In this episode of the “GILTI Conscience” podcast, Roger Brown, global head of Tax Strategy at Chainalysis, joins our hosts Nate Carden and David Farhat to talk about the basics of blockchain. Roger explains what blockchain is, how tax rules apply to crypto and the field’s potential benefits.

Roger says that people regularly approach him with questions about blockchain and crypto — although the sector began forming many years ago, substantial uncertainty remains, especially regarding tax rules and policies. Roger therefore begins this overview with the basics. He notes that buzzwords like “bitcoin” and “blockchain” are commonly thrown around, but he emphasizes that they’re only interconnected, not interchangeable. Bitcoin, which uses blockchain technology to secure transactions, is intended to be a peer-to-peer payment network, while blockchain is utilized for recordkeeping, tracking the movement of a digital asset (such as bitcoin) from virtual wallet to virtual wallet.  

Roger also notes that the crypto space is more expansive and potentially beneficial than most people realize. “Crypto” refers to more than just payment applications. Technologies like Filecoin, a blockchain-based cooperative digital storage system, are focused on replacing business functions. Individuals and businesses alike can take advantage of such advances. But what important tax rules and policies should you understand before diving into this space?

From a technical tax perspective, Roger says, the rules are nothing new. When you own cryptocurrency or any other digital asset, it’s your property and, therefore, property rights still apply. If you’re worried about taxation on cryptocurrencies as trading becomes more commonplace, Roger suggests investing in a partner company. These experts can help you understand how tax rules apply to crypto and ensure the IRS doesn’t come knocking on your door for an audit.  

💡 Featured Guest 💡

Name: Roger Brown

What he does: Roger is the global head of Tax Strategy at Chainalysis. He has 30 years of international tax experience for multinational enterprises in financial services, technology, blockchain and other industries. Roger has worked with law firms, accounting firms and the national office of the IRS. 

Organization: Chainalysis Inc.

Words of wisdom: “There are all these [technologies] now that are leaning into these traditional business processes, that are far more than just payments.

Connect: LinkedIn

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GILTI Conscience is a podcast by Skadden, Arps, Slate, Meagher & Flom LLP, and Affiliates. Skadden’s tax team is recognized globally for providing clients with creative and innovative solutions to their most pressing transactional, planning, and controversy challenges. This podcast is provided for educational and informational purposes only and is not intended and should not be construed as legal advice. This podcast is considered advertising under applicable state laws.

This is GILTI Conscience, casual discussions on transfer pricing, tax treaties, and related topics. A podcast from Skadden that invites thought leaders and industry experts to discuss pressing transfer pricing issues, international tax reform efforts, and tax administration trends. We also dig into the innovative approaches companies are using to navigate the international tax environment and address the obligation everyone loves to hate. Now, your hosts, Skadden partners David Farhat and Nate Carden.

Hi, everyone. Welcome back to GILTI Conscience. As always, I'm Nate Carden, joined by David Farhat and Stefane Victor. Iman Kyler is still on leave, so we are unsupervised. Today we're going to talk about crypto, and we are joined by Roger Brown from Chainalysis Group, who's going to educate us and answer some questions about both the basic tax issues and controversy issues that arise in that space. Roger, welcome

Pleasure. Thanks so much, David. Thanks so much, Nate. Thanks so much, Stefane.

Roger, tell us a little bit about yourself before we kick off.

Sure. I've been a international tax lawyer for a long time, about 30 years. When I say that, I have to pinch myself about a decade in the government, IRS National Office, about a decade as a partner, Ernst & Young. Got to crypto via ... I always blended tax with something else, so it was tax and financial products, tax and financial institutions, tax and FinTech, when FinTech became a thing circa 2008. And then when FinTech, financial products, really all that became ... financial institutions were all coming together in 2013, '14 people, started asking questions throughout this new asset class, digital assets, then it was really Bitcoin only, and other ones grew up out of it. And when clients ask questions, you have to become smart. You've got to touch it and feel it in order to understand and give practical advice. And that's how I got into crypto, far more deeply. Because it really was the favorite thing I was doing, I would look forward to my crypto clients, their companies, their issues. And really, I know we'll get into this all the wealth of things that it drew upon. I really enjoyed it and decided to focus full time on it, which I have in Chainalysis.

So maybe just to start out, can you tell us, for people that are listening to this, wanting to get started a little bit of blockchain for dummies and how at a basic level it works, what its purposes are. And then frankly, whether it's the same as other kinds of assets, how the tax analysis would be different, just the fly by that you would explain to a general tax person.

