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Federal Register Publishes Proposed Transition Tax Regulations

On August 9, 2018, the Federal Register published the Treasury and the IRS’s proposed transition tax regulations. While the IRS had made an initial draft of the proposed regulations available for review, publication in the Federal Register begins the comment period for the proposed regulations. Comments on the proposed regulations must be received by October 9, 2018. Read More: Federal...

AICPA and CIMA US Tax Reform Conference 2018

Eversheds Sutherland is the proud lead sponsor of the Association of International Certified Professional Accountants (AICPA) and the Chartered Institute of Management Accountants (CIMA) US Tax Reform Conference 2018 on September 17, 2018, at the Jumeirah Carlton Tower Hotel in London, United Kingdom. The US and International Eversheds Sutherland Tax team will be chairing the event and...

Proposed Transition Tax Regulations Released

The IRS has released proposed regulations on section 965, a provision created by the 2017 TCJA, which imposes a one-time transition tax on accumulated earnings of foreign subsidiaries of U.S. multinationals. Read more:   IRS Floats Rules On Transition Tax On Foreign Earnings;...

The Tax Cuts and Jobs Act Could Impact Intangible Valuation

Thomas Amendolari, a senior economist at the Treasury Department, recently stated that many of the fundamental aspects of determining the discount rate, for purposes of valuing intangible transfers under the section 482 regulations, may be affected by the 2017 TCJA. While the economic effects of the TCJA may increase discount rates, Amendolari noted that it is not yet certain and...

David Kautter Announces that Guidance on the Section 199A Pass-through Deduction will be Released in Weeks

On July 17, 2018, David Kautter, the acting Commissioner of the Internal Revenue Service (“IRS”), announced that the Treasury Department is currently reviewing guidance under section 199A and anticipates the guidance to be released within weeks. Kautter further stated that the IRS is treating the section 199A deduction, the section 59A base erosion and anti-abuse tax (“BEAT”), and the...

The Office of Management and Budget Received Draft Transition Tax Regulations

On July 13, the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) acknowledged receipt on its website of proposed rules under section 965.  The rules are currently under review, but OIRA has indicated that they are not economically significant, and therefore the normal 45-day review timeline (subject to extension) applies. Read more: Transition Tax...

Tax Reform 2.0 Not Expected to Address International Provisions

According to Republican Congressman Carlos Curbelo, tax reform 2.0 will not address international tax provisions, such as BEAT or GILTI.  Instead, the next round of tax legislation is projected to focus on making the individual provisions permanent.  The excluded provisions are expected to be addressed in a future, separate technical corrections bill.  Curbelo also noted that the draft...

The White House Office of Management and Budget Has Not Yet Reviewed any New Tax Law Rules

Based on a new arrangement between the White House Office of Management and Budget (OMB) and Treasury, regulations and other guidance that have policy or economic significance will undergo a compliance review by the OMB. A senior administration official recently stated that Treasury and IRS have not yet sent any new tax regulations or guidance to the OMB for review, despite officials...

LB&I Division Announces Campaign Targeting Transition Tax Compliance

On July 2, 2018, the Internal Revenue Service’s Large Business and International Division announced a compliance campaign focused on the transition tax provisions of section 965, enacted by the 2017 Tax Act. Section 965 generally requires that U.S. shareholders pay a tax on the untaxed foreign earnings of certain specified foreign corporations. The compliance campaign serves as a...

Six Main Areas Identified For TCJA International Guidance

In anticipation of tax reform 2.0, six major international areas have been identified as prime for regulatory focus and guidance: the allocation of expenses to GILTI income; the application of the accumulated earnings tax under section 531 to GILTI;  treatment of consolidated tax return filers for GILTI purposes; potential carve-outs to the base erosion and anti-abuse tax (or BEAT);...

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...

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...

Committee Hearing Discusses Tax Reform Impact and Next Steps

The House Ways and Means Committee held a hearing last Wednesday, May 16th, where Republicans and Democrats continued to be divided in their evaluations of the recent tax reform and its effects on jobs, the economy, and investment. In opening statements, Richard Neal criticized the new law for giving “83 percent of the tax savings to the top one percent.” Testimony during the hearing...

IRS Provides Timeline for Tax Reform Guidance

During the ABA Section of Taxation meeting in Washington, D.C. on May 12, David Kautter, the acting IRS commissioner, provided a rough timeline as to when IRS intends to release guidance related to the 2017 tax act. Kautter stated that a notice regarding section 965 (the so-called transition tax) may be released in the next two weeks and that proposed regulations are slated for release...


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