Our Tax Group sheds light on recent IRS rulings that disallow deductions involving success-based fees in M&A transactions. Contrary to common practice, the IRS recently ruled target companies could not deduct success-based...more
Our Federal & International Tax Group examines a long-awaited Tax Court ruling that helps clarify when a non-U.S. company engages in a “U.S. trade or business.”...more
Our Federal Tax Group examines an IRS letter ruling on a company’s ability to take advantage of Section 197 intangibles. What is a liability limitation fund, and how can a company receive payments?...more
It isn’t just the Federal Election Commission political action committees (PACs) need to worry about. Our Federal Tax Group examines the tax pitfalls for tax-exempt organizations and one worrisome IRS ruling in particular....more
At long last, we have the first set of final regulations for the Tax Cuts and Jobs Act. Our International Tax Group celebrates with a look at how the Treasury and IRS have clarified Section 965 and why taxpayers may need to...more
In long-awaited guidance on Section 163(j) post-tax reform, the Treasury and IRS present taxpayers with an expansive definition of “interest,” subjective anti-abuse rules, complex computational instructions, and several...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
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While we wait to learn whether the Section 385 regulations will be withdrawn or changed, it is useful to recall some of the basic rules of dealing with debt.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
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
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
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
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
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
LTR 201542004 at first seems to involve a standard spinoff for the purpose of pursuing a reverse Morris Trust combination of Controlled with a Merger Partner, with the “significant issue” for ruling being a proposed swap of...more
On September 14, 2015, the government released Notice 2015-59 and Rev. Proc. 2015-43, both relating to Section 355 spinoffs. They respond to government concerns about spinoff transactions that result in the distributing...more