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U.K. Election and Taxes • C Corp Conversion • Gig Work Defense



This is a weekend roundup of Bloomberg Tax Insights, which are written by practitioners featuring expert analysis on current issues in tax practice and policy. The articles featured here represent just a handful of the many Insights published each week. For a full archive of articles, browse by jurisdiction at Daily Tax Report, Daily Tax Report: State, and Daily Tax Report: International.

This week we look at what the U.K. election means for taxes, private equity fund entity choice, California’s new worker classification law, multilateral v. unilateral digital taxation, and good deeds with opportunity funds. We’ll hear from:

Paul Falvey of BDO U.K. on what the election means for U.K. taxes

Jeremy Swan, Jonathan R. Collett, and Robert Richardt of CohnReznick LLP on private equity C Corp conversion

Christopher Karachale and Nancy Dollar of Hanson Bridgett LLP on a potential defense to the California classification law

Duncan Edwards of BritishAmerican Business on unilateral v. multilateral digital services tax solutions

Christopher Hanewald of Wyatt, Tarrant & Combs LLP on finding the good in opportunity zones

Boris Johnson, U.K. prime minister, delivers a speech outside No. 10 Downing St. in London on Friday, Dec. 13, following the general election.

Photographer: Chris Ratcliffe/Bloomberg

The Conservative Party has won the 2019 general election. Paul Falvey of BDO U.K. discusses what this means for U.K. taxes. How bold will the new government be? Read: What the Election Result Means for U.K. Taxes

Since enactment of the 2017 tax law, some large private equity funds have converted from publicly traded partnerships to C corporations. Jeremy Swan, Jonathan R. Collett, and Robert Richardt of CohnReznick LLP look at whether conversion makes sense for middle-market funds. Read: What Middle-Market Private Equity Funds Should Know About C-Corp Conversions

California’s new worker classification law—intended to restrict the classification of workers as independent contractors—goes into effect on Jan. 1. Christopher Karachale and Nancy Dollar of Hanson Bridgett LLP analyze a potential defense raised by technology platform companies, which argue they are third-party payment intermediaries and not employers. Read: IRS Form 1099-K in the Technology Platform Defense to California AB 5

Several countries have enacted or proposed a digital services tax on such firms as Google and Apple. Duncan Edwards of BritishAmerican Business says these unilateral measures are the wrong solution to a genuine problem and stresses the need to pursue a multilateral agreement. Read: Taxing the 21st Century Economy—A Multilateral Approach?

The opportunity zone program has fans and critics. Many of those fans are among the affluent and their advisers. While the program has received some deserved criticism as a way to make the wealthy wealthier, it is also a significant opportunity for local nonprofits, economic development organizations, and local governments to shape an incomplete program into something transformational, writes Christopher Hanewald of Wyatt, Tarrant & Combs LLP. Read: Impact Investing and Finding the Good in Opportunity Zones

From the Archive

Bloomberg Tax contributors have stayed on top of the twisted tale of Brexit from the beginning.

With the U.K.’s departure from the EU having been postponed for a third time, until Jan. 31, 2020, James Ross, of McDermott Will & Emery, considered whether the Brexit fog is now finally about to lift.

Clive Jie-A-Joen and Monique van Herksen listed some transfer pricing aspects companies may want to consider while they are making (last-minute) Brexit-triggered decisions.

Beyond Tax

What’s happening outside the world of tax?

Litigators can learn about good legal writing from a recent New York Times review giving zero stars to Brooklyn’s Peter Luger Steak House. Boies Schiller Flexner LLP’s Evan North says litigators who contend with audiences ranging from neutral to hostile should take the same approach as the review and catch and release all but the most compelling legal arguments. Read: What a Peter Luger Steak House Review Can Teach Lawyers About Effective Legal Writing

The global growth of cryptocurrency paves the way for an expanding legal practice around regulatory and investigations work. FTI Consulting’s Steve McNew has seen the growth first hand and examines the most common types of legal cases, illicit activities, and other issues emerging around cryptocurrency. Read: Crypto Advancements Stir Legal Work in Investigations, Asset Tracing

