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Treasury Considering Treatment of Foreign Taxes Under Transition Tax

Under the new Tax Act, U.S. shareholders are charged a one-time tax on deferred foreign earnings of their foreign subsidiaries; these earnings and profits are measured as of November 2 if the amount is greater than on December 31.  Taxpayers have brought to Treasury’s attention that the use of the November 2 date can result in an overstatement of earnings because foreign taxes...

Treasury to Issue Regulations Limiting Exclusion to the New Carried Interest Holding Period to C Corporations

The legislation formerly known as the Tax Cuts and Jobs Act extended the section 1061 carried interest holding period from one year to three years. However, section 1061(c)(4) provided an exception for “any interest in a partnership directly or indirectly held by a corporation.” The reference to a corporation arguably applies to both S corporations and C corporations, which provides...

The Treasury Department Anticipates Releasing a Notice on IRC 163(j) in the Near Future

Krishna Vallabhaneni, Treasury deputy tax legislative counsel, recently stated that the Treasury Department plans on issuing a notice in the coming weeks to address some of the recent issues related to amended IRC 163(j) (interest expense deductions). Some of the specific issues the notice will address include the treatment of carryovers and limitations under the previous section...

EU Finance Ministers Debate the EU’s Response to the 2017 Tax Act

Finance ministers from key EU countries, including France, Germany and Italy, are questioning whether some of the provisions of the 2017 tax act are contrary to World Trade Organization (WTO) rules. The finance ministers are currently reviewing whether to file a complaint with the WTO out of concern that the tax act will spark a race to the bottom with respect to tax rates. EU finance...

IRS Releases Revenue Procedure Limiting Changes to Annual Accounting Periods

The IRS has restricted the ability of taxpayers to make certain changes in accounting periods, through the issuance of Revenue Procedure 2018-17. The revenue procedure modifies Revenue Procedure 2002-39 and Revenue Procedure 2006-45, which deal with approval for changes to annual accounting periods. The modification generally denies automatic approval for changes to tax years of...

Eversheds Sutherland Releases Videocast on the Interest Deduction Limitation under Section 163(j)

Eversheds Sutherland (US) LLP recently released a videocast covering the broadly applicable limitation on the ability to deduct interest under Section 163(j), enacted as part of the recent tax act. This short video includes an overview of the limitation, the differences between the current and prior limitation, and the exceptions to the limitation. Listen to the video:  The Interest...

Eighteen Guidance Priorities and New Projects Released in Second Quarter Update to Priority Guidance Plan

The second quarter update to the 2017-2018 Priority Guidance Plan was released by the Treasury and IRS this past Wednesday. It sets forth eighteen priorities for guidance on tax issues stemming from the Tax Act, including for new sections 965 and 163(j), and other international sections. The update also contains projects that are hoped to be completed through June 30, 2018. These...

Videocast: Eversheds Sutherland Releases Videocast on the new BEAT provision

Eversheds Sutherland (US) LLP recently released a videocast, discussing the new Base Erosion and Anti-Abuse Tax (“BEAT”). This brief video walks through an example of how BEAT would be calculated. View it here: Tax Reform: Base Erosion and Anti-Abuse Tax (BEAT)...

Eversheds Sutherland Releases Videocast Providing a Basic Overview of International Tax Provisions

Eversheds Sutherland (US) LLP recently released a videocast which provides a brief overview of the impact of international tax provisions. This short video provides a concise overview of various international provisions in the recent legislation formerly known as the Tax Cuts and Jobs Act, including those related to the reduced corporate tax rate, the shift to a hybrid...

White House Requests $90 Million Funding for Implementation of Tax Cuts and Jobs Act

Congress is expected vote on a funding bill this week to avoid a government shutdown. President Trump has requested that $90 million be added to the bill to fund the IRS’s implementation of the Tax Cuts and Jobs Act. This amount falls short of the $397 million that the Treasury Department had estimated it would cost for the IRS to respond to the Act. Read more:  House GOP Scrambles to...

Chamber of Commerce Provides Feedback on Notice 2018-07

The U.S. Chamber of Commerce recently released recommendations for further guidance in response to Notice 2018-07, which provides guidance related to section 965 (the transition tax on deferred foreign earnings). The recommendations include excluding short-term loans from foreign affiliates to a U.S. parent from aggregate foreign cash if they have previously triggered a taxable...

“Permanent Tax Cuts of Americans Act” Introduced by the House

This past Monday, Republican House Representative Rodney Davis introduced H.R. 4886, to make the individual provisions of the newly enacted tax law permanent.  Under this bill, subtitles A and B of the tax law, which lower the individual tax rates, would be extended past their 2025 sunset dates with the goal to “provide future tax relief for individual taxpayers”. Read the Bill here:...

Conference Sparks Insights from Treasury Regarding New Tax Law

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...

IRS is Prioritizing Certain Guidance Related to Pass-through Entities

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...

Treasury Department Releases Notice 2018-13, Providing Additional Guidance on Section 965

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...


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