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House Budget Would Extend Individual TJCA Provisions

On June 19, 2018, the House Budget Committee released a 10-year budget plan that, if passed, would provide a vehicle to extend the individual tax provisions enacted under the TJCA past their current expiration date in 2025 through the budget reconciliation process. To help reduce the cost of extending the cuts, the budget plan requires committees to submit legislation to reduce the...

Legislation for Phase 2 of Tax Reform Expected in August

House Ways and Means Committee Chair Kevin Brady indicated that Republicans hope to have a proposal for healthcare and additional tax changes by August. While the contents of the bill remain uncertain, potential topics include: permanent individual income tax provisions, retirement savings, the treatment of capital gains, and employer incentives for helping to pay back student loan...

The IRS Releases Additional Guidance on Penalties Related to the Transition Tax

The IRS announced that it will waive the estimated tax penalty for taxpayers subject to the transition tax under section 965 in certain instances, such as (1) for any taxpayer that improperly applied a 2017 overpayment to a 2018 estimated tax liability, and (2) for any individual that missed the April 18, 2018 deadline for making the first payment. Read more: IRS offers penalty, filing...

IRS to Crackdown on SALT Deduction Cap Workarounds

The IRS intends to issue regulations pertaining to states’ attempts to subvert the state and local tax deduction cap. The Tax Cuts and Jobs Act imposed a $10,000 ($5,000 for married individuals filing separately) limit on state and local tax deductions for federal income tax purposes. Certain states, including New York, New Jersey, and Connecticut, have enacted legislation to allow...

The Upcoming FAA Authorization May Not Contain Any Technical Corrections to the Tax Legislation

House Ways and Means Chairman Kevin Brady has indicated that the upcoming Federal Aviation Administration (“FAA”) reauthorization bill is unlikely to contain additional technical corrections to the 2017 tax bill, despite containing a tax title. Congress had previously passed, in the 2018 Consolidated Appropriations Act, a technical correction to fix a provision that encouraged farmers...

IRS Provides Timeline for Tax Reform Guidance

During the ABA Section of Taxation meeting in Washington, D.C. on May 12, David Kautter, the acting IRS commissioner, provided a rough timeline as to when IRS intends to release guidance related to the 2017 tax act. Kautter stated that a notice regarding section 965 (the so-called transition tax) may be released in the next two weeks and that proposed regulations are slated for release...

IRS Issues Guidance Related to Determining Built-in Gain or Loss under Section 382

Recently released Notice 2018-30 provides that the two safe harbor approaches in Notice 2003-65–related to recognizing built-in gain or loss–will be determined without regard to the bonus depreciation rule under section 168(k). Section 382 imposes limits of the amount of built-in losses that can offset future taxable income following ownership change. The notice states that...

IRS Considering the Definition of a “Trade or Business” under Section 163(j)

The IRS is in the process of defining a “trade or business” for purpose of determining what counts as business interest for the purposes of section 163(j). The text of the statute and Notice 2018-28 indicate that all income earned by a corporation is business interest, but questions still remain on whether a corporation that receives only passive dividend income is a business and...

IRS Releases Fact Sheet on Depreciation

The IRS recently released a factsheet that provides an overview of the changes to depreciation and expensing under the new tax law. The fact sheet addresses immediate expensing for section 179 property, first year bonus depreciation, limitations on luxury automobiles and personal use property, treatment of certain farm property, the applicable recovery period for real property, and the...

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...

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...

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...

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,...

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...

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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