IRS Releases Business Interest Expense Proposed Regulations
Posted on Nov 27, 2018 in News, Tax Accounting
The IRS has released proposed regulations (REG-106089-18) concerning the business interest expense deduction limits applied to certain taxpayers. As amended by the Tax Cuts and Jobs Act (TCJA), section 163(j) generally places a limit on the amount of deductible business interest expenses in a current taxable year. The proposed regulations, released on November 26, provide rules for...
IRS Releases Priority Guidance Plan for 2018-2019
Posted on Nov 9, 2018 in Individual Taxation, International Tax, Pass-through Taxation, Tax Accounting
On November 8, the IRS and Treasury Department released their priority guidance plan (PGP) for 2018-2019, which includes a number of projects concerning the implementation of the Tax Cuts and Jobs Act. Planned projects include finalizing regulations under sections 199A (the 20% deduction for qualifying business income) and 951A (global intangible low-taxed income) and issuing...
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...
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 to Issue Proposed Regulations on Market Discount
Posted on Sep 27, 2018 in News, Tax Accounting
The IRS and Treasury Department have recently announced (Notice 2018-80) that they plan to issue guidance providing that market discount is not includible in income under section 451(b), which was added to the Code by the Tax Cuts and Jobs Act. Under section 451(b), accrual method taxpayers generally must include an amount in gross income no later than when it is included in income in...
Comments on Sections 162 and 6050X Requested by IRS
Posted on Sep 4, 2018 in News, Tax Accounting
The IRS has invited the public to comment on transitional guidance for the new reporting requirements under section 162(f) and new section 6050X, which was added by the Tax Cuts and Jobs Act, with respect to fines, penalties and other amounts. The comment period is open through November 5, 2018. Read the Notice here: Notice 2018-19172 Read more here: IRS Seeks Comment On Planned Biz...
Section 168(k) Administrative Solutions Possible for QIP Error; Partnership Remedial Allocations
On August 16, the Senate Finance Committee sent a letter to Treasury clarifying the drafting error in the Tax Cuts and Jobs Act that failed to make qualified improvement property (QIP) eligible for 100% bonus depreciation under section 168(k). Ellen Martin, a tax policy adviser in the Treasury Office of Tax Legislative Counsel, commented that the letter was welcome but may not be...IRS Releases Preliminary Guidance Clarifying Section 162(m) Deduction Limitations
Posted on Aug 22, 2018 in News, Tax Accounting
The IRS released Notice 2018-68, which provides preliminary guidance on section 162(m). As amended by the Tax Cuts and Jobs Act, section 162(m) disallows the deduction for performance-based executive compensation and expands the definition of “covered employees” for the $1 million deduction limitation. The Notice provides that “covered employees” include the chief executive officer and...
Presentation by Proposed Section 168(k) Regulations Team Provides Insight Into Significant Policy Decisions
Posted on Aug 21, 2018 in Presentations, Tax Accounting
On August 21, 2018, the Federal Bar Association hosted at Eversheds Sutherland’s Washington, D.C. office, a panel discussion with the team of IRS and Treasury professionals who drafted the proposed regulations for section 168(k). Kathy Reed and Betsy Binder of the IRS Office of Chief Counsel were joined by Ellen Martin of the Department of the Treasury, as well as Barbara Young, Vice...
Regulations on Bonus Depreciation Are Mostly as Expected
Posted on Aug 7, 2018 in News, Tax Accounting
The proposed regulations addressing section 168(k) bonus depreciation largely conform to expectations, however there were a few unanticipated elements. In her recent comments to the press, Ellen McElroy of Eversheds Sutherland (US) LLP highlighted the IRS’ failure to address the drafting error that left qualified improvement property ineligible for bonus depreciation. McElroy also...
Proposed Full Expensing Regulations Released
Posted on Aug 3, 2018 in News, Tax Accounting
The IRS has released regulations on the full expensing provisions under section 168(k), as amended by the Tax Cuts and Jobs Act. That section allows businesses to fully expense certain business assets. Read more: REG-104397-18.
Full Expensing Regulations Ready for Publication
Posted on Jul 31, 2018 in Tax Accounting, Uncategorized
On July 30, 2018, the Office of Management and Budget (“OMB”) waived its review of the Internal Revenue Service’s (“IRS”) proposed regulations that implement the full expensing provisions of the 2017 tax act. The full expensing provisions allow temporary 100% expensing for certain business assets. With the OMB review complete, the IRS may publish the proposed regulations in the Federal...
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...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...New Rev. Proc. Provides that Citrus Replanting Costs Not Included in Automatic Accounting Method Changes
Posted on Jun 22, 2018 in News, Tax Accounting
Released Tuesday, Rev. Proc. 2018-35 provides that the new automatic change procedures under Rev. Proc. 2018-31 do not apply section 263A to replanting costs for damaged or lost citrus plants. Section 263A generally requires taxpayers to include the costs of certain property produced or acquired for resale to be included in inventory costs. However, under section 263A(d)(2)(A) as...