Tax Reform 2.0 Will Likely Not Be Passed By Congress Before Midterms
Posted on Sep 19, 2018
House Ways and Means Committee Chair Kevin Brady recently stated that the three tax bills that together comprise the new tax reform package will likely not get through the Senate before midterm elections. The House Ways and Means Committee previously passed the bills through committee. The House is expected to vote the legislation later this month. Read More: Top House tax writer Kevin Brady doubts new GOP tax cuts can get through the Senate before midterm ...
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Proposed GILTI Regulations Released
Posted on Sep 13, 2018
The IRS has released proposed regulations on global intangible low-tax income (GILTI) under section 951A, a provision added by the Tax Cuts and Jobs Act. The proposed regulations set forth rules for calculating the GILTI inclusion and new reporting requirements, but do not address foreign tax credit rules, which will be addressed separately in the future. Public comments on the proposed regulations are due by 60 days after the proposed regulations are published in the federal register. Read the proposed regulations here: REG-104390-18 Read more here: IRS issues proposed regulations on...
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Tax Reform 2.0 Approved by House Ways and Means Committee
Posted on Sep 13, 2018
The House Ways and Means Committee approved the Tax Reform 2.0 package consisting of three bills. This overhaul package would make permanent the TCJA’s reduced rates for individuals along with several other provisions, including the $10,000 cap on the state and local tax (SALT) deduction, and the 20% deduction on certain pass-through business income. A proposed amendment to repeal the SALT deduction cap was defeated in committee. The full House of Representatives may consider the bills now, with a vote planned this month. Read the Overhaul Package: H.R. 6760; H.R. 6757; H.R. 6756 Read more:...
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IRS Releases Draft Forms for Transition Tax and BEAT Reporting
Posted on Sep 10, 2018
The IRS released draft forms for reporting a taxpayer’s section 965 transition tax and section 59A base erosion and anti-abuse tax liabilities. The forms, titled Form 965 (“Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System”) and Form 8991 (“Tax on Base Erosion Payments of Taxpayers With Substantial Gross Receipts”), respectively, can be found on the IRS website. The IRS also released draft schedules for Form 965 (Schedules A through H). These schedules can be found on the IRS website as...
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GILTI Regulations Reviewed by OMB
Posted on Sep 10, 2018
The Office of Management and Budget (OMB) has completed its review of global intangible low-tax income (“GILTI”) proposed regulations. Section 951A, enacted by the Tax Cuts and Jobs Act, generally taxes income earned by controlled foreign corporations at a reduced rate. Read more: OMB Completes Review of Regs on GILTI
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Draft of Tax Reform 2.0 Introduced in Congress
Posted on Sep 10, 2018
House of Ways and Means Committee Chair Kevin Brady recently highlighted the introduction of three new tax bills that together comprise the new tax reform package. The drafts of new tax legislation deal primarily with individuals, retirement savings, and small businesses. H.R. 6760, the Protecting Family and Small Business Tax Cuts Act of 2018, would extend the 20 percent deduction on certain pass-through businesses and make permanent tax provisions related to individuals including reduced rates and the cap on state and local tax deductions. H.R. 6757, the Family Savings Act of 2018, would...
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Tax Reform 2.0 to be Marked Up This Thursday
Posted on Sep 7, 2018
According to its Chairman Kevin Brady, the House Ways and Means Committee will consider and mark-up “Tax Reform 2.0” legislation this Thursday. Released early last week, the Tax Reform 2.0 package consists of three bills to make permanent the individual tax cuts, pass-through provision under Section 199A and state and local tax (SALT) deduction cap added by the Tax Cuts and Jobs Act. The framework provides that the Tax Reform 2.0 is about “locking in tax cuts for middle-class families and small businesses, and changing the culture in Washington so we continuously improve our tax code and...