I'll start with blockchain because the blockchain technology is different than a quote digital asset. Digital assets, there's tens of thousands of different digital assets and there's many categories of digital assets that do different things. Let's just start with Bitcoin as an example, because it became really the one that most people know, it's the largest asset by market cap. And it's the one that captured everybody's attention.

So, blockchain technology is ... and if you focus on the Bitcoin white paper, it was a feature for a peer-to-peer payment network. And it is a very simple network of creating a system of record where if I give something to David, David gives it to you, Nate, Nate gives it to Stefan and we'll call this thing a Bitcoin. Then there's going to be a system of record on an agreed upon general ledger, an accounting concept that we can always track that I have given it to David, David's given it to you and Nate, and Nate, you've given it to Stefane. And the technology that allows for anyone looking at the blockchain network, and it's open so all can look at it, once you ... you can log in and see it on a blocking score. It'll have my wallet address, not my name. It'll go to David's wallet, Bitcoin, it'll go to Nate's, it'll go to Stefane's. And there'll be a consensus mechanism that agrees that everybody will vote and confirm via a calculation process, via a process called the consensus mechanism where we all agree, that that effective movement of the digital asset has happened.

And when sufficient number of people agree independently that has occurred, then effectively, the record of that payment, the movement of the digital asset, is recorded on the blockchain. And you're literally putting blocks together based on basically a sequence of transactions confirming that the Bitcoin has moved from wallet to wallet, to wallet, to wallet. So, that's really the technology and that Bitcoin is effectively the digital asset.

So, for a newbie like me coming into crypto, talking about ... the way I hear you describe blockchain, it's more of a tracking mechanism, more of a record keeping thing or is it ... I mean that may be an oversimplification, but is that accurate?

It's not an oversimplification when you just focus on Bitcoin because bitcoin was meant to be a peer-to-peer payment network outside of institutions. Blockchain is about record keeping for the movement of Bitcoin through different wallets or to contract between exchanges obviously. However you get to say Ethereum and then smart contracts, then you have business functions or things like, that actually are replacing traditional business functions. I'll go to something like Bao coin and Boa coin network again is a blockchain project that is focused on replacing certain business functions, which is storage and decentralized storage for, I have excess capacity in my computer, I'm not using it. I in effect can rent out that space and be compensated and measured for how much space I rent to people. Secure, multiple copies can be created, so there's other things Helium, there's VideoCoin, which replaces a video transcoding process. There's all these things now that are leaning into these traditional business processes, that are far more than just payments.

Then people have heard the phrase stable coins. Stable coins are ... in effect there's different varieties, one of which I'll just call USDC, which is effectively ... or tether USDT, which is effectively a digital asset backed by dollars or dollar-linked instruments, or PAXD, Paxos dollar, where they're 98% backed by dollars. You can redeem it for a dollar. USDC and USDT are yes denotionally backed by dollars. But in reality, they're really backed by dollar-based debt instruments largely, either sovereign debt or corporate debt, et cetera.

For people who are trying to analogize this or understand exactly what the digital asset is, what do you really own when you own, let's just use Bitcoin, because that's probably one that most listeners are familiar with? Is the ownership, the ownership of the key, my ability to transfer it to David? Is it some other thing? I don't have any contract right against anybody, I don't think because that would be contrary to the whole idea of it, right? But on the other hand, if I walk through the grocery store and I lose my keys and David finds them, it doesn't mean he owns my car. If I lose my wallet and he finds it, it doesn't mean he owns my wallet. But what if I lose my personal key? What if I lose my Bitcoin wallet? Is it just David's period, full stop?

So, there's a concept that people often ... phrase that people often say in crypto, which is not your keys, not your crypto. Or lose your keys, lose your crypto. So, if you lose the ability to move your crypto and your private keys, you are putting aside many account, you have it on an exchange, your ability to control your crypto in your private wallet is affected by your keys. Your seed phrase to activate your wallet, your private keys. If you don't have that, you don't have the ability to control your crypto. And then therefore, in effect, you lose ownership. That said, property rights still apply. If David comes and knocks me on my head and he takes my keys, so therefore ... my keys for my wallet and he can-

Is that possible? Just want to make sure.

