What are the State Tax Implications of International Tax Reform?
Posted on Apr 19, 2018
What are the State Tax Implications of International Tax Reform? Jeff Friedman and others outline the key points at the COST 2018 Spring Audit Session/Income Tax Conference in snowy Boston, Massachusetts. These issues were also addressed in a recent article, “Waiting for the Other Shoe to Drop: State and Local Tax Implications of Federal Tax Reform – International Tax Provisions,” in Bloomberg Tax – Daily Tax Report: State by Jeff Friedman, Todd Betor and Michael Spencer. ...
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Fiscal Year Taxpayers Reminded about Blended Corporate Tax Rate
Posted on Apr 18, 2018
Notice 2018-38, released April 16, reminds fiscal year taxpayers about the requirement to apply a blended tax rate under Section 15 of the Code to their taxable year that includes January 1, 2018. The Tax Cuts & Jobs Act (the “TCJA”) changed the corporate tax rate, effective for taxable years beginning after December 31, 2017, in the middle of fiscal year taxpayers’ tax year. Under Section 15(a) of the Code, a corporation with a tax year that includes January 1, 2018, but does not start on that day, must apply a blended tax rate, calculated by applying the rates before and after the...
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Oregon Legislature Passes IRC Conformity Legislation, But Decouples from Certain Federal Tax Reform Provisions
Posted on Apr 17, 2018
On April 10, 2018, and April 13, 2018, Oregon Governor Kate Brown signed into law S.B. 1529 and S.B. 1528 (the Bills), respectively, which provide a series of changes to Oregon’s income tax laws in response to recent federal tax changes as part of the federal Tax Cuts and Jobs Act. Most notably, the Bills: (i) update the state’s IRC conformity date to December 31, 2017; (ii) decouple from the federal temporary dividend received deduction with respect to the transition tax under IRC § 965 by requiring an addback of the federal deduction allowed under IRC § 965(c); (iii) provide relief from...
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Notice Confirms Business as Usual for Taxpayers with Advance Payments
Posted on Apr 16, 2018
The IRS issued Notice 2018-35 on April 13, which permits taxpayers to continue to rely on Rev. Proc. 2004-34 for the treatment of advance payments under Section 451. According to the Notice, the IRS will not challenge taxpayers’ use of the current guidance that provides for the limited deferral of advance payments. Additionally, the Notice requests comments with suggestions on Section 451 guidance, including: the applicability of Rev. Prov. 2004-34; whether the definition of “advance payments” should be expanded; and the possibility of expanding the rules under section 451(c), which allows...
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IRS Updates Q&As about Section 965 Reporting
Posted on Apr 16, 2018
On April 13, the IRS updated its Questions and Answers page to include additional discussion on reporting amounts owed under section 965—the so-called “transition tax”—on a taxpayer’s 2017 tax return. The Q&As provide answers to questions on reporting requirements, such as how section 965 amounts are reported or steps that a taxpayer should take if the taxpayer had previously filed its return without reporting section 965 amounts where such reporting was required. The update also discusses what additional reporting is required in connection with section 965 amounts and how a taxpayer...
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The OMB and Treasury Release Memo on OMB’s Oversight of Tax Regulations
Posted on Apr 12, 2018
The Office of Management of Budget (OMB) and the Department of Treasury recently issued a memo describing the framework for the OMB’s review of tax regulations. The memo provides that regulations will be subject to review if they 1) create a serious inconsistency or interfere with an action of another agency, 2) raise novel legal or policy issues, or 3) have an annual non-revenue effect on the economy of $100 million or more. OMB oversight has raised concerns about the efficiency of the tax regulation process, however the memo was positively received by the Treasury officials. Read more:...
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LEGAL ALERT: IRS RELEASES NOTICE 2018-26 – RETROACTIVELY DISREGARDING CERTAIN ACCOUNTING METHOD CHANGES AND ENTITY CLASSIFICATION ELECTIONS
Posted on Apr 9, 2018
View the Eversheds Sutherland Legal Alert summarizing the treatment of certain accounting method changes and entity classification elections in Notice 2018-26 here.