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Legal Alert: Real estate unlocked: Opportunity zones offer tax incentives to investors
Posted on Sep 7, 2018
As part of the Tax Cuts and Jobs Act of 2017, Congress added new rules to the Internal Revenue Code intended to promote investments in low-income communities designated as “qualified opportunity zones.” Deferral of tax on gains reinvested in Opportunity Funds and reduction or elimination of tax on such investments held for extended periods are the OZ Program’s carrots. Qualifying real estate development/redevelopment projects could be especially attractive opportunities under the program. While regulations are needed to answer some questions, early investors stand to reap the greatest...
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Comments on Sections 162 and 6050X Requested by IRS
Posted on Sep 4, 2018
The IRS has invited the public to comment on transitional guidance for the new reporting requirements under section 162(f) and new section 6050X, which was added by the Tax Cuts and Jobs Act, with respect to fines, penalties and other amounts. The comment period is open through November 5, 2018. Read the Notice here: Notice 2018-19172 Read more here: IRS Seeks Comment On Planned Biz Fine and Penalty...
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Videocast: State tax considerations of IRC § 965
Posted on Aug 28, 2018
In this Bottom Line videocast, Eversheds Sutherland attorneys Aaron Payne and Todd Betor discuss the state tax consequences and considerations of IRC § 965. This videocast includes: A federal income tax overview of IRC § 965 SALT considerations of IRC § 965 Specific state responses...
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IRS Releases Proposed Regulations Addressing Purported Charitable Contributions in Exchange for State and Local Tax Credits
Posted on Aug 27, 2018
On August 23, 2018, the IRS released proposed regulations under section 170, which allows deductions for certain charitable contributions. The regulations are in response to plans by some states to circumvent the $10,000 deduction limitation for state and local taxes imposed by the Tax Cuts and Jobs Act by offering tax credits for contributions to certain government programs. The proposed regulations generally deny a deduction for such contributions. Read more: REG-112176-18; Treasury Issues Crackdown on State and Local Tax...
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Proposed GILTI Tax Regulations are Currently Under Review by the OMB
Posted on Aug 23, 2018
According to the Office of Budget and Management (OMB) website, the proposed regulations on section 951A were received on August 22, 2018 and are currently under review. Section 951A, a provision added by the Tax Cuts and Jobs Act, addresses the inclusion of global intangible low-taxed income by United States shareholders. Notice on OMB Website: Pending EO 12866 Regulatory Review
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Section 168(k) Administrative Solutions Possible for QIP Error; Partnership Remedial Allocations
Posted on Aug 22, 2018
On August 16, the Senate Finance Committee sent a letter to Treasury clarifying the drafting error in the Tax Cuts and Jobs Act that failed to make qualified improvement property (QIP) eligible for 100% bonus depreciation under section 168(k). Ellen Martin, a tax policy adviser in the Treasury Office of Tax Legislative Counsel, commented that the letter was welcome but may not be enough for an administrative solution. Martin explained that the limited QIP discussion in the proposed regulations is due to the fact that the IRS and Treasury are still weighing the options of what can be done,...
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IRS Releases Preliminary Guidance Clarifying Section 162(m) Deduction Limitations
Posted on Aug 22, 2018
The IRS released Notice 2018-68, which provides preliminary guidance on section 162(m). As amended by the Tax Cuts and Jobs Act, section 162(m) disallows the deduction for performance-based executive compensation and expands the definition of “covered employees” for the $1 million deduction limitation. The Notice provides that “covered employees” include the chief executive officer and chief financial officer and the three highest-compensated employees apart from these two positions. Additionally, the Notice confirms that material modifications to an agreement, such as an increase in...
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Presentation by Proposed Section 168(k) Regulations Team Provides Insight Into Significant Policy Decisions
Posted on Aug 21, 2018
On August 21, 2018, the Federal Bar Association hosted at Eversheds Sutherland’s Washington, D.C. office, a panel discussion with the team of IRS and Treasury professionals who drafted the proposed regulations for section 168(k). Kathy Reed and Betsy Binder of the IRS Office of Chief Counsel were joined by Ellen Martin of the Department of the Treasury, as well as Barbara Young, Vice President of Global Tax Accounting and Compliance at Marriott International, Inc., and Eversheds Sutherland partners Ellen McElroy, Brad Seltzer, and Wes Sheumaker. In a lively discussion, the government...
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