Decades after their debut, MS Word and email are still used by law firms for contract management. Olga V. Mack, CEO of ParleyPro, explores the opportunities contract management software (CMS) can bring to law firms and legal departments willing to understand its core technologies enabling real-time access, artificial intelligence, and blockchain capabilities. Read: Beyond MS Word—Three Technologies Transforming Contract Management

Law firms need to protect against cyber attacks. OpenText legal and data experts offer steps to take and warn a key concern is that a breach may violate the professional and ethical obligations lawyers have to protect privileged client information from unwanted access and disclosure. Read: Four Steps Law Firms Should Take to Reduce Cybersecurity Risks

Jane Fogarty, vice president and global counsel at SYNNEX Corp., explains why it’s important to listen to and address whistleblower complaints, especially for global companies. She walks through some decisions SYNNEX made when upgrading its internal review program. Read: How a Global Company Embraces Internal Whistleblowers

The director of the U.K.’s Serious Fraud Office, Lisa Osofsky, has made clear her goal of increasing U.S.-U.K. cooperation in investigating and prosecuting complex international financial crimes. Timothy J. Coley, counsel with Buckley LLP, says increased cooperation between the SFO and U.S. law enforcement agencies like the Justice Department and the SEC’s Division of Enforcement would be mutually beneficial. Read: Stronger Transatlantic Cooperation Could Be Boon for DOJ, Ailing U.K. Serious Fraud Office

Public comments on proposed CFIUS regulations are in, and final regulations must take effect by Feb. 13, 2020. Kirkland & Ellis attorneys look at the issues raised by industry trade groups, foreign government agencies, and law firms about their potential breadth, perceived ambiguities, and gaps, and highlight areas where more clarification and guidance is needed. Read: Proposed CFIUS Regs Draw Questions on Foreign Investment Definitions, Enforcement

Exclusive Content for Bloomberg Tax Subscribers

(*Note: Your Bloomberg Tax login will be required to read the following content.)

Kim Blanchard of Weil, Gotshal & Manges looks at whether treating a domestic partnership as an aggregate causes small U.S. partners to become subject to the passive foreign investment company (PFIC) regime.

The weekend roundup of Bloomberg Tax Insights will take a break for the holidays and return Jan. 4.

Bloomberg Tax Insights articles are written by experienced practitioners, academics, and policy experts discussing developments and current issues in taxation. To contribute please contact Erin McManus at

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Gig Workers Continue To Experience Problems Getting Unemployment Benefits From Colorado Department Of Labor – CBS Denver




LAKEWOOD, Colo. (CBS4)– It’s been months and Simone F.M. Spinner is still unable to get her unemployment. We started talking with her in March, when she was applying for help as a gig worker.

(credit: CBS)

“I work in hospitality and wine and academia, tourism. All of those industries have just been decimated.”

At first when she applied for unemployment, the state was trying to get a system up and running to provide assistance to gig workers like Simone, who gets the majority of her income from freelance work.

“I understand back when I talked to you in March that these difficulties were happening and gig employers, gig employees were never able to apply before but they’ve had six months to figure this out.”

And still, she’s having troubles.

The State of Colorado said it had fixed the tool many people were stymied by as they tried to apply for help recently.

(credit: CBS)

“The Colorado Department of Labor and Employment (CDLE) re-launched its online and telephone certification functions for the Lost Wages Assistance (LWA) unemployment benefits program after technical difficulties,” wrote chief communications officer Cher Roybal Haavind in a statement.

The online and phone system had been down since Monday, overwhelmed with requests. But the problems with that system are only part of the frustrations for many people like Simone, who have been unable to get benefits.

“I still haven’t been able to file correctly to get the gig work section of the money of the employments benefits because of the one W2 that I have,” she said.

She has not gotten benefits since July when her initial unemployment help exhausted. Less than a quarter of her income came from part-time teaching work. That meant receiving a W2. Most of her income was freelancing for which the government indicated all she had to do was show proof of income from recent tax returns. But her attempts to get onto the system as a worker with both types of income have been frustrated time after time. So she’s called, a lot.

“It’s been a complete nightmare,” she said.

(credit: CBS)

On July 25, she entered into a cue for a callback about her problems. Her appointment time: Oct. 26 at 10 a.m.

“And it’s a 10-minute call.”

