A&M recently spoke with the Head of the UK Tax Authority Transfer Pricing Team regarding key issues impacting business

The first step has finally been taken to address an area of tax law that has materially impacted both corporate and individual taxpayers alike for some time. But don't get too excited...it's not what you may think it is. Nevertheless, the passage of the Mobile Workforce State Income Tax Simplification Act of 2012 by the U.S. House of Representatives in May is an attempt by Congress to substantially simplify state income tax law by imposing a uniform standard for nonresident taxation and employer withholding.

It is widely held that the reality of a transaction should ultimately govern when interpreting the meaning of a contractual arrangement. The "substance over form" doctrine, which originated under the Supreme Court's ruling in Gregory v. Helvering, is frequently invoked by tax authorities to frame the interpretation of a contractual arrangement whose meaning is called into question.

"Give someone an inch and they'll take a mile." Although this phrase is usually not associated with state taxation, perhaps it should be. More specifically, in the absence of guidance from the United States Supreme Court, states have sometimes taken the inch they have been given in determining what activities are sufficient to constitute nexus for income tax purposes and stretched this inch into a mile.

In recent years an increasing number of post-merger and acquisition disputes have been triggered by the financial performance of target companies performing below buyers' expectations. In these situations, representations and warranties may not justify a cause of action or may include caps prohibiting a claim that would cover the economic loss.

For years, the collective wisdom has been that flow-through entities such as partnerships and S corporations are rarely audited. We still regularly hear that comment in the marketplace. However, this is no longer the case. In fact, several years ago the IRS identified high-wealth individuals as an area of audit emphasis, and the partnerships in which many of these individuals invest have also come under additional scrutiny.

In the popular series "Where in the World Is Carmen Sandiego?" Carmen is an international thief who sneaks around the world dodging the crime-fighting moves of her followers while leaving behind fundamental lessons of math, geography and other subjects in her wake.

Borrowing trends and the overall economic environment have undergone notable changes, prompting the UK tax authority (HMRC) to set out guidance for Tax Inspectors when selecting cases for audit.