Eversheds Sutherland Tax Reform Law Blog
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Notice Confirms Business as Usual for Taxpayers with Advance Payments

The IRS issued Notice 2018-35 on April 13, which permits taxpayers to continue to rely on Rev. Proc. 2004-34 for the treatment of advance payments under Section 451.  According to the Notice, the IRS will not challenge taxpayers’ use of the current guidance that provides for the limited deferral of advance payments. Additionally, the Notice requests comments with suggestions on Section 451 guidance, including: the applicability of Rev. Prov. 2004-34; whether the definition of “advance payments” should be expanded; and the possibility of expanding the rules under section 451(c), which allows...
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IRS Updates Q&As about Section 965 Reporting

On April 13, the IRS updated its Questions and Answers page to include additional discussion on reporting amounts owed under section 965—the so-called “transition tax”—on a taxpayer’s 2017 tax return. The Q&As provide answers to questions on reporting requirements, such as how section 965 amounts are reported or steps that a taxpayer should take if the taxpayer had previously filed its return without reporting section 965 amounts where such reporting was required. The update also discusses what additional reporting is required in connection with section 965 amounts and how a taxpayer...
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The OMB and Treasury Release Memo on OMB’s Oversight of Tax Regulations

The Office of Management of Budget (OMB) and the Department of Treasury recently issued a memo describing the framework for the OMB’s review of tax regulations. The memo provides that regulations will be subject to review if they 1) create a serious inconsistency or interfere with an action of another agency, 2) raise novel legal or policy issues, or  3) have an annual non-revenue effect on the economy of $100 million or more. OMB oversight has raised concerns about the efficiency of the tax regulation process, however the memo was positively received by the Treasury officials. Read more:...
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LEGAL ALERT: IRS RELEASES NOTICE 2018-26 – RETROACTIVELY DISREGARDING CERTAIN ACCOUNTING METHOD CHANGES AND ENTITY CLASSIFICATION ELECTIONS

View the Eversheds Sutherland Legal Alert summarizing the treatment of certain accounting method changes and entity classification elections in Notice 2018-26 here.
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LEGAL ALERT: TRANSITION TAX – ENOUGH ABOUT HOW IT WORKS; HERE IS WHAT DOESN’T WORK

View the Eversheds Sutherland Legal Alert summarizing the new anti-avoidance rules and other technical guidance described in Notice 2018-26 with respect to which the Treasury and the IRS intend to issue regulations, effective as of the first taxable year of a foreign corporation to which section 965 applies, here.
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VIDEOCAST: TOOLS OF ENGAGEMENT – BEST PRACTICES TO MAXIMIZE CERTAINTY AND MINIMIZE CONTROVERSY

The tax reform bill passed at the end of 2017, but Congress continues to propose and make changes to the Internal Revenue Code. Many provisions provided welcome relief; others created uncertainty.  In this Bottom Line videocast, Susan Seabrook and Daniel Strickland discuss the administrative controversy processes and procedures available to taxpayers, as well as the certainty achievable in an otherwise uncertain climate. View the Videocast...
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Georgia Legislature Enacts Significant Income, Sales, and Property Tax Legislation

The Georgia legislative session concluded on March 29, 2018. In addition to two major bills relating to federal tax reform, Georgia enacted several other pieces of notable tax legislation. View the full Legal Alert.
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IRS Releases Notice on the Withholding Obligations of Non-publicly Traded Partnerships

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
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IRS Releases Guidance on Section 965

On April 2, 2018, the IRS issued Notice 2018-26, which describes additional regulations to be promulgated under Section 965. The regulations will provide anti-avoidance rules under the authority granted by the statute, provide an exception to the treatment of a foreign corporation as a specified foreign corporation (SFC) in connection with the downward attribution of stock through a partnership in certain circumstances; provide a proration rule for foreign income taxes in determining a SFC’s post-1986 earnings and profits as of November 2, 2017; and set out related reporting and...
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IRS Releases Guidance on Section 163(j)

On April 2, 2018, the IRS issued Notice 2018-28, which provides guidance related to the interest deductibility limitation in Section 163(j). The Notice clarifies that Section 163(j) will treat taxpayers who file a consolidated return as a single taxpayer and that interest disallowed under the prior version of Section 163(j) may be carried forward and treated as business interest in taxable years beginning after December 31, 2017. Notably, the Notice did not address the applicability of Section 163(j) to controlled foreign corporations or to consolidated groups where one of the members of the...
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Transitional Guidance on Fines and Penalties Issued by IRS

Last week, the IRS issued Notice 2018-23 to assist government officials and taxpayers with complying with Sections 162(f) and 6050X of the Internal Revenue Code. The Tax Cuts and Jobs Act revised Section 162(f), which disallows deductions for fines and penalties, defined to exclude amounts paid as restitution or as reimbursement for investigations, or paid in suits where there is no government party involved. Notice 2018-23 provides details on how to satisfy the requirements for these exceptions. Additionally, the notice addresses the effective date of Section 6050X, a new section of the...
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New York State Budget Adopts Substantial Changes in Response to Federal TCJA

The New York Legislature passed its 2018-2019 Fiscal Year budget on March 30, 2018, which is expected to be signed into law by Governor Cuomo. The Legislature responded to the Tax Cuts and Jobs Act (TCJA) passed by the United States Congress late last year by excluding IRC § 965 repatriated income from New York taxable income. However, the final budget failed to address other TCJA provisions, such as the tax on global intangible low-taxed income (GILTI) and the interest expense limitation under IRC § 163(j). Thus, New York will conform to these federal tax changes. View the full Legal...
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Videocast: Implications of tax reform on income recognition

The changes made to the Internal Revenue Code by the Tax Cuts and Jobs Act (TCJA) included a number of modifications to the rules associated with income recognition. Although the TCJA codified certain taxpayer-favorable methods (i.e., the Deferral Method under Rev. Proc. 2004-34), the revised Section 451(b) likely will result in an acceleration of taxpayers’ historic recognition of income. In light of these changes and the changes, made under ASC 606 regarding revenue recognition for financial accounting purposes, taxpayers now more than ever should be reviewing and evaluating their...
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Videocast: State Tax Implications of Federal Tax Reform

The state and local tax (SALT) implications of federal tax reform are numerous, yet still often unclear. With states releasing new law and guidance about federal tax reform, taxpayers must stay abreast of this very dynamic area of law. In this videocast, Todd Lard and Todd Betor discuss the gating question to the SALT implications of federal tax reform—state conformity to the IRC—along with other SALT considerations pertaining to major general, domestic and international tax provisions included in the new tax law. View the videocast....
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President Trump Considers Subjecting the Treasury to OMB Oversight

President Trump is considering whether to grant the Office of Management and Budget (“OMB”) oversight over regulations issued by the Treasury Department. While the Treasury Department has been exempt from OMB review since the 1980s with respect to tax regulations, President Trump’s move would end that autonomy and add an additional layer of review to forthcoming Treasury regulations. Neomi Rao, head of the Office of Information and Regulatory Affairs within the OMB, remarked that such a move will delay forthcoming guidance related to the 2017 tax act, given the additional layer of review and...
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