Eversheds Sutherland Tax Reform Law Blog
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OIRA Begins Review of Final Regulations under Section 250

The Office of Information and Regulatory Affairs (OIRA), part of the Office of Management and Budget, has begun its review of final regulations under section 250. Section 250 generally allows a domestic corporation a deduction for its foreign-derived intangible income (FDII) and its global intangible low-taxed income (GILTI) inclusion. The proposed regulations were published in the Federal Register on March 6, 2019. Read More: Final FDII, GILTI Deduction Regs Begin OIRA Review Read More: Proposed Regulations under Section 250...
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IRS Issues Guidance on CARES Act changes to Section 163(j)

The IRS has issued Rev. Proc. 2020-22 to provide guidance to taxpayers applying the provisions of section 163(j), as amended by the CARES Act. Among other provisions, the CARES Act amended 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 financing income, for taxable years beginning in either 2019 or 2020. Rev. Proc. 2020-22 explains how taxpayers may elect to use the prior 30% limitation, rather than the new 50% limitation. Section 163(j) also allows farming and real property businesses to elect out of...
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Treasury and the IRS Release Proposed and Final Regulations under Section 245A(e) and 267A

On April 7th, the Department of Treasury and the Internal Revenue Service released final and proposed regulations regarding hybrid arrangements under sections 245A(e) and 267A. Section 245A(e) generally limits the participation exemption deduction under section 245A or causes a dividend received by a controlled foreign corporation (CFC) to be included in subpart F income if a dividend from a CFC is a hybrid dividend, and section 267A generally eliminates deductions for any “disqualified related party amount” paid or accrued through a related hybrid entity or transaction. The final...
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CARES Act Amends TCJA Provisions

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)

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

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

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...
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IRS to Consider Relief from Double Taxation Related to Transition Tax

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

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

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...
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Treasury and IRS Release Final and Proposed FTC Regulations

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...
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Treasury and IRS Release Final and Proposed BEAT Regulations

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

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...
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Bill to Correct Qualified Improvement Property Glitch Fails to Gain Traction in the House

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

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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