On October 17 and 18, 2013, BCLBE and Crowell & Moring LLP co-sponsored a two-day seminar entitled “Managing Tax Audits and Appeals.” The seminar was held at Le Meridien hotel in San Francisco, and featured Crowell & Moring attorneys as well as three esteemed guest speakers.
Jozel Brunett, Chief Counsel for the California Franchise Tax Board, spoke about tax audit trends. David L. Veeder, Principal at Ryan LLC, presented on current developments in interest netting and deposits made to suspend the running of interest. David M. Ernick, Principal in the transfer pricing practice at PWC, explained how the recent OECD Base Erosion and Profit Shifting plan moves international audits in a new direction. Technical advice was given regarding recurring audit issues affecting large corporate taxpayers, correcting mistakes before and after filing returns, and best practices for the Compliance Assurances Process. Other topics included use of the Administrative Procedure Act to challenge IRS actions and pronouncements, dealing with state and local tax audits, and recent developments in partnership tax audits.
UC Berkeley Law Professor David Gamage and Crowell & Moring’s Seth T. Perretta presented a practical insight into the anticipated tax issues under the Patient Protection and Affordable Care Act (PPACA). According to Gamage and Perretta, the PPACA is the biggest revision of the Internal Revenue Code since 1986, and is likely to have perverse incentives that harm low- and moderate-income employees. The harm is caused by effective taxes on low- and moderate-income employees that reduce employment opportunities and distort social and economic behavior.
Examples of such distortions include deterring taxpayers from increasing household income, penalizing marriage and incentivizing divorce, encouraging employers to reduce salaries and increase the number of part-time positions, and tempting employers to implement costly strategies for dodging the PPACA’s mandates and penalties. This behavior could make the actual cost of the PPACA greatly exceed the Congressional Budget Office’s official projections. Professor Gamage’s Tax Law Review article Perverse Incentives Arising from the Tax Provisions of Healthcare Reform: Why Further Reforms are Needed to Prevent Avoidable Costs to Low- and Moderate-Income Workers explores these assertions in great detail.