Eversheds Sutherland Tax Reform Law Blog
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Legal Alert: And the BEAT goes on – proposed regulations clarify the application of the base-erosion and anti-abuse tax

On December 13, 2018, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued proposed regulations under section 59A of the Internal Revenue Code of 1986, as amended, commonly referred to as the base-erosion and anti-abuse tax (BEAT). Read the full Legal Alert here.
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California Court of Appeal Affirms that Transactions Involving Out-of-State Title Transfer Are Subject to Local Use Tax, Not Local Sales Tax

The California Court of Appeal affirmed a trial court decision finding that transactions involving an Internet retailer headquartered in Brisbane, California, were subject to local use tax, rather than local sales tax, because title in the transactions at issue passed outside California. The court explained that when a retail seller delivers goods to a common carrier at an out-of-state warehouse for shipment to a customer in California, title will pass to the buyer at the time and place that the retailer delivers the goods to the carrier, absent an agreement to the contrary. City of Brisbane...
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OMB Receives Final and Proposed Section 199A Regulations

The Office of Management and Budget (OMB) received the proposed and final regulations regarding the new section 199A pass-through deduction regime on December 13 and 14.  The proposed regulations focus on regulated investment company-specific guidelines while the final regulations follow up on the proposed pass-through deduction rules released in August.  The regulations are not marked for expedited review; however, the government has indicated that it plans to release the final regulations before the end of the year so they will take effect for tax year 2018. Read More: OIRA Reviewing Final...
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IRS Releases Proposed BEAT Regulations

On December 13, the IRS released proposed regulations (REG-104259-18) concerning the base erosion and anti-abuse tax (BEAT) under section 59A. Section 59A generally operates as a minimum tax on income without regard to certain deductible payments made to foreign related parties. The new regulations clarify who is an “applicable taxpayer” under the provision, as well as provide further explanation regarding the BEAT calculation. Read the Proposed Regulations: REG-104259-18
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OIRA Receives Final Transition Tax Regulations for Review

On December 6, the Office of Information and Regulatory Affairs (OIRA) received final regulations under section 965, the so-called transition tax. OIRA will have 45 days to review the regulations, as they are not designated for expedited review. The Treasury Department has previously stated that the final regulations will provide additional detail regarding ordering rules for determining earnings and profits, but the final regulations may include other changes to the proposed regulations as well.  The final regulations are expected to be released by the end of the calendar year. Read More:...
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Legal Alert: IRS and Treasury Issue Final Regulations on Negative Adjustments under UNICAP

On November 19, 2018, the Internal Revenue Service (IRS) and the Treasury Department (Treasury) issued final regulations (T.D. 9843) that address taxpayers’ use of negative amounts in calculating additional costs for purposes of section 263A. Read the full legal alert here
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Legal Alert: Allocation, Apportionment and Attribution, oh my – Proposed Foreign Tax Credit Regulations Provide Critical Guidance

On November 28, 2018, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued proposed regulations concerning foreign tax credit determinations and related issues (Proposed Regulations) to take into account changes to the Internal Revenue Code made by the Tax Cuts and Jobs Act (TCJA). The Proposed Regulations were highly anticipated because their application will significantly impact the practical cost to taxpayers of many provisions of the TCJA, most notably the new Global Intangible Low-Taxed Income (GILTI) provisions. Read the full legal alert...
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Legal Alert: INXS? IRS Issues Proposed Regulations under Section 163(j)

On November 26, 2018, the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued proposed regulations (Proposed Regulations) under section 163(j) of the Internal Revenue Code of 1986, as amended (the Code). The Tax Cuts and Jobs Act (the TCJA) amended “old” section 163(j) with an entirely new section 163(j) which operates to limit the ability of taxpayers to deduct business interest expense. In contrast to “old” section 163(j), new section 163(j) applies to all taxpayers and all interest expense deductions. Read the full legal alert...
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Legal Alert: House Bill Proposes Tax Credit Extensions for Renewable Energy, Biodiesel and Alternative Fuels and other Energy Tax Provisions

On November 26, the House of Representatives released a tax bill (Extenders Bill) that, if enacted, would extend certain tax credits for the renewable energy and alternative fuels industries and would make other changes relevant to the energy sector. The Extenders Bill provisions include:  view full legal alert...
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Prospects for Year-End Tax Legislation Dim

Democratic members of the Senate Finance Committee, including Benjamin Cardin and ranking minority member Ron Wyden, have expressed doubt that the Retirement, Savings and Other Tax Relief Act of 2018 will pass this year.  While the bill includes provisions for the retroactive application of tax extenders through 2018, several technical corrections to the Tax Cuts and Jobs Act, and clarification of deemed repatriation overpayments (via a manager’s amendment), the size and contents of the package have been met with opposition from both parties in the House and Senate.  The House’s initial...
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OIRA Receives Foreign Partner Sales Regulations

On December 4th the Office of Information and Regulatory Affairs (OIRA) received regulations pertaining to the treatment of foreign partners’ gains on the sale of a U.S. partnership.  The regulations will provide guidance on section 864(c)(8), enacted by the Tax Cuts and Jobs Act, which treats gain from the sale of an interest in a partnership engaged in the conduct of a U.S. trade or business as effectively connected with the conduct of that business, overriding the Tax Court’s decision in Grecian Magnesite Mining.  The regulations are anticipated to address treatment of partial sales of...
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IRS Releases Proposed Foreign Tax Credit Regulations

On November 28, the IRS released proposed regulations (REG-105600-18) concerning the treatment of foreign tax credits and related issues taking into account the changes made by under the Tax Cuts and Jobs Act (TCJA).  Foreign tax provisions under the TCJA modified the method for calculating taxable income for purposes of the foreign tax credit limitation; added two additional foreign tax credit limitation categories, for amounts includible under the new Global Intangible Low-Taxed Income (GILTI) provisions of the TCJA and foreign branch income; and repealed the pooling concept for computing...
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House Republicans Release Tax Package

House Republicans released a 297 page tax bill on the evening of November 26, with the possibility of voting on the proposed bill as soon as this week. The legislation includes a number of “extenders,” which would renew certain tax provisions set to expire; tax breaks for smaller businesses; and technical corrections to the Tax Cuts and Jobs Act (TCJA) passed in 2017. The five technical corrections included in the legislation would address legal expenses incurred by sexual harassment victims; provide guidance on the effective date of net operating loss provision modifications; address the...
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IRS Releases Business Interest Expense Proposed Regulations

The IRS has released proposed regulations (REG-106089-18) concerning the business interest expense deduction limits applied to certain taxpayers. As amended by the Tax Cuts and Jobs Act (TCJA), section 163(j) generally places a limit on the amount of deductible business interest expenses in a current taxable year. The proposed regulations, released on November 26, provide rules for calculating the business interest expense limitations in international, partnership, and consolidated group contexts, among other items. The proposed regulations further provide that certain trades and businesses,...
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OIRA Receives Section 267A Regulations for Review

The IRS on November 13th submitted its proposed section 267A anti-hybrid regulations to the Office of Information and Regulatory Affairs for expedited review. Section 267A of the Tax Cuts and Jobs Act, eliminates deductions for any “disqualified related party amount” paid or accrued through a related hybrid entity or transaction. The regulations are expected to address such issues as conduit arrangements, multiple tax residences, structured transactions, and payments subject to a preferential tax regime or participation exemption system. Read more: Proposed Regulations on Hybrid Mismatches...
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