Tax Conference Program
This agenda is subject to change.
Thursday, November 5, 2020
10:00 a.m. - 1:00 p.m. Central Time
10:00 - 10:15 a.m. CT: Welcome & Introductory Remarks
10:15 - 11:30 a.m. CT: Session 1. The Foreign Tax Credit Implications of Reallocating the Income of “Digital” Taxpayers
Over the past five years, momentum has built for a fundamental restructuring of the international tax rules to meet the challenges posed by a “digitalized” economy. The OECD is seeking to forge a consensus around a new set of tax rules containing significant departures from existing tax norms. Although the likelihood that the OECD will be able to broker a broad-based political agreement by its G20-imposed deadline of year-end 2020 appears doubtful, particularly in light of U.S. ambivalence about the project, the momentum for major changes to cross-border taxation will continue to build.
In this environment, it seems inevitable that countries, or groups of countries, will soon be adopting novel tax regimes aimed at increasing local taxation of U.S. based companies (and not only digital companies). Some countries, or groups of countries, may take the OECD’s work as a starting point for their own unilateral or multilateral changes, while others may proceed with plans for digital services taxes and other arguably extraterritorial tax regimes. The contemplated new regimes may be framed as taxes but enacted with a purpose of protecting local market participants and may be indistinguishable from tariffs.
The question is how the U.S. Congress and the Administration will respond to new taxes developed with an implicit or explicit goal of collecting more revenue from U.S.-headquartered multinationals. Given the protectionist aspects of some of the foreign tax proposals, the Administration is actively considering the possibility of retaliatory tariffs. Additionally, Treasury may question the availability of the U.S. foreign tax credit, which has taken on increased importance with the current taxation of most worldwide earnings of U.S. multinationals under the Global Intangible Low-Taxed Income (GILTI) regime, for these new taxes.
The panel will examine the current state of play in this rapidly involving context, taking into consideration already-enacted “digital” taxes as well as the OECD’s work on a “reformed” international tax regime, and consider what the international tax landscape may (or should) look like over the next 1 to 3 years. Particular consideration will be given to the impact of possible proposals on U.S. companies and potential responses by the U.S. government, taking into account existing income tax treaties, trade agreements, and foreign tax credit policy. With regard to foreign tax credits in particular, the panel will consider whether and how far the U.S. concept of a creditable foreign tax may need to stretch in order for the new taxes can be claimed as a foreign tax credit.
- Moderator: Julie A. Roin, University of Chicago Law School
- Lead Presenter: Brian H. Jenn, McDermott Will & Emery LLP
- Panelists: Mary C. Bennett, Baker & McKenzie LLP, Steve Edge, Slaughter and May, Timothy M. McDonald, The Proctor & Gamble Company
11:30 - 11:45 a.m. CT: Break
11:45 a.m. - 1:00 p.m. CT: Session 2. A Cause for Distress? The Ways the Federal Income Tax Pushes Taxpayers into Bankruptcy
Various provisions of the Federal income tax law – some intentional, others more subtle - result in favorable treatment for taxpayers that resolve their financial distress in bankruptcy instead of out-of-court transactions. This panel will discuss some of the ways that taxpayers may, appropriately or not, be “pushed” to file for bankruptcy, policy considerations regarding the current treatment of financially distressed taxpayers more generally, and potential areas for improvement.
- Moderator: Anthony Sexton, Kirkland & Ellis LLP
- Lead Presenter: Mark R. Hoffenberg, KPMG LLP
- Panelists: Douglas G. Baird, University of Chicago Law School, Linda Z. Swartz, Cadwalader, Wickersham & Taft LLP