Not over Zoom, but in real world, yes. In real world. So yes, it's fact that he has stolen something from me. The value of what he stole is the value of the crypto in my wallet. And there are people who are facing criminal action now for having done electronic versions of that, whether they be ransomware, or stealing people's keys, or hacks and taking crypto out. So, in effect, what is it? It is property. It's not real property. It is, if you put a label on it, probably either an intangible or personal property, depending on the relevant asset. You can turn on parts of the code and say, there are parts of the code dealing with intangibles, that you can in effect have ... Could it be a customer-based intangible that's amortizable under 197? Yeah.

Suppose I'm using crypto assets to store my business data and therefore I can advertise it under 197. Absolutely. So, it has a business function. Or could it be, suppose I buy a stable coin backed by euros and I'm a US dollar taxpayer. Well, I probably have an ordinary asset there because it's effectively ... it's not currency, but the currency rules probably apply to it because it's backed by currency and redeemable for currency derived as value. And there's provisions under section 98-1 that actually tell you, turn on the currency rules.

Doesn't matter that the OCC or regulators don't treat it as currency, the fact is there's a different standard. And then you cross a border in other countries, France is one of them. France's rule for currency is that does any country in the world think that thing is legal tender. So, in France, Bitcoin is legal tender, not for transacting in France, but for purposes of their tax rules. Because El Salvador and Central African Republic think Bitcoin is legal tender, they have jurisdiction to write their rules. Then that's what they did as matter of national sovereignty. They say Bitcoin is legal tender in addition to whatever else I was using, the dollar was used in El Salvador, still is, but Bitcoin is as well now legal tender. Now all of a sudden, those countries think from a tax perspective, you turn on all the currency rules.

Lose your keys, lose your crypto. Do I have an abandonment loss or do I have some other loss if I lose my keys?

I'm glad you asked that because it's a nuanced question and abandonment versus theft or casualty are all different events. And in effect, you have to look and ask yourself because they have different consequences. So, after the 2017 Tax Act, you may not be able to claim a personal loss where it doesn't arise from a natural disaster. They limited that ability at 2017, but that's different than abandoning and some people, and I've had this conversation with people, let's say their crypto is underwater and they have an option of abandoning it, effectively sending it to a burn address, which is an affirmative act of getting rid of it. That's not a theft, that's not losing it. That is controlling and walking away. And many people, including people who were partners in Arthur Andersen and other places like that, that had partnership interests, do treat that as a tax planning strategy because crypto is not a security, generally in a tax code. You can go through all the different definitions and it would be hard pressed to treat crypto as in security in the way security is defined, generally it's dead instrument, or a financial derivative, or stock.

Bitcoin, Ethereum, all these things are not. Again, I'm putting aside real tokenized equity instruments. So, if you have that, if you abandon, you probably are into the classic rules that they're not going to treat you as a capital loss and you can have ordinary. So, you have to give full effect to what the economic transaction is. And when we teach in our courses, tax consequences of crypto, you always have to ask and begin with what is the real transaction that occurred? And then I can tell you how the tax rules will apply.

I wrote it down, it's in the drawer. Then I forget what drawer it's in. Maybe I'll dig it up someday, but I think it's gone, it's like the power bill. I lost it.

I think it's a personal loss. I don't think you would treat it as abandonment. It's along the lines of a personal casualty loss. Then you could have the limitations there. In effect, when you are filing your tax return then, and you're thinking of, "Gee, do I treat this as abandonment? Or I treat this as a personal casualty?" If you're going to take an ordinary loss on it, you're going to have a burden of proof if the IRS disagrees with you.

And then I find it, section 61?

There's a tax benefit rule, where if you do take a loss and you find it back, then you've got to pull it back into income. Yes.

So, you think it would just same concepts that we'd use with anything else, is your basic point?

Absolutely right, absolutely right.

Can companies create their own blockchains?

Yeah, absolutely. They do. Banks do, many companies do. You see fewer tax issues around it. I think you're going to see more and more of those. I think what you're frequently going to see, there's many permissioned ... there's permissionless and permissioned. So, the Bitcoin blockchain, Ethereum is permissionless. Anybody can come up and interact with it, or create a variation of it, change things, et cetera, build et cetera. Permissioned are where a company or group of companies can come together and they're going to say, "We are going to interact together in a consorted way and we will ... " or a company can develop this and then license it to a group of companies or company. And in effect, you get all the benefits of faster processes, confirmed transactions, doing away with the need for audit. People have flirted it with around transfer pricing, I know that's one of the areas that Dave is very strong in and there, if you have an effective blockchain, where all of your transactions are being recorded on an immutable basis, and any auditor can come in and see that parents sold to subsidiary and here was the price and there's a payment being made and you see that depending on what you put in there, just the ... whether it be the supply chain itself, or whether it be the payments, what's on there, again, you can determine what's going to be actually recorded on the blockchain.

