Tuesday, December 11, 2018

The 100 greatest innovations of 2018: Taxing the Sharing Economy

Confucius said: “When the wise person points at the moon, the fool looks at the finger.”


Life is like accounting, everything must be balanced ...     


Groupled by Thomas Piketty presents plan for more balanced 'a fairer Europe' 

Tax agents who are also SMSF trustees have been put on notice by the Tax Practitioners Board, as part of a major compliance campaign officially launched this morning.

The TPB’s new debt and lodgement project will focus on tax agents with personal tax debts and no payment plans, and outstanding lodgements including of their income tax and SMSF annual returns.
About  2700 practitioners who are trustees of their SMSFs currently have outstanding SMSF annual returns. Persistent lodgment failure could compromise trustee duties, which trustees agree to abide by on their initial fund declaration form.

“A person’s fitness and propriety to act as a tax agent… can have a knock-on impact on their fitness to act as a trustee,” said secretary and chief executive of the TPB, Michael O’Neill, who was appointed in August
New TPB blitz circles 2,700 SMSF trustees   


Tax Practitioners Board chair Ian Taylor says accountants are required to comply with professional obligations.  Daniel Kalisz Photographer

Accountants put on notice over delays in filing their own tax return

Michael O’Neill
Michael G O’Neill CEO and Secretary TPB

 More than 5000 tax agents haven’t paid their own taxes, owe ATO almost $115m - The Australian

Mr O’Neill, who was appointed to the TPB during its restructure earlier this year, said the data often indicates a correlation between a tax agent’s personal non-compliance and that of their clients. 

Further, the timing of the campaign ties in with the ATO’s compliance work in targeting “agents of concern”.

Over 5k tax agents in firing line of new TPB blitz

Advisers failing to submit SMSF returns Financial Standard
Popular Science: “Our 31st annual Best of What’s New list is the culmination of a year spent obsessing over, arguing about, and experiencing the newest technologies and discoveries across 10 distinct disciplines [aerospace, gadgets, auto, home, security, entertainment, recreation, health, software, engineering,] Yes, there are eye-poppingly-bright TVs. Sure, there are video games that will suck us in for hours. And, naturally, there’s a car that, on the right road, will just drive itself. Here, we dig deep, because some innovations don’t make a lot of noise, yet have the potential to make a real and lasting impact. A drug that blocks mind-numbing migraines or a fake egg that scrambles like the real thing are no less impressive than the fastest spacecraft ever to break free of earth’s atmosphere. Why? Because the effects of each of the feats will reverberate for years down the road…


Half-priced car registration for NSW drivers who spend $15 per week on tolls


The move is designed to outmanoeuvre Labor on tolls policy ahead of the state election.

 Nowhere to hide as ATO empowered to chase super dodger

Home loans jump as RBA sticks to rate hike call


A cut in interest rates could not be ruled out, a senior central banker said on Monday, but emphasised that the next move was still likely to be an increase given expectations for a gradual acceleration in inflation.


VentureBeat: “Real-time captions and subtitles are heading to PowerPoint and Skype, the company today revealed in a pair of announcements timed to coincide with the United Nations International Day of Persons with Disabilities (UN IDPD). “The word ‘empower’ means a lot to every Microsoft employee, it’s a key word in our mission ‘to empower every person on the planet to achieve more’, including the [more than a billion people] with disabilities,” Jenny Lay-Flurrie, chief accessibility officer at Microsoft, wrote in a blog post. “So, this year has special meaning to us and want to share some new features, and programs that we hope empower a more inclusive, diverse, and productive world…”





Investors are at an increasing risk from the lack of information disclosed by companies about their tax practices, according to a new analysis published today by the Financial Accountability and Corporate Transparency (FACT) Coalition.
The FACT Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.
John Gallemore (Chicago) & Martin Jacob (WHU), Corporate Tax Enforcement Externalities and the Banking Sector:



Governments around the world are considering increasing corporate tax enforcement efforts to mitigate base erosion and improve revenue. Whether such enforcement efforts have externalities is not well known. In this study, we examine whether corporate tax enforcement can affect banks via their corporate lending. Specifically, we hypothesize that tax enforcement efforts aimed at small and midsized enterprises (SME) can improve their information environments, which in turn could lead to better lending decisions and greater commercial loan growth. Exploiting the regional structure employed by the IRS between 1992 and 1999, we find that the corporate tax audit probability for SMEs is associated with greater loan portfolio quality and commercial lending growth for regionally focused banks. We find similar evidence when exploiting the IRS reorganization from a regional to a federal-based system in 2000 as an exogenous change to tax enforcement at the district level.






