The Need for Income Sourcing Changes

Abstract

The UF Tax Incubator, a group of primarily tax advisors of major law and accounting firms and some in-house tax professionals, all of whom have to some extent an agenda to help their multinational clients and employers, have issued a series of recommendations on possible tax law changes. In their July 2024 Tax Notes Federal paper, Considerations for Reforming the U.S. Source of Income Rules, they made a number of suggestions that would encourage and help secure their profit-shifting structures.

In this paper, I indicate this group's seriously problematic recommendations and provide either specific reasons why they are problematic and/or references to prior papers and other documents that recommend specifically what should be done to improve the U.S. source rules so that profit-shifting structures are curtailed and profits get taxed in alignment with real economic activity.

Keywords: source, source of income, International Taxation, Profit Shifting, BEPS