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IRS Releases Draft Forms for Transition Tax and BEAT Reporting

The IRS released draft forms for reporting a taxpayer’s section 965 transition tax and section 59A base erosion and anti-abuse tax liabilities. The forms, titled Form 965 (“Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System”) and Form 8991 (“Tax on Base Erosion Payments of Taxpayers With Substantial Gross Receipts”), respectively, can be found on the...

GILTI Regulations Reviewed by OMB

The Office of Management and Budget (OMB) has completed its review of global intangible low-tax income (“GILTI”) proposed regulations. Section 951A, enacted by the Tax Cuts and Jobs Act, generally taxes income earned by controlled foreign corporations at a reduced rate. Read more: OMB Completes Review of Regs on GILTI...

Draft of Tax Reform 2.0 Introduced in Congress

House of Ways and Means Committee Chair Kevin Brady recently highlighted the introduction of three new tax bills that together comprise the new tax reform package. The drafts of new tax legislation deal primarily with individuals, retirement savings, and small businesses. H.R. 6760, the Protecting Family and Small Business Tax Cuts Act of 2018, would extend the 20 percent deduction on...

Tax Reform 2.0 to be Marked Up This Thursday

According to its Chairman Kevin Brady, the House Ways and Means Committee will consider and mark-up “Tax Reform 2.0” legislation this Thursday. Released early last week, the Tax Reform 2.0 package consists of three bills to make permanent the individual tax cuts, pass-through provision under Section 199A and state and local tax (SALT) deduction cap added by the Tax Cuts and Jobs Act....

Comments on Sections 162 and 6050X Requested by IRS

The IRS has invited the public to comment on transitional guidance for the new reporting requirements under section 162(f) and new section 6050X, which was added by the Tax Cuts and Jobs Act, with respect to fines, penalties and other amounts. The comment period is open through November 5, 2018. Read the Notice here: Notice 2018-19172 Read more here: IRS Seeks Comment On Planned Biz...

IRS Releases Proposed Regulations Addressing Purported Charitable Contributions in Exchange for State and Local Tax Credits

On August 23, 2018, the IRS released proposed regulations under section 170, which allows deductions for certain charitable contributions. The regulations are in response to plans by some states to circumvent the $10,000 deduction limitation for state and local taxes imposed by the Tax Cuts and Jobs Act by offering tax credits for contributions to certain government programs. The...

Proposed GILTI Tax Regulations are Currently Under Review by the OMB

According to the Office of Budget and Management (OMB) website, the proposed regulations on section 951A were received on August 22, 2018 and are currently under review.  Section 951A, a provision added by the Tax Cuts and Jobs Act, addresses the inclusion of global intangible low-taxed income by United States shareholders. Notice on OMB Website: Pending EO 12866 Regulatory...

Section 168(k) Administrative Solutions Possible for QIP Error; Partnership Remedial Allocations

On August 16, the Senate Finance Committee sent a letter to Treasury clarifying the drafting error in the Tax Cuts and Jobs Act that failed to make qualified improvement property (QIP) eligible for 100% bonus depreciation under section 168(k). Ellen Martin, a tax policy adviser in the Treasury Office of Tax Legislative Counsel, commented that the letter was welcome but may not be...

IRS Releases Preliminary Guidance Clarifying Section 162(m) Deduction Limitations

The IRS released Notice 2018-68, which provides preliminary guidance on section 162(m). As amended by the Tax Cuts and Jobs Act, section 162(m) disallows the deduction for performance-based executive compensation and expands the definition of “covered employees” for the $1 million deduction limitation. The Notice provides that “covered employees” include the chief executive officer and...

IRS Releases Interim Guidance for Unrelated Business Taxable Income

The IRS released Notice 2018-67, which provides interim guidance addressing section 512(a)(6). Section 512(a)(6), added by the Tax Cuts and Jobs Act, requires a taxpayer to calculate its unrelated business taxable income separately for each unrelated trade or business in which the taxpayer is engaged. In determining whether a taxpayer has more than one trade or business, the Notice...

Senate Finance Committee Provides Congressional Intent Behind TCJA Concepts

The Senate Finance Committee Republicans sent a letter to Treasury asking that its guidance on provisions of the Tax Cuts and Job Act reflect congressional intent. The letter specifically identified three errors to be corrected by technical correction legislation: the effective date of the net operating loss carryforwards and carrybacks should begin after December 31, 2017; qualified...

Federal Register Publishes Proposed Passthrough Deduction Regulations

On August 16, 2018, the Federal Register published the Treasury and the IRS’s proposed passthrough deduction regulations. The regulations provide guidance on section 199A, which grants up to a 20% deduction for certain business income with respect to individuals and passthrough entities. The publication in the Federal Register begins the comment period for the proposed regulations, and...

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...

Proposed Pass-Through Deduction Regulations Released

The IRS has released proposed regulations on section 199A, a provision added by the Tax Cuts and Jobs Act that provides a deduction for certain qualified business income with respect to individuals and pass-through entities. Read more: IRS issues proposed regulations on new 20 percent deduction for passthrough businesses;...

Regulations on Bonus Depreciation Are Mostly as Expected

The proposed regulations addressing section 168(k) bonus depreciation largely conform to expectations, however there were a few unanticipated elements. In her recent comments to the press, Ellen McElroy of Eversheds Sutherland (US) LLP highlighted the IRS’ failure to address the drafting error that left qualified improvement property ineligible for bonus depreciation. McElroy also...


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