Eversheds Sutherland Tax Reform Law Blog
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IRS Releases Additional Guidance on Section 965

The Treasury and the IRS have published Notice 2018-78, containing additional guidance on the proposed regulations for Section 965, which were published on August 9, 2018. The Notice provides that the final regulations (i) will not require taxpayers to make a binding basis election until at least 90 days after finalization of the proposed regulations; (ii) will permit all members of consolidated groups that are U.S. shareholders of a specified foreign corporation to be treated as a single U.S. shareholder for purposes of the exception to treating certain items as cash under proposed...
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House Approves Three New Tax Bills

On September 27, 2018, the House approved two bills that are part of a second package of tax law changes advanced by House Republicans (“Tax Reform 2.0”). The first bill would create universal savings accounts, expand the utility of section 529 education savings plans, and make the offering of employee retirement plans more accessible for small businesses. The second bill would provide additional benefits for start-up companies. Also, on September 28, 2018, the House approved a third bill, which would make permanent the individual tax cuts enacted by the 2017 Tax Cuts and Jobs Act. Read the...
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IRS to Issue Proposed Regulations on Market Discount

The IRS and Treasury Department have recently announced (Notice 2018-80) that they plan to issue guidance providing that market discount is not includible in income under section 451(b), which was added to the Code by the Tax Cuts and Jobs Act.  Under section 451(b), accrual method taxpayers generally must include an amount in gross income no later than when it is included in income in their financial statements. Read more: IRS Provides Guidance on Treatment of Market Discount
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House to Vote on Tax Reform 2.0 on Thursday and Friday

House Ways and Means Committee Chair Kevin Brady recently stated the House votes for Tax Reform 2.0 are scheduled to occur on Thursday and Friday. H.R. 6757, the Family Savings Act of 2018, and H.R. 6756, the American Innovation Act of 2018, are scheduled for votes on Thursday. H.R. 6760, the Protecting Family and Small Business Tax Cuts Act of 2018, is scheduled for vote on Friday. Read more: House to vote Friday on individual tax cuts: Republican tax chairman  
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Tax Reform 2.0 Will Likely Not Be Passed By Congress Before Midterms

House Ways and Means Committee Chair Kevin Brady recently stated that the three tax bills that together comprise the new tax reform package will likely not get through the Senate before midterm elections. The House Ways and Means Committee previously passed the bills through committee. The House is expected to vote the legislation later this month. Read More: Top House tax writer Kevin Brady doubts new GOP tax cuts can get through the Senate before midterm  ...
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Proposed GILTI Regulations Released

The IRS has released proposed regulations on global intangible low-tax income (GILTI) under section 951A, a provision added by the Tax Cuts and Jobs Act.  The proposed regulations set forth rules for calculating the GILTI inclusion and new reporting requirements, but do not address foreign tax credit rules, which will be addressed separately in the future. Public comments on the proposed regulations are due by 60 days after the proposed regulations are published in the federal register. Read the proposed regulations here: REG-104390-18 Read more here: IRS issues proposed regulations on...
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Tax Reform 2.0 Approved by House Ways and Means Committee

The House Ways and Means Committee approved the Tax Reform 2.0 package consisting of three bills. This overhaul package would make permanent the TCJA’s reduced rates for individuals along with several other provisions, including the $10,000 cap on the state and local tax (SALT) deduction, and the 20% deduction on certain pass-through business income.  A proposed amendment to repeal the SALT deduction cap was defeated in committee. The full House of Representatives may consider the bills now, with a vote planned this month. Read the Overhaul Package: H.R. 6760; H.R. 6757; H.R. 6756 Read more:...
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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 IRS website. The IRS also released draft schedules for Form 965 (Schedules A through H). These schedules can be found on the IRS website as...
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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  
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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 certain pass-through businesses and make permanent tax provisions related to individuals including reduced rates and the cap on state and local tax deductions. H.R. 6757, the Family Savings Act of 2018, would...
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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. The framework provides that the Tax Reform 2.0 is about “locking in tax cuts for middle-class families and small businesses, and changing the culture in Washington so we continuously improve our tax code and...
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Legal Alert: Real estate unlocked: Opportunity zones offer tax incentives to investors

As part of the Tax Cuts and Jobs Act of 2017, Congress added new rules to the Internal Revenue Code intended to promote investments in low-income communities designated as “qualified opportunity zones.” Deferral of tax on gains reinvested in Opportunity Funds and reduction or elimination of tax on such investments held for extended periods are the OZ Program’s carrots. Qualifying real estate development/redevelopment projects could be especially attractive opportunities under the program. While regulations are needed to answer some questions, early investors stand to reap the greatest...
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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 Fine and Penalty...
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Videocast: State tax considerations of IRC § 965

In this Bottom Line videocast, Eversheds Sutherland attorneys Aaron Payne and Todd Betor discuss the state tax consequences and considerations of IRC § 965. This videocast includes: A federal income tax overview of IRC § 965 SALT considerations of IRC § 965 Specific state responses...
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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 regulations generally deny a deduction for such contributions. Read more: REG-112176-18; Treasury Issues Crackdown on State and Local Tax...
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