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Treasury and IRS Release Final and Proposed FTC Regulations

On December 2, the Treasury and the IRS released final and proposed regulations with respect to the determination of the foreign tax credit relating to changes made to applicable law by the Tax Cuts and Jobs Act. The regulation package addresses the allocation and apportionment of deductions, foreign tax redeterminations, and the treatment of overall foreign losses, among other items....

Treasury and IRS Release Final and Proposed BEAT Regulations

On December 2, the Treasury and the IRS released final and proposed regulations under section 59A. Section 59A imposes a base erosion and anti-abuse tax (or BEAT), which generally operates as a minimum tax on income without regard to certain deductible payments made to foreign related parties. The final regulations implement BEAT generally, and the proposed regulations provide guidance...

IRS LB&I Division Announces Section 965 Compliance Campaign

On November 4, the IRS Large Business and International Division (LB&I) announced a new compliance campaign directed at promoting compliance with section 965. Section 965, enacted by the Tax Cuts and Jobs Act, generally imposes a transition tax on a US shareholder’s pro rata share of the accumulated earnings and profits of certain foreign corporations. The LB&I campaign will...

Proposed Regulations and New Revenue Procedure Address the Repeal of Section 958(b)(4)

Treasury and the IRS have released proposed regulations and a revenue procedure addressing the repeal of section 958(b)(4). Prior to its repeal by the Tax Cuts and Jobs Act, section 958(b)(4) prevented downward attribution from a foreign person for purposes of determining whether a foreign entity was a controlled foreign corporation under section 957.  The proposed regulations address...

OIRA Receives Proposed and Final BEAT Regulations

The Office of Information and Regulatory Affairs (OIRA) has received both proposed and final regulations related to the base erosion and anti-abuse tax (BEAT) under section 59A. Section 59A generally operates as a minimum tax on income without regard to certain deductible payments made to foreign related parties. The proposed and final regulations are not deemed to be economically...

IRS Working to Address Double-Gain-Recognition Issue in Final GILTI Regulations and Temporary Section 245A Regulations

Speaking at an event on September 4, John Merrick, senior-level counsel to the IRS associate chief counsel (international), stated that the IRS is aware that the interaction between the anti-avoidance rules of section 245A (the participation exemption deduction) and section 951A (global intangible low-taxed income, GILTI) could result in double gain recognition for taxpayers and is...

IRS Official States that Final Foreign Tax Credit Regulations Likely to Be Released by Fall and BEAT Regulations Likely to Be Released Before the End of the Year

At an event for the National Association for Business Economics on July 16, Peg O’Connor (deputy associate chief counsel (Operations and International Programs) at the IRS Office of the Associate Chief Counsel, International) stated that she expects final regulations addressing foreign tax credits to be released by the end of the summer and final regulations under section 59A (Base...

IRS Provides Additional Q&A Guidance on Section 965

On July 16, 2019, the IRS released additional guidance in a Q&A format with respect to section 965. Enacted by the Tax Cuts and Jobs Act, section 965 generally imposes a transition tax on a US shareholder’s pro rata share of the accumulated earnings and profits of certain foreign corporations. The guidance includes information on making subsequent installment payments and filing...

Treasury Releases Final and Proposed GILTI Regulations and Temporary Section 245A Regulations

On June 14, Treasury and the IRS (the Service) released final and proposed regulations on the new global intangible low-taxed income provisions, or GILTI, that were introduced under the Tax Cuts and Jobs Act. Along with finalizing regulations related to determining a US shareholder’s GILTI inclusion and their pro rata share of a CFC’s subpart F income, the regulations also address the...

IRS Releases Proposed Regulations Addressing the FDII and GILTI Deduction under Section 250

On March 4, 2019, the IRS released proposed regulations under section 250. Section 250 generally allows a domestic corporation a deduction for its foreign-derived intangible income (FDII) and its global intangible low-taxed income (GILTI). The proposed regulations provide rules for determining the amount of the deduction, including guidance related to the provision’s taxable income...

IRS Issues Final Transition Tax Regulations

On January 15, 2019, the IRS and Treasury released final regulations on the section 965 transition tax. The final regulations largely adopt the basic approach and the structure of the proposed regulations (REG-104226-18) issued on August 9, 2018 but with some changes, including modifications to the election to reallocate basis to reflect the offset of positive earnings with deficits...

Discussion Draft of the “Tax Technical and Clerical Corrections Act” Released

Rep. Kevin Brady, former Chairman of the House Ways and Means Committee, issued a draft of technical changes to the Tax Cuts and Jobs Act (TCJA) on January 2, 2019, just prior to relinquishing the Chair to Rep. Richard Neal.  The dozens of proposed changes, written to implement Congressional intent and correct provisions in the TCJA, include restoration of the applicable recovery...

IRS Releases Proposed Regulations Addressing Hybrid Arrangements

On December 20, the IRS released proposed regulations under sections 245A(e) and 267A. Section 245A allows a deduction for certain related party dividends, except in the case of certain hybrid dividends, and section 267A disallows deductions for certain amounts paid in a related-party hybrid transaction or to a related hybrid entity. The proposed regulations under section 267A clarify...

Joint Committee on Taxation Releases Blue Book of TCJA

The General Explanation of Public Law 115-97, prepared by the staff of the Joint Committee on Taxation in consultation with the staffs of the House Committee on Ways and Means, the Senate Committee on Finance, and the Treasury Department’s Office of Tax Policy, was released this week. The explanation provides a discussion of the Tax Cuts and Jobs Act (TCJA) including a description of...

IRS Releases Proposed BEAT Regulations

On December 13, the IRS released proposed regulations (REG-104259-18) concerning the base erosion and anti-abuse tax (BEAT) under section 59A. Section 59A generally operates as a minimum tax on income without regard to certain deductible payments made to foreign related parties. The new regulations clarify who is an “applicable taxpayer” under the provision, as well as provide further...


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