IRS Considering the Definition of a “Trade or Business” under Section 163(j)
Posted on May 4, 2018 in News, Tax Accounting
The IRS is in the process of defining a “trade or business” for purpose of determining what counts as business interest for the purposes of section 163(j). The text of the statute and Notice 2018-28 indicate that all income earned by a corporation is business interest, but questions still remain on whether a corporation that receives only passive dividend income is a business and...
IRS Releases Fact Sheet on Depreciation
Posted on Apr 24, 2018 in News
The IRS recently released a factsheet that provides an overview of the changes to depreciation and expensing under the new tax law. The fact sheet addresses immediate expensing for section 179 property, first year bonus depreciation, limitations on luxury automobiles and personal use property, treatment of certain farm property, the applicable recovery period for real property, and the...
IRS Updates Q&As about Section 965 Reporting
Posted on Apr 16, 2018 in Individual Taxation, News
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...
IRS Releases Notice on the Withholding Obligations of Non-publicly Traded Partnerships
Posted on Apr 4, 2018 in News, Pass-through Taxation
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
IRS Releases Guidance on Section 965
Posted on Apr 4, 2018 in International Tax, News
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...
IRS Releases Guidance on Section 163(j)
Posted on Apr 4, 2018 in Individual Taxation, News
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...
President Trump Considers Subjecting the Treasury to OMB Oversight
Posted on Mar 28, 2018 in Individual Taxation, News
President Trump is considering whether to grant the Office of Management and Budget (“OMB”) oversight over regulations issued by the Treasury Department. While the Treasury Department has been exempt from OMB review since the 1980s with respect to tax regulations, President Trump’s move would end that autonomy and add an additional layer of review to forthcoming Treasury regulations....
House Provides a Fix for the “Grain Glitch” with Passage of the Omnibus Spending Bill
Posted on Mar 23, 2018 in News
Today, Congress approved an omnibus spending bill, a step toward averting a government shutdown that would otherwise occur this evening. The bill includes a fix to the so-called “grain glitch,” which addresses a technical error in the Tax Cuts and Jobs Act that allows farmers who sell grain to cooperatives to have a lower tax liability than those who sell to other purchasers. In...
Treasury to Issue Regulations Limiting Exclusion to the New Carried Interest Holding Period to C Corporations
Posted on Mar 2, 2018 in News
The legislation formerly known as the Tax Cuts and Jobs Act extended the section 1061 carried interest holding period from one year to three years. However, section 1061(c)(4) provided an exception for “any interest in a partnership directly or indirectly held by a corporation.” The reference to a corporation arguably applies to both S corporations and C corporations, which provides...
EU Finance Ministers Debate the EU’s Response to the 2017 Tax Act
Posted on Feb 20, 2018 in International Tax, News
Finance ministers from key EU countries, including France, Germany and Italy, are questioning whether some of the provisions of the 2017 tax act are contrary to World Trade Organization (WTO) rules. The finance ministers are currently reviewing whether to file a complaint with the WTO out of concern that the tax act will spark a race to the bottom with respect to tax rates. EU finance...
IRS Releases Revenue Procedure Limiting Changes to Annual Accounting Periods
Posted on Feb 15, 2018 in News, Tax Accounting
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...
Eversheds Sutherland Releases Videocast on the Interest Deduction Limitation under Section 163(j)
Posted on Feb 13, 2018 in International Tax, News
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...
Eversheds Sutherland Releases Videocast Providing a Basic Overview of International Tax Provisions
Posted on Feb 7, 2018 in International Tax, News
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...
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...IRS Releases Guidance on the Transition Tax Provision
Posted on Jan 2, 2018 in International Tax, News
Last week, the IRS released Notice 2018-07 (the “Notice”), which provides guidance on calculating the so-called “transition tax” of the Tax Cuts and Jobs Act. While the Notice itself does not contain any specific regulations, it does describe the regulations that the IRS plans to issue at a later date, including guidance on the effects that the future regulations will have. The Notice...