Eversheds Sutherland Tax Reform Law Blog
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OIRA Receives Section 267A Regulations for Review

The IRS on November 13th submitted its proposed section 267A anti-hybrid regulations to the Office of Information and Regulatory Affairs for expedited review. Section 267A of the Tax Cuts and Jobs Act, eliminates deductions for any “disqualified related party amount” paid or accrued through a related hybrid entity or transaction. The regulations are expected to address such issues as conduit arrangements, multiple tax residences, structured transactions, and payments subject to a preferential tax regime or participation exemption system. Read more: Proposed Regulations on Hybrid Mismatches...
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Single Entity Can Apply 199A De Minimis Rule Multiple Times, According to IRS Official

Speaking at the American Institute of CPAs Fall Tax Division Meeting in Washington, D.C. on November 14, IRS associate chief counsel Holly Porter stated that the section 199A de minimis test applied to identify specified service businesses could apply multiple times for the same entity if separate businesses are being operated.  Enacted by the Tax Cuts and Jobs Act (TCJA), section 199A allows for a 20 percent deduction for certain passthrough business owners.  Porter explained that one passthrough could maintain separate records for each business within the entity and apply the de minimis...
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Eversheds Sutherland Seattle CPE Day – Navigating The Changing World of Tax – Day 2, November 7, 2018

Please view our presentations from day 2 of our Seattle CPE Day on federal and international tax planning. Hard Knock Life: The New Worldwide Territoriality and the Continuing Significance of the Foreign Tax Credit in the US – Speakers, Randy Buchanan and Robb Chase On to the Next One: The Increasing Importance of Destination in Tax Regimes – Speakers, Michele Borens, Randy Buchanan and Daniel Nicholas Encore: Marketplace Collection – All Things Marketplace Plus the Kitchen Sink – Speaker, Michele...
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Eversheds Sutherland Seattle CPE Day – Navigating The Changing World of Tax – Day 1, November 6, 2018

Please view our presentations from our Seattle CPE Day on federal and international tax planning. 99 Problems: Planning in a Time of Tax Uncertainty – Speakers, Robb Chase, Randy Buchanan, Mary Monahan and Stefanie Wood Empire State of Mind: International M&A Post Tax Reform – Speakers, Daniel Nicholas and Jed Rogers Can’t Knock the Hustle: The Implications of International Reforms for Audit and Controversy – Speakers, Robb Chase, Randy Buchanan and Mary Monahan Dirt Off Your Shoulder: Addressing Ethics in a Time of Uncertainty – Speakers, Mary Monahan and Daniel...
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Eversheds Sutherland Year-End Tax Seminar – Navigating the Changing World of Tax, November 14, 2018, Philadelphia, PA

Please view our presentations from Eversheds Sutherland’s year-end tax seminar on federal and international tax planning. 99 Problems: Addressing Risk in a Time of Tax  Uncertainty – Speakers, Ellen McElroy, Karl Zeswitz and Michael Resnick Can’t Knock the Hustle: The Implications of International Reforms for Audit and Controversy – Speakers, Mary Monahan and Robb Chase Holy Grail:  Section 199A and Opportunity Zones – Speakers, Jamie Null and Karl Zeswitz Empire State of Mind: International M&A Post Tax Reform – Speakers, Taylor Kiessig and Jed Rogers Hard...
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IRS to Consider Changing Section 199A Aggregation Rules Based on Comments

IRS official Benjamin Weaver stated that the IRS is open to changing the aggregation rules set forth in the proposed section 199A pass-through deduction regulations since they are not “statutorily derived.” Weaver stated that the IRS has received numerous comments on the proposed regulations, particularly on the requirement that attributes of multiple businesses be aggregated at the individual level rather than the entity level. Weaver did not confirm that the IRS and Treasury would definitely revise the proposed regulations but stated that it will be “an area of focus” as they finalized the...
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IRS Releases Priority Guidance Plan for 2018-2019

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 regulations for section 163(j) (the interest deduction limitation); sections 959 and 961 (previously taxed earnings and profits); and sections 901, 960, and 78 (foreign tax credits). In total, the PGP includes 239...
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BEAT Regulations submitted to OMB

