20 Tax Executives Institute
|
|
- Augustine Hood
- 5 years ago
- Views:
Transcription
1 20 Tax Executives Institute
2 COVER TAX DEVELOPMENTS IN 2016 Part 1: Federal Tax Sections 355, 382, and 385; and new rules on partnership audits dominate landscape By Todd Reinstein, Annette Ahlers, Joan Arnold, Jennifer O Leary, and Morgan Klinzing This article reviews and analyzes recent law changes and IRS guidance for federal income tax issues this past year. Section 385 Proposed Regulations Impact on Related-Party Financing Section 385 has been in the Internal Revenue Code since It was enacted to provide guidance for whether to classify an interest in a corporation as debt or equity, but it requires the adoption of regulations to be effective. There have been three previous attempts at adopting regulations, none of which made it past the proposal stage. For many years, courts filled in the gap by creating multifactor tests to determine whether an instrument was classified as debt or equity. On April 4, 2016, the Internal Revenue Service and the Treasury Department issued proposed regulations under Section 385. Final and temporary regulations were issued November/December 2016 Tax Executive 21
3 on October 13, 2016, providing a completely new way to analyze whether an instrument is debt or equity in certain related-party transactions. The regulations apply to covered debt instruments issued on or after April 4, Certain Transactions in Which Debt May Be Recharacterized. An instrument issued to a member of an expanded group will be treated as equity for all federal income tax purposes if it is issued by a domestic corporation (other than an S Corporation, a RIC, or a REIT) in one of the following three transactions, outside of a federal consolidated return group: 1. As issuance of debt for no consideration (e.g., a dividend of a note), 2. A note issued in exchange for stock of a member of the expanded group (e.g., a Section 304 transaction), and 3. A note issued in internal asset reorganization (e.g., a cash D reorganization). An expanded group (EG) generally includes corporations connected through a common parent corporation by ownership of eighty percent vote or value, and it includes non-u.s. corporations and corporations that meet the ownership test through a partnership. Importantly, all corporations that are members of the same federal consolidated return group are treated as one corporation, so the reclassification rules will have no impact within a consolidated group. The Funding Rule If a taxpayer engages in a funding transaction that has as a principal purpose of funding one of the three transactions discussed previously, the instrument issued will be treated as stock. For example, assume that a foreign parent lends cash to a U.S. subsidiary in exchange for a note. If within thirty-six months the U.S. subsidiary makes a distribution to the foreign parent, subject to certain exceptions, the note issued in the original loan is recharacterized as equity as of the date of the dividend because it is the same result as having the U.S. subsidiary issue the note for no consideration. The funding rule applies whether the instrument is issued before or after the relevant distribution or acquisition. The per se rules do not apply to ordinary course debt instruments issued for property (i.e., purchases of inventory). Exceptions The threshold exception provides that these rules do not apply if the EG has total EG debt of $50 million or less. Additionally, the earnings and profits exception provides that the amount of any general rule or funding rule distribution or acquisition is reduced by the issuer s post-april 4, 2016, current and accumulated earnings and profits. Lastly, final regulations include exceptions for certain cash pooling, treasury centers, and entities like insurance companies and banks that are subject to regulation of their capital. Documentation Requirements. The regulations provide minimum documentation requirements that, if not met, set up a rebuttable presumption that an expanded group instrument (EGI) qualifies as debt. Although failure to meet the documentation requirements means an EGI is stock, satisfying those requirements is not conclusive evidence that the EGI is debt. The documentation requirements apply to an EGI if: (1) the stock of any member of the EG is publicly traded; (2) total assets on the EG s financial statements exceed $100 million; or (3) total revenue on the EG s financial statements exceeds $50 million. If the documentation rules apply, an EGI must be evidenced by documentation prepared no later than the due date for the filing of the tax return for the year of issuance of the instrument that establishes: (1) a binding obligation to repay; (2) creditor s rights; and (3) a reasonable expectation of repayment (e.g., cash flow projections, financial statements, or other relevant financial data). Notably, expectation of repayment can take into account the possibility of refinancing the obligation. While consolidated return groups are generally excused from the reclassification rules, they are not excluded from the documentation rules they have to comply if the thresholds are met. Bifurcation of Purported Equity Instruments. Under the proposed regulations, the IRS would have had the authority to bifurcate instruments between members of an EG or a modified EG (MEG). A MEG was defined as more expansive and generally included entities connected by ownership of fifty percent vote or value, and certain individuals. Although the government has expressed that it has the authority to bifurcate an instrument, the final regulations were reserved on the bifurcation rules. Thus there was no need for the MEG, and it was deleted. Effective Time. For an EGI issued on or after April 4, 2016, and before the date the regulations are published in the registry, the issuer has 90 days from the date of publishing in the federal registrar to restructure the EGI. After that it would be automatically converted into equity. The documentation rules apply to EGIs issued on or after January 1, Conclusion. The final regulations provided for a much-needed narrowing of the proposed rules, given that they only apply to recharacterized debt issued by domestic corporations, and they do not apply within a consolidated group. But, they need to be carefully considered whenever a U.S Tax Executives Institute
