Eversheds Sutherland Tax Reform Law Blog
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Proposed Regulations and Guidance on Sections 199A and 163(j) Will Draw on Existing Regulations

The IRS is incorporating relevant existing regulations in drafting the proposed regulations for sections 199A and guidance for section 163(j). However, as noted by Holly Porter, acting IRS associate chief counsel, there are limitations to the degree to which application of these two sections can rely on regulations already existing under other sections due to the differences in nature...

New Jersey Legislature Passes Corporate Tax Increases, Still Negotiating with Governor

In the midst of a budget showdown between New Jersey’s Legislature and Governor Murphy, on June 25, 2018, the Legislature passed a replacement bill that seeks to raise revenue with a temporary Corporation Business Tax “surtax” on corporations meeting certain income thresholds and by limiting New Jersey’s dividend exclusion. The Legislature also responded to the Tax Cuts, and Jobs Act...

Brady Anticipates Legislative Outline of Tax Reform 2.0 in Early August

House Ways and Means Committee Chairman Kevin Brady, at a Washington Post event held on June 26th, stated that Committee Republicans would begin circulating a draft of the next tax package after the July 4th holiday, followed by the release of an outline of the tax cut package in early August and a vote in the fall.  Brady sees the next round of tax cuts as a package of multiple bills...

Proposed Regulations Related to Previously Taxed Income (PTI) Are Expected This Year

Marjorie Rollinson, IRS Associate Chief Counsel International, has indicated that issuing new proposed PTI regulations is a priority for the IRS this year. The new PTI regulations would address issues related to the global intangible low-taxed income (GILTI) and deemed repatriation provisions of the Tax Cuts and Jobs Act, specifically, how to allocate deductions against tested income...

Markup for Legislation for Phase 2 of Tax Reform Is Expected After August

House Ways and Means Committee Chair Kevin Brady indicated that a new tax bill may be marked up after the August recess, a date later than his previous estimate. Brady also noted that parts of the phase 2 legislation may be pulled from previous Senate and House proposals. Read More: Phase 2 Markup Likely Delayed Until After August Recess

Congress Unlikely to Act on Technical Corrections until after November Elections

Congress appears unlikely to pass a technical corrections bill for the Tax Cuts and Jobs Act prior to the November elections. Senate Majority Whip John Cornyn stated that the corrections are not imminent, and as an indication of further delay, Kevin Brady, Chair of the House Ways and Means Committee, has stated that any technical corrections will be affected by the guidance released by...

State Tax Reform Roundtables

The Tax Executives Institute’s (TEI) State and Local Tax Committee is holding a series of State Tax Reform Roundtables to enable SALT professionals to stay abreast of state tax developments associated with the Tax Cuts and Jobs Act, to engage with subject-matter experts, and to hear from peers regarding their “boots on the ground” knowledge and experience. This series of calls will...

New Rev. Proc. Provides that Citrus Replanting Costs Not Included in Automatic Accounting Method Changes

Released Tuesday, Rev. Proc. 2018-35 provides that the new automatic change procedures under Rev. Proc. 2018-31 do not apply section 263A to replanting costs for damaged or lost citrus plants. Section 263A generally requires taxpayers to include the costs of certain property produced or acquired for resale to be included in inventory costs. However, under section 263A(d)(2)(A) as...

House Budget Would Extend Individual TJCA Provisions

On June 19, 2018, the House Budget Committee released a 10-year budget plan that, if passed, would provide a vehicle to extend the individual tax provisions enacted under the TJCA past their current expiration date in 2025 through the budget reconciliation process. To help reduce the cost of extending the cuts, the budget plan requires committees to submit legislation to reduce the...

Legislation for Phase 2 of Tax Reform Expected in August

House Ways and Means Committee Chair Kevin Brady indicated that Republicans hope to have a proposal for healthcare and additional tax changes by August. While the contents of the bill remain uncertain, potential topics include: permanent individual income tax provisions, retirement savings, the treatment of capital gains, and employer incentives for helping to pay back student loan...

Guidance on Section 199A May Halt Benefitting Firms

The Treasury Department may issue guidance on section 199A in response to workarounds taken by law and accounting firms. The new section 199A provides a 20% deduction for qualifying pass-through businesses. Since its enactment, offices have been broken down into separate businesses to take advantage of the deduction; future guidance may halt this technique. According to an official at...

Congressman States that the TCJA will not be Amended, Despite EU Criticism

Rep. Peter Roskam, a Republican member of the House Ways and Means Committee, stated at a conference that, despite criticism from EU officials, Congress does not intend to amend the Tax Cuts and Jobs Act (TJCA). Some EU officials have been particularly critical of the foreign-derived intangible income provision, arguing that the provision essentially acts as an export subsidy which...

The IRS Releases Additional Guidance on Penalties Related to the Transition Tax

The IRS announced that it will waive the estimated tax penalty for taxpayers subject to the transition tax under section 965 in certain instances, such as (1) for any taxpayer that improperly applied a 2017 overpayment to a 2018 estimated tax liability, and (2) for any individual that missed the April 18, 2018 deadline for making the first payment. Read more: IRS offers penalty, filing...

Potential Phase Two of Tax Legislation Focuses on Making Individual Tax Changes Permanent

House Republicans intend to roll out a second package of tax cuts this summer. The focus of the new bill is to make the individual tax cuts permanent, but it may also include other changes, such as cutting capital gains taxes and including incentives to boost business innovation. House Ways and Means Committee Chairman Kevin Brady anticipates that the new bill would be approved in the...

Non-Tax Lawyer’s Guide to the Tax Cuts and Jobs Act

On December 22, 2017, the largest overhaul of the nation’s tax code since 1986 was signed into law. While the reduction in the corporate income tax rate grabbed most of the headlines, in their article for the Summer 2018 edition of Partnering Perspectives, Eversheds Sutherland attorneys Jeffrey Friedman and Michael Resnick discuss several additional important considerations related to...