TAX CONTROVERSY 360
TAX CONTROVERSY 360
McDermott’s Real-Time Tax Disputes Insights
TAX CONTROVERSY 360
McDermott’s Real-Time Tax Disputes Insights
Uncategorized
Subscribe to Uncategorized's Posts

Bring That CFC on Home: Domesticating Individually-Owned CFCs After Tax Reform

by and | Oct 30, 2018 | ,

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.

Continue Reading.

Originally published in Bloomberg BNA Daily Tax Report – October 26, 2018 – Number 205.



read more

Weekly IRS Roundup October 22 – 26, 2018

by | Oct 29, 2018 | , ,

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.



read more

NTA Announces Date and Location for 4th International Conference on Taxpayer Rights

by | Oct 26, 2018 |

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:



read more

Illinois Department of Revenue Issues Post-Wayfair Guidance Implementing October 1 Economic Nexus Law

by and | Oct 23, 2018 |

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…)



read more

Weekly IRS Roundup October 15 – 19, 2018

by | Oct 22, 2018 | ,

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.



read more

Weekly IRS Roundup October 8 – 12, 2018

by | Oct 15, 2018 | , ,

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.



read more

A 360-Degree View: September & October 2018

by | Oct 10, 2018 |

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.



read more

Weekly IRS Roundup October 1 – 5, 2018

by | Oct 8, 2018 | , ,

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of October 1 – 5, 2018:

October 1, 2018: The IRS announced in Notice 2018-78 that the deadline for the basis election under Treas. Reg. § 1.965-2 was extended from prior to the publication of final Internal Revenue Code (Code) Section 965 regulations to 90 days after the issuance of the final Code Section 965 regulations.

October 3, 2018: The IRS issued Rev. Proc. 2018-53, which sets out the procedure for taxpayers requesting private letter rulings with respect to divisive reorganizations under Code Sections 355 and 368(a)(1)(D).

October 3, 2018: The IRS issued Notice 2018-76 providing transitional guidance on the deductibility of expenses for certain business meals under Code Section 274 in an entertainment context and stated that it intended to publish proposed regulations on the matter. For more information, see our post here.

October 4, 2018: The IRS released a reminder that calendar-year taxpayers who placed qualifying property in service during 2017 but intend to elect not to claim the new 100 percent depreciation deduction under Code Section 168(k) must file the election before October 15, 2018.

October 5, 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 Lee in our DC office for this week’s roundup.



read more

Uncle Sam Is Buying Your Next Business Meal – at Least Half of It!

by | Oct 5, 2018 | , ,

Tax reform made many structural changes to our tax system. Changes to Code Section 274, however, sent shudders through corporate America. As amended, Code Section 274 eliminated the 50 percent deduction for “entertainment” expenses that are related to business activities. Sadly, gone are the days of companies deducting the cost of box tickets to games for the local sport’s team. Gulp! But, in its haste, Congress left what constitutes entertainment expenses substantially undefined. Accordingly, a strict reading of the statute meant—along with the box seats—went the hot dogs and beer! Ugh! So, under this strict interpretation, taking your client to the fancy restaurant to encourage her to buy your product or services would no longer be deductible.

Thankfully, the IRS has recently clarified that meals are not entertainment under amended Code section 274. IRS Notice 2018-76 explains that business meals are still eligible for the 50 percent deduction if they are not lavish and extravagant. And an IRS press release, IR-2018-195, explains that the IRS will release proposed regulations explaining what “entertainment” means.

Practice Point: We can all sigh with relief that Uncle Sam will continue to underwrite the “wining and dining” of our clients. Although eating is officially not entertainment (at least for tax purposes), the recent IRS guidance acknowledges that America does a lot of its business while breaking bread.



read more

BLOG EDITORS

Kevin Spencer

Evan Walters

STAY CONNECTED

Subscribe

TOPICS

ARCHIVES

jd supra readers choice top firm 2023 badge