4 corporation issues debt to a related person outside of the consolidated group. Update on Section 355 Guidance Section 355 transactions allow corporations to separate two businesses housed in one corporation without triggering corporate-level or shareholderlevel income tax. This past year, there were four significant pieces of guidance regarding Section Proposed Regulations Amending the Device Test and New Requirements for Active Trade or Business Qualification On July 14 the IRS issued proposed regulations on the device and the active trade or business tests under Section 355. The proposed regulations, if adopted, would formalize the IRS and Treasury views on several key requirements in Section 355 spin-offs, and provide significant formula-driven rules to evaluate whether a proposed Section 355 spin-off meets the device test and the active trade or business test. The IRS also designated as matters requiring National Office coordination the potential to apply the device test in certain instances, planned sales of stock after the transaction, and debt of the distributing corporation retired with securities of the controlled corporation. For a transaction to be eligible for tax-free treatment under Section 355, the transaction cannot have been undertaken for the purpose of distributing corporate profits and/or assets at capital gains rates. This prohibited device can occur if investment and liquid assets are separated from operating business assets and then distributed to shareholders. This separation of investment-type assets can have the effect of providing a return of corporate profits that appears to be equivalent to a dividend without taxation. Although capital gains rates and dividend rates are similar under current law, the IRS believes that there remains a significant difference with respect to capital gains treatment and dividend treatment due to tax basis issues and the ability of capital gains to offset capital losses. Focus on Nonbusiness Assets. The proposed regulations provide new rules and a minimum threshold that must be met to determine whether the active trade or business test is satisfied and include a per se device test. This per se test has two prongs, the first being whether the nonbusiness assets (a newly defined term) of either the distributing or the controlled corporation constitute 66 2/3 percent of the total assets of the corporation. Cash or liquid assets can be treated as good business assets as long as the corporation can demonstrate that such cash and other assets are required by regulatory or other business exigencies. The second prong of the per se test is that the ratio of the nonbusiness assets to business assets of the distributing and controlled corporations, when compared with each other, falls within one of three bands of percentage comparisons. If a taxpayer meets the two-prong per se test, the distribution would be a per se device and thus would not qualify as a tax-free spin-off. If the per se test does not apply, the general device rules would continue to apply to determine if a distribution is motivated by device, and there is no comfort under these general device rules that a strong business purpose can trump all other device factors. De Minimis Threshold for ATB. Proposed Treasury Regulations Section provides rules to determine the minimum percentage (generally at least five percent) of the total assets of both the distributing and the controlled corporations that represent five-year-active-business assets (a newly defined term). Five-year-active-business assets are those relied upon to meet the active trade or business test demonstrating that each of the distributing and controlled corporations has had income and expenses for each of the past five years, indicating that each corporation has been an active trade or business. Certain cash and other assets qualify as five-year-active-business assets if they are used for working capital, regulatory purposes, and other business operational exigencies. Notably, expectation of repayment can take into account the possibility of refinancing the obligation. 2. Carve-Back for Section 355 No-Rule Issues In a reversal of recent trends in which the IRS has reduced the number of corporate tax issues on which it will rule, in Revenue Procedure , the IRS stated that significant legal issues relating to both the device test and the business purpose requirement have been removed from the no-rule list of Revenue Procedure , thus allowing taxpayers to seek rulings on legal issues arising under these aspects of a potential Section 355 transaction. 3. Restriction on REIT Spin-offs As part of the PATH 1 bill signed in December 2015, new Section 355(h) was enacted. In June 2016, the IRS and Treasury issued regulations implementing Section 355(h) with respect to the tax treatment of certain distributions that separates corporate assets into a new entity that can qualify as a REIT. It generally requires gain recognition with respect to such purported Section 355 distributions as if the assets were sold November/December 2016 Tax Executive 23
5 at fair market value on the date of the distribution. Certain exceptions apply if, for example, the distributing corporation is already a REIT (subject to a look-back period to ensure it is not a newly elected REIT) and the corporation seeks to distribute a controlled corporation that will also operate as a REIT after the distribution. In those cases, both the distributing and controlled corporations must retain their REIT status for at least two years. Partnerships with 100 or fewer partners may elect to opt out of the entity-level partnership audit, but restrictions on the types of partners such a partnership may include make it unlikely that many partnerships would qualify for the opt-out. 4. Revenue Procedure Safe Harbors for Acquisition of Control Prior to a 355 Distribution The IRS has issued Revenue Procedure , which addresses certain issues associated with a transaction that can occur prior to a Section 355 distribution that results in the distributing corporation obtaining control of the controlled corporation to satisfy the control requirements of Section 355. It provides that there are two safe harbors to evaluate whether the control requirement of Section 355 has been met. The first safe harbor provides a twenty-four-month rule and applies if no action is taken by the controlled corporation, its board of directors, its management, or any of the controlled corporation s controlling shareholders that would result in an unwind of the transaction in which control was obtained. The second safe harbor allows for an unwind within the twenty-four months if two conditions are met. The first condition borrows definitions from Treasury Regulations Section and requires that [t]here is no agreement, understanding, arrangement, or substantial negotiations (within the meaning of (h)(1)) or discussions (within the meaning of (h)(6)) concerning the transaction or a similar transaction at any time during the twenty-four-month period ending on the date of the distribution. The second condition is that no more than twenty percent of the acquiring entity or other party to the transaction involving the controlled corporation is owned by the same persons that own twenty percent or more of the controlled corporation. The IRS specifically states that if these safe harbors do not apply, no inference as to the qualification of the control requirement should be made. Section 382 Long-Term Tax-Exempt Rates Decrease Under Final Regulations Section 382 generally requires a corporation to limit the amount of its income in future years that can be offset