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IRS Releases Proposed Foreign Tax Credit Regulations

On November 28, the IRS released proposed regulations (REG-105600-18) concerning the treatment of foreign tax credits and related issues taking into account the changes made by under the Tax Cuts and Jobs Act (TCJA).  Foreign tax provisions under the TCJA modified the method for calculating taxable income for purposes of the foreign tax credit limitation; added two additional foreign...

House Republicans Release Tax Package

House Republicans released a 297 page tax bill on the evening of November 26, with the possibility of voting on the proposed bill as soon as this week. The legislation includes a number of “extenders,” which would renew certain tax provisions set to expire; tax breaks for smaller businesses; and technical corrections to the Tax Cuts and Jobs Act (TCJA) passed in 2017. The five...

IRS Releases Business Interest Expense Proposed Regulations

The IRS has released proposed regulations (REG-106089-18) concerning the business interest expense deduction limits applied to certain taxpayers. As amended by the Tax Cuts and Jobs Act (TCJA), section 163(j) generally places a limit on the amount of deductible business interest expenses in a current taxable year. The proposed regulations, released on November 26, provide rules for...

Single Entity Can Apply 199A De Minimis Rule Multiple Times, According to IRS Official

Speaking at the American Institute of CPAs Fall Tax Division Meeting in Washington, D.C. on November 14, IRS associate chief counsel Holly Porter stated that the section 199A de minimis test applied to identify specified service businesses could apply multiple times for the same entity if separate businesses are being operated.  Enacted by the Tax Cuts and Jobs Act (TCJA), section 199A...

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...

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...


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