The unemployment system has had troubles dealing with unique situations. Simone owns a home, but is concerned as she runs out of money.

“I am worried about losing my house. I’m worried about not being able to find a job.”

She has applied for over 150 jobs with no success. Those include many out of her industry.

“I’ve applied for everything from working at Starbucks to working as a writer for nonprofits and everything in between, Costco. Just about anything I can find,” she told us.

(credit: CBS)

But her advanced degree, a doctorate, may be a problem with potential employers thinking she won’t stay. Now, she waits for the system to work for her as a pandemic cripples her industry.

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California unemployment claims remain high at 230,000; claims from gig workers fall 53% in coronavirus era




New official figures on new claims for unemployment benefits in California dipped slightly last week but remained at the high pandemic level. Meanwhile, applications for special help for the self-employed and gig workers plummeted 53% last week, even ahead of new rules to stem a surge in suspected fraud.

New applications for conventional unemployment insurance were 230,225 last week, down 13,000 from 243,404 the week before, the Labor Department reported Thursday.

New claims have been 200,000–300,000 since late May, following a big spike just after the state’s shelter orders for the coronavirus went into place in mid-March. Weekly claims were 30,000–50,000 before the virus.

Californians last week made up 29% of the 790,000 new claims nationwide, up from 28% of 866,000 applications the week before.

Residents receiving traditional unemployment benefits totaled 2.76 million in the most recent tally, for the week ending Sept. 5, down 256,000 from 3.01 million the week before.

Californians accounted for 22% of the 12.3 million Americans receiving benefits as of Sept. 5, roughly the same proportion as the in the week before, according to the latest figures available on recipients.

For the new Pandemic Unemployment Assistance benefits for the self-employed and gig workers, put into place in California in late April from the federal CARES Act, new claims totaled 204,700 in the Golden State last week, down by 236,000 from nearly 441,000 the week before.

On Sept. 11, the California Employment Development Department said it will require more proof before payments are made on the new type of benefits, according to the San Francisco Chronicle. The department will no longer automatically backdate claims for the new benefits to the date of claimed work loss and limit multiple claims at the same address.

It’s one of the reforms Gov. Gavin Newsom has said he’s trying to make to the state’s employment safety net, which at one point had a backlog of 1 million claims and was not answering a number of calls.

The roll of Californians getting the new benefits dropped by almost 592,000 the week ending Aug. 29, the latest data available, to 6.39 million, down from 6.98 million the week before. Recipients of these benefits in the state accounted for 44% of the 14.5 million getting them nationwide, down from almost 48% of 14.6 million the week before.

The hardships of the pandemic economy also came just three months after a new California law, Assembly Bill 5, took effect, reclassifying many independent contractors as employees. However, categories of workers have been excluded from that law by legislation and court orders in the months since.

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at or 707-521-4256.

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Bringing the Gig Economy to Legal Practices




Harnessing the power of the gig economy in the legal sector offers a more diverse group of skilled workers an added level of flexibility and accessibility

Rising as a well-deserved pillar in our nation’s economy, the gig workforce continues to make significant contributions to the US job market and GDP. Last year, the gig economy contributed close to 5%, or $1 trillion to the U.S. GDP. This year, the Bureau of Labor estimates 42% of Americans as gig workers, a 6% increase over last year. Given these facts, the gig economy can no longer be seen as a unique niche market, but a legitimate player with valuable contributions. 

As gig roles become increasingly popular, the global pandemic and resulting economic crisis have presented a new opportunity for businesses and professionals to tap into the gig economy as a way to sustain their livelihood. The opportunities and benefits of gig work are particularly relevant as industries navigate the current volatile business climate.

The legal gig economy, along with progressive technology, has allowed legal professionals a means to pivot, allowing them to maintain operations, and ensure seamless continuity for their clients during uncertain times. Innovative companies in the industry are already making the most of these opportunities, paving the way for additional legal professionals to access skilled work and deliver services their clients demand.

History of the Gig Economy 

Understanding of the history of the gig economy through the lens of labor regulations is a critical step for legal professionals who are considering starting a gig role or partnering with gig specialists.