by historic net operating losses (NOLs) once that corporation has undergone an ownership change. The amount of the NOLs that can be used in each year after an ownership change is generally limited to the value of the corporation immediately before the ownership change multiplied by the long-term tax-exempt rate. Section 382(f) defines that rate as the highest adjusted federal long-term rate for each of the preceding three months ending with the calendar month in which the ownership change occurs. The long-term tax-exempt rate is determined by multiplying the monthly applicable federal rate (AFR) and an adjustment factor. Personnel in the Department of the Treasury calculate the AFRs, which are published every month in the Internal Revenue Bulletin. In response to comments from Notice and proposed regulations, Treasury Regulations Section was finalized on April 25, 2016, regarding the methodology used to determine the long-term tax-exempt rate for Section 382 ownership changes. The final regulations were effective in determining the long-term tax-exempt rate beginning August 2016 and applied in September 2016 and importantly have led to a reduced longterm tax-exempt rate. For example, the rate for September 2016 was 1.41 percent. Because the top rate is used for the current month and the previous two months for determining the long-term tax-exempt rate for ownership changes, the real impact will likely begin with ownership changes in November 2016, as the published rate in Revenue Ruling was 1.54 percent. New Rules on Partnership Audits The increasing use of partnerships (including limited liability companies taxed as partnerships) as the business entity for all types of businesses has highlighted the need for partnerships to be audited at a rate similar to corporations. One significant obstacle to this, however, is TEFRA, 2 which governs the audits of most partnerships. In response to the need for a more effective way to audit partnerships, Congress passed Section 1101 of the Bipartisan Budget Act of 2015 replacing the TEFRA rules. The new law will generally take effect for tax years beginning after December 31, 2017, although taxpayers may elect for the law to be applied earlier Tax Executives Institute
6 Under the new law, the default rule is to make partnerships subject to federal income tax upon audit. Therefore, the new rules have the potential to dramatically change the economics of many partnerships. Although we are still awaiting regulations and other guidance on how to implement the new law, parties should begin to consider these rules when structuring investments utilizing partnerships and when transferring interests in partnerships. The new law permits partnership-level determinations and assessments, simplifying the process of auditing partnerships. The default rule is that if, on audit, the IRS determines that the partnership underreported income to its partners, the partnership will be assessed the tax liability, including interest and penalties, and will be responsible for paying the tax, unless the partnership elects to pass the tax liability through to its partners. Although the tax assessed to the partnership will generally be computed at the highest tax rate applicable to individuals, partnerships can demonstrate that the tax should be lower based on certain tax characteristics of its partners, such as their being tax-exempt. Also, partnerships may reduce the amount of tax due by demonstrating that partners have filed amended returns taking into account the audit adjustment. However, for most partnerships, getting all partners to file amended tax returns is unlikely to be feasible. Partnerships with 100 or fewer partners may elect to opt out of the entity-level partnership audit, but restrictions on the types of partners such a partnership may include make it unlikely that many partnerships would qualify for the opt-out. The only permitted partners in opt-out partnerships are individuals, C corporations, S corporations, and estates of deceased partners. The new law does not give partners any rights to participate in an audit or to be notified of the audit. Therefore, partners must negotiate any participation or notification rights in the partnership agreement. All partners are bound by a final resolution in the partnership audit, and penalties are determined at the partnership level. There are no partner-level defenses against penalties. Additionally, rather than having a tax matters partner as partnerships currently have under TEFRA, partnerships are required to have a partnership representative who need not be a partner for tax purposes. Thus, LLCs with a nonmember manager or partnerships with a noneconomic general partner can use that person as the partnership representative, which is not currently permitted. In lieu of having the partnership pay the tax due, the partnership can also elect to issue statements, which are essentially amended K-1s, to the partners who were partners during the audited year. If the partnership issues statements, the partners are liable for the tax, plus penalties and interest. An additional interest cost of an extra two percent is imposed on partners when the partnership uses statements to pass through the payment obligation to its partners. This election replicates the usual economics of taxation of partnerships, except that the partners bear the higher interest cost. Todd Reinstein is a partner in the Washington, D.C., office of Pepper Hamilton LLP. Annette Ahlers is of counsel in the Los Angeles office of Pepper Hamilton LLP. Joan Arnold and Jennifer O Leary are partners in the Philadelphia office of Pepper Hamilton LLP. Morgan Klinzing is an associate in the Philadelphia office of Pepper Hamilton LLP. Todd Reinstein Annette Ahlers Joan Arnold Jennifer O Leary Endnotes Morgan Klinzing 1. Protecting Americans Against Tax Hikes Act of 2015 (PATH Act), enacted as Division Q of the Consolidated Appropriations Act, 2016, Public Law , 129 Stat Section 311 (a) and (b) of the PATH Act added to the Code sections 355 (h) and 856 (c) (8). 2. The Tax Equity and Fiscal Responsibility Act of 1982, commonly referred to as TEFRA, set forth in Code Sections 6221 through 6234, established unified procedures for examining partnerships. November/December 2016 Tax Executive 25
Treasury Issues Final and Temporary Regulations on Related-Party Debt Instruments
Latham & Watkins Tax Practice October 26, 2016 Number 2023 Treasury Issues Final and Temporary Regulations on Related-Party Debt Instruments Seeking to curb excessive use of related-party debt, Treasury
More informationUpdate on Partnership Audit Provisions and Certain Deductions
Update on Partnership Audit Provisions and Certain Deductions Jennifer O Leary, Philadelphia Office olearyj@pepperlaw.com Ph. 215.981.4184 Annette Ahlers, Los Angeles Office ahlersa@pepperlaw.com Ph. 213.928.9825
More informationKIRKLAND ALERT. Proposed Treasury Regulations on Debt- Equity Classification Change the Landscape for Related Party Financings.
