Weighing Anticipated Tax Regulatory Impacts on Corporate Business Strategy

BDO in the Boardroom

Join BDO's Center for Corporate Governance Amy Rojik as she and her colleague Todd Simmens, National Managing Partner of Tax Risk Management, to discuss how the board’s oversight of corporate strategy and risk management would be remiss without an understanding and consideration of evolving global and domestic tax regulations anticipated to significantly impact decision-making at the board level.

Key Takeaways:

• Companies are advised to continue to remain abreast of legislative activity to inform on-going scenario planning, inclusive of the tax department and appropriate advisors. Tax implications need to be considered early on in contemplation of transactions as well as operational decisions and human resource matters.

• Expectations for a robust tax bill in 2022 under the Biden Administration’s ‘Build Back Better’ plans may have lost sight of the power that individual members of the House and Senate can have.

• Mid-term U.S. political elections may put some of the more contentious progressive tax increases being considered on the back burner.

• With regard to Biden’s budget (aka the Green Book): As a reminder, certain of the Jobs Act provisions expire in 2025/2026; other provisions are permanent (e.g. Corporate Tax Rate increase from 21% to 28%, individual rates and capital gains as well as international regulations and policy changes such as the replacement of BEATS and onshoring of taxes) and would require legislation to enact tax changes.

• Internationally, companies are advised to be in tune to the OECD’s agenda

• The IRS continues to experience operational challenges including staffing issues, processing, refund delays and extended communication response times. Filers are advised to communicate with the IRS using certified mail or other form to demonstrate proof on communications.

• It is the responsibility of board of directors to be very aware of what tax professionals have to say about what is going on at the business level.

Resources:

• 2022 BDO Tax Outlook Survey