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Senate Passes 2014 Tax Extenders, White House Opposition Unlikely

On December 16, in a vote of 76 to 16, the Senate passed the long-anticipated “extenders bill,” extending 55 tax provisions that expired at the end of 2013.  The bill had been passed by the House of Representatives on December 3, 2014 and now heads to the President’s desk where it is expected to be signed into law. As a one-year extension of tax provisions that expired on...

IRS Commissioner: Congressional Action Required to Stop Inversions

As the Treasury Department considers additional steps it may take addressing corporate inversion transactions, IRS Commissioner John Koskinen is saying that, to a “substantial extent,” Congress would need to act if it wishes to prevent the transactions.  In a conversation with Bloomberg BNA Koskinen stated that, while the inversion issue is being carefully examined by the...

More Countries Joining the Transparency Trend

On October 29, more than 50 countries signed on to implement OECD standard for automatic exchange of information starting in 2017 or 2018.  The Secretary-General of the OECD, Angel Gurria, announced at the end of the Global Forum on Transparency and Exchange of Information for Tax Purposes that of the 123 Global Forum members, close to 90 agreed to implement the international...

New Inversion Notices Forthcoming

Our prior post on Notice 2014-52, Treasury’s crackdown on corporate inversions, outlined potential tools Treasury would consider using to counteract the attractiveness of inverting.  The Treasury Office of International Tax Council announced that at least one additional notice will likely be released prior to the issuance of the regulations, although the timing of the release is...

Treasury Dropping Hints on Earnings Stripping

Treasury Department officials are stating publicly the potential methods it is considering to reduce the benefit of inversion transactions through so-called “earnings stripping.”  According to reports of an October 29 panel discussion, Treasury is considering cutting back on interest deductions under section 163(j), or treating certain instruments as equity rather than debt...

Switzerland Moving Towards International Standards

Switzerland recently announced intentions for draft legislation to provide authority for amending existing double taxation avoidance agreements that would bring them in line with the OECD’s standard for exchange of information provisions.  The proposal would authorize the use of a unilateral extension to execute the amendments.  The amendments would apply the OECD standard to any...

Ireland Announces the End to the “Double Irish” Tax Structure

A tax structure often referred to as the “Double Irish” is being shut down by the Irish government, although companies that are currently utilizing the structure will have a five-year transition period before the new law eliminates the tax structure completely. Finance Minister Michael Noonan announced that Ireland’s 2015 budget is “abolishing the ability of companies to...

The “Very Near Future” is Now: Treasury and IRS Release Anti-Inversion Notice

After much anticipation, the Treasury Department and IRS released new “anti-inversion” guidance on September 22, in Notice 2014-52.  The Notice announces forthcoming regulations that are targeted at reducing some of the perceived economic benefits of inverting.  The forthcoming regulations would apply primarily to companies which complete inversions on or after September...

Lew: Inversion Guidance Coming “Very, Very Soon,” Rather than Just in the “Very Near Future”

Anti-inversion guidance from Treasury is now a near-certainty, but when they arrive and how they will operate remains a mystery.  Treasury Secretary Jacob Lew used strong language to warn corporations against inverting in a September 17th interview with Bloomberg Television.  “Any company considering an inversion is now on notice that there is action that is going to be taken,”...

Schumer-Durbin Target Earnings Stripping

The change from summer to fall did nothing to alter the focus of the Congressional tax debate – inversions.  To that end, two Senators have introduced a new bill on “earnings stripping.” Senators Charles Schumer (D-NY) and Dick Durbin (D-Ill.) introduced new legislation on September 11 that would significantly limit earnings stripping by inverted companies.  The...

State Legislators Getting in on Inversion Game

With numerous Congressional legislative proposals, and increasingly heated and political rhetoric, regarding corporate inversions, it was probably only a matter of time before state legislators entered the political fray. New Jersey state senator Shirley Turner (D-Mercer, Hunterdon) has proposed legislation which would deny certain state benefits to companies that have taken part in...

Representative Levin Targets Earnings Stripping

Inversion transactions are making waves, and politicians are taking notice, with the number of legislative proposals dealing with inversions and other international tax issues growing at a fast rate. Of particular note, Representative Sander Levin (D-Mich.), the ranking member of the House Ways and Means Committee, released a discussion draft of the Stop Corporate Earnings Stripping Act...

SALT Shaker: Alaska Supreme Court Determines Foreign-Source Dividends are Includable in the Apportionable Tax Base

The Alaska Supreme Court held that a foreign member of a water’s edge unitary group must include its foreign dividend income in the Alaska apportionable tax base, regardless of whether the income is “effectively connected income” (ECI) for federal income tax purposes. Alaska law incorporates the Internal Revenue Code, including the ECI rules, “unless excepted to or modified”...

Repatriation Holiday in the Driver’s Seat?

Senator Harry Reid (D-Nev.) and Sen. Rand Paul (R.-Ky.) are in negotiations on a one-time repatriation “holiday,” which would allow U.S. corporations to repatriate foreign earnings at a special reduced rate.  No proposal has formally been released, but reports on the negotiations say that the rate would be between 5 percent and 9.5 percent.  The short-term revenue increase...

The Topsy Turvy Status of Inversions – Levins Move Forward, Wyden and Pfizer Move Back

Senator Carl Levin (D-Mich.) and 13 other Senate Democrats introduced legislation on May 20th that would significantly reduce the ability of U.S. companies to expatriate.  The Stop Corporate Inversions Act of 2014 would generally enact President Obama’s budget proposal targeting corporate inversions (see our prior post) by reducing from 80% to 50% the post-inversion ownership...

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