Talking Tax

There are about five weeks left in tax filing season — the busiest time of year for the IRS and tax preparers.

IRS CEO Frank Bisignano told lawmakers earlier this month the tax season has so far been a success, with quick refund turnaround times and a shrinking backlog. That is despite a tumultuous 2025 for the agency, when the IRS lost about a quarter of its workforce to resignation offers, began implementing the GOP's new tax-and-spending law, and managed the fallout of the longest government shutdown in US history.

Tom O'Saben, director of tax content and government relations at the National Association of Tax Professionals, said tax preparers also aren't hearing a ton of complaints from clients either.

On this episode of Talking Tax, O'Saben joined Bloomberg Tax reporter Erin Slowey to discuss how filing season is going, the impact of changes from the 2025 law, and what to do if you don't have the money to pay taxes by the deadline.

"Don't put your head in the sand and say 'I know I am going to owe so I am just not going to file,'" O'Saben said. "That's a bad idea."

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Tax-filing season is well underway, and yet many states are still figuring out whether to conform to or decouple from provisions in last year's GOP-led tax overhaul, especially the deductions and other breaks for corporate taxpayers. The upshot is one of the more complicated filing periods in recent years.

Corporate taxpayers are watching which states reject federal tax policy changes, such as those related to immediate expensing for research and development or property investments. Just in the past week, lawmakers in Republican-controlled states like Florida and Democrat-led states like Oregon moved ahead in decoupling from some of those corporate tax provisions to preserve billions of dollars in state revenue.

Then there's the unique situation in Washington, DC, where a local law severing the city's tax code from more than a dozen provisions in the 2025 federal tax rewrite was met with Congress's formal disapproval. That set off a dispute between Capitol Hill and city leaders over whether the district's decoupling measure is in effect. (DC officials say it is.)

Most of all, corporate taxpayers are looking for clarity from the states as they plan their filings, Scott Roberti, a managing director focusing on state and local tax in EY's national tax practice, says on this week's episode of Talking Tax. Roberti tells Bloomberg Tax editor Benjamin Freed that so far, at least 17 states have issued some sort of guidance on the conformity issue. Roberti hopes the remainder finish up soon in time for the end of filing season and quarter-end accounting.

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The Supreme Court's decision to nix a wide swath of the Trump administration's tariffs comes with some big tax and transfer pricing questions for tax executives as companies battle to collect refunds from the government.

The court's 6-3 ruling sets up what would be a messy refund process, though the justices basically said nothing about it, leaving companies to take their claims to court.

If the refunds come in, businesses will have to figure out how to apportion funds across subsidiaries —sometimes across borders — without breaking transfer pricing rules, which govern the pricing of affiliate transactions and ultimately determine where taxes are owed.

The rules say related-party transfers must be priced as though they were done at arm’s length, in the open marketplace. Companies that don't do it right risk a tax agency audit.

On this episode of Talking Tax, Bloomberg Tax transfer pricing reporter Caleb Harshberger discusses the sticky tax and transfer pricing issues surrounding tariffs and the possibility of refunds.

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Tax enforcement has entered a new age.

The decades-old Justice Department Tax Division is now split between the broader civil and criminal divisions. Critics say the reorganization sends a signal that tax enforcement won't be a priority.

While the reorganization may mean tax attorneys are pulled into different DOJ priorities, it also could mean more investigations will include tax charges, said Karen Kelly, who was the top official at the DOJ Tax Division before she joined Kostelanetz as a partner in August.

DOJ tax attorneys are prioritizing immigration, fraud, and investigations into tax-exempt organizations that may have ties to "Antifa," Kelly said. The latter refers to an informal collection of people with left-leaning views that was a focus of a recent directive from Attorney General Pam Bondi.

On this episode of Talking Tax, Kelly sits down with Bloomberg Tax reporter Erin Schilling to discuss DOJ's tax enforcement priorities, changing strategies, and how taxpayers should prepare.

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Data centers have emerged as a major political target in state capitals as they proliferate across the country and elected officials hear complaints from their voters about the massive, energy-guzzling warehouses.

That has put tax breaks for data centers—which can amount to hundreds of millions of dollars annually in some states—squarely in the legislative cross hairs.

State lawmakers in more than a dozen states have introduced legislation to repeal sales tax exemptions or raise the bar to qualify for them. Support for rolling back incentives cuts across party lines, with Republicans and Democrats expressing opposition to subsidizing a rapidly growing industry.

But the industry's boosters also cross party lines, and two Republican governors have vetoed attempts in previous years to repeal the tax breaks.

On this episode of Talking Tax, Bloomberg Tax reporter Daniel Moore discusses how these tax exemptions work, why they've grown so much, and how they could change this year.

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