Partners Alexander Lee, Tim Shuman, Britt Haxton and Jay Singer discuss novel concerns facing CFCs in light of tax reform.
Timothy (Tim) S. Shuman focuses his practice on corporate and international tax matters for US and non-US multinationals, with particular emphasis on domestic and cross-border acquisitions, dispositions, restructurings and liquidations. He has extensive experience in structuring spin-offs and tax-free reorganizations involving publicly traded and privately held companies, and regularly represents clients in obtaining private letter rulings and other guidance from the Internal Revenue Service (IRS). He also works on tax issues involving regulated investment companies. Read Tim Shuman's full bio.
A House-Senate conference committee has reached agreement on a compromise version of the Tax Cuts and Jobs Act, which includes substantial changes to the corporate and international business taxation rules. The stage now appears to be set for final passage and enactment of the legislation before the end of 2017.
The October 2017 issue of Focus on Tax Strategies & Developments has been published. This issue includes five articles that provide insight into US federal and international tax developments and trends across a range of industries, as well as strategies for navigating these complex issues.
Republican Leaders Release Tax Reform Framework
By David G. Noren Alexander Lee
M&A Tax Aspects of Republican Tax Reform Framework
By Alexander Lee, Alejandro Ruiz and Timothy S. Shuman
State and Local Tax Aspects of Republican Tax Reform Framework
By Peter L. Faber
Grecian Magnesite Mining v. Commissioner: Foreign Investor Not Subject to US Tax on Sale of Partnership Interest
Kristen E. Hazel, Sandra P. McGill and Susan O’Banion
The IRS Attacks Taxpayers’ Section 199 (Computer Software) Deductions
Kevin Spencer, Robin L. Greenhouse and Jean A. Pawlow
The outline of pending tax reform provisions remain vague, but a significant impact on M&A activity is expected by way of corporate tax cuts, interest deductibility, changes to the expensing of capital investments, a reduction of the pass-through tax rate and changes to our international (territorial) tax system.
On April 4, 2016, the Internal Revenue Service and the US Department of the Treasury issued proposed regulations pursuant to Internal Revenue Code (IRC) section 385 addressing whether an interest in a related corporation is treated as stock or indebtedness for US federal income tax purposes (Proposed Regulations). On June 29, 2016, both the DC Bar Taxation Section and the New York State Bar Association Tax Section submitted comments on the Proposed Regulations. Both Tax Sections urged Treasury not to finalize the Proposed Regulations. The DC Bar Taxation Section letter can be found here and the New York State Bar Association Tax Section letter can be found here.
The Proposed Regulations have been met with substantial criticism by the tax bar and taxpayers alike. The Proposed Regulations would have a significant impact on intercompany debt of multinational groups and could, if finalized in their proposed form, force major changes in the way that taxpayers conduct routine business.