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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...

Tax Reform 2.0 Approved by House Ways and Means Committee

The House Ways and Means Committee approved the Tax Reform 2.0 package consisting of three bills. This overhaul package would make permanent the TCJA’s reduced rates for individuals along with several other provisions, including the $10,000 cap on the state and local tax (SALT) deduction, and the 20% deduction on certain pass-through business income.  A proposed amendment to repeal 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...

Tax Reform 2.0 to be Marked Up This Thursday

According to its Chairman Kevin Brady, the House Ways and Means Committee will consider and mark-up “Tax Reform 2.0” legislation this Thursday. Released early last week, the Tax Reform 2.0 package consists of three bills to make permanent the individual tax cuts, pass-through provision under Section 199A and state and local tax (SALT) deduction cap added by the Tax Cuts and Jobs Act....

Comments on Sections 162 and 6050X Requested by IRS

The IRS has invited the public to comment on transitional guidance for the new reporting requirements under section 162(f) and new section 6050X, which was added by the Tax Cuts and Jobs Act, with respect to fines, penalties and other amounts. The comment period is open through November 5, 2018. Read the Notice here: Notice 2018-19172 Read more here: IRS Seeks Comment On Planned Biz...

Section 168(k) Administrative Solutions Possible for QIP Error; Partnership Remedial Allocations

On August 16, the Senate Finance Committee sent a letter to Treasury clarifying the drafting error in the Tax Cuts and Jobs Act that failed to make qualified improvement property (QIP) eligible for 100% bonus depreciation under section 168(k). Ellen Martin, a tax policy adviser in the Treasury Office of Tax Legislative Counsel, commented that the letter was welcome but may not be...

IRS Releases Preliminary Guidance Clarifying Section 162(m) Deduction Limitations

The IRS released Notice 2018-68, which provides preliminary guidance on section 162(m). As amended by the Tax Cuts and Jobs Act, section 162(m) disallows the deduction for performance-based executive compensation and expands the definition of “covered employees” for the $1 million deduction limitation. The Notice provides that “covered employees” include the chief executive officer and...

Proposed Regulations on Contribution Limits for ABLE Act Anticipated

According to recently released Notice 2018-62, the IRS and the Treasury will issue proposed regulations to clarify the new rules regarding the Achieving a Better Life Experience (ABLE) Act. The ABLE program provides tax-advantaged savings accounts for individuals with disabilities. The TCJA increased the contribution limit to ABLE accounts under certain circumstances. The proposed...

Tax Law Discourages U.S. Investment and Leaves Taxpayers in the Dark, According to New Report from Senate Finance Democrats

A recent report released by the Senate Finance Committee ranking member Ron Wyden asserts that the new tax legislation has resulted in “more complexity, loopholes and incentives to ship jobs overseas.” According to the report, the global intangible low taxed income (“GILTI”) provisions create a new web of complexity and leave taxpayers in the dark regarding future investment decisions....

Tax Reform 2.0 Not Expected to Address International Provisions

According to Republican Congressman Carlos Curbelo, tax reform 2.0 will not address international tax provisions, such as BEAT or GILTI.  Instead, the next round of tax legislation is projected to focus on making the individual provisions permanent.  The excluded provisions are expected to be addressed in a future, separate technical corrections bill.  Curbelo also noted that the draft...

New Rev. Proc. Provides that Citrus Replanting Costs Not Included in Automatic Accounting Method Changes

Released Tuesday, Rev. Proc. 2018-35 provides that the new automatic change procedures under Rev. Proc. 2018-31 do not apply section 263A to replanting costs for damaged or lost citrus plants. Section 263A generally requires taxpayers to include the costs of certain property produced or acquired for resale to be included in inventory costs. However, under section 263A(d)(2)(A) as...

Guidance on Section 199A May Halt Benefitting Firms

The Treasury Department may issue guidance on section 199A in response to workarounds taken by law and accounting firms. The new section 199A provides a 20% deduction for qualifying pass-through businesses. Since its enactment, offices have been broken down into separate businesses to take advantage of the deduction; future guidance may halt this technique. According to an official at...

Potential Phase Two of Tax Legislation Focuses on Making Individual Tax Changes Permanent

House Republicans intend to roll out a second package of tax cuts this summer. The focus of the new bill is to make the individual tax cuts permanent, but it may also include other changes, such as cutting capital gains taxes and including incentives to boost business innovation. House Ways and Means Committee Chairman Kevin Brady anticipates that the new bill would be approved in the...

Committee Hearing Discusses Tax Reform Impact and Next Steps

The House Ways and Means Committee held a hearing last Wednesday, May 16th, where Republicans and Democrats continued to be divided in their evaluations of the recent tax reform and its effects on jobs, the economy, and investment. In opening statements, Richard Neal criticized the new law for giving “83 percent of the tax savings to the top one percent.” Testimony during the hearing...

Rev. Proc. Offers Automatic Accounting Change for 606 Book-Tax Accounting Conformity

An automatic method change is now available for taxpayers wishing to change their accounting method to comply with the new financial accounting standards issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) (“Topic 606”). Under the new standards of Topic 606, taxpayers recognize revenue from contracts with customers based on...


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