Confrontations with Minnesota or federal tax collectors are not something any business or individual looks for. Avoiding practices that could lead to needing to resolve tax disputes is something most experts agree deserves prioritizing. Achieving that aim typically requires solid tax planning, or as singer/songwriter, Carly Simon crooned about – “Anticipation.”
Anticipation is about looking forward. Where taxes are concerned, however, simply looking ahead isn’t enough. Action is required. The current environment around taxes is rather foggy right now, making it hard to know what action to take. Leaders in Washington insist that reform is high on their agenda. At the same time, it’s unclear what shape that reform might take or when it will come. Still, some experts say there are things corporate taxpayers can explore to hedge against whatever happens.
Tax anticipation opportunities
In the view of one such expert, the key is to develop an understanding of what could become law. By doing that and then structuring financial reserves so that funds can be distributed as might be needed, businesses can position themselves to best advantage.
One example of an issue that might be planned for are cuts in corporate taxes. Drastic cuts are proposed, but the White House’s one-page outline and rough House plans lack clarity on how they will be achieved and how they’ll be paid for.
Still, one vendor of corporate taxation software says some ideas seem to enjoy more favor than others do, and so might deserve some anticipatory action. She points specifically to:
- 199 depreciation expensing
- Border adjustment taxes on imported goods
- Corporate restructuring to reduce partnerships
- Repatriation of corporate income parked overseas
Of course, whatever happens at the federal level will likely have ripple effects at the state level. Whatever the outcome, serious tax problems can arise. When they do, finding resolutions that protect your rights and interests is easier with the help of an experienced attorney.