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IRS Releases Proposed Regulations Addressing Hybrid Arrangements

On December 20, the IRS released proposed regulations under sections 245A(e) and 267A. Section 245A allows a deduction for certain related party dividends, except in the case of certain hybrid dividends, and section 267A disallows deductions for certain amounts paid in a related-party hybrid transaction or to a related hybrid entity. The proposed regulations under section 267A clarify...

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...

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...

IRS to Consider Changing Section 199A Aggregation Rules Based on Comments

IRS official Benjamin Weaver stated that the IRS is open to changing the aggregation rules set forth in the proposed section 199A pass-through deduction regulations since they are not “statutorily derived.” Weaver stated that the IRS has received numerous comments on the proposed regulations, particularly on the requirement that attributes of multiple businesses be aggregated at the...

IRS Releases Priority Guidance Plan for 2018-2019

On November 8, the IRS and Treasury Department released their priority guidance plan (PGP) for 2018-2019, which includes a number of projects concerning the implementation of the Tax Cuts and Jobs Act. Planned projects include finalizing regulations under sections 199A (the 20% deduction for qualifying business income) and 951A (global intangible low-taxed income) and issuing...

OMB Receives Proposed Foreign Tax Credit Regs for Review

The Office of Management and Budget (OMB) received proposed foreign tax regulations for review on November 7. The regulations include guidance on allocation of expenses to the section 951A Global Intangible Low-Taxed Income (GILTI) basket for purposes of determining the foreign tax credit limitation, as well as transition rules for excess foreign tax credit carryforwards. The...

OIRA Receives Proposed Section 163(j) Regulations for Review

The Office of Information and Regulatory Affairs (OIRA) received draft proposed regulations under section 163(j), addressing the limitation on business interest deductions, on October 25, according to the Office of Management and Budget’s website. As amended by the Tax Cuts and Jobs Act (TCJA), section 163(j) generally limits business interest expense deductions to the sum of business...

IRS Releases Opportunity Zone Guidance

On October 19, 2018, the IRS released proposed regulations (REG-115420-18) concerning opportunity zones (sections 1400Z-1 and 1400Z-2). Opportunity zones were created by the Tax Cuts and Jobs Act and allow tax benefits for investments in low-income communities, through what are termed qualified opportunity funds. Among other items, the proposed regulations provide taxpayers with...

Proposed Foreign Tax Credit and Section 163(j) Regulations to be sent to OIRA

On October 18, 2018, Lafayette G. Harter III, the deputy assistant secretary for international tax affairs for the Department of Treasury, announced that the proposed regulations focusing on foreign tax credits under section 904 are likely to be sent to the Office of Information and Regulatory Affairs (OIRA) for review on October 19 or the following week. Harter also announced that...

Treasury Confirms Issuance of Transition Tax Regulations by the End of the Year

Brenda Zendt, special adviser to the Treasury Office of International Tax Counsel, corroborated a prior report that the Treasury Department intends to issue final Section 965 regulations by the end of 2018. Treasury deputy assistant secretary for international tax affairs, Chip Harter, previously commented on the deadline while discussing Treasury’s goal to issue proposed regulations,...

Proposed GILTI Regulations to Be Published in Federal Register

The proposed regulations for the global intangible low-taxed income (“GILTI”) under section 951A (REG-104390-18) are set to be published in the Federal Register on October 10. Released on September 13, the regulations set forth new reporting requirements and rules for calculating GILTI inclusions. Public comments on the proposed GILTI regulations must be received by December 9. 2018,...

IRS Provides Interim Guidance on Expenses for Business Meals

The Treasury Department and IRS issued Notice 2018-76, offering interim guidance under section 274 of the Code. The guidance provides that taxpayers may treat certain business meal expenses as non-entertainment and may continue to deduct 50 percent of food and beverage expenses associated with operating their business or trade, so long as the expenses are not extravagant and the...

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...

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...

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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