Andy Roberson, Kevin Spencer and Emily Mussio recently authored an article for Law360 entitled, “A Look At Tax Code Section 199’s Last Stand.” The article discusses the IRS’s contentious history in handling Code Section 199 and the taxpayers’ continued battle to claim the benefit – even after its recent repeal.
Originally published in Law360, November 2018.
Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 29 – November 2, 2018:
October 30, 2018: The IRS issued a notice of public hearing on November 28, 2018, regarding the proposed regulations the first-year additional depreciation deductions under section 168(k).
October 30, 2018: The IRS Large Business and International Division in an announcement identified five compliance campaigns it approved, which are Individual Foreign Tax Credit Phase II, Offshore Service Providers, FATCA Filing Accuracy, 1120-F Delinquent Returns Campaign and Work Opportunity Tax Credit. We recently blogged about this here.
October 31, 2018: The IRS and the Treasury submitted proposed regulations that would reduce the amount determined under Internal Revenue Code Section 956 with respect to certain domestic corporations.
November 2, 2018: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandum and Chief Counsel Advice).
Special thanks to Alex Cheng-Yi Lee in our DC office for this week’s roundup.
The Internal Revenue Service (IRS) Large Business and International (LB&I) Division continues to churn out new audit “campaigns.” The most recent announcement on October 30, 2018, identifies five new campaigns, which were identified through LB&I data analysis and suggestions from IRS employees. With the addition of these new campaigns, LB&I has now identified 50 campaigns since the program’s initial release on January 13, 2017.
The five new LB&I campaigns are listed verbatim by title and description.
Individual Foreign Tax Credit Phase II
Section 901 of the Internal Revenue Code alleviates double taxation through a dollar-for-dollar credit against U.S. tax on foreign-sourced income in the amount of foreign taxes paid on that income.
Individuals who meet certain requirements may qualify for the foreign tax credit. This campaign addresses taxpayers who have claimed the credit but do not meet the requirements. The IRS will address noncompliance through a variety of treatment streams, including examination. (more…)
Several changes in tax reform have a disparate impact on non-corporate US shareholders of foreign corporations compared with their corporate counterparts. Many such non-corporate shareholders face an expensive tax increase. They may attempt to mitigate this increase by transferring their shares to a US corporation or making a Section 962 election. This article examines the new rules governing US individuals who own foreign corporations and discusses the most significant recent changes, including a lack of participation exemption for US individuals who own foreign corporations and a higher transition tax rate. It further outlines new options for domestication of such foreign corporations.
Originally published in Bloomberg BNA Daily Tax Report – October 26, 2018 – Number 205.
Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 22 – 26, 2018:
October 23, 2018: The IRS released an updated Form 1040 Schedule B for reporting interest and ordinary dividends and draft Form 1120 Schedule D instructions for reporting capital gains and losses. Both documents include changes made to reflect the Tax Cuts and Jobs Act.
October 25, 2018: The IRS released IRS Tax Reform Tax Tip 2018-166, which advises business owners of the basics regarding potential deductions under Internal Revenue Code Section 199A for domestic businesses operated as sole proprietorships or through partnerships, S corporations, trusts and estates.
October 25, 2018: The IRS released Internal Revenue Bulletin 2018-44, dated October 29, 2018, which includes REG-104872-18, Notice 2018-82 and Revenue Procedure 2018-51.
October 26, 2018: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandum and Chief Counsel Advice).
Special thanks to Alex Cheng-Yi Lee in our DC office for this week’s roundup.
The National Taxpayer Advocate recently announced that the 4th International Conference on Taxpayer Rights will be held May 23 – 24, 2019, in Minneapolis, Minnesota. The purpose of conference is to connect government officials, scholars and practitioners from around the world to explore how taxpayer rights globally serve as the foundation for effective tax administration. The theme for the 2019 conference will be the role of taxpayer rights in the digital age and the implications of the expanding digital environment for transparency, certainty and privacy in tax administration. Presentations and paper proposals on range of topics are being sought, and the deadline to submit a proposal is December 1, 2018.
Prior conferences have been held in Amsterdam, The Netherlands, Vienna, Austria and Washington, DC Conference. Archived materials for the prior conferences can be found here.