The IRS has submitted its proposed base erosion and anti-abuse tax (BEAT) regulations to the U.S. Office of Management and Budget for review.  Under section 59A of the Tax Cuts and Jobs Act (TCJA), the BEAT is an alternative minimum tax on income with deductions for payments between U.S. corporations and their foreign affiliates added back, which is designed to limit shifting of corporate income overseas through intangible property transfers.  The regulations are expected to provide guidance on certain exclusions applicable to BEAT calculations, including the cost of goods sold exception and...
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OMB Receives Proposed Foreign Tax Credit Regs for Review

The Office of Management and Budget (OMB) received proposed foreign tax regulations for review on November 7. The regulations include guidance on allocation of expenses to the section 951A Global Intangible Low-Taxed Income (GILTI) basket for purposes of determining the foreign tax credit limitation, as well as transition rules for excess foreign tax credit carryforwards. The regulations are to receive expedited review, according to a Treasury official. Read more: Proposed U.S. Foreign Tax Credit Regs Submitted for OMB...
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Treasury and IRS Issue Proposed Regulations for Section 956

Treasury and the IRS have issued proposed regulations (REG-114540-18) that would reduce the inclusion determined under section 956 for certain domestic corporations that own stock in controlled foreign corporations.   The proposed regulations are intended to harmonize the application of section 956 and the participation exemption system (section 245A) enacted under the Tax Cuts and Jobs Act.  Public comments on the proposed regulations are due within 30 days of their publication in the Federal Register. Read Proposed Regulations: REG-114540-18: Amount Determined Under Section 956 for...
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OIRA Receives Proposed Section 163(j) Regulations for Review

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 interest income, 30% of adjusted taxable income, and floor plan financing interest. Existing questions regarding section 163(j) include how to allocate business interest between businesses that are exempt and...
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IRS Releases Opportunity Zone Guidance

On October 19, 2018, the IRS released proposed regulations (REG-115420-18) concerning opportunity zones (sections 1400Z-1 and 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. Among other items, the proposed regulations provide taxpayers with guidance on what kinds of taxable gains can be deferred by investors, the timeframe for investing in qualified opportunity funds, and the manner in which investors may elect to defer specified gains. The IRS also...
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Proposed Foreign Tax Credit and Section 163(j) Regulations to be sent to OIRA

On October 18, 2018, Lafayette G. Harter III, the deputy assistant secretary for international tax affairs for the Department of Treasury, announced that the proposed regulations focusing on foreign tax credits under section 904 are likely to be sent to the Office of Information and Regulatory Affairs (OIRA) for review on October 19 or the following week. Harter also announced that proposed regulations focusing on section 163(j), which limits the deductibility of business interest, will also be sent to OIRA within days. Harter stated that the proposed foreign tax credit regulations provide...
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Treasury Guidance May Shield Opportunity Zone Transfers From Capital Gains Tax

In a conversation with reporters, Senator Tim Scott, who helped draft the Tax Cuts and Jobs Act, stated that he has encouraged Treasury and the IRS to adopt guidance that would allow investors to transfer funds between opportunity zones without subjecting the transfers to federal capital gains tax. His comments are in reference to new section 1400Z-2 of the Code, which was added by the Tax Cuts and Jobs Act and allows deferral of certain gains arising from investments in opportunity zones. Without such guidance, transfers of investments between opportunity zones may not qualify for deferral...
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Treasury Confirms Issuance of Transition Tax Regulations by the End of the Year

Brenda Zendt, special adviser to the Treasury Office of International Tax Counsel, corroborated a prior report that the Treasury Department intends to issue final Section 965 regulations by the end of 2018. Treasury deputy assistant secretary for international tax affairs, Chip Harter, previously commented on the deadline while discussing Treasury’s goal to issue proposed regulations, within the next six weeks, for sections 163(j) interest limitation and 267A anti-hybrid rules, foreign tax credits, and for the base erosion and anti-abuse tax. Read More: U.S. Treasury Hopes for Final...
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