Legal Alert: The devil is in the details – Final infrastructure framework announced, fingers crossed for continued R&E deductibility
Posted on Sep 23, 2021 in Legal Alerts, Tax Accounting
Democratic leadership announced today that an agreement has been reached to fund the pending infrastructure and budget reconciliation measures. There does not appear to be any agreement regarding which specific tax measures that will be included, however, it is hoped that continued deductibility of research and experimental (R&E) expenditures will be included. Read the full legal...
Legal Alert: An incomplete picture: Democratic senators release “framework” for international tax overhaul
Posted on Aug 31, 2021 in International Tax, Legal Alerts
On August 25, 2021, Senate Finance Committee members Wyden, Brown, and Warner released draft bill language and a section-by-section summary of their proposed International Tax Reform Framework. The legislative language is generally in line with the International Tax Overhaul proposals first released by the Senators on April 5, 2021. The draft legislation includes some provisions...
Legal Alert: Rev. Proc. 2021-34, IRS guidance for implementing the final Section 451 regulations
Posted on Aug 17, 2021 in Legal Alerts
On August 12, 2021, the IRS released Rev. Proc. 2021-34, setting forth procedural guidance to implement the final Section 451 regulations (Final Regulations). In a lengthy 70-page piece of guidance, the revenue procedure not only provides accounting method changes and the terms and conditions to comply with the Final Regulations by its effective date, (tax years beginning on or after...
Legal Alert: Budget Reconciliation Act I – Setting the Stage: Senate provides slim details of Budget Resolution Agreement
Posted on Aug 11, 2021 in Legal Alerts
On Monday, August 9, the Senate released the framework for the Fiscal Year 2022 Budget Resolution Agreement, and subsequently passed the resolution in a 50-49 partisan vote on August 10. The resolution now goes to the House, as both chambers of Congress must pass the final reconciliation bill. The framework totals $3.5 trillion in Budget Reconciliation instructions. The instructions...
Legal Alert: Making a Manchin out of a molehill – Senate infrastructure and budget debates heat up
Posted on Jul 15, 2021 in International Tax, Legal Alerts
Fresh from their July 4 recess, the Senate has returned to Washington to continue infrastructure and budget bill negotiations. As previously discussed, there are two distinct legislative paths making their way through Congress: (1) a bipartisan infrastructure package; and (2) a Democratic budget reconciliation bill focusing on family aid, healthcare, and a global minimum tax. Important...
Legal Alert: IRS issues new Section 45Q CCUS ruling
Posted on Jul 9, 2021 in Legal Alerts
The IRS issued Revenue Ruling 2021-13 on July 1, 2021, which provides additional guidance regarding the section 45Q carbon capture, utilization and storage (CCUS) credit. More specifically, the ruling concludes that: A taxpayer needs to own only one component of carbon capture equipment within a single process train to be the person that is entitled to the tax credit.For section...
Legal Alert: Downsizing from a House to a Manchin: Federal and International tax negotiations continue
Posted on Jul 8, 2021 in Legal Alerts
As Congress and the White House look to make a deal on infrastructure by this summer, negotiations regarding changes in the tax law continue. Since our prior alert, while progress has been made regarding a bipartisan infrastructure deal and a minimum global tax, the details of most corporate tax proposals have yet to be decided. Of course, the most pressing question remains –...
Legal Alert: IRS extends continuity safe harbor for renewable energy projects
Posted on Jun 30, 2021 in Energy Tax, Legal Alerts
On June 29, 2021, the IRS issued Notice 2021-41, which provides a further extension of the continuity safe harbor and revises the “facts and circumstances” rules:- For PTC and ITC-eligible projects for which construction began in calendar years 2016 through 2019, the continuity safe harbor is extended to six years.- For PTC and ITC-eligible projects for which construction began in...
Legal Alert: FY 2022 Green Book goes big for green energy
Posted on Jun 1, 2021 in Energy Tax, Legal Alerts
On May 28, 2021, Treasury released the General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals, more commonly referred to as the Green Book. The issuance of the Green Book provides further detail on the White House’s American Jobs Plan, one of the major proposals in the development of an infrastructure bill. The Green Book’s release comes as Congress works...
Legal Alert: Warren bill fundamentally changes financial account reporting requirements and substantially increases IRS funding
Posted on May 28, 2021 in Legal Alerts, Tax Accounting
On May 24, 2021, Sen. Warren introduced Senate Bill 1788, the “Restoring the IRS Act” (the Proposed Legislation). The Proposed Legislation generally (1) imposes new information reporting obligations on financial institutions relating to various types of transaction information associated with an account of an individual or business at that institution, (2) provides for significantly...
Legal Alert: Rev. Proc. 2021-26 provides accounting method change procedures for CFCs seeking to use the alternative depreciation system
Posted on May 26, 2021 in Legal Alerts, Tax Accounting
Recently released Revenue Procedure 2021-26 (the Revenue Procedure) provides taxpayers with guidance regarding accounting method changes made on behalf of foreign corporations. The Revenue Procedure: Allows controlled foreign corporations (CFCs) to obtain automatic consent to change depreciation methods to use the alternative depreciation system under section 168(g) (ADS) (or...
State of play: A May methods update
Posted on May 19, 2021 in Legal Alerts, Tax Accounting
At last week’s ABA May Tax Meeting, government attorneys from both the Internal Revenue Service National Office Income Tax & Accounting division (IT&A) and the Department of the Treasury provided updates to taxpayers and practitioners on the status of guidance projects, and offered clarification regarding certain recent legislative proposals. IT&A leadership acknowledged...
Who in the world is Joe Manchin: International tax proposals vary under Biden, Senate proposals
Posted on Apr 23, 2021 in International Tax, Legal Alerts
Just a few months after regulations were finalized, and as taxpayers were getting comfortable with the international tax provisions implemented by the 2017 Tax Cuts and Jobs Act (TCJA), proposals from President Biden1 and the Senate Finance Committee2 to overhaul international tax have arrived. While similarities are present between the two proposals, including raising the corporate...
Legal Alert: BEAT, FATCA and Insurance—proposed regulations clarify the application of the BEAT and the treatment of insurance premiums under FATCA
Posted on Dec 21, 2018 in Legal Alerts
On December 13, 2018, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued two sets of proposed regulations of importance to insurance companies. One set was the long-awaited regulations under section 59A of the Internal Revenue Code of 1986, as amended (Code), commonly referred to as the base-erosion anti-abuse tax (BEAT). The other set of proposed...
Legal Alert: The season of giving – proposed regulations ease FATCA reporting burdens
Posted on Dec 21, 2018 in Legal Alerts
On December 13, 2018, proposed regulations (Proposed Regulations) were issued that reduce certain compliance obligations under Sections 1471-1474 (the Foreign Account Tax Compliance Act (FATCA)) of the Internal Revenue Code of 1986, as amended (Code) and Sections 1441-1446 of the Code. FATCA generally requires withholding 30% on certain US source payments made to foreign financial...