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Weekly IRS Roundup September 28 – October 2, 2020

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of September 28, 2020 – October 2, 2020. Additionally, for continuing updates on the tax impact of COVID-19, please visit our resource page here. September 29, 2020: The IRS published final regulations related to the source of income for certain property sales and modifying rules for determining whether foreign source income is effectively connected with a US trade or business. September 29, 2020: The IRS published final regulations related to a wide range of foreign tax credit topics. The regulations provide guidance on the allocation and apportionment of deductions and creditable foreign taxes, the definition of financial services income, foreign tax redeterminations, availability of foreign tax credits under the transition tax, the application of the foreign tax credit limitation to consolidated groups, adjustments to hybrid deduction...

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Weekly IRS Roundup December 2 – 6, 2019

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 2 – 6, 2019. December 2, 2019: The IRS issued final regulations providing guidance relating to the determination of the foreign tax credit as well as guidance relating to changes made by the 2017 US tax law. The regulations finalize the proposed regulations that were published on December 7, 2018. The regulations also finalize proposed regulations on overall foreign losses that were published on June 25, 2012, as well as certain portions of proposed regulations published on November 7, 2007, relating to a US taxpayer’s obligation to notify the IRS of a foreign tax redetermination. The final regulations will be effective upon their date of publication in the federal register. December 2, 2019: The IRS issued proposed regulations that also provide guidance relating to the determination of the foreign tax credit. The proposed...

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Weekly IRS Roundup March 11 – 15, 2019

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of March 4 – 8, 2019. March 11, 2019: The IRS cancelled a public hearing scheduled for March 14 on proposed regulations on changes to the foreign tax credit under Section 904 of the Code. March 12, 2019: The IRS issued Notice 2019-10 requesting comments on possible changes to rules regarding the excise tax treatment of fuel used in a motor vehicle to operate auxiliary equipment via a power take-off. March 12, 2019: The IRS issued a notice listing the names of individuals losing US citizenship (within the meaning of section 877(a) or 877A) pursuant to Section 6039G of the Code. March 12, 2019: The IRS announced that a private letter ruling pilot program addressing whether stock distributions are tax free under Section 355 would be extended indefinitely. March 13, 2019: The IRS issued Revenue Ruling 2019-06 providing tables of covered...

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Weekly IRS Roundup February 25 – March 1, 2019

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of February 25 – March 1, 2019. February 25, 2019: The IRS issued Revenue Ruling 2019-05, announcing the interest rates for underpayments and overpayments under section 6621 of the Code, applicable for the calendar quarter beginning April 1, 2019. February 26, 2019: The IRS issued a news release as part of its new Tax Time Guide series, providing information and online resources to help taxpayers understand the changes made by the Tax Cuts and Jobs Act. February 27, 2019: The IRS released final regulations amending the utility allowance regulations concerning the low-income housing credit under section 42 of the Code. February 27, 2019: The IRS issued a news release reminding taxpayers who owe federal taxes about potential restrictions on their ability to obtain or renew passports. February 27, 2019: The IRS scheduled a public hearing...

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Weekly IRS Roundup December 31, 2018 – January 4, 2019

Presented below is our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for the week of December 24, 2018 – January 4, 2019. Tax news is very limited because of the government shut down: December 31, 2018: The IRS released Notice 2019-09, providing interim guidance on section 4960 of the Code, enacted by the Tax Cuts and Jobs Act, regarding excise taxes on excess remuneration and excess parachute payments paid by certain tax-exempt organizations to covered employees. December 31, 2018: The IRS released the final 2018 version of Form 8990, dealing with limitations on business interest expense deductions under section 163(j) of the Code. December 31, 2018: The IRS released final instructions for the 2018 version of Form 1116, dealing with the foreign tax credit, reflecting changes made by the Tax Cuts and Jobs Act. January 4, 2018: The IRS released final instructions for the 2018 version of Form 8990, dealing with...

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

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. In addition, the reduction in the US corporate tax rate results...

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IRS Releases Second Quarter Update to 2017-2018 Priority Guidance Plan

On February 7, 2018, the Department of the Treasury (Treasury) released its second quarter update to the 2017-2018 Priority Guidance Plan to identify tax issues it believes should be addressed through regulations, revenue rulings, revenue procedures, notices and other published administrative guidance. The Priority Guidance Plan contains projects the Treasury hopes to complete during the 12-month period from July 2, 2017 through June 30, 2018. We previously posted on the first quarter 2017-2018 Priority Guidance plan here. Most of the projects do not involve the issuance of new regulations, instead focus on guidance to taxpayers on a variety of tax issues important to individuals and businesses in the form of: (1) revocations of final, temporary, or proposed regulations (for our prior coverage, see here); (2) notices, revenue rulings and revenue procedures; (3) simplifying and burden reducing amendments to existing regulations; (4) proposed regulations; or...

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Tax Reform Conference Committee Reaches Agreement

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. Continue Reading.

