Co-Authors: John S. MacArthur and Dale A. Spiegel, Jr.
As with global tax strategists, chess players routinely practice against hypothetical opponents to prepare themselves for real contests. Now is the time for the tax community (“taxpayers” below) to similarly prepare for US tax reform (“USTR”).
Taxpayers (White) must act now not knowing what taxing authorities (Black) will do next. Some rules (e.g. BEPS (the OECD Base Erosion and Profit Shifting counter-measures)) are known. Some Black moves (e.g. BEPS implementation) may be anticipated with some reliability. Other potential Black gambits (e.g. the course of US tax reform) are more speculative as of this writing. Chess puzzles often allow White to make a “forcing move” that compels Black’s doom, or perhaps at least allow White to protect itself from defeat by finding a stalemate. Taxpayers moving today do not have that option – all they can do is position themselves as far as possible to achieve favorable outcomes under the most likely variety of taxing authority moves.