KIRKLAND ALERT April 13, 2016 Proposed Treasury Regulations on Debt- Equity Classification Change the Landscape for Related Party Financings Executive Summary On April 4, 2016, the U.S. Treasury Department
More information26th Annual Health Sciences Tax Conference
26th Annual Health Sciences Tax Conference Cross-border financing and impact of Section 385 December 5, 2016 Disclaimer EY refers to the global organization, and may refer to one or more, of the member
More informationFollow-Up Discussion of the Final Section 385 Related-Party Debt Rules
Follow-Up Discussion of the Final Section 385 Related-Party Debt Rules Final and Temporary Regulations Limit and Clarify Proposed Documentation and Recharacterization Rules That Now Apply Mainly to Inbound
More informationTemporary Regulations Addressing Inversions and Related Transactions and Proposed Section 385 Regulations
Temporary Regulations Addressing Inversions and Related Transactions and Proposed Section 385 Regulations Allegheny Tax Society April 25, 2016 Steve Massed Managing Director Washington National Tax International
More informationGW/IRS 29 th Annual Institute on Current Issues in International Taxation Final and Temporary Section 385 Regulations
GW/IRS 29 th Annual Institute on Current Issues in International Taxation Final and Temporary Section 385 Regulations L.G. Chip Harter, PwC, Chair Bruce Lassman, VP-International Tax, IBM Corp. Kevin Nichols,
More informationRecent Developments in Corporate Tax
Recent Developments in Corporate Tax Scott M. Levine Jones Day Washington D.C. Lori A. Hellkamp Jones Day Washington D.C. Todd R. Miller Jones Day Detroit Tax Executives Institute Dearborn, Michigan October
More informationClient Update Treasury s Sweeping Proposed Regulations Attack Related-Party Debt
1 Client Update Treasury s Sweeping Proposed Regulations Attack Related-Party Debt NEW YORK Gary M. Friedman gmfriedman@debevoise.com Peter A. Furci pafurci@debevoise.com Vadim Mahmoudov vmahmoudov@debevoise.com
More informationSection 385 Regulations
Section 385 Regulations Peter Faber Partner, McDermott Will & Emery LLP December 12, 2016 Britt Haxton Associate, McDermott Will & Emery LLP www.mwe.com Boston Brussels Chicago Dallas Düsseldorf Frankfurt
More informationThe Proposed Section 385 Regulations: An In-Depth Look
The Proposed Section 385 Regulations: An In-Depth Look Scott Levine (Moderator) Jones Day Didi Borden Deloitte Tax LLP Kevin Nichols U.S. Department of Treasury Ossie Borosh U.S. Department of Treasury
More informationNEW SECTION 385 PROPOSED REGULATIONS CHANGING THE DEBT-EQUITY LANDSCAPE
@BDO_USA_Tax NEW SECTION 385 PROPOSED REGULATIONS CHANGING THE DEBT-EQUITY LANDSCAPE August 2, 2016 BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited,
More informationFinal US related-party debt regulations will impact US subsidiaries of Canadian parent companies
Final US related-party debt regulations will impact US subsidiaries of Canadian parent companies October 2016 On October 13, the US Treasury Department and the IRS released new final and temporary Section
More informationPartnerships and the Proposed Debt-Equity Regulations
taxnotes Partnerships and the Proposed Debt-Equity Regulations By Charles Kaufman Reprinted from Tax Notes, September 26, 2016, p. 1843 Volume 152, Number 13 September 26, 2016 Partnerships and the Proposed
More informationFinal and temporary Section 385 regulations: FAQs and initial reactions
Final and temporary Section 385 regulations: FAQs and initial reactions Guidance on new international tax developments from Grant Thornton s Washington National Tax Office International Tax Services October
More informationAnti-Inversion Guidance: Treasury Releases Temporary and Proposed Regulations
Inbound Tax U.S. Inbound Corner Navigating complexity In this issue: Anti-Inversion Guidance: Treasury Releases Temporary and Proposed Regulations... 1 Proposed regulations addressing treatment of certain
More informationPartnership Audit Changes. January 19, 2016
Partnership Audit Changes January 19, 2016 BIPARTISAN BUDGET BILL OF 2015 Signed into law by President Obama November 2, 2015. Applies to partnership tax years beginning after December 31, 2017. Partnerships
More informationTreasury Issues Final Debt/Equity Regulations, Tempers Controversial Approach Taken in Proposed Regulations
October 28, 2016 Treasury Issues Final Debt/Equity Regulations, Tempers Controversial Approach Taken in Proposed Regulations On October 13, 2016, the U.S. Department of Treasury released the highly-anticipated
More informationCurrent issues and transaction structures for tax-free spin-offs
Current issues and transaction structures for tax-free spin-offs David Wheat, dwheat@kpmg.com Steven Qualls, squalls@kpmg.com May 1, 2017 Disclaimer The following information is not intended to be written
More informationJCT estimate: According to JCT, the provision would have no revenue effect over
Provision: Under the provision, the definition would be moved to Code section 7701, which provides generally applicable definitions. The provision would be effective on the date of enactment. JCT estimate:
More informationThe BBA Partnership Audit Rules. What you need to know today to prepare for the new partnership audit regime under the BBA
What you need to know today to prepare for the new partnership audit regime under the BBA Disclaimer This presentation is provided solely for the purpose of enhancing knowledge on tax matters. It does
More informationResponding to the New IRS Audit Partnership Audit Procedures
ABA Section of Taxation ABA Business Law Section Responding to the New IRS Audit Partnership Audit Procedures Panelists: George A. Hani, Miller & Chevalier Kevin M. Johnson, Pepper Hamilton LLP Warren
More informationFocus on New Tax Law: Section 199A Pass-Through Deduction and Restrictions on Interest Deductions
Focus on New Tax Law: Section 199A Pass-Through Deduction and Restrictions on Interest Deductions TAX UPDATE Volume 2018, Issue 2 Annette M. Ahlers ahlersa@pepperlaw.com The Tax Cuts and Jobs Act (2017
More informationThese new rules apply to any distribution after June 23, PLR Valuation of Several Classes of Stock Held Constant
Tax Update JUNE 2006 New Authorities Issued Addressing Ability to Utilize Net Operating Losses F or many corporate taxpayers, net operating losses (NOLs) are a valuable asset and their preservation for
More informationSection 385 Proposed Regulations
Section 385 Proposed Regulations USS Where Have All the Factors Gone? Moderator Karen Gilbreath Sowell, EY, Washington, DC Panelists Jeff Maddrey, PwC, Washington, DC Peter Marrs, General Electric Company,
More informationFinal and temporary US Section 385 regulations significantly narrow scope of earlier proposed regulations
19 October 2016 International Tax Alert Final and temporary US Section 385 regulations significantly narrow scope of earlier proposed regulations EY Global Tax Alert Library Access both online and pdf
More informationClient Alert May 3, 2016
Tax News and Developments North America Client Alert May 3, 2016 Treasury Issues Temporary Regulations on Inversions On April 4, 2016, the US Department of Treasury issued extensive temporary regulations
More informationInvestment Management and Hedge Funds: What s Happening Now Gregory J. Nowak Joan C. Arnold Steven D. Bortnick Jennifer A. O Leary
Investment Management and Hedge Funds: What s Happening Now Gregory J. Nowak Joan C. Arnold Steven D. Bortnick Jennifer A. O Leary February 23, 2017 New York, NY Agenda How might funds be impacted by proposed
More informationNew Proposed Section 385 Regulations
New Proposed Section 385 Regulations Idan Netser, Partner Anil Kalia, Partner TEI Regions IX & X Annual Conference Portland, Oregon, May 22-25, 2016 Agenda I. Introduction II. III. A. Section 385 B. Scope
More informationInternational Tax Update
International Tax Update Stephen Bates Jose Murillo Cynthia Yu 3 May 2016 Disclaimers This presentation is provided solely for the purpose of enhancing knowledge on tax matters. It does not provide tax
More informationThe IRS s Stricter(?) Stance on Regulated Investment Company Investments in Commodities
The IRS s Stricter(?) Stance on Regulated Investment Company Investments in Commodities TAX UPDATE Volume 2017, Issue 1 Morgan Klinzing klinzingm@pepperlaw.com W. Roderick Gagné gagner@pepperlaw.com WHILE
More informationFundamental Partnership Audit Reform, Part 1 How It Happened? D.C. Bar Panel Tuesday, February 2, 2016 at 12:00 p.m. Washington, D.C.
