Proposed Transition Tax Regulations Released
Posted on Aug 1, 2018 in International Tax, News
The IRS has released proposed regulations on section 965, a provision created by the 2017 TCJA, which imposes a one-time transition tax on accumulated earnings of foreign subsidiaries of U.S. multinationals. Read more: IRS Floats Rules On Transition Tax On Foreign Earnings; REG-104226-18
The Tax Cuts and Jobs Act Could Impact Intangible Valuation
Thomas Amendolari, a senior economist at the Treasury Department, recently stated that many of the fundamental aspects of determining the discount rate, for purposes of valuing intangible transfers under the section 482 regulations, may be affected by the 2017 TCJA. While the economic effects of the TCJA may increase discount rates, Amendolari noted that it is not yet certain and...David Kautter Announces that Guidance on the Section 199A Pass-through Deduction will be Released in Weeks
On July 17, 2018, David Kautter, the acting Commissioner of the Internal Revenue Service (“IRS”), announced that the Treasury Department is currently reviewing guidance under section 199A and anticipates the guidance to be released within weeks. Kautter further stated that the IRS is treating the section 199A deduction, the section 59A base erosion and anti-abuse tax (“BEAT”), and the...The Office of Management and Budget Received Draft Transition Tax Regulations
Posted on Jul 17, 2018 in International Tax, News
On July 13, the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) acknowledged receipt on its website of proposed rules under section 965. The rules are currently under review, but OIRA has indicated that they are not economically significant, and therefore the normal 45-day review timeline (subject to extension) applies. Read more: Transition Tax...
Tax Reform 2.0 Not Expected to Address International Provisions
According to Republican Congressman Carlos Curbelo, tax reform 2.0 will not address international tax provisions, such as BEAT or GILTI. Instead, the next round of tax legislation is projected to focus on making the individual provisions permanent. The excluded provisions are expected to be addressed in a future, separate technical corrections bill. Curbelo also noted that the draft...The White House Office of Management and Budget Has Not Yet Reviewed any New Tax Law Rules
Based on a new arrangement between the White House Office of Management and Budget (OMB) and Treasury, regulations and other guidance that have policy or economic significance will undergo a compliance review by the OMB. A senior administration official recently stated that Treasury and IRS have not yet sent any new tax regulations or guidance to the OMB for review, despite officials...LB&I Division Announces Campaign Targeting Transition Tax Compliance
Posted on Jul 5, 2018 in International Tax, News
On July 2, 2018, the Internal Revenue Service’s Large Business and International Division announced a compliance campaign focused on the transition tax provisions of section 965, enacted by the 2017 Tax Act. Section 965 generally requires that U.S. shareholders pay a tax on the untaxed foreign earnings of certain specified foreign corporations. The compliance campaign serves as a...
Six Main Areas Identified For TCJA International Guidance
Posted on Jul 5, 2018 in International Tax, News
In anticipation of tax reform 2.0, six major international areas have been identified as prime for regulatory focus and guidance: the allocation of expenses to GILTI income; the application of the accumulated earnings tax under section 531 to GILTI; treatment of consolidated tax return filers for GILTI purposes; potential carve-outs to the base erosion and anti-abuse tax (or BEAT);...
Proposed Regulations Related to Previously Taxed Income (PTI) Are Expected This Year
Posted on Jun 26, 2018 in International Tax, News
Marjorie Rollinson, IRS Associate Chief Counsel International, has indicated that issuing new proposed PTI regulations is a priority for the IRS this year. The new PTI regulations would address issues related to the global intangible low-taxed income (GILTI) and deemed repatriation provisions of the Tax Cuts and Jobs Act, specifically, how to allocate deductions against tested income...
Congressman States that the TCJA will not be Amended, Despite EU Criticism
Posted on Jun 7, 2018 in International Tax, News
Rep. Peter Roskam, a Republican member of the House Ways and Means Committee, stated at a conference that, despite criticism from EU officials, Congress does not intend to amend the Tax Cuts and Jobs Act (TJCA). Some EU officials have been particularly critical of the foreign-derived intangible income provision, arguing that the provision essentially acts as an export subsidy which...
The IRS Releases Additional Guidance on Penalties Related to the Transition Tax
Posted on Jun 5, 2018 in International Tax, News
The IRS announced that it will waive the estimated tax penalty for taxpayers subject to the transition tax under section 965 in certain instances, such as (1) for any taxpayer that improperly applied a 2017 overpayment to a 2018 estimated tax liability, and (2) for any individual that missed the April 18, 2018 deadline for making the first payment. Read more: IRS offers penalty, filing...
Committee Hearing Discusses Tax Reform Impact and Next Steps
Posted on May 21, 2018 in International Tax, News
The House Ways and Means Committee held a hearing last Wednesday, May 16th, where Republicans and Democrats continued to be divided in their evaluations of the recent tax reform and its effects on jobs, the economy, and investment. In opening statements, Richard Neal criticized the new law for giving “83 percent of the tax savings to the top one percent.” Testimony during the hearing...
IRS Provides Timeline for Tax Reform Guidance
Posted on May 15, 2018 in International Tax, News
During the ABA Section of Taxation meeting in Washington, D.C. on May 12, David Kautter, the acting IRS commissioner, provided a rough timeline as to when IRS intends to release guidance related to the 2017 tax act. Kautter stated that a notice regarding section 965 (the so-called transition tax) may be released in the next two weeks and that proposed regulations are slated for release...
LEGAL ALERT: TRANSITION TAX – ENOUGH ABOUT HOW IT WORKS; HERE IS WHAT DOESN’T WORK
View the Eversheds Sutherland Legal Alert summarizing the new anti-avoidance rules and other technical guidance described in Notice 2018-26 with respect to which the Treasury and the IRS intend to issue regulations, effective as of the first taxable year of a foreign corporation to which section 965 applies, here.VIDEOCAST: TOOLS OF ENGAGEMENT – BEST PRACTICES TO MAXIMIZE CERTAINTY AND MINIMIZE CONTROVERSY
Posted on Apr 9, 2018 in International Tax, News
The tax reform bill passed at the end of 2017, but Congress continues to propose and make changes to the Internal Revenue Code. Many provisions provided welcome relief; others created uncertainty. In this Bottom Line videocast, Susan Seabrook and Daniel Strickland discuss the administrative controversy processes and procedures available to taxpayers, as well as the certainty...