But those things are being flirted with, for purposes of not having to deal with trying to close the books and taking 30, 90, 60, 90 days to close your books. Did the transaction happen, at what price? I think in five to 10 years, that it'll be widely accepted. And there's a project called Vchain. PwC is actually one of the investors in it if I recall correctly, which is actually a supply chain-based blockchain that people, including Maersk, I believe is actually flirting with it and using for purposes of tracking the movement of goods. I know banks are also flirting with that with regard to their customers.

So to pivot a little bit, again, we've gotten some of the building blocks as to what you have when you have a digital asset. We've talked about the taxing being very similar, but as we know, as tax practitioners, while in theory it's very simple, the practice can become very difficult and nuanced. But before we jump into some of the taxing, what are some of the implications here for governments and taxing authorities? Particularly talking about blockchain and these digital assets and looking at some things as currency. You can see the complexity in them trying to keep up with the change in technology. But it also sounds like talking about blockchain, there may be some advantages there for your typical tax examiner. The information should be easier to have, it should be easier to track. And they shouldn't at as much of an information disadvantage, as they are in some cases with audits.

So, the implications for governments I'll start, and I'll just focus on the IRS. The IRS is not motivated, or metric-ed, or tasked with maximizing tax revenue. Their mission is collect the appropriate amount, the proper amount under the internal revenue rules that Congress enacts. Congress has put this framework in. If you have accession to wealth by whether it's selling iPods, AirPods, or crypto, you have income. So, then the IRS comes in and their job is to make sure that you're compliant.

IRS statistics are, and these are not mine, they're IRS, there's a trillion dollars a year of taxes that people owe that they don't pay, data point one. Data point two, 50 billion of that every year are from unpaid taxes on crypto, that's their data, not ours. We have a similar data that it actually aligns somewhat with the amount of potential gains, but we don't map it to what people are not paying. That's what the IRS thinks, 50 billion a year unpaid taxes in crypto.

So then the government has to deal with how do I deal with ... This is not a matter of, I don't have to write rules or try to administer people selling AirPods to friends and whether or not they're paying tax, because that's not something at a scalable level of $50 billion. But where they see, and this is a statistic in their GAO study that Treasury Department put out, the Government Accounting Office put out, that when they saw one of the largest exchanges saying they had 30 million customers trading crypto, 30 million and the IRS based on 2013 to '15 data, saw that they had 900 returns reporting crypto. And they must have gotten that from either schedule D or the 8949 saying, "This is crypto, you have to specify your asset class in 8949.

So, 900 people reporting crypto, but 30 million customers. And the IRS knows, and again, GAO study, that there's mass non-compliance when you don't have third-party information reporting. So, what Congress did was really smart in terms of ... and the government was actually working a similar project to actually propose regulations on this. They were putting out a regime for an information reporting for exchanges to say ... I can't go out and audit every human being because the blockchain doesn't say, "Roger Brown's wallet." The blockchain will say, "Wallet address 1257 AQ wallet." It has these transactions, but the IRS has no way of knowing to say, "That's Roger Brown."

But anytime you have a point where you can associate a name with a wallet address, that's where you can now all of a sudden have an audit, or you can do certain open source information searches, et cetera. Maybe they come up on a Bank Secrecy Act form, a FIN send, et cetera. Maybe it'll come up that way. But from a policy perspective, the government governments can ask, "Should we tax crypto?" And if so, then we need the information to make sure that people are paying the appropriate amount. Some governments have said, "We're not going to tax crypto when you're investing in a technology." Germany's policy, for example, is that if you hold crypto for more than a year, we're not going to tax it. France's policy, as long as you don't ... You can trade crypto for crypto, like Bitcoin for Eth but I mean ... That's not a good example after El Salvador made it legal tender, but if you change Bitcoin for XRP, Ethereum for XRP, that's not taxable under their policy, but Germany's pro-growth policy, and they're one of the top four or five countries in leaning into blockchain, their policy in effect is pro-growth because you can invest in the digital asset. And if you hold it for more than a year, it's not taxed at all assuming you're not a super active trader, et cetera. You're just an investor.

