Global Tax 50 2016: Elise Bean

Elise Bean was also in the Global Tax 50 2015

Elise Bean has been helping to tackle complex tax issues this year through a mix of oversight training and tax expertise. As the co-director of training and conferences at the Levin Centre at Wayne Law School in Detroit, she has been organising workshops to help legislatures dig into the complexities of abusive tax practices. Outside of her work at the Centre, she has dedicated a significant portion of her time to becoming familiar with the information released in connection with the Panama Papers and serving as a resource for public and private sector groups examining related issues. She has also written articles to raise public awareness around the revelations and the repercussions.

On October 19-20, at the invitation of the European Parliament's committee of inquiry into money laundering, tax avoidance and tax evasion (PANA), the Levin Centre conducted two workshops in Brussels on how to conduct complex tax oversight. The events, which were attended by more than 55 members of the European Parliament and staffers from the PANA committee focused on how to investigate offshore tax issues.

"For me, helping to publicise, explain, and use the Panama Papers to advocate for increased corporate ownership transparency, stronger tax reforms, and new safeguards on lawyers forming offshore shell entities was a 2016 highlight," Bean told International Tax Review.

During the course of 2016, Bean also worked with a wider coalition on a series of letters advocating greater multinational corporate tax transparency in US law as the government plans its tax reform policy. Bean said the letters, which highlighted a variety of technical issues, included:

• Filing country-by-country reports with the US Internal Revenue Service (IRS) in line with Action 13 of the OECD BEPS Project;

• Requiring publicly traded US resource extraction corporations to file reports with the US Securities and Exchange Commission (SEC) to disclose payments and taxes paid to governments as required by Section 1504 of the Dodd-Frank Wall Street Reform and Consumer Protection Act; and

• Encouraging the SEC and Financial Accounting Standards Board (FASB) to create new requirements for large US corporations to disclose tax-related information, including country-by-country BEPS-compatible data, in their financial reports.

The efforts of Bean and the coalition have been paying off, with the US finalising the rules around country-by-country reporting to the IRS and Section 1504 corporate reporting to the SEC. "Together, the letters helped build the case for increased corporate tax transparency to enable policymakers, tax authorities, investors, academics and the tax-paying public to gain a greater understanding of existing multinational corporate tax practices and to combat ongoing offshore tax abuses," Bean said.

Throughout the year, she has also spoken at several key events, including a May 23-24 conference sponsored by the World Bank and Tax COOP 2016, entitled "Winning the Tax Wars: Protecting Developing Countries from Global Tax Base Erosion", where she spoke about the tax avoidance strategies used by US multinationals.

Bean also spoke about how aggressive corporate tax dodging was producing increased tax investigations, enforcement actions, and multi-billion-dollar penalties at a May 25 conference sponsored by the US SIF: The Forum for Sustainable and Responsible Investment, entitled "Investing for the Next Generation".

"At both conferences, I explained in part how Apple had set up three Irish subsidiaries that were tax resident nowhere and, over a four-year period, directed $74 billion in sales profits to those Irish subsidiaries while paying Ireland a tax rate of less than 1%," said Bean. "The audiences reacted strongly to Apple's offshore tax actions. Investors and taxpayers may have had similar reactions when, in August, the European Commission ruled that Ireland had negotiated an inappropriate tax deal with Apple that constituted 'illegal state aid' to the company and disadvantaged Apple's competitors."

In September 2016, Bean also presented issues related to "Congressional Oversight" at a Congressional Operations Seminar for Federal Agency Personnel, sponsored by the Government Affairs Institute at Georgetown University.

Bean has also continued her association with the Independent Commission for Reform of International Corporate Taxation (ICRICT) as head rapporteur over the past year.

The ICRICT describes itself as a group of leaders from around the world that believes that there is an urgent need and an unprecedented opportunity to bring about significant reform of the international corporate tax system. The ICRICT was initiated by a coalition of civil society organisations including ActionAid, Christian Aid, the Global Alliance for Tax Justice, Oxfam and the Tax Justice Network. Since its inception, it has had a significant impact on global corporate tax issues.

Throughout 2016, it has played a prominent role in unravelling the complex web of the Panama Papers scandal. ICRICT member Joseph Stiglitz was part of Panama's inquiry into the scandal and how to improve the Central American nation's tax credibility, but after the Panamanian government refused to grant the inquiry independence and transparency, he resigned from his post and has since spoken in front of the European Parliament's PANA committee.

Before ICRICT, Bean was the staff director and chief counsel of the US Senate Permanent Subcommittee on Investigations (PSI), overseeing a number of tax avoidance investigations, including into the tax practices of Apple, Caterpillar and Microsoft. During her time on the investigations subcommittee, Bean was twice named one of Washington's 100 most powerful women – in 2011 and 2013 – by the Washingtonian magazine, as well as being recognised by the National Law Journal as one of Washington's most influential female lawyers.

Bean's background working with Levin on issues of corporate profit shifting and offshore tax abuse has proved invaluable in the formulation and presentation of ICRICT's ideas, and will help to ensure the group gains even more traction in the year ahead.

In 2017, Bean said she is most concerned about plans to revamp rules for taxing US corporate income under the new President, Donald Trump.

"The new administration is promising major changes in corporate tax rates and the rules for taxing non-US corporate income. President-elect Donald Trump promised to 'drain the swamp' in Washington, but Republicans in Congress expect him to reward profitable corporations that have stashed billions of dollars offshore by dramatically cutting their taxes. Among the many pending questions is whether the new administration will support or repeal measures related to Section 1504 and country-by-country reporting, which together require multinational corporations to disclose basic information about where they do business, declare profits, and pay tax. The same question applies to new US regulations to stop corporate inversions and curb earnings stripping."

In addition, she is concerned about whether the new administration will continue work on several high-profile court cases that could change the tax landscape in the US. Enforcement cases underway include IRS audits of Microsoft, Caterpillar and Renaissance Technology, all of which were investigated by the PSI during Bean's tenure there.

"2017 promises a number of important US tax developments due to court challenges to new US regulations involving Section 1504 disclosures, country-by-country reports, and restrictions on corporate inversions and earnings stripping. The big question is how the new President and his tax leadership team will handle those court cases as well as ongoing IRS audits of powerful corporations like Microsoft, Caterpillar, and Renaissance Technology."

"Next year is also likely to see new legal developments in the European Commission's $14.5 billion assessment against Apple, as well as new Commission decisions invalidating other sweetheart tax deals granted by some EU member states. Together, the Commission rulings could make it much harder for European tax havens to facilitate multinational corporate tax dodging, a development I would like to witness in 2017," Bean concluded.