Law360 Speaks with Mark Allison on Tax Bill's Effect on Corporate Tax Planning
As the tax bill heads to President Trump’s desk, the legislation may require companies to pursue corporate tax legal advice.
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The manner in which the bill made its way through Congress compounds the need for companies to seek legal advice. Because lawmakers rushed to pass the legislation with few hearings, there is little legislative intent on the record, leaving attorneys to do the heavy lifting of sussing out the inner workings of the bill, according to Mark D. Allison, a member of Caplin & Drysdale, Chtd. It may take the U.S. Treasury Department and the Internal Revenue Service several years to catch up with guidance, Allison said.
“We will work with a clean slate for some time,” he said. “That is what we get paid to do: Figure out and navigate where there isn’t clean guidance.”
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The changes to the international tax system will produce a particularly ripe area for attorneys to work on, Allison said. The bill eliminates disincentives to repatriate cash and other assets, creating the need for more planning, while there will be new activity in the cross-border area, he said.
“Definitely the entire international regime will go through a metamorphosis,” Allison said.
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With the bill’s dramatic changes to the tax treatment of partnerships, many clients likely will want to shift their business structures to take advantage of the benefits, Allison said.
“I expect to see that shake up,” he said.
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Attorneys, however, should not expect an immediate uptick in new jobs to handle all the new work. Law firms likely will stick to their conservative hiring practices and wait to see if they need to add staff members before acting, Allison said.
“We will probably wait to see what clients need before doing significant hiring,” he said.
Instead, Allison's firm will focus on internal training and continuing legal education, he said. Accounting firms may be a faster barometer for hiring because they are more aggressive and specialize much more than law firms, he said.
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Excerpt taken from the article “Tax Bill Like ‘Manna From Heaven’ For Work-Hungry Firms” by David Hansen for Law360.