OIRA Begins Review of Final Regulations under Section 250
Posted on May 28, 2020 in International Tax
The Office of Information and Regulatory Affairs (OIRA), part of the Office of Management and Budget, has begun its review of final regulations under section 250. Section 250 generally allows a domestic corporation a deduction for its foreign-derived intangible income (FDII) and its global intangible low-taxed income (GILTI) inclusion. The proposed regulations were published in the...
IRS Issues Guidance on CARES Act changes to Section 163(j)
Posted on Apr 15, 2020 in Uncategorized
The IRS has issued Rev. Proc. 2020-22 to provide guidance to taxpayers applying the provisions of section 163(j), as amended by the CARES Act. Among other provisions, the CARES Act amended section 163(j) to allow taxpayers to deduct up to 50% of their adjusted taxable income (up from 30%), plus interest income and floor plan financing income, for taxable years beginning in either 2019...
Treasury and the IRS Release Proposed and Final Regulations under Section 245A(e) and 267A
Posted on Apr 7, 2020 in International Tax
On April 7th, the Department of Treasury and the Internal Revenue Service released final and proposed regulations regarding hybrid arrangements under sections 245A(e) and 267A. Section 245A(e) generally limits the participation exemption deduction under section 245A or causes a dividend received by a controlled foreign corporation (CFC) to be included in subpart F income if a dividend...
CARES Act Amends TCJA Provisions
Posted on Mar 30, 2020 in Uncategorized
On March 27, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. While the Act is primarily focused on the coronavirus epidemic, the Act made a few significant changes to provisions enacted by the Tax Cuts and Jobs Act (TCJA). The Act: • Allows net operating losses (NOLs) arising in 2018, 2019, or 2020 to be carried back five years and exempts NOLs from the...
OMB Completes its Review of Proposed Regulations under Section 163(j)
Posted on Mar 24, 2020 in Uncategorized
The Office of Management and Budget (OMB) has completed its review of proposed regulations under section 163(j). Section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. The IRS had previously stated that the proposed section 163(j) regulations would likely be...
OIRA Completes Its Review of Final 163(j) Regulations
Posted on Feb 5, 2020 in Uncategorized
On January 31, the Office of Management and Budget (OMB) completed its review of final regulations under section 163(j). Section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. The IRS had previously stated that the final regulations would likely be released along...
IRS to Consider Relief from Double Taxation Related to Transition Tax
Posted on Jan 21, 2020 in International Tax
On January 17, the IRS announced that it was aware of certain circumstances under which a taxpayer may be subject to double taxation as a result of the so-called transition tax under section 965. For example, where a corporation paid an unusual dividend for business reasons, double taxation may result if the same E&P of the foreign corporation are taxed both as dividends and under...
Treasury and IRS Issue Final Regulations on Investing in Qualified Opportunity Funds
Posted on Dec 20, 2019 in Uncategorized
On December 19, Treasury and the IRS released final regulations regarding investments in opportunity zones under section 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 (“QOF”). The final regulations provide guidance on the ability of taxpayers to...
OMB Begins Review of Final Section 163(j) Regulations
Posted on Dec 19, 2019 in Uncategorized
The Office of Management and Budget (OMB) received final regulations under section 163(j) on December 17. Section 163(j) generally limits a taxpayer’s interest deduction to the sum of its business interest income, floor plan financing interest, and 30% of its adjusted taxable income. While the OMB website does not state whether the regulations are subject to expedited review, IRS...
Treasury and IRS Release Final and Proposed FTC Regulations
Posted on Dec 2, 2019 in International Tax
On December 2, the Treasury and the IRS released final and proposed regulations with respect to the determination of the foreign tax credit relating to changes made to applicable law by the Tax Cuts and Jobs Act. The regulation package addresses the allocation and apportionment of deductions, foreign tax redeterminations, and the treatment of overall foreign losses, among other items....
Treasury and IRS Release Final and Proposed BEAT Regulations
Posted on Dec 2, 2019 in International Tax
On December 2, the Treasury and the IRS released final and proposed regulations under section 59A. Section 59A imposes a base erosion and anti-abuse tax (or BEAT), which generally operates as a minimum tax on income without regard to certain deductible payments made to foreign related parties. The final regulations implement BEAT generally, and the proposed regulations provide guidance...
Bill to Correct Qualified Improvement Property Glitch Fails to Gain Traction in the House
Posted on Nov 22, 2019 in Tax Accounting
On Nov. 20, the House of Representatives failed to approve a motion that would have attached the Restoring Investment in Improvement Act (H.R. 1869) to the Workplace Violence Prevention for Health Care and Social Service Workers Act (H.R. 1309). H.R. 1869 would correct a drafting error in the Tax Cuts and Jobs Act changes to section 168 that prevents qualified improvement property from...
IRS LB&I Division Announces Section 965 Compliance Campaign
Posted on Nov 5, 2019 in International Tax
On November 4, the IRS Large Business and International Division (LB&I) announced a new compliance campaign directed at promoting compliance with section 965. Section 965, enacted by the Tax Cuts and Jobs Act, generally imposes a transition tax on a US shareholder’s pro rata share of the accumulated earnings and profits of certain foreign corporations. The LB&I campaign will...
IRS Releases Final Regulations under Section 6050Y
Posted on Oct 28, 2019 in Insurance Tax
The IRS has issued final regulations under section 6050Y, which was added by the TCJA. Generally, section 6050Y requires information reporting with respect to certain life insurance contract transactions, such as payments of reportable death benefits. The final regulations detail the reporting requirements, such as the manner of reporting and the required timing of such reporting....
Proposed Regulations and New Revenue Procedure Address the Repeal of Section 958(b)(4)
Posted on Oct 1, 2019 in International Tax
Treasury and the IRS have released proposed regulations and a revenue procedure addressing the repeal of section 958(b)(4). Prior to its repeal by the Tax Cuts and Jobs Act, section 958(b)(4) prevented downward attribution from a foreign person for purposes of determining whether a foreign entity was a controlled foreign corporation under section 957. The proposed regulations address...