impact is analyzed in Chapter 2.

State Imposition of Tax on Trust Income. Some states attempt to tax trust income based on the residency of the beneficiary. In North Carolina Department of Revenue v. The Kimberly Rice Kaestner 1992 Family Trust, the State of North Carolina imposed an income tax on accumulated income of an irrevocable trust created in New York because of the residency of three beneficiaries in North Carolina. The U.S. Supreme Court in a decision based on the specific facts of the case held that the tax violated the Due Process Clause. See Chapter 31.

Impact of Tax Cuts and Jobs Act Exclusion. The IRS for 2018 reported that it received 34,092 total estate tax returns and 245,584 gift tax returns. Of the estate tax returns for 2018, the IRS reported that it received 5,484 taxable returns (which most likely relate to deaths in 2017) reporting $106 billion of estate gross assets and a tentative estate tax liability of $34 billion. The Urban Institute Tax Policy Center estimates that for 2020 only 1,900 estate tax returns will have tax owing of a total $16 billion.

Tax Cuts and Jobs Act Exclusion. The Tax Cuts and Jobs Act of 2017 (“TCJA”) increases from 2018 until 2026 the transfer tax exemption to $10 million per individual indexed for inflation so that for 2020 the amount is $11.58 million or $23.16 million per married couple. The 2020 annual gift tax exclusion for gifts made to a non-citizen spouse is $157,000. In 2026, the transfer tax exemption reverts back to the 2017 level indexed for inflation (in 2018 it would have been $5.6 million). All chapters have been updated to reflect these changes as well as the inflation adjustments of Rev. Proc. 2019-44.

U.S. Estate Tax Regime On High Net Wealth Immigrants. Chapter 7 analyzes planning strategies to mitigate exposure of foreign assets to U.S. estate tax.

IRS Settlement Offer For Microcaptives. See Chapter 5.

Author and Contributors

Professor William Byrnes of Texas A&M University School of Law and author of ten Lexis legal treatises is the author of Texas Estate Planning. He has assembled a team of preeminent subject matter experts as chapter contributors, including: Tena Fox (Leach & Fox), Terry Leach (Leach & Fox), Patrick McCormick (Drucker Scaccetti), Benjamin Terner (The Einstein Group), Kim Donovan Uskovich (Kelly Hart), and James Weller (Greenway Capital Advisors).

Interested in the two volumes of Estate Planning book? See here

Posted in Pensions, Retirement Planning, Taxation, Uncategorized, Wealth Management | Tagged: | Leave a Comment »

 
%d bloggers like this: