Conference Sparks Insights from Treasury Regarding New Tax Law
Posted on Jan 29, 2018
At an event organized by the District of Columbia Bar Community of Taxation on January 25, 2018, Treasury officials discussed the changes prompted by the recently passed tax legislation and how they affect a variety of different industries and areas. Treasury is prioritizing guidance on changes that have immediate impacts on early financial statements. Among other guidance, Treasury will focus on projects involving qualified business income deduction under section 199A, changes to cost recovery under section 168, changes to the section 451 accrual method, and the revised section 163(j)...
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IRS is Prioritizing Certain Guidance Related to Pass-through Entities
Posted on Jan 24, 2018
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 income deduction) and section 163(j) (interest expense deduction limitation) as being high on the list for further guidance due to their complexity. Warren also indicated that section 1061 (carried interest rules)...
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Treasury Department Releases Notice 2018-13, Providing Additional Guidance on Section 965
Posted on Jan 22, 2018
The IRS and Treasury Department have issued additional guidance regarding the transition tax imposed by the tax law’s new section 965. In addition to providing background information on section 965, Notice 2018-13 states that future regulations will be introduced to address: factors for determining a specified foreign corporation; an alternative method for calculating post-1986 earnings and profits; the treatment of deficits; the determination of aggregate foreign cash position; and currency translation rules. Additionally, the notice requests comments, provides effective dates, and offers...
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IRS Modifies Notice 1036 Withholding Tables Incorporating Changes to the Individual Tax Rates
Posted on Jan 17, 2018
The IRS recently released an updated version of Notice 1036 (includes income tax withholding tables for employers) which integrates the changes made by the recently passed tax legislation. The notice states that employers must implement the withholding tables by February 15, 2018. The IRS anticipates updating its online withholding calculator by the end of February. Read more: New 2018 Withholding Tables Released
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Speaker Ryan Foresees only Technical Corrections to the Tax Reform Bill, Rather Than Major Changes
Posted on Jan 16, 2018
In an interview with C-SPAN, House Speaker Paul Ryan stated that the bill previously known as the Tax Cuts and Jobs Act would require some technical corrections, such as in the area of international taxation, though he did not offer further details. He anticipates that any corrections to the bill would be small changes. House Ways and Means Committee Chair Keven Brady has also stated that any technical corrections would take time and that he does not expect Congress to immediately take on the technical corrections. Listen to the interview: Interview with Speaker Ryan. Read more: No Major...
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Many State Tax Incentives Are Now Taxable Due to Federal Tax Reform
Posted on Jan 16, 2018
Recently enacted federal tax reform is expected to generate $6.5 billion in additional federal revenue through 2027 by increasing corporate tax liability for certain state and local incentives. In their article for Bloomberg, Eversheds Sutherland attorneys Timothy Gustafson and Hanish Patel discuss the change and opportunities to minimize its impact. View the full article.
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Broad Scope of “Cash” for Tax on Deferred Foreign Income Impacts Financial Sector
Posted on Jan 10, 2018
The new provision requiring that U.S. companies pay a 15.5 percent tax on deferred foreign earnings to the extent of cash and cash equivalents and a 8 percent tax on additional untaxed foreign earnings produces complications for the financial sector. Companies are reporting that the repatriation tax imposes a heavier burden on the financial sector because such companies typically hold significant cash assets, which cause a corresponding amount of earnings to be taxed at almost double the rate. Recent IRS guidance states that derivatives, routinely used by banks and broker-dealers, will be...
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CRS Report Analyzes 2017 Federal Tax System In Anticipation of Tax Bill Changes
Posted on Jan 9, 2018
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 system) alike. The report also explains and provides analysis regarding the 2017 individual income tax, corporate income tax and other taxes, including those on insurance, retirement and estates. Additionally,...
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California Proposes Bill to Permit Donations Instead of State Taxes as Challenge to New Federal Tax Bill
Posted on Jan 5, 2018
The California legislature has introduced a bill that permits residents to donate to a state “public purpose” fund and receive a dollar-for-dollar tax credit on their returns. This donation is intended to be deductible for federal tax purposes as a means of circumventing the new $10,000 cap on state/local tax deductions included in the recently passed tax bill. White House economic adviser Gary Cohn said the federal government might try to block attempts to circumvent the cap. Read more: California bill takes aim at new federal tax deduction cap.
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Legal Alert: Tax Reform Bill – Changes to Section 529 Qualified Tuition Programs and Section 529A Qualified ABLE Programs
Posted on Jan 4, 2018
View the Eversheds Sutherland Legal Alert summarizing the principal provisions of the Final Tax Reform Bill affecting Section 529 Qualified Tuition Programs and Section 529A Qualified ABLE Programs here.
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New York Challenges Federal Government’s Tax Reform Bill as Unconstitutional Double Taxation
Posted on Jan 3, 2018
In his recent speech before the state legislature, New York Governor Andrew M. Cuomo stated that the reduction in the state and local tax deduction reflected in the new tax reform bill is unconstitutional double taxation. The governor further indicated that New York would challenge the provision. Cuomo also said that the state will undergo its own tax revision process, shifting away from its reliance on income taxes. Read more: In State of State speech, Cuomo vows to sue federal government over tax bill
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IRS Releases Guidance on the Transition Tax Provision
Posted on Jan 2, 2018
Last week, the IRS released Notice 2018-07 (the “Notice”), which provides guidance on calculating the so-called “transition tax” of the Tax Cuts and Jobs Act. While the Notice itself does not contain any specific regulations, it does describe the regulations that the IRS plans to issue at a later date, including guidance on the effects that the future regulations will have. The Notice also covers topics like the treatment of related-party transactions and hedging transactions, as well as the effective dates for the transition tax. Read more: Notice 2018-07
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Legal Alert: Insurance Industry Provisions in H.R. 1, the Final Tax Bill
Posted on Dec 29, 2017
View the Eversheds Sutherland Legal Alert discussing the modifications of importance to insurance companies in the Final Tax Reform Bill here.
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Legal Alert: Party Like it’s 1986: Business Impacts of the Bill Formerly Known as the Tax Cuts and Jobs Act
Posted on Dec 27, 2017
View the Eversheds Sutherland Legal Alert summarizing the principal provisions of the Final Tax Reform Bill impacting domestic and multinational businesses here.
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Legal Alert: Section 162(q) Raises Questions about Deductibility of Employment Settlement
Posted on Dec 27, 2017
View the Eversheds Sutherland Legal Alert discussing the impact of the Final Tax Reform Bill on the settlement of employment-related claims here.
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