CARES Act Amends TCJA Provisions
Posted on Mar 30, 2020
On March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. While the Act is primarily focused on the coronavirus epidemic, the Act made a few significant changes to provisions enacted by the Tax Cuts and Jobs Act (TCJA). The Act: • Allows net operating losses (NOLs) arising in 2018, 2019, or 2020 to be carried back five years and exempts NOLs from the 80% taxable income limitation for years beginning before 2021; • Amends section 163(j) to allow taxpayers to deduct up to 50% of their adjusted taxable income (up from 30%), plus interest income and floor plan...
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OMB Completes its Review of Proposed Regulations under Section 163(j)
Posted on Mar 24, 2020
The Office of Management and Budget (OMB) has completed its review of proposed regulations under section 163(j). Section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. The IRS had previously stated that the proposed section 163(j) regulations would likely be released with final section 163(j) regulations by the end of March. The OMB completed its review of the final section 163(j) regulations in February. Read More: Interest Deduction Reg Packages Under Final Treasury...
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Treasury Intends to Finalize All Major TCJA Guidance by October 1
Posted on Feb 21, 2020
Speaking at a conference yesterday, Chip Harter, Treasury deputy assistant secretary for international tax affairs, stated that he is “fairly confident” that Treasury will be able to finalize all major guidance related to the Tax Cuts and Jobs Act by October 1st of this year. With respect to timing, Harter stated that he expects that regulations under section 901(m) will be released “any day now,” and that proposed and final anti-hybrid regulations will be released in the next couple of weeks. Additionally, Harter expects that proposed and final regulations under section 163(j) (limitation...
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OIRA Completes Its Review of Final 163(j) Regulations
Posted on Feb 5, 2020
On January 31, the Office of Management and Budget (OMB) completed its review of final regulations under section 163(j). Section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. The IRS had previously stated that the final regulations would likely be released along with proposed regulations; however, the proposed regulations are not under review by OMB. Read More: Final Interest Regs Leave OIRA, No Sighting of Second Batch
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IRS to Consider Relief from Double Taxation Related to Transition Tax
Posted on Jan 21, 2020
On January 17, the IRS announced that it was aware of certain circumstances under which a taxpayer may be subject to double taxation as a result of the so-called transition tax under section 965. For example, where a corporation paid an unusual dividend for business reasons, double taxation may result if the same E&P of the foreign corporation are taxed both as dividends and under section 965. The announcement provides that the IRS will consider relief in cases where the application of foreign tax credits do not significantly reduce the resulting tax, and taxpayers may raise this issue...
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Treasury and IRS Issue Final Regulations on Investing in Qualified Opportunity Funds
Posted on Dec 20, 2019
On December 19, Treasury and the IRS released final regulations regarding investments in opportunity zones under section 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 (“QOF”). The final regulations provide guidance on the ability of taxpayers to exclude gain through investments in QOFs after holding the equity interests for at least 10 years and also provide guidance regarding the requirements that an entity must meet to be considered a QOF. Read more:...
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OMB Begins Review of Final Section 163(j) Regulations
Posted on Dec 19, 2019
The Office of Management and Budget (OMB) received final regulations under section 163(j) on December 17. Section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. While the OMB website does not state whether the regulations are subject to expedited review, IRS officials had previously stated that the regulations could be issued prior to the end of the year. Read More: Interest Deduction Regs Close to Release as OIRA Review Begins
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Treasury and IRS Release Final and Proposed FTC Regulations
Posted on Dec 2, 2019
On December 2, the Treasury and the IRS released final and proposed regulations with respect to the determination of the foreign tax credit relating to changes made to applicable law by the Tax Cuts and Jobs Act. The regulation package addresses the allocation and apportionment of deductions, foreign tax redeterminations, and the treatment of overall foreign losses, among other items. Read More: Final and Temporary Regulations Proposed Regulations
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Treasury and IRS Release Final and Proposed BEAT Regulations
Posted on Dec 2, 2019
On December 2, the Treasury and the IRS released final and proposed regulations under section 59A. Section 59A imposes a base erosion and anti-abuse tax (or BEAT), which generally operates as a minimum tax on income without regard to certain deductible payments made to foreign related parties. The final regulations implement BEAT generally, and the proposed regulations provide guidance with respect to the determination of a taxpayer’s aggregate group, provide an election to waive deductions, and detail application of BEAT to partnerships. Read More: Proposed Regulations Final...
