Treasury and IRS Issue Proposed Regulations for Section 956
Posted on Oct 31, 2018 in International Tax
Treasury and the IRS have issued proposed regulations (REG-114540-18) that would reduce the inclusion determined under section 956 for certain domestic corporations that own stock in controlled foreign corporations. The proposed regulations are intended to harmonize the application of section 956 and the participation exemption system (section 245A) enacted under the Tax Cuts and...
OIRA Receives Proposed Section 163(j) Regulations for Review
Posted on Oct 26, 2018 in Individual Taxation, International Tax, News, Pass-through Taxation, Tax Accounting
The Office of Information and Regulatory Affairs (OIRA) received draft proposed regulations under section 163(j), addressing the limitation on business interest deductions, on October 25, according to the Office of Management and Budget’s website. As amended by the Tax Cuts and Jobs Act (TCJA), section 163(j) generally limits business interest expense deductions to the sum of business...
IRS Releases Opportunity Zone Guidance
Posted on Oct 19, 2018 in Individual Taxation, Pass-through Taxation
On October 19, 2018, the IRS released proposed regulations (REG-115420-18) concerning opportunity zones (sections 1400Z-1 and 1400Z-2). Opportunity zones were created by the Tax Cuts and Jobs Act and allow tax benefits for investments in low-income communities, through what are termed qualified opportunity funds. Among other items, the proposed regulations provide taxpayers with...
Proposed Foreign Tax Credit and Section 163(j) Regulations to be sent to OIRA
Posted on Oct 19, 2018 in International Tax
On October 18, 2018, Lafayette G. Harter III, the deputy assistant secretary for international tax affairs for the Department of Treasury, announced that the proposed regulations focusing on foreign tax credits under section 904 are likely to be sent to the Office of Information and Regulatory Affairs (OIRA) for review on October 19 or the following week. Harter also announced that...
Treasury Guidance May Shield Opportunity Zone Transfers From Capital Gains Tax
Posted on Oct 12, 2018 in Individual Taxation
In a conversation with reporters, Senator Tim Scott, who helped draft the Tax Cuts and Jobs Act, stated that he has encouraged Treasury and the IRS to adopt guidance that would allow investors to transfer funds between opportunity zones without subjecting the transfers to federal capital gains tax. His comments are in reference to new section 1400Z-2 of the Code, which was added by the...
Treasury Confirms Issuance of Transition Tax Regulations by the End of the Year
Posted on Oct 11, 2018 in International Tax
Brenda Zendt, special adviser to the Treasury Office of International Tax Counsel, corroborated a prior report that the Treasury Department intends to issue final Section 965 regulations by the end of 2018. Treasury deputy assistant secretary for international tax affairs, Chip Harter, previously commented on the deadline while discussing Treasury’s goal to issue proposed regulations,...
Treasury Official Clarifies Section 199A De Minimis Rules
Posted on Oct 10, 2018 in International Tax
The proposed regulations under new section 199A, which allows a 20% deduction for qualifying business owners, provide a de minimis rule which generally provides that a business will not be treated as a disqualified “specified service trade or business” if less than 5% or 10% of the gross receipts (depending on the amount of the business’s gross receipts) are attributable to certain...
IRS To Extend Transfer Agreement Deadline
Posted on Oct 10, 2018 in International Tax
Section 965, enacted by the TCJA, imposes a one-time transition tax on certain U.S. shareholders. The proposed regulations under section 965 require corporations that have elected to make transition tax payments pursuant to an eight-year installment plan and have transferred substantially all of their assets to another corporation file certain transfer agreements by October 9. At the...
Proposed GILTI Regulations to Be Published in Federal Register
Posted on Oct 8, 2018 in International Tax
The proposed regulations for the global intangible low-taxed income (“GILTI”) under section 951A (REG-104390-18) are set to be published in the Federal Register on October 10. Released on September 13, the regulations set forth new reporting requirements and rules for calculating GILTI inclusions. Public comments on the proposed GILTI regulations must be received by December 9. 2018,...
Treasury and IRS Guidance will not Address Qualified Improvement Property
Posted on Oct 5, 2018 in Tax Accounting
During an ABA Tax Section meeting in Atlanta on October 5, 2018, officials from the Treasury Department and the IRS announced that they will not be able to provide an administrative fix for the drafting error in the qualified improvement property provision of section 168(k). Rather, the officials stated that Congress must make a technical correction, as the agencies do not have...
IRS Provides Interim Guidance on Expenses for Business Meals
Posted on Oct 3, 2018 in Individual Taxation
The Treasury Department and IRS issued Notice 2018-76, offering interim guidance under section 274 of the Code. The guidance provides that taxpayers may treat certain business meal expenses as non-entertainment and may continue to deduct 50 percent of food and beverage expenses associated with operating their business or trade, so long as the expenses are not extravagant and the...
IRS Releases Additional Guidance on Section 965
Posted on Oct 1, 2018 in International Tax, News
The Treasury and the IRS have published Notice 2018-78, containing additional guidance on the proposed regulations for Section 965, which were published on August 9, 2018. The Notice provides that the final regulations (i) will not require taxpayers to make a binding basis election until at least 90 days after finalization of the proposed regulations; (ii) will permit all members of...