Evan Walters

Evan Walters focuses his practice on US and international taxation. He has experience across a wide range of issues involving corporate and partnership taxation. Read Evan Walter's full bio.

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Taxpayers Should Prepare for the Next Penalty Battleground

By Andrew R. Roberson, Kevin Spencer & Evan Walters on May 31, 2019

Posted in IRS Audits, IRS Guidance, Tax Refunds

The IRS is using a new tool from its arsenal to enforce compliance for tax refund and credit claims: the Internal Revenue Code Section 6676 penalty. Taxpayers and their advisers need to be aware of the mechanics of this penalty and how best to avoid it being sustained.

Andrew R. Roberson, Kevin Spencer and Evan…

Ninth Circuit Interprets Summons Notice Rules Strictly Against IRS

By Andrew R. Roberson & Evan Walters on March 5, 2019

Posted in Appellate Courts, IRS Audits, IRS Guidance, Trial Courts

The Internal Revenue Service (IRS) had broad examination authority to determine the correct amount of tax owed by taxpayers. In addition to seeking information directly from a taxpayer, the IRS is also authorized to seek information from third parties. However, Internal Revenue Code (Code) Section 7602(c)(1) requires that the IRS provide “reasonable notice in advance…

Tax Reform Insight: New Foreign Tax Credit Rules May Warrant Restructuring Foreign Branches

By Damon M. Lyon, Lowell D. Yoder, Susan E. O’Banion & Evan Walters on June 27, 2018

Posted in IRS Guidance, Tax Reform

The 2017 Tax Act added a separate foreign tax credit limitation category, or basket, for income earned in a foreign branch. As a result, certain US groups may be limited in their ability to use foreign income taxes paid or accrued by a foreign branch as a credit against their US federal income tax liability.

This new limitation can present a problem for a taxpayer with losses in some foreign branches and income in other foreign branches. Consider, for example, a US consolidated group that has $1,000 of losses from Foreign Branch X and $1,000 of income in Foreign Branch Y on which it pays $200 of foreign income taxes. The group would have zero income in its foreign branch basket, and therefore the $200 of foreign taxes would not be currently usable as a foreign tax credit. The credits can be carried over to other tax years, but they may never be tax benefited if the above circumstances continue.