We previously attended and participated in the Amsterdam and Vienna conferences. For our posts on these conferences, see below:
This post originally appeared on McDermott’s Inside SALT blog, which is dedicated to in-depth coverage of issues surrounding state and local tax.
In June 2018, just before the US Supreme Court ruling in Wayfair, Illinois enacted an economic nexus standard modeled after South Dakota’s law (see our prior coverage). The new Illinois standard takes effect on October 1, 2018. On September 11, the Illinois Department of Revenue (Department) issued an emergency rule (Regulation 150.803), together with other guidance found on its website, intended to assist remote retailers with compliance with the new law. (more…)
Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 15 – 19, 2018:
October 16, 2018: The IRS issued Rev. Proc. 2018-54, which sets forth procedural rules for certain taxpayers that hold investments in one or more segregated asset accounts to elect to treat certain mortgage-backed securities as having deemed issuers for purposes of the diversification requirements of Internal Revenue Code (Code) Section 817(h).
October 17, 2018: The IRS, in Qualified Intermediaries News, reminded entities seeking Qualified Intermediary, Withholding Partnership or Withholding Foreign Trust status with a withholding agreement effective in 2018 that the deadline for submitting the applications is November 16, 2018.
October 18, 2018: The IRS issued Notice 2018-81, which describes the manner in which taxpayers should notify the IRS of revocation of an election to aggregate or disaggregate certain church-related organizations from treatment as a single employer under Code Section 414(c)(2)(C) and (D).
October 18, 2018: The IRS issued Notice 2018-84, which clarifies the suspension of the personal exemption deduction in the newly-added section 151(d)(5) under certain rules in section 36B and section 6011.
October 19, 2018: The IRS issued proposed regulations for investment in opportunity zones, providing guidance on under new Code Section 1400Z-2 relating to gains that may be deferred as a result of a taxpayer’s investment in a qualified opportunity fund.
October 19, 2018: The IRS issued Rev. Rul. 2018-19, which provides guidance on the requirement of original use with respect to land purchased after 2017 in qualified opportunity zones.
October 19, 2018: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandum and Chief Counsel Advice).
Special thanks to Alex Cheng-Yi Lee in our DC office for this week’s roundup.
Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 8 – 12, 2018:
October 8, 2018: IRS issued a special update in Questions and Answers about Reporting Related to Section 965 on 2017 Tax Returns, providing that transfer agreements under Prop. Reg. § 1.965-7 filed in accordance with the future guidance after the deadline, October 9, 2018, will nevertheless be considered timely filed.
October 9, 2018: IRS advised small business owners and self-employed individuals to use the resources it has provided, including a fact sheet highlighting the changes by the Tax Cuts and Jobs Act affecting them, to understand their tax responsibilities.
October 12, 2018: IRS released proposed regulations scheduled to be published in the Federal Register on October 17, 2018, which clarify how taxpayers may waive penalties for low-dollar mistakes as a result of incorrect information returns or inaccurate payee statements.
October 12, 2018: IRS filed proposed regulations removing Treas. Reg. § 1.451-5, which currently allow taxpayers to defer the inclusion of income from advance payments for goods and long-term contracts. Comments and public hearing requests are due by January 14, 2019.
October 12, 2018: The IRS released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandum and Chief Counsel Advice).
Special thanks to Alex Cheng-Yi Lee in our DC office for this week’s roundup.
Wrapping Up September – and Looking Forward to October
Top September Posts You Might Have Missed
IRS Proposes to Withdraw Debt-Equity Documentation Regulations
LB&I Announces Five New Campaigns
A Lot Is Going on at the Tax Court
Upcoming Tax Controversy Activities in October
Our lawyers will present on key tax topics during the month of October. We hope to see you.
October 29-30, 2018: Thomas Jones and Kristen Hazel will be presenting on various captive insurance tax topics at the Captive Insurance Tax Forum taking place in McDermott’s office in Chicago, IL.
October 31, 2018: Todd Welty and Lowell Yoder will be presenting on Administrative Guidance, Ethical Hazards and Tax Return Positions at the TEI Annual Conference in San Diego, CA.
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