Eversheds Sutherland Tax Reform Law Blog
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IRS Releases Revenue Procedure Limiting Changes to Annual Accounting Periods

The IRS has restricted the ability of taxpayers to make certain changes in accounting periods, through the issuance of Revenue Procedure 2018-17. The revenue procedure modifies Revenue Procedure 2002-39 and Revenue Procedure 2006-45, which deal with approval for changes to annual accounting periods. The modification generally denies automatic approval for changes to tax years of specified foreign corporations that otherwise would have a tax year corresponding to calendar year 2017, in order to address issues related to section 965 (the transition tax on deferred foreign earnings). Read the...
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Eversheds Sutherland Releases Videocast on the Interest Deduction Limitation under Section 163(j)

Eversheds Sutherland (US) LLP recently released a videocast covering the broadly applicable limitation on the ability to deduct interest under Section 163(j), enacted as part of the recent tax act. This short video includes an overview of the limitation, the differences between the current and prior limitation, and the exceptions to the limitation. Listen to the video:  The Interest Deduction Limitation under Section...
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Eighteen Guidance Priorities and New Projects Released in Second Quarter Update to Priority Guidance Plan

The second quarter update to the 2017-2018 Priority Guidance Plan was released by the Treasury and IRS this past Wednesday. It sets forth eighteen priorities for guidance on tax issues stemming from the Tax Act, including for new sections 965 and 163(j), and other international sections. The update also contains projects that are hoped to be completed through June 30, 2018. These include guidance on section 861 (addressing how to allocate interest expense and characterize income) and section 367 (treatment of property transfers to foreign corporations). Read the second quarter update here....
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Videocast: Eversheds Sutherland Releases Videocast on the new BEAT provision

Eversheds Sutherland (US) LLP recently released a videocast, discussing the new Base Erosion and Anti-Abuse Tax (“BEAT”). This brief video walks through an example of how BEAT would be calculated. View it here: Tax Reform: Base Erosion and Anti-Abuse Tax (BEAT)  
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Eversheds Sutherland Releases Videocast Providing a Basic Overview of International Tax Provisions

Eversheds Sutherland (US) LLP recently released a videocast which provides a brief overview of the impact of international tax provisions. This short video provides a concise overview of various international provisions in the recent legislation formerly known as the Tax Cuts and Jobs Act, including those related to the reduced corporate tax rate, the shift to a hybrid territorial/worldwide system and base erosion (including BEAT and hybrid transactions). Over the next few days, additional videocasts on the base erosion and anti-abuse tax (BEAT), the global intangible low-taxed income...
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White House Requests $90 Million Funding for Implementation of Tax Cuts and Jobs Act

Congress is expected vote on a funding bill this week to avoid a government shutdown. President Trump has requested that $90 million be added to the bill to fund the IRS’s implementation of the Tax Cuts and Jobs Act. This amount falls short of the $397 million that the Treasury Department had estimated it would cost for the IRS to respond to the Act. Read more:  House GOP Scrambles to Avoid Shutdown; Interpreting the...
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Regulations and Notices to Provide Guidance on New Tax Bill

As the early guidance period for the new tax bill continues, the Treasury and IRS plan to shift to focusing on developing regulations over the next six months. A less notice-oriented approach is expected, with only five to ten limited-scope notices addressing basic questions, such as section 163(j) business interest issues, anticipated. IRS and Treasury tax reform projects will be included in the soon-to-be-released amended 2017-2018 priority guidance plan and are predicted to tackle repatriation provisions and other major international provisions, including base erosion, GILTI, and FDII....
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Chamber of Commerce Provides Feedback on Notice 2018-07

The U.S. Chamber of Commerce recently released recommendations for further guidance in response to Notice 2018-07, which provides guidance related to section 965 (the transition tax on deferred foreign earnings). The recommendations include excluding short-term loans from foreign affiliates to a U.S. parent from aggregate foreign cash if they have previously triggered a taxable inclusion, and providing guidance on avoiding double counting of earning and profits.  The Chamber made 13 recommendations in total. Read more: Chamber of Commerce Tackles Transactions Tax Guidance...
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“Permanent Tax Cuts of Americans Act” Introduced by the House

This past Monday, Republican House Representative Rodney Davis introduced H.R. 4886, to make the individual provisions of the newly enacted tax law permanent.  Under this bill, subtitles A and B of the tax law, which lower the individual tax rates, would be extended past their 2025 sunset dates with the goal to “provide future tax relief for individual taxpayers”. Read the Bill here: H.R. 4886 Read More:  House Bill Would Make TCJA Individual Tax Cuts...
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Legal Alert: Special treatment for motor vehicle inventory interest under new federal tax law

View the Eversheds Sutherland Legal Alert summarizing the Tax Act’s effect on motor vehicle dealers here.
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Conference Sparks Insights from Treasury Regarding New Tax Law

At an event organized by the District of Columbia Bar Community of Taxation on January 25, 2018, Treasury officials discussed the changes prompted by the recently passed tax legislation and how they affect a variety of different industries and areas. Treasury is prioritizing guidance on changes that have immediate impacts on early financial statements. Among other guidance, Treasury will focus on projects involving qualified business income deduction under section 199A, changes to cost recovery under section 168, changes to the section 451 accrual method, and the revised section 163(j)...
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IRS is Prioritizing Certain Guidance Related to Pass-through Entities

As the IRS continues to work on guidance for the new tax legislation (formerly known as the Tax Cuts and Jobs Act), the agency is prioritizing certain complex provisions that relate to pass-through entities. In comments to the New York State Bar Association, Clifford Warren, special counsel to the IRS associate chief counsel, identified section 199A (qualified pass-through business income deduction) and section 163(j) (interest expense deduction limitation) as being high on the list for further guidance due to their complexity. Warren also indicated that section 1061 (carried interest rules)...
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Treasury Department Releases Notice 2018-13, Providing Additional Guidance on Section 965

The IRS and Treasury Department have issued additional guidance regarding the transition tax imposed by the tax law’s new section 965. In addition to providing background information on section 965, Notice 2018-13 states that future regulations will be introduced to address: factors for determining a specified foreign corporation; an alternative method for calculating post-1986 earnings and profits; the treatment of deficits;  the determination of aggregate foreign cash position; and currency translation rules. Additionally, the notice requests comments, provides effective dates, and offers...
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IRS Modifies Notice 1036 Withholding Tables Incorporating Changes to the Individual Tax Rates

The IRS recently released an updated version of Notice 1036 (includes income tax withholding tables for employers) which integrates the changes made by the recently passed tax legislation. The notice states that employers must implement the withholding tables by February 15, 2018. The IRS anticipates updating its online withholding calculator by the end of February. Read more: New 2018 Withholding Tables Released
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Speaker Ryan Foresees only Technical Corrections to the Tax Reform Bill, Rather Than Major Changes

In an interview with C-SPAN, House Speaker Paul Ryan stated that the bill previously known as the Tax Cuts and Jobs Act would require some technical corrections, such as in the area of international taxation, though he did not offer further details. He anticipates that any corrections to the bill would be small changes. House Ways and Means Committee Chair Keven Brady has also stated that any technical corrections would take time and that he does not expect Congress to immediately take on the technical corrections. Listen to the interview: Interview with Speaker Ryan. Read more: No Major...
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