That's not us. We give a favorable tax rate for long-term capital gains, but that's not, again a full exemption. So, as a policy matter, the governments are saying, "What rule should I write for purpose of this?" IRS is doing information reporting leading with that, based on the Congressional Infrastructure Act. And there's a number of audits that are occurring.

It sounds like government tax authorities, while all at different stages, are still in very early days, whether it's policy and whether it's actual enforcement. So as taxpayers, whether I'm an individual kind of doing this on the side, or I'm a large multinational and looking at crypto, what should we be thinking about in terms of possible controversy, what the governments are doing? What should we be doing to be prepared for the day when the governments are more advanced?

I would say, learning about how tax rules apply to crypto. All the law firms that I did discussions with, are thinking about ways to embrace the technology and partner with companies like ours and partners with tax calculation companies. We also partner with them, including a client onboarding. So, as you guys probably know, law firms and accounting firms can be nervous about taking on clients who touch crypto. Our technology can be licensed by them to show that all of their crypto holdings, for example, come from centralized exchanges. So, they're all KYC. They're not monitoring drug money, they're all responsible business people. So, that's the kind of client you want, that just is getting access to this digital asset class. And we risk score and we have products that do that.

Second, there's a swath of products that calculate taxable income. So, teaming and with us and a tax calculation firm, where they can compute a gain loss, so that you can defend either a number that people have put on a return or calculating a number where they didn't report it. Now the IRS is coming in and saying, "You should have, and you didn't." So, you're partnering with those.

So, it's getting the knowledge, getting the systems to onboard with companies so that you're not going to be bogged down with administrative processes, and putting in place to framework to calculate the gain loss. The amount of trading of any material amount of taxable income, you will need a special software product.

Does blockchain or crypto change the transfer pricing landscape for companies? Or can they rely on traditional transfer pricing norms?

It depends. So, if a actively traded digital asset is sold from one controlled party to another controlled party, there's a third-party price, and you could apply a cup to that to determine what is the right price. So, that issue, that hasn't changed from if they were to sell an other actively traded asset, a stock or bond. So, there's no difference there. First resting point.

Second resting point, if they're selling goods or services between affiliates, and you're recording that on a blockchain, the blockchain is going to record the fact that that asset moved. It's not going to tell you whether or not the right price ... it was transferred at the right price. So, that's where you'll have a pricing source come in and by the way, people including our tools, we use third-party pricing sources, will come and say, "It moved at this price." And you can have metrics to show it moved, but it won't tell you that it's a fair price. You'll need to have an external metric to determine that it was the right price and then you're going back to your traditional transfer pricing methods, whatever method govern that movement of goods and services. So, I appreciate that question, but I think that's the answer.

Yeah. I think one thing that's interesting about transfer pricing, isn't so much the pricing, but it's the documentation, how you track these transactions, how much more precise, not just the taxpayer, but the government can get going at some of these transactions, because I think one of the ... and we've talked about this on the pod before, one of the issues with the government is when you're auditing a transaction, you have less information than the taxpayer does and you're chasing. It sounds like a lot of these digital assets and blockchain, may be able to close that information gap for the government. So, it would require a bit more precision on the taxpayers part, right? Because if the government can see a bit more, your transfer ... I think precision becomes more important in your transfer price.

The blockchain will reflect that the fact that the transaction happened and they will follow the flows as to where the assets are moving. They will not be able to do an overlay of what is the right amount. I view that blockchain in effect, really will be replacing traditional accounting systems, inventory management systems. They're related, and then there'll be different stakeholders looking at that and drawing different inferences and using that common tracking mechanism for different purposes. So, we want to be payables, receivables, the transfer pricing people, the financial auditors, the tax auditors, the customs officials, all of those will be in effect on a blockchain. And people are even now talking about governments using blockchain to audit for customs purposes because of the open source nature of the blockchain and recording all of those so that there could be same time tracking and auditing of that.

But it sounds like from what you're saying, it's not just governments. Anybody can see these transactions as they're going on the chain. So, does that basically mean that everybody's ... if they're doing these transactions internally, but through blockchain, that anybody's internal transfer pricing transactions would also be visible to the world if they could associate a key with a particular entity?