Fundamental Partnership Audit Reform, Part 1 How It Happened? Moderator: Panelists: D.C. Bar Panel Tuesday, February 2, 2016 at 12:00 p.m. Washington, D.C. Donald B. Susswien RSM, Washington, D.C. Charles
More informationPresident Obama s Fiscal Year 2012 Revenue Proposals
President Obama s Fiscal Year 2012 Revenue Proposals Proposals Relating to International Taxation SUMMARY On February 14, 2011, the Obama Administration (the Administration ) released the General Explanations
More informationAn Analysis of the Regulated Investment Company Modernization Act of 2010
January 2011 / Issue 1 A legal update from Dechert s Financial Services Group An Analysis of the Regulated Investment Company Modernization Act of 2010 d Summary The Regulated Investment Company Modernization
More informationIRS re-issues proposed regulations on new partnership audit regime
June 22, 2017 Tax Alert 2017-1002 Asset Management IRS Practice & Procedure Partnerships & Joint Ventures IRS re-issues proposed regulations on new partnership audit regime The IRS re-issued proposed regulations
More informationUniversity of Chicago Federal Tax Conference. Final and Temporary Section 385 Regulations
University of Chicago Federal Tax Conference Final and Temporary Section 385 Regulations Julie A. Roin, Moderator L.G. Chip Harter Kevin C. Nichols Deborah L. Paul November 11, 2016 Section 385 Congress
More information2017 Tax Update. Presented by: John Monahan CPA, Tax Partner February 8, 2017
2017 Tax Update Presented by: John Monahan CPA, Tax Partner February 8, 2017 Introduction All audio lines are muted, please use our chat feature to ask questions. We will save time at the end for Q&A.
More informationNew Proposed Regulations Provide Clarity and Rigidity to Tax-Free Spin- Off Rules
S! ta Tax Alert July 2016 New Proposed Regulations Provide Clarity and Rigidity to Tax-Free Spin- Off Rules If finalized, newly released proposed Treasury regulations may make spin-offs more difficult
More informationTreasury Issues Inversion Regulations, Proposes Sweeping Changes to Debt/Equity Classification
April 11, 2016 Treasury Issues Inversion Regulations, Proposes Sweeping Changes to Debt/Equity Classification On April 4, 2016, as the most recent step in its ongoing battle against inversion transactions,
More informationThe Proposed Regulations at a Glance. Legal Update April 7, 2016
Legal Update April 7, 2016 Treasury s New Anti-Inversion Regulations: Do They Go Too Far? THE PROPOSED AND TEMPORARY REGULATIONS WILL AFFECT FUTURE TAX PLANNING FOR ALL MULTINATIONAL BUSINESSES On April
More informationPartnership Audit Procedures Under the Bipartisan Budget Act of 2015
Partnership Audit Procedures Under the Bipartisan Budget Act of 2015 INTRODUCTION The Internal Revenue Service ( IRS ) currently audits most partnerships under rules enacted in the Tax Equity and Fiscal
More informationPartnership Audits. Crowell & Moring, LLP. Gregory Armstrong, Senior Technician Reviewer, Office of Chief Counsel (Procedure & Administration)
Partnership Audits Crowell & Moring, LLP Gregory Armstrong, Senior Technician Reviewer, Office of Chief Counsel (Procedure & Administration) Jennifer Ray, Partner, Crowell & Moring, LLP September 29, 2016
More informationTEFRA REPEAL ESSENTIAL CHANGES TO PARTNERSHIP AGREEMENTS AND OPERATING AGREEMENTS
TEFRA REPEAL ESSENTIAL CHANGES TO PARTNERSHIP AGREEMENTS AND OPERATING AGREEMENTS TEFRA Repeal Essential Changes to Partnership Agreements and Operating Agreements by Jeramie J. Fortenberry, JD, LL.M (Taxation)
More informationOnce upon a time, a large fiscal cliff was
September October 2012 Anti-Deferral and Anti-Tax Avoi dance By Peter A. Glicklich and Abraham Leitner Tax Planning to Mitigate the Fiscal Cliff Including Retrospective Elections INTERNATIONAL TAX JOURNAL
More informationState Tax Implications of New (and Pending) Federal Rules
Todd A. Lard Andrew D. Appleby NESTOA September 27, 2016 State Tax Implications of New (and Pending) Federal Rules All Rights Reserved. This communication is for general informational purposes only and
More informationPension Protection Act of 2006
Pension Protection Act of 2006 August 2006 Friends and Colleagues: On August 17, 2006, President Bush signed into law the Pension Protection Act of 2006 (the Act ). This client alert provides general highlights
More informationVIA ELECTRONIC SUBMISSION [
VIA ELECTRONIC SUBMISSION [www.regulations.gov] NATIONAL ASSOCIATION OF REAL ESTATE INVESTMENT TRUSTS REITS: BUILDING DIVIDENDS AND DIVERSIFICATION Attn: CC:PA:LPD:PR (REG-108060-15) Courier s Desk 1111
More informationInside This Issue. Important Modifications to Rules Governing Cancellation of Debt in a Consolidated Group
GCD Gardner Carton & Douglas Tax Update March 2004 Issue Executive Overview Insights and Frequently Overlooked Items Arising From Purchase Price Allocations in an Asset Purchase Many more acquisitions
More informationAMERICAN LAW INSTITUTE-AMERICAN BAR ASSOCIATION LIMITED LIABILITY ENTITIES. Presentation on: March 16, 2006
AMERICAN LAW INSTITUTE-AMERICAN BAR ASSOCIATION LIMITED LIABILITY ENTITIES Presentation on: March 16, 2006 NON-QUALIFIED DEFERRED COMPENSATION SECTION 409A AND PARTNERSHIPS John R. Maxfield Holland & Hart
More informationProposed Tax Extenders Legislation Would Limit Opco/Propco Spinoffs, Modify FIRPTA and Affect Treatment of REITs
