OMB’s Review of 199A Regulations to Be Completed in Ten days
Posted on Jul 25, 2018 in News, Pass-through Taxation
Last week, the Office of Management and Budget’s Office of Information and Regulatory Affairs (OIRA) received draft proposed computational section 199A regulations from Treasury. OIRA’s expedited deadline for this review is ten business days after receipt of all necessary information, subject to extension as agreed with Treasury. Guidance sent to OIRA is generally subject to a 45-day...
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 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...Proposed Regulations and Guidance on Sections 199A and 163(j) Will Draw on Existing Regulations
Posted on Jun 29, 2018 in News, Pass-through Taxation
The IRS is incorporating relevant existing regulations in drafting the proposed regulations for sections 199A and guidance for section 163(j). However, as noted by Holly Porter, acting IRS associate chief counsel, there are limitations to the degree to which application of these two sections can rely on regulations already existing under other sections due to the differences in nature...
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
Resignation of Treasury Official Expected to Result in Guidance Delays
Treasury Deputy Assistant Secretary of Tax Policy Dana Trier stepped down from his position on February 23. Trier’s role focused on developing guidance on various aspects of the new tax reform law, including the partnership and international tax provisions. Practitioners have expressed concern that his departure will result in delays in issuing regulations, which could result in...Treasury Considering Treatment of Foreign Taxes Under Transition Tax
Under the new Tax Act, U.S. shareholders are charged a one-time tax on deferred foreign earnings of their foreign subsidiaries; these earnings and profits are measured as of November 2 if the amount is greater than on December 31. Taxpayers have brought to Treasury’s attention that the use of the November 2 date can result in an overstatement of earnings because foreign taxes...The Treasury Department Anticipates Releasing a Notice on IRC 163(j) in the Near Future
Krishna Vallabhaneni, Treasury deputy tax legislative counsel, recently stated that the Treasury Department plans on issuing a notice in the coming weeks to address some of the recent issues related to amended IRC 163(j) (interest expense deductions). Some of the specific issues the notice will address include the treatment of carryovers and limitations under the previous section...IRS is Prioritizing Certain Guidance Related to Pass-through Entities
Posted on Jan 24, 2018 in News, Pass-through Taxation
As the IRS continues to work on guidance for the new tax legislation (formerly known as the Tax Cuts and Jobs Act), the agency is prioritizing certain complex provisions that relate to pass-through entities. In comments to the New York State Bar Association, Clifford Warren, special counsel to the IRS associate chief counsel, identified section 199A (qualified pass-through business...
CRS Report Analyzes 2017 Federal Tax System In Anticipation of Tax Bill Changes
Posted on Jan 9, 2018 in Individual Taxation, Insurance Tax, International Tax, News, Pass-through Taxation
The Congressional Research Service (CRS) published Report 7-5700 on December 26, 2017, which provides an overview of the federal tax system as in effect through 2017. The report notes that the new tax bill, H.R. 1, will generate broad changes for individuals (personal exemptions; standard deduction) and businesses (different tax rate for pass-through business income; territorial tax...
Legal Alert: Party Like it’s 1986: Business Impacts of the Bill Formerly Known as the Tax Cuts and Jobs Act
View the Eversheds Sutherland Legal Alert summarizing the principal provisions of the Final Tax Reform Bill impacting domestic and multinational businesses here.With a Consensus Tax Bill, Christmas May Come Early for Republicans
An agreement between Senate and House Republicans on a tax bill was finalized Wednesday morning. According to lawmakers and reports from aides, Senate and House Republicans have agreed to provisions including the following: • Corporate tax rate will drop from 35% to 21%, to go in effect in 2018. • Individuals will be allowed to deduct up to $10,000 in state and local taxes, split...Senate May Vote on Its Tax Reform Bill as Early as Thursday, but There Are Hurdles to Overcome
At least a half dozen Republican senators have shown concern about the Senate version of the Tax Cuts and Jobs Act, threatening the passage of the bill by the end of this year. The bill, passed out of the Senate Finance Committee on November 17, faces its next major hurdle from the Senate Budget Committee who will meet Tuesday, November 28, to add a revenue-raising measure allowing...Senate Will Not Release Bill Until House Finishes Markup
The House Ways and Means Committee continues the markup process that began on Monday. No new amendments were agreed to in yesterday’s markup session but the state and local tax deduction and pass-through entities remain key issues in the debate concerning the legislation. The House’s negotiation process has important implications for the Senate timeline as the Senate bill will not...Rates Proposed by House’s Tax Bill
Posted on Nov 2, 2017 in News, Pass-through Taxation
The tax bill released by the House Ways and Means Committee proposes significant changes to both individual and corporate rates. The corporate tax rate will be lowered from 35% to 20% while the rate on “pass-through” businesses will be lowered to 25%. On the individual side, tax rates will be consolidated into four brackets: 12%, 25%, 35% and 39.6%. Read more: Policy Highlights –...