It depends what blockchain, going back to the question earlier. There are some permissioned, meaning everybody can't see the blockchain, only the people I let in. So, the world couldn't see those transactions, where they're just permissioned only inside my company, or permissioned inside a group of banks. So, a huge amount of activity, for example, occurs between the biggest banks in the world, like 80% of commerce. If you take the top 100 banks, you would have a huge percent of global commerce, just occurring between the top 100 banks. So, could they have a permission blockchain just between themselves, that only those banks can see with regard to payments? And there are people developing projects and use cases around that, as an effective way for immediate settlement of transactions and not two or three days, or you don't need seven days for your international wire transfers or things like that. So, there are absolutely those things.

So Roger, we're coming to the end of time. And again, thank you for joining us. Any final comments? Anything you want to leave us with? And I think Stefane had one last question as well.

I guess a couple things. From a technical tax perspective, the rules are not new. You're relying upon historic things that you've had to deal with. There's a technology barrier to understand the core. There's lots of learning resources out there. It's important to understand technology that surrounds it in terms of companies like ours. We are a company that focuses on on-chain analytics. There's lots of things that are relevant from a business perspective. Many banks use our services for assessing risks for transfers on and off, so that their customers, that they can feel comfortable with they're not violating any sanctions or managing institutional risk.

Many investment funds use our services, so that when they're buying digital assets, that they're not engaging with people, again, who are presenting institutional risk to them. Governments are using our products for purposes of not only doing your tax audits, but also securities regulators, commodities regulators, banking regulators, and assessing for purposes of standards. And then thinking about all the core use cases of our technology, as well as those that compute gain and losses.

So, it's important to lean into that space and understand how your clients as a law firm, or an accounting firm, or other service provider can benefit and use technologies like ours for purposes of serving your clients, reducing your own risk and gaining the efficiencies of the technology, quite frankly. Because I think we literally will be moving ... As we move from a there's a Web 1.0 world that people talk about, which was just these read-only pages on the internet. There's a Web 2.0 world, which are the Facebooks, the Amazons, et cetera, which are marketplaces, ways to interact with these centralized companies. And now we're leaning into this Web 3.0 world, which is more of a permissionless, engaging, peer-to-peer, empowerment of the customer, taps into a lot of political trends. A lot of that are going on inside the government on the left to right in the middle, but also in terms of technology. And that's some of which, which is what you're seeing with Twitter, what you're seeing with Parler and all these other things, all these free speech. And also yes, has a political and speech perspective, but there's also this engaging in commerce, which literally draws back to the original purpose of Bitcoin, which is a peer-to-peer mechanism to transact.

Will companies run into any issues when valuing either its own or the use of blockchain, where the value is largely, as you said, efficiency?

When you say value, value the asset or value the benefits of using blockchain? I'm not sure if I understand your question?

Value of the asset.

For actively traded, no. The only issue I could see there is that there's different valuation sources. Many sources use what they call a VWAP, volume-weighted average price. So, they basically just look to the price at which assets are trading on every actively trade exchange and they weight them by volume on the exchange. And they do that on a minute by minute tick. If you go get into CoinMarketCap or CoinGecko, that's the kind of method you see. Other people use a gap method, which is the principle market, to say which is the principle market, the most reliable market to observe that.

So, if the price in a particular exchange is not reliable, and the reason that could exist for example, is that some exchanges are accused of watch trading, so that they basically turn assets between wallets that they control, not customer wallet, but just their own for purposes of driving up volume and it appear that they're really active exchange. And then therefore, that effectively inflates the price. And they can do that for purposes of trying to create traction activity on their platform. So some people, to answer your question, do try to look to methodologies that weed out that sort of non-market behavior, or market distortive behavior, so that they won't ... you want to use a volume-weight average price, VWAP.

I say that in that the IRS is okay, for the FAQs, to use a VWAP and as David, however would tell us from transfer pricing perspective, unweighted averages are a no-no in general, you want to use real pricing. So therefore, that will lend itself more so to using a price that takes into account and looks at reliability from that perspective. Reliability is always a theme in transfer pricing.

Same concepts, new area. Fascinating. Roger, thanks so much for coming on the show. Appreciate it.

Thanks so much for your time. Appreciate it.

Thank you for joining us for today's episode of GILTI Conscience. If you like what you're hearing, be sure to subscribe in your favorite podcast app so you don't miss any future conversations. Skadden's tax team is recognized globally for providing clients with creative and innovative solutions to their most pressing transactional, planning and controversy challenges. Additional information about Skadden can be found at skadden.com.