IRS and Facebook square off in court; $9 billion at stake. The Wall Street Journal reports (paywall) on this week’s upcoming trial in US Tax Court. The IRS alleges that Facebook improperly booked profits through an Irish subsidiary to avoid paying US taxes. Facebook claims it can pay a lower rate on its international operations. At stake: a potential $9 billion tax bill and the IRS’s ability to go after other multinationals that use similar structures to avoid US tax.
Does tax reform have to be so hard? In Utah, it did, apparently. The legislature passed a major restructuring bill in December and, in the face of political backlash, repealed it a month later. TPC’s Richard Auxier reviews the rise and fall of the state’s tax reform effort. “Utah legislators thought taxing groceries was an easy way to pay for income tax cuts. But that was very different from [Governor] Herbert’s original goal of modernizing the state’s tax code. The new goals and tradeoffs were never fully explained to Utahans. And it backfired.”
In Alabama: Paying off students’ debt with tax refunds? A state lawmaker wants to add colleges and universities to a 2019 law that allows some state agencies to garnish income tax refunds to pay debts. Said bill sponsor Representative Danny Crawford: “It’s sort of a win/win for the student and the institution of higher education,” Crawford said. "It doesn’t discourage further education; it would encourage it... It sort of forces them into a better situation than they would be in.” A recent study finds that half of Alabama students graduated with debt, averaging $29,564 in 2018.
Next week: Conference on Taxes and the Future of Philanthropy. On Tuesday, February 18, TPC and the American Tax Policy Institute are convening experts to discuss how charitable giving has changed, how the Tax Cuts and Jobs Act has affected non-profits, how the IRS regulates philanthropies, and what policies would more efficiently and fairly encourage charitable giving. Chronicle of Philanthropy editor Stacy Palmer will deliver the keynote address. Register to attend here, the event will be webcast live here.
Taxation and Gender Equality Conference Is Upcoming. If you are interested in speaking, let the sponsors know by March 15. The Tax Policy Center, the American Tax Policy Institute, the American Bar Foundation, and other groups will cosponsor the conference September 14-15, 2020. Its goal is to spotlight gender issues in taxation, both in the US and abroad. Learn more about the research, round table, and policy program, and how to contribute to it, here.
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