Proposed Tax Extenders Legislation Would Limit Opco/Propco Spinoffs, Modify FIRPTA and Affect Proposed Legislation Would Limit Opco/Propco Spinoffs and Make Changes to Treatment of Some Foreign Investment
More informationTony Switajewski Tax Partner BlumShapiro. Alan Lieberman Shipman & Goodwin LLP. David Bigger Shipman & Goodwin LLP
a Tony Switajewski Tax Partner BlumShapiro Alan Lieberman Shipman & Goodwin LLP David Bigger Shipman & Goodwin LLP 1 This presentation is intended to provide general information and no tax advice is intended
More informationAMERICAN JOBS CREATION ACT OF 2004
AMERICAN JOBS CREATION ACT OF 2004 OCTOBER 26, 2004 TABLE OF CONTENTS Page REPEAL OF EXCLUSION FOR EXTRATERRITORIAL INCOME AND DEDUCTIONS FOR DOMESTIC PRODUCTION ACTIVITIES... 1 TAX SHELTERS... 2 Information
More informationNONQUALIFIED DEFERRED COMPENSATION: THE EFFECT OF THE NEW RULES NOW AND IN THE FUTURE
NONQUALIFIED DEFERRED COMPENSATION: THE EFFECT OF THE NEW RULES NOW AND IN THE FUTURE By Deloitte Tax LLP This special report was authored by Deborah Walker, partner (former deputy to the benefits tax
More informationFIRPTA Provisions Under Protecting Americans From Tax Hikes Act of April 2016
FIRPTA Provisions Under Protecting Americans From Tax Hikes Act of 2015 April 2016 Notice ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY KPMG TO BE USED, AND CANNOT BE USED, BY A CLIENT
More informationPS Business Parks, Inc.
The information in this preliminary prospectus supplement is not complete and may be changed. This preliminary prospectus supplement and the accompanying prospectus are not an offer to sell these securities
More informationTax Alert. Funds Escape Debt-Equity Regulation Net For Now. Introduction. Key Points
Tax Alert October 20, 2016 Key Points The New Regulations do not apply to debt issued by investment partnership funds, including publicly traded partnership funds, or blockers-at least, not now. The New
More informationTHE NEW CENTRALIZED PARTNERSHIP AUDIT REGIME: AN OVERVIEW
THE NEW CENTRALIZED PARTNERSHIP AUDIT REGIME: AN OVERVIEW By: Kevin M. Henry, Esq. I. WHERE ARE WE NOW? THE TAX EQUITY AND FISCAL RESPONSIBILITY ACT OF 1982 ( TEFRA ) A. Prior to TEFRA, partnership audits
More informationTax Management International Journal TM
Tax Management International Journal TM Reproduced with permission from Tax Management International Journal, 46 TM International Journal 101, 2/10/17. Copyright 2017 by The Bureau of National Affairs,
More informationPartnership Transactions Involving Equity Interests of a Partner. SUMMARY: This document contains final and temporary regulations that prevent a
This document is scheduled to be published in the Federal Register on 06/12/2015 and available online at http://federalregister.gov/a/2015-14405, and on FDsys.gov [4830-01-p] DEPARTMENT OF THE TREASURY
More informationMarch 29, Proposed Guidance-Interagency Guidance on Nontraditional Mortgage Products 70 FR (December 29, 2005)
1001 PENNSYLVANIA AVENUE, N.W. SUITE 500 SOUTH WASHINGTON, D.C. 20004 Tel. 202.289.4322 Fax 202.289.1903 John H. Dalton President Tel: 202.589.1922 Fax: 202.589.2507 E-mail: johnd@fsround.org 250 E Street,
More informationRelated-Party Provisions Prevent Deduction by S Corp Shareholders
Related-Party Provisions Prevent Deduction by S Corp Shareholders Annette M. Ahlers ahlersa@pepperlaw.com Many routine transactions occur between related parties, including the payment or accrual of interest
More informationFinal 409A Deferred Compensation Regulations
April 2007 Bulletin 07-030 If you have questions or would like additional information on the material covered in this Bulletin, please contact one of the authors: Jeffrey G. Aromatorio 412.288.3364 jaromatorio@reedsmith.com
More informationGlobal Employer Rewards. Nonqualified Deferred Compensation: The Effect of Section 409A Now and in the Future
Global Employer Rewards Nonqualified Deferred Compensation: The Effect of Section 409A Now and in the Future 1 Contents Introduction...1 Section 409A: Overview...2 Nonqualified Deferred Compensation Plans:
More informationThe Tax Cuts and Jobs Act1 (TCJA) made
Significant Provisions of the Tax Cuts and Jobs Act Affecting Closely Held Businesses and Their Owners by Gerald A. Shanker The Tax Cuts and Jobs Act1 (TCJA) made significant changes to the Internal Revenue
More informationNew PTC beginning of construction guidance
New PTC beginning of construction guidance Introduction The Internal Revenue Service ( IRS ) and U.S. Department of Treasury ( Treasury ) released Notice 2017-04 on December 15, 2016, clarifying prior
More informationPRACTICAL U.S. / DOMESTIC TAX STRATEGIES
... as appeared in... WTE PRACTICAL U.S. / DOMESTIC TAX STRATEGIES WorldTrade Executive, Inc. www.wtexec.com/tax.html The International Business Information Source TM How US Business Manages its Tax Liability
More informationAccounting Methods Update: Repair Regulations and Transition Guidance Baltimore DC Tax Executives Institute
Accounting Methods Update: Repair Regulations and Transition Guidance Baltimore DC Tax Executives Institute Ellen McElroy and Todd Reinstein June 7, 2012 AGENDA Overview of Tangible Regulations Unit of
More informationYEAR END TAX BULLETIN
YEAR END TAX BULLETIN As 2017 draws to a close, tax reform remains the major topic of discussion in Washington, but we are closer to the largest tax reform this country has seen in 30 years. At the time
More informationNACCO Industries, Inc.