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Eversheds Sutherland’s TEI Portland Chapter Seminar
Posted on Nov 25, 2019
Please view our presentations from Eversheds Sutherland’s TEI Portland Chapter Seminar. Methods to the Madness – Speakers: Mary Monahan and Robb Chase Brave New World – Speakers: Daniel Nicholas and Ben Jones The New Worldwide Territoriality – Speakers: Robb Chase, Mary Monahan, Ben Jones, Daniel Nicholas Best Practices for Resolving State Tax Disputes – Speaker: Tim Gustafson
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Bill to Correct Qualified Improvement Property Glitch Fails to Gain Traction in the House
Posted on Nov 22, 2019
On Nov. 20, the House of Representatives failed to approve a motion that would have attached the Restoring Investment in Improvement Act (H.R. 1869) to the Workplace Violence Prevention for Health Care and Social Service Workers Act (H.R. 1309). H.R. 1869 would correct a drafting error in the Tax Cuts and Jobs Act changes to section 168 that prevents qualified improvement property from being eligible for full expensing. Specifically, while qualified improvement property was intended to be eligible for full expensing, a drafting error failed to assign a useful life to the class of property,...
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Eversheds Sutherland Year-End Tax Seminar – Back to the Future: The tax and legal outlook for multinational companies, November 21, 2019, Philadelphia, PA
Posted on Nov 21, 2019
Please view our presentations from Eversheds Sutherland’s year-end tax seminar on federal and international tax planning. Planes Trains and Automobiles – Practical Considerations for a Mobile Workforce – Speaker: Mary Monahan War Games – Tax Trade and Tariffs – Speakers: Robb Chase, Katie Blaszak and Ben Jones Wall Street – Market Trends in Global M&A – Speakers: Katie Blaszak and Taylor Kiessig Risky Business – Impact of Reforms on Commercial Transaction – Speakers: Ellen McElroy and Katie Blaszak The Firm – Navigating Privilege and...
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IRS LB&I Division Announces Section 965 Compliance Campaign
Posted on Nov 5, 2019
On November 4, the IRS Large Business and International Division (LB&I) announced a new compliance campaign directed at promoting compliance with section 965. Section 965, enacted by the Tax Cuts and Jobs Act, generally imposes a transition tax on a US shareholder’s pro rata share of the accumulated earnings and profits of certain foreign corporations. The LB&I campaign will involve conducting examinations and “focus on identifying and addressing taxpayer populations with a potential material compliance risk.” Read More: Large Business and International Active...
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IRS Releases Final Regulations under Section 6050Y
Posted on Oct 28, 2019
The IRS has issued final regulations under section 6050Y, which was added by the TCJA. Generally, section 6050Y requires information reporting with respect to certain life insurance contract transactions, such as payments of reportable death benefits. The final regulations detail the reporting requirements, such as the manner of reporting and the required timing of such reporting. Read the Final Regulations: TD 9879 Read the Proposed Regulations: REG-103083-18
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Proposed Regulations and New Revenue Procedure Address the Repeal of Section 958(b)(4)
Posted on Oct 1, 2019
Treasury and the IRS have released proposed regulations and a revenue procedure addressing the repeal of section 958(b)(4). Prior to its repeal by the Tax Cuts and Jobs Act, section 958(b)(4) prevented downward attribution from a foreign person for purposes of determining whether a foreign entity was a controlled foreign corporation under section 957. The proposed regulations address the impact of the repeal on various other Code provisions, such as sections 267, 332, and 1297. The revenue procedure describes changes made with respect to filing requirements to Form 5471 and also provides...
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