Our Federal Tax Group explains why Section 163(j)’s small business exception is useful, but may not be quite the exemption taxpayers think it should be.
- “Small business” is a difficult definition
- Thwarted by the...more
The Office of Management and Budget may throw a wrench into how IRS and Treasury regulations are treated. Our Federal Tax Group outlines why slowing down the regulation process may be the least of taxpayers’ worries....more
Corporate groups like to have affiliates sell property to each other at book value. They know what book value is, but may not know fair market value. However, using book value as the sales price, even within consolidated...more
With tax reform on the horizon, Treasury takes aim at three sets of regulations with clear cross-border implications. Our International Tax Group explains the department’s recommendations to scrap much of Section 385 and...more
With tax cuts likely coming, it might make sense to consider establishing a C corporation for some new businesses. Our Federal Tax Group offers tax planners several different ways of thinking....more
A new Letter Ruling from the IRS brings concerns for corporations looking at a spinoff. Our Federal Tax Group breaks down the guidelines and what they mean.
- Dual-class structure
- Debt
- Delayed transfers
LTR...more
While we wait to learn whether the Section 385 regulations will be withdrawn or changed, it is useful to recall some of the basic rules of dealing with debt. Even related-party debt can sometimes run into payment troubles....more
LTR 201721014 ruled that a holding company can reorganize into a partly owned subsidiary by swapping old shares for new shares of the subsidiary and then liquidating. The technique is an old one, but tends to be forgotten...more
Taxpayers who have concrete suggestions for changes in tax regulations that would make life easier for their business activities should take this opportunity to inform the Treasury of those needs. Several Treasury officials...more
The Tax Court’s recent opinion in Austin v. Commissioner, TC Memo 2017-69, claims to be following the Fourth Circuit’s view of the economic substance doctrine by calling it the sham transaction doctrine, saying it is an issue...more
The merger of or into a mutual corporation would seem to be a great candidate for reorganization treatment. And generally that is true, with one huge exception. Paulsen v. Commissioner, 469 U.S. 131 (1985), ruled that the...more
Federal firearms taxes are some of the small group of excise taxes in the Internal Revenue Code. They tend to only concern gun importers, manufacturers and dealers, but the ranks of dealers are growing. There are actually...more
In December, the Treasury published temporary and proposed regulations clarifying the application of Section 355(e) when the distributing (D) corporation or the controlled (C) corporation has a predecessor (P) or...more
Recently the Treasury issued proposed regulations for Section 305. The proposal was prompted by Section 6045B, enacted in 2008 and effective only under regulations requiring the issuer of stock to provide basis reporting. A...more
On December 2, 2016, the Treasury issued Notice 2016-73, describing future regulations that will modify the Killer B regulation issued in 2011; the modifications will stymie newly discovered variations of the Killer B...more
Problems are mounting for the Treasury’s business of issuing tax regulations. One lawyer in a prominent law firm is personally suing the Treasury for failing to provide within two months of his Freedom of Information Act...more
In July the Treasury proposed regulations reinterpreting Section 355 in cases where one of the corporations involved in the spinoff has more investment assets than the other or very little five-year active trade or business...more
The Florida Bankers Association lost an attempt to invalidate regulations requiring banks to withhold certain taxes by a 2–1 vote in the D.C. Circuit Court. The bankers hoped that the Supreme Court would hear the case and...more
Notice 2015-59, 2015-40 IRB 459, issued last September, suggests that the IRS has concerns about several aspects of Section 355 tax-deferred spinoffs. One of these is the relevance of the 1986 repeal of the General Utilities...more
On April 4, the Treasury released temporary regulations to attack (and prevent) inversions. Aimed at transactions designed to avoid the purposes of Sections 7874 and 367 and certain post-inversion avoidance transactions, the...more
In January 2016, the Sixth Circuit reversed the Tax Court and ruled for the taxpayer in Wright v. Commissioner, 809 F. 3d 877 (6th Cir. 2016). If the IRS agrees, the ruling means that foreign currency contracts that are...more
The Tax Court mostly ruled against a private foundation and its main contributor and foundation manager by approving the assessment of the private foundation excise tax on lobbying expenditures. However, the court gave them a...more
Not a State Tax –
State tax disputes commonly involve claims that a state cannot tax beyond its geographical boundaries. That principle is at the root of Quill Corp. v. N.D., 504 U.S. 298 (1992), requiring that a...more
Sections 351 and 362 contain investment company rules that have nothing to do with mutual funds. They define certain corporations as investment companies in counterintuitive ways and then deny the usual nonrecognition...more
Things are heating up in the economic substance doctrine area, which could lead to a U.S. Supreme Court review of the IRS’s aggressive arguments for the doctrine.
Certiorari Petitions -
Salem Financial Inc. and Bank...more