The Upcoming FAA Authorization May Not Contain Any Technical Corrections to the Tax Legislation
Posted on May 16, 2018 in News, Tax Accounting
House Ways and Means Chairman Kevin Brady has indicated that the upcoming Federal Aviation Administration (“FAA”) reauthorization bill is unlikely to contain additional technical corrections to the 2017 tax bill, despite containing a tax title. Congress had previously passed, in the 2018 Consolidated Appropriations Act, a technical correction to fix a provision that encouraged farmers...
Rev. Proc. Offers Automatic Accounting Change for 606 Book-Tax Accounting Conformity
Posted on May 14, 2018 in News, Tax Accounting
An automatic method change is now available for taxpayers wishing to change their accounting method to comply with the new financial accounting standards issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) (“Topic 606”). Under the new standards of Topic 606, taxpayers recognize revenue from contracts with customers based on...
No Rules or Answers: Notices to Just Provide Notice
Posted on May 11, 2018 in News, Tax Accounting
Rather than provide “subregulatory guidance” or answer specific questions, future notices will simply notify taxpayers of regulations to come. According to Catherine Hughes of the Treasury’s Office of Tax Policy, the Treasury and IRS will not create new rules, but give a “heads up” of what proposed regulations are in the works. This has been seen in recent notices, including Notice...
IRS Issues Guidance Related to Determining Built-in Gain or Loss under Section 382
Posted on May 9, 2018 in News, Tax Accounting
Recently released Notice 2018-30 provides that the two safe harbor approaches in Notice 2003-65–related to recognizing built-in gain or loss–will be determined without regard to the bonus depreciation rule under section 168(k). Section 382 imposes limits of the amount of built-in losses that can offset future taxable income following ownership change. The notice states that...
IRS Considering the Definition of a “Trade or Business” under Section 163(j)
Posted on May 4, 2018 in News, Tax Accounting
The IRS is in the process of defining a “trade or business” for purpose of determining what counts as business interest for the purposes of section 163(j). The text of the statute and Notice 2018-28 indicate that all income earned by a corporation is business interest, but questions still remain on whether a corporation that receives only passive dividend income is a business and...
Fiscal Year Taxpayers Reminded about Blended Corporate Tax Rate
Posted on Apr 18, 2018 in News, Tax Accounting
Notice 2018-38, released April 16, reminds fiscal year taxpayers about the requirement to apply a blended tax rate under Section 15 of the Code to their taxable year that includes January 1, 2018. The Tax Cuts & Jobs Act (the “TCJA”) changed the corporate tax rate, effective for taxable years beginning after December 31, 2017, in the middle of fiscal year taxpayers’ tax year....
Notice Confirms Business as Usual for Taxpayers with Advance Payments
Posted on Apr 16, 2018 in News, Tax Accounting
The IRS issued Notice 2018-35 on April 13, which permits taxpayers to continue to rely on Rev. Proc. 2004-34 for the treatment of advance payments under Section 451. According to the Notice, the IRS will not challenge taxpayers’ use of the current guidance that provides for the limited deferral of advance payments. Additionally, the Notice requests comments with suggestions on Section...
The OMB and Treasury Release Memo on OMB’s Oversight of Tax Regulations
Posted on Apr 12, 2018 in News, Tax Accounting
The Office of Management of Budget (OMB) and the Department of Treasury recently issued a memo describing the framework for the OMB’s review of tax regulations. The memo provides that regulations will be subject to review if they 1) create a serious inconsistency or interfere with an action of another agency, 2) raise novel legal or policy issues, or 3) have an annual non-revenue...
LEGAL ALERT: IRS RELEASES NOTICE 2018-26 – RETROACTIVELY DISREGARDING CERTAIN ACCOUNTING METHOD CHANGES AND ENTITY CLASSIFICATION ELECTIONS
View the Eversheds Sutherland Legal Alert summarizing the treatment of certain accounting method changes and entity classification elections in Notice 2018-26 here.Transitional Guidance on Fines and Penalties Issued by IRS
Posted on Apr 3, 2018 in News, Tax Accounting
Last week, the IRS issued Notice 2018-23 to assist government officials and taxpayers with complying with Sections 162(f) and 6050X of the Internal Revenue Code. The Tax Cuts and Jobs Act revised Section 162(f), which disallows deductions for fines and penalties, defined to exclude amounts paid as restitution or as reimbursement for investigations, or paid in suits where there is no...
Videocast: Implications of tax reform on income recognition
Posted on Apr 2, 2018 in Tax Accounting
The changes made to the Internal Revenue Code by the Tax Cuts and Jobs Act (TCJA) included a number of modifications to the rules associated with income recognition. Although the TCJA codified certain taxpayer-favorable methods (i.e., the Deferral Method under Rev. Proc. 2004-34), the revised Section 451(b) likely will result in an acceleration of taxpayers’ historic recognition of...
IRS Releases Revenue Procedure Limiting Changes to Annual Accounting Periods
Posted on Feb 15, 2018 in News, Tax Accounting
The IRS has restricted the ability of taxpayers to make certain changes in accounting periods, through the issuance of Revenue Procedure 2018-17. The revenue procedure modifies Revenue Procedure 2002-39 and Revenue Procedure 2006-45, which deal with approval for changes to annual accounting periods. The modification generally denies automatic approval for changes to tax years of...
Legal Alert: Special treatment for motor vehicle inventory interest under new federal tax law
View the Eversheds Sutherland Legal Alert summarizing the Tax Act’s effect on motor vehicle dealers here.Conference Sparks Insights from Treasury Regarding New Tax Law
Posted on Jan 29, 2018 in News, Tax Accounting
At an event organized by the District of Columbia Bar Community of Taxation on January 25, 2018, Treasury officials discussed the changes prompted by the recently passed tax legislation and how they affect a variety of different industries and areas. Treasury is prioritizing guidance on changes that have immediate impacts on early financial statements. Among other guidance, Treasury...