NACCO Industries, Inc. IMPORTANT TAX INFORMATION STOCKHOLDER TAX BASIS INFORMATION STATEMENT PLEASE RETAIN FOR YOUR RECORDS Dear NACCO Industries, Inc. Stockholder: The purpose of this letter is to assist
More informationNew US income tax treaty and protocol with Italy enters into force
22 December 2009 International Tax Alert News and views from Foreign Tax Desks New US income tax treaty and protocol with Italy enters into force Executive summary On 16 December 2009, the United States
More informationThe American Jobs Creation Act of 2004
October 12, 2004 The American Jobs Creation Act of 2004 On October 11, 2004, the Senate passed the conference agreement on the American Jobs Creation Act of 2004 (H.R. 4520). The House of Representatives
More informationTax Cuts & Jobs Act: Considerations for Funds
Tax Cuts & Jobs Act: Considerations for Funds December 22, 2017 On December 22, 2017, the President signed into law the 2017 U.S. tax reform bill formerly known as the Tax Cuts & Jobs Act (the TCJA ).
More informationAnnette Ahlers, Todd Reinstein and Homeira Ghorbani
Tax Update DECEMBER 2004 Our Corporate Tax Group Has Joined Pepper Hamilton W e are pleased and excited to inform you of our recent move to the Washington, D.C. office of Pepper Hamilton LLP. Pepper s
More informationThe State of Debt Under the Proposed Section 385 Regulations
Robb Chase Andrew Appleby TEI Denver May 11, 2016 The State of Debt Under the Proposed Section 385 Regulations All Rights Reserved. This communication is for general informational purposes only and is
More informationRegulated Investment Companies
IRS Extends Guidance on Stock Distributions to Publicly-Traded SUMMARY On January 7, 2009, the Internal Revenue Service issued Revenue Procedure 2009-15 which extends to publicly-traded regulated investment
More informationLEGAL ALERT. April 13, 2007
LEGAL ALERT April 13, 2007 IRS Issues Final Section 409A Regulations On April 10, 2007, the Treasury Department and the Internal Revenue Service (the IRS) released the final regulations interpreting section
More informationRegulation of Private Funds and Their Advisers Under the Dodd-Frank Wall Street Reform and Consumer Protection Act
Regulation of Private Funds and Their Advisers Under the Dodd-Frank Wall Street Reform and Consumer Protection Act August 3, 2010 I. INTRODUCTION On July 21, 2010, President Obama signed into law the Dodd-Frank
More informationWhat s News in Tax Analysis That Matters from Washington National Tax
What s News in Tax Analysis That Matters from Washington National Tax Potential Financial Reporting Implications of Changes to Partnership Examinations New rules for IRS examination proceedings of partnership
More informationSTATEMENT OF MANAGERS REVENUE PROVISIONS CONTAINED IN THE CONFERENCE REPORT (H. REPT ) TO ACCOMPANY H.R RELATING TO
STATEMENT OF MANAGERS ON REVENUE PROVISIONS CONTAINED IN THE CONFERENCE REPORT (H. REPT. 106-478) TO ACCOMPANY H.R. 1180 RELATING TO EXTENSION OF EXPIRED AND EXPIRING TAX PROVISIONS, AND OTHER TAX PROVISIONS
More informationIRS ISSUES PROPOSED REGULATIONS UNDER CODE SECTION 409A COVERING NEW DEFERRED COMPENSATION RULES
IRS ISSUES PROPOSED REGULATIONS UNDER CODE SECTION 409A COVERING NEW DEFERRED COMPENSATION RULES October 17, 2005 TABLE OF CONTENTS A. EFFECTIVE DATE; TRANSITION RULES...1 1. Effective Date of Regulations;
More informationThis revenue procedure provides model plan language that may be used by public schools
Part III --Administrative, Procedural, and Miscellaneous 26 CFR 601.201: Rulings and determination letters. (Also, Part I, 403; 1.403(b)-3.) Rev. Proc. 2007-71 SECTION 1. PURPOSE This revenue procedure
More informationNew Partnership Audit Rules Require Attention
New Partnership Audit Rules Require Attention Michael Hirschfeld and Thomas R. McDonnell, Andersen Tax In response to concerns by the IRS about properly auditing partnerships and collecting any resulting
More informationImpact Of Tax Reform On Choice Of Entity
Page 1 of 6 Published on The National Law Review (http://www.natlawreview.com) Impact Of Tax Reform On Choice Of Entity Article By: Timothy C. Smith The tax reform legislation known as the Tax Cuts and
More informationTreasury Reveals Plans Regarding Certain 2016 Tax Rules, Including Disguised Sale and Debt/Equity Regulations
October 10, 2017 Treasury Reveals Plans Regarding Certain 2016 Tax Rules, Including Disguised Sale and Debt/Equity Regulations On October 2, 2017, the United States Department of the Treasury submitted
More informationSEC Adopts New Brochure Requirement for Registered Advisers