 Michelle Hanlon (MIT), Jeffrey L. Hoopes (North Carolina) & Joel Slemrod (Michigan), Tax Reform Made Me Do It!:

This paper examines corporations’ actions, and statements about actions, following the tax law change known as the Tax Cuts and Jobs Act (TCJA). Specifically, we examine four different outcomes — bonuses (or other actions that benefit workers), announcements of new investments, share repurchases, and dividend announcements. We find that 4% of public firms in our sample announced in Q1 2018 they would pay some portion of their tax savings toward workers.




Rice University Baker Institute for Public Policy, How Should We Tax the Sharing Economy?:
Walking out of the airport lobby and getting into an Uber car booked through an app on a smartphone, hiring a handyman through the TaskRabbit website to repair a leaking kitchen sink, searching vacation rental accommodations on Airbnb—none of these functions was possible a decade ago. Yet today, with the development and growth of the sharing economy—which includes a number of mostly online enterprises that match service providers with clients—these are common transactions. This report reviews key federal tax considerations for companies and workers as the sharing economy becomes more prevalent.

 Michael Hatfield (University of Washington), Privacy in Taxation, 44 Fla. St. U. L. Rev. 579 (2017):


The IRS has extraordinary legal authority to collect personal information — and it does collect it, on about 290,000,000 individuals each year. Much of this information is not financial: the agency collects notes from therapists’ sessions and surgeons’ files, love letters and reading lists, and information on taxpayers’ sleeping arrangements and the sexual activities of their family members.

Comparing financial secrecy in Israel to other OECD countries

Read Article




Tax justice pushes forward at OECD’s Global Forum



ATO caves in on bank tax secrets






Haaretz Article On New DOJ Entity Prosecution Policies and Isreali Banks

A couple of days ago I wrote on new DOJ entity prosecution policies announced by DAG Rod Rosenstein.  New DOJ Policies for Prosecution of Entities and the Individuals Within Them Most Responsible (Federal Tax Crimes Blog 11/30/18), here.  Following through on that item with respect to offshore banks and their principal individual actors (officers, agents and other individual partners in crime), Haaretz has this article:  Michael Rochvarger, Bad News for Israeli Bankers: The U.S. Has a New Policy on Corporate Crime (Haaretz 12/5/18), here.  In the context of foreign banks and their individual actors that means that, although corporations and other juridical entities, cannot be jailed, individuals can, particularly those who are principal actors in the scheme.  Of course, with respect to principal individual actors for foreign entities (such as Swiss and Isreali banks), effectively prosecuting the principal individual actors can be a problem, but one that is sometimes not surmountable.  For example, Raoul Weil of UBS was extradited to the U.S. and tried, albeit with acquittal.  See On Foreign Enabler Indictments, Sealed Indictments and INTERPOL Red Alerts (Federal Tax Crimes Blog 6/29/16), here.  And, as I noted yesterday, principal individual actors for entities involved with the Panama Papers fiasco were indicted and extradited to the U.S.  Enablers and Taxpayer Related to Panama Papers Disclosures Indicted (Federal Tax Crimes Blog 11/5/18), here.



 Dear Hollywood, here are 9 other Pulitzer-winning stories worth considering. By

Kristen Hare

 Most people think being smart is about having more facts. Trivia-shows like Jeopardy! epitomize this view of knowledge. The smartest people are the people with the most names, dates and places stored away inside their mind. Twenty-Five Useful Thinking Tools

Debbie Hastings is retiring after 33 years of service  Reinventing the way we manage tax disputes | Australian Taxation Office

 Jeremy Geale, ATO

GST refund process operating efficiently | Australian Taxation Office
A night at Q & A Bizarre Cormabnn skit and sociopath accusations


Comedy and Cormann 
In just a decade, a day in the life of a leading lawyer will be transformed by legal technology
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