On a national scale, labor regulations differ across states and as a result, classify contracted professionals differently. For example, a 2018 landmark case in California (Dynamex Operations West, Inc. vs. The Superior Court of Los Angeles) had a significant impact on the future of the gig economy in the state. The unanimous ruling resulted in the adoption of the new ABC test, offering more stringent guidelines than its predecessor. 

Building on this ruling, California Assembly Bill 5 (AB5), popularly known as the “gig worker bill,” expands on this case. AB5 was signed into law by Governor Gavin Newsom in September 2019. AB5 requires companies that hire independent contractors to reclassify them as employees, with some exceptions. Together, the ABC test and AB5 put the burden of proof on employers to ensure fair labor practices in the state. New legislation and legal precedents such as these have tremendous implications for how gig professionals can access work, especially while the U.S. employment market navigates turbulence.

Notable players in the gig economy – Lyft and Uber, are advocating for ride-sharing professionals and continue to heavily impact the future of the gig workforce. For example, the rideshare leaders announced they would halt operations in California unless the courts intervened on the AB5 verdict. In August 2020, the courts temporarily responded, preventing thousands of professionals from immediately losing their primary source of income. However, that preliminary injunction only lasts until voters decide their fate with Proposition 22 in November.

Impact of Gig Legislation on the Legal Industry 

As Uber and Lyft continue to appeal the initial ruling, some gig professions were successful in winning exemptions to AB5, given they met certain criteria. These exemption standards include the ability for contractors to negotiate their own rates, have direct communication with customers, and earn at least twice the minimum wage. These exemptions did include attorneys, but left process servers in the gray area. Meaning, process servers have a current lack of clarity around whether they can maintain contractor classification in CA.

Driver with an Apple Watch; image by Luca Bravo, via
Driver with an Apple Watch; image by Luca Bravo, via

Process service is a profession where a limited, registered workforce supports courts to ensure proper notice of legal proceedings. It’s common for professional process servers to accept gig work assignments from several sources. The process server is traditionally a freelancer looking to optimize their earning potential inside their desired weekly hours by accepting and fulfilling work through their preferred driving route. For this profession to be attractive, the process server must be able to accept and fulfill work from multiple sources – there just isn’t enough controlled market share to justify limiting or being denied the ability to work for multiple job originators. It’s a logistics business with a uniquely professional delivery agent.

New Opportunities for the Legal Field

The rise of the legal gig economy is being pioneered by agile technology companies that have harnessed SaaS platforms to offer industry-specific gig roles. Currently, the legal procedures best suited for the gig economy include alternative service, appearance counsel, e-filing, messenger service, and service of process. 

Process servers have driven the recent surge in the legal gig economy thanks to the prominence of cloud-based legal platforms that make it convenient for these professionals to deliver services anywhere around the world. For example, a request for service can be sent to a process server in practically every location, with real-time updates on the status and completion of the serve. The process server, with the use of technology, can offer immediate proof of service that will stand up in any court of law. Additionally, expanded use of technology by the courts has allowed for increased use of e-filing as a legal service, offering greater speed and accuracy in accessing the judicial system. 

In addition to process servers, appearance attorneys are well-suited to thrive in the gig economy. These legal practitioners represent large companies, banks and other law firms who need a lawyer to appear in court for them. The arrangement fosters a relationship founded on necessity and professionalism. In many cases, companies require representation in multiple jurisdictions which presents complications in the standard single-attorney representation model. 

Overall, the increased use of gig workers in the legal industry is improving access to the legal system, while minimizing costs and burden for all parties involved.

Advancing Gig Work for the Legal Sector

Harnessing the power of the gig economy in the legal sector offers a more diverse group of skilled workers an added level of flexibility and accessibility. Professionals in older generations looking to supplement retirement income, current lawyers looking to stay active in their legal careers on a part-time basis, or younger professionals looking to start their own legal service business, all find technology one of the greatest resources in forming partnerships with gig economy companies. 

Equipped with new and emerging tools, legal professionals of all ages, backgrounds and skill levels will be well-positioned to make the most of what the gig economy offers. As businesses continue to adapt to the challenges posed by the pandemic, the legal industry is advancing automation technologies aimed at improving access and opportunity to the judicial system. This, along with the repositioning of legal professionals to remote and virtual operations will further solidify the gig workforce as a significant contributor to the U.S. economy.

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