August 2010 SEC Adopts New Brochure Requirement for Registered Advisers BY THE INVESTMENT MANAGEMENT PRACTICE 1. Overview The Securities and Exchange Commission ( SEC ) has adopted long-awaited amendments
More informationWells Fargo & Company
PRICING SUPPLEMENT No. 284 dated February 15, 2013 (To Prospectus Supplement dated April 13, 2012 and Prospectus dated April 13, 2012) Wells Fargo & Company Medium-Term Notes, Series K Equity Linked Securities
More information2018, Vol. 14. No. 1, ISSN: /69. Jonathan R. Everhart University of Houston Clear Lake
Small Business Institute Journal Small Business Institute 2018, Vol. 14. No. 1, 44-51 ISSN: 1994-1150/69 Unlimited Tax Liability: A Common Misnomer of Limited Liability Company Taxation in the United States
More informationTax Planning for Law Firms Under the 2017 Tax Act Revisited: The Effects of the Proposed Regulations American Bar Association Section of Taxation
Tax Planning for Law Firms Under the 2017 Tax Act Revisited: The Effects of the Proposed Regulations American Bar Association Section of Taxation Wednesday, September 26, 2018 1 Presenters Morgan L. Klinzing,
More informationTax Challenges With Private Equity Management Fee Waivers Given Newly Heightened IRS Scrutiny
Presenting a live 90-minute webinar with interactive Q&A Tax Challenges With Private Equity Management Fee Waivers Given Newly Heightened IRS Scrutiny Structuring Waiver Arrangements in Light of the Proposed
More informationCertain Transfers of Property to Regulated Investment Companies [RICs] and Real Estate Investment Trusts [REITs]; Final and Temporary Regulations
This document is scheduled to be published in the Federal Register on 06/08/2016 and available online at http://federalregister.gov/a/2016-13443, and on FDsys.gov [4830-01-p] DEPARTMENT OF THE TREASURY
More information26th Annual Health Sciences Tax Conference
26th Annual Health Sciences Tax Conference Partnerships and joint ventures: M&A, current developments and JVs with exempt organizations December 7, 2016 Disclaimer EY refers to the global organization,
More informationNEW TAX LAWS RELATING TO IRS EXAMINATION OF AND TAX COLLECTION FROM PARTNERSHIPS: UNDERSTANDING THE NUANCES OF THE NEW LEGISLATION
NEW TAX LAWS RELATING TO IRS EXAMINATION OF AND TAX COLLECTION FROM PARTNERSHIPS: UNDERSTANDING THE NUANCES OF THE NEW LEGISLATION Charles M. Ruchelman, Member, Caplin & Drysdale Gregory T. Armstrong,
More informationJanuary 29, RE: Request for Immediate Guidance Regarding Pub. L. No Dear Messrs. Kautter and Paul:
January 29, 2018 The Honorable David J. Kautter Assistant Secretary for Tax Policy Department of the Treasury 1500 Pennsylvania Avenue, NW Washington, DC 20220 Mr. William M. Paul Principal Deputy Chief
More informationNew Corporate Inversion Regulations Provide Useful Exception for Certain Companies
New Corporate Inversion Regulations Provide Useful Exception for Certain Companies John Chase Tax Litigation June 12, 2012 Attorney Articles Tax, Trusts and Estates On June 7, 2012, the Internal Revenue
More informationLIST OF SUBSTANTIVE CHANGES AND ADDITIONS PPC s 1065 Deskbook. Twenty-seventh Edition (October 2016)
Route To: j Partners j Managers j Staff j File LIST OF SUBSTANTIVE CHANGES AND ADDITIONS PPC s 1065 Deskbook Twenty-seventh Edition (October 2016) Highlights of this Edition The following are some of the
More informationFORGIVE AND FORGET - - THE CALIFORNIA EMPLOYMENT TAX AMNESTY. By Steven Toscher, Esq. March, 1995
FORGIVE AND FORGET - - THE CALIFORNIA EMPLOYMENT TAX AMNESTY By Steven Toscher, Esq. March, 1995 INTRODUCTION Should a taxing authority be able to forgive and forget - - that is, grant amnesty to taxpayers
More informationTHE BUY SELL AGREEMENT
THE BUY SELL AGREEMENT Thomas F. Kennedy KENNEDY & ASSOCIATES Attorneys-at-Law Board Certified Estate Planning and Probate Law - Texas Board of Legal Specialization 5851 San Felipe, Suite 925 Houston,
More informationTax Extenders 2015 SUMMARY. December 21, 2015
New Legislation Extends Expiring Tax Provisions, Delays Taxes Imposed Under the Patient Protection and Affordable Care Act, and Enacts Revenue Raisers SUMMARY On December 18, 2015, President Obama signed
More informationExplanation of Provision
Explanation of Provision The provision revises section 6051 to require employers to include an identifying number for each employee, rather than an employee s SSN, on Form W-2. This change will permit
More informationTreasury and IRS Re-Release Proposed Regulations on Implementation of New Centralized Partnership Audit Regime
Legal Update June 13, 2017 Treasury and IRS Re-Release Proposed Regulations on Implementation of New Centralized The increasing use of partnerships has posed administrative challenges for the Internal
More information