Federal
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June 14, 2024
Taxation With Representation: Kirkland, Arnold & Porter
In this week's Taxation with Representation, Noble Corp. PLC buys Diamond Offshore Drilling Inc., Cognizant buys Belcan, AlphaSense raises funding to buy Tegus, and Matador Resources Co. acquires a subsidiary of the EnCap Investments portfolio company Ameredev II Parent.
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June 14, 2024
House Panel Approves Slashing $2B From IRS Budget
The House Appropriations Committee approved legislation that would reduce Internal Revenue Service funding for fiscal 2025 by more than $2 billion and prohibit money from going to the agency's free online tax-filing program without congressional approval, sending it to the full House for consideration.
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June 14, 2024
ABA Tax Section Calls For Revision To Stock Buyback Regs
The U.S. Department of the Treasury and the IRS should narrow a rule in proposed regulations on the stock buyback tax regarding U.S. subsidiaries funding repurchases of their foreign parents' stock, the American Bar Association's Tax Section said in a letter released Friday.
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June 14, 2024
Weekly Internal Revenue Bulletin
The Internal Revenue Service's weekly bulletin, issued Friday, included delays for reporting certain intercompany payments that are exempt from the base erosion and anti-abuse tax.
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June 14, 2024
Full DC Circ. Won't Hear Foreign Disclosure Penalty Dispute
The D.C. Circuit declined to reconsider its ruling overturning a major U.S. Tax Court decision that had crimped the administrative collection arm of the Internal Revenue Service, letting stand a panel's restoration of the agency's power to more freely penalize undisclosed foreign corporations.
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June 13, 2024
Senate Finance Panel OKs 3 Tax Court Judges, Treasury IG
The Senate Finance Committee overwhelmingly approved Thursday the nominations of three judges for the U.S. Tax Court and a new inspector general for the U.S. Department of the Treasury, a post that has lacked a Senate-confirmed nominee for five years.
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June 13, 2024
Staffing Hurdles Could Slow Impact Of IRS Audit Boost
The Internal Revenue Service's intended ramping up of enforcement on wealthy people, large corporations and complex partnerships may not have a meaningful impact in the short term because of challenges in hiring and training people to do the work.
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June 13, 2024
Easement Deduction Limit Hurts Conservation, 11th Circ. Told
A partnership's tax deduction for its donation of a conservation easement should not be limited to its adjusted basis in the property, the partnership told the Eleventh Circuit in urging it to overturn a U.S. Tax Court decision that it claims will hurt conservation efforts.
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June 13, 2024
A Chronology Of The Hunter Biden Investigation
The story behind President Joe Biden's son Hunter Biden's conviction on federal gun charges started with a gun purchase in 2018, was complicated by a laptop repair in 2019, and could bleed into an upcoming trial on federal tax charges in California in September.
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June 13, 2024
Mo. City Tax Credit Suit Tossed Over Federal Jurisdiction
A federal judge dismissed a Kansas City, Missouri, resident's claims that the city unconstitutionally refused to credit his state income taxes paid to Kansas against his city earnings tax liabilities, ruling that a federal law barred the case from being lodged in federal court.
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June 13, 2024
IRS Extends Corp. AMT Penalty Relief Into August
The Internal Revenue Service will continue to provide penalty relief for entities that fail to make estimated quarterly payments of the corporate alternative minimum tax through Aug. 15, the agency said Thursday.
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June 12, 2024
Senate Budget Chair Seeks End To Carried Interest Tax Break
Lawmakers should end the favorable tax treatment of income from carried interest compared with ordinary earned income, Senate Budget Committee Chairman Sheldon Whitehouse said Wednesday.
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June 12, 2024
Digital Taxes May Take Hold Regardless Of Treaty Signing
An internationally agreed-upon freeze on digital levies may continue to thaw even if countries meet their impending deadline to sign a related treaty for new corporate tax rules, in part because the accord faces a hazy path to formal ratification.