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LEGAL ALERT: TRANSITION TAX – ENOUGH ABOUT HOW IT WORKS; HERE IS WHAT DOESN’T WORK
Posted on Apr 9, 2018
View the Eversheds Sutherland Legal Alert summarizing the new anti-avoidance rules and other technical guidance described in Notice 2018-26 with respect to which the Treasury and the IRS intend to issue regulations, effective as of the first taxable year of a foreign corporation to which section 965 applies, here.
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VIDEOCAST: TOOLS OF ENGAGEMENT – BEST PRACTICES TO MAXIMIZE CERTAINTY AND MINIMIZE CONTROVERSY
Posted on Apr 9, 2018
The tax reform bill passed at the end of 2017, but Congress continues to propose and make changes to the Internal Revenue Code. Many provisions provided welcome relief; others created uncertainty. In this Bottom Line videocast, Susan Seabrook and Daniel Strickland discuss the administrative controversy processes and procedures available to taxpayers, as well as the certainty achievable in an otherwise uncertain climate. View the Videocast...
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Georgia Legislature Enacts Significant Income, Sales, and Property Tax Legislation
Posted on Apr 4, 2018
The Georgia legislative session concluded on March 29, 2018. In addition to two major bills relating to federal tax reform, Georgia enacted several other pieces of notable tax legislation. View the full Legal Alert.
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IRS Releases Notice on the Withholding Obligations of Non-publicly Traded Partnerships
Posted on Apr 4, 2018
On April 2, 2018, the IRS issued Notice 2018-29, which provides guidance related to withholding under Section 1446(f) with respect to the disposition of a partnership interest in a partnership that is not publicly traded. Read more here: Notice 2018-29
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IRS Releases Guidance on Section 965
Posted on Apr 4, 2018
On April 2, 2018, the IRS issued Notice 2018-26, which describes additional regulations to be promulgated under Section 965. The regulations will provide anti-avoidance rules under the authority granted by the statute, provide an exception to the treatment of a foreign corporation as a specified foreign corporation (SFC) in connection with the downward attribution of stock through a partnership in certain circumstances; provide a proration rule for foreign income taxes in determining a SFC’s post-1986 earnings and profits as of November 2, 2017; and set out related reporting and...
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IRS Releases Guidance on Section 163(j)
Posted on Apr 4, 2018
On April 2, 2018, the IRS issued Notice 2018-28, which provides guidance related to the interest deductibility limitation in Section 163(j). The Notice clarifies that Section 163(j) will treat taxpayers who file a consolidated return as a single taxpayer and that interest disallowed under the prior version of Section 163(j) may be carried forward and treated as business interest in taxable years beginning after December 31, 2017. Notably, the Notice did not address the applicability of Section 163(j) to controlled foreign corporations or to consolidated groups where one of the members of the...
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Transitional Guidance on Fines and Penalties Issued by IRS
Posted on Apr 3, 2018
Last week, the IRS issued Notice 2018-23 to assist government officials and taxpayers with complying with Sections 162(f) and 6050X of the Internal Revenue Code. The Tax Cuts and Jobs Act revised Section 162(f), which disallows deductions for fines and penalties, defined to exclude amounts paid as restitution or as reimbursement for investigations, or paid in suits where there is no government party involved. Notice 2018-23 provides details on how to satisfy the requirements for these exceptions. Additionally, the notice addresses the effective date of Section 6050X, a new section of the...
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New York State Budget Adopts Substantial Changes in Response to Federal TCJA
Posted on Apr 2, 2018
The New York Legislature passed its 2018-2019 Fiscal Year budget on March 30, 2018, which is expected to be signed into law by Governor Cuomo. The Legislature responded to the Tax Cuts and Jobs Act (TCJA) passed by the United States Congress late last year by excluding IRC § 965 repatriated income from New York taxable income. However, the final budget failed to address other TCJA provisions, such as the tax on global intangible low-taxed income (GILTI) and the interest expense limitation under IRC § 163(j). Thus, New York will conform to these federal tax changes. View the full Legal...
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