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June 12, 2024
Feds Strike Deal Ending $7M FBAR Penalty Cases
The U.S. government agreed to settle a pair of foreign bank account reporting cases in which it had sought a total of $7 million from a former insurance broker and his wife's estate, according to a court order filed Wednesday in California federal court.
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June 12, 2024
Groups Push Back On Stock Buyback Tax Test's Scope
The U.S. Treasury Department's proposed stock buyback tax rules go too far in trying to assess whether the main purpose of a U.S. subsidiary's funding purchase of its foreign parent's stock is to avoid the tax, two groups said in comments released Wednesday.
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June 12, 2024
St. Louis Atty Urges Acquittal After Tax Avoidance Conviction
A Missouri attorney who was found guilty of participating in a $4 million tax avoidance scheme alongside her father and a North Carolina insurance agent is looking to wipe out the verdict, arguing there wasn't enough evidence to convict.
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June 12, 2024
IRS Nix Of $45M Easement Deduction Invalid, Donor Says
A North Carolina partnership asked the U.S. Tax Court to invalidate an Internal Revenue Service adjustment that slashed its $45.6 million deduction for its donation of a conservation easement, saying the agency failed to follow proper administrative procedures.
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June 12, 2024
Treasury Issued Over $1B In Clean Vehicle Tax Credits
The clean vehicle tax credit of up to $7,500 has saved buyers more than $1 billion in total upfront costs since January, the U.S. Treasury Department announced Wednesday, saying the figures represent a major milestone in lowering transportation costs since the incentive was updated in 2022.
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June 12, 2024
First 'Survivor' Winner Wants $3M Tax Case Tossed
The winner of the first season of the TV series "Survivor" asked a Rhode Island federal court to toss the government's case against him seeking nearly $3.3 million in unpaid taxes, saying the liabilities stem from his flawed criminal conviction for tax evasion nearly 20 years ago.
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June 12, 2024
4 Taxpayer Advocacy Panel Committees To Meet In July
Four Taxpayer Advocacy Panel committees will hold public meetings in July focused on improving customer service at the Internal Revenue Service, the agency announced Wednesday.
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June 11, 2024
SVB Wants A Trial Over Its $605M Tax Bill From IRS
The parent company of failed Silicon Valley Bank has told a New York bankruptcy judge it wants him to decide if it owes the Internal Revenue Service more than $605 million in taxes.
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June 11, 2024
US Issues Sanctions For $50M Guyana Gold Tax Evasion
Two Guyanese businessmen and a Guyanese official were sanctioned by the U.S. Treasury Department on Tuesday after a probe into a corruption scheme that helped the businessmen evade $50 million in gold export taxes that should have been paid to Guyana's government, Treasury said.
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June 11, 2024
Trucks Don't Qualify For $400M Tax Exemption, 6th Circ. Told
A Tennessee company's refurbished trucks do not qualify for the safe harbor from the heavy-truck excise tax and should not be exempt from roughly $400 million in excise taxes, penalties and interest, the U.S. government told the Sixth Circuit.
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June 11, 2024
Aflac Matriarch's Estate Says IRS Missing Info In $11.7M Fight
The Internal Revenue Service's push to recover $11.7 million in deficiencies and penalties from the estate of the matriarch of the family that founded Aflac is predicated on a "mistaken understanding" regarding a trust, the estate told the U.S. Tax Court.
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June 11, 2024
Compliance Costs Outweigh Min. Tax Gains, Biz Reps Say
Multinational businesses are concerned that the burden of complying with the 15% global minimum tax outweighs any potential revenue gains associated with the burgeoning system, tax attorneys and a trade association representative said during a panel Tuesday.
Expert Analysis
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Reimagining Benefits For A World Without Noncompetes
Though the Federal Trade Commission's recently proposed noncompete ban is still in its infancy, companies should begin considering whether they would need to retool their payment and benefits packages to comply, while still protecting their competitive edge, say Melissa Ostrower and Alec Nealon at Jackson Lewis.
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A Closer Look At Rep. Santos' Claims And Potential Charges
Skadden partner and former federal prosecutor Maria Cruz Melendez discusses Rep. George Santos' legal exposure following his alleged misrepresentations and the possible scope of investigations into his conduct — noting that if history is any indication, the congressman could face prison time if convicted.
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Stock Buyback Excise Tax Guidance A Mixed Bag For SPACs
Recent IRS guidance on the new stock repurchase excise tax includes a welcome exception for publicly traded special-purpose acquisition companies but does not exclude redemptions in connection with a de-SPAC transaction, and further guidance is needed to clarify ambiguities around the exception's application, say Olga Bogush and Evgeny Magidenko at ArentFox Schiff.
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Crypto Coverage After FTX Fall: Accountant And Atty Liability
The recent fall of cryptocurrency firm FTX highlights complexities regarding accounting and tax reporting for digital assets, and reveals lawyers’ potential liability exposure when providing services to crypto firms — as a result, insurers may face unintended vulnerabilities related to this nebulous landscape, say Anjali Das and Farzana Ahmed at Wilson Elser.
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The Forces Defining Sales Tax Policy And Compliance In 2023
In the coming year, expect to see tax policymakers grapple with the complexity of state and local tax compliance, cryptocurrency, metaverse transactions, and more, says Scott Peterson at Avalara.
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Inflation Reduction Act's Methane Tax May Be Unenforceable
Recent legislation directs the U.S. Environmental Protection Agency to impose a first-ever direct charge on methane emissions from oil and gas operations — but two fundamental problems with the formula for calculating this tax could make it impossible for the EPA to implement, say Poe Leggette and Bailey Bridges at BakerHostetler.
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Atty-Client Privilege Arguments Give Justices A Moving Target
Recent oral arguments before the U.S. Supreme Court in a case regarding the scope of the attorney-client privilege appeared to raise more questions about multipurpose counsel communications than they answered, as the parties presented shifting iterations of a predictable, easily applied test for evaluating the communications' purpose, say Trey Bourn and Thomas DiStanislao at Butler Snow.
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Industry Takeaways From IRS Guidance On EV Tax Credits
The IRS and U.S. Department of the Treasury’s recently issued documents on tax credit eligibility for clean vehicle purchases showcases three important points for the electric vehicle industry, including emphasis on the importance of in-service dates, guidance on how leased vehicles could be evaluated, and insight into manufacturing requirements, says Levi McAllister at Morgan Lewis.
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States Must Align Distribution Age Rules With Secure 2.0
To prevent unintended escheatment of retirement benefits, states will need to undertake legislative efforts to amend unclaimed property standards that conflict with the Secure 2.0 Act's required minimum distribution age increases, says Michael Giovannini at Alston & Bird.
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The IRS' APA Rulemaking Journey: There And Back Again
Attorneys at Dentons examine recent challenges in which taxpayers successfully argued Internal Revenue Service rulemaking was invalid under the Administrative Procedure Act, how tax exceptionalism and U.S. Supreme Court regulatory deference prompted such challenges, and similar challenges the agency will likely face following this line of cases.
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Tax Court Ruling Should Allay Post-Boechler Concerns
An unusually long U.S. Tax Court ruling in Hallmark Research Collective v. Commissioner, confirming that deficiency deadlines are jurisdictional, should reassure practitioners concerned about the statutory time limit implications of last year's U.S. Supreme Court Boechler v. Commissioner ruling and reaffirm the vital role of the Tax Court itself, says James Creech at Baker Tilly.
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Unpacking The Interim Guidance On New Stock Buyback Tax
The U.S. Department of the Treasury and Internal Revenue Service's recent notice on applying the newly effective excise tax on stock repurchases provides much-needed clarity on the tax's scope, which is much broader than anticipated given its underlying policy rationale, say attorneys at Eversheds Sutherland.
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The Cryptocurrency Law And Policy Outlook For 2023
The digital asset sector saw significant losses in 2022, amid a continuing lack of guidance about how such assets should be taxed, but new government regulation, growing participation by traditional financial players and other factors should spur recovery in the coming year, says Joshua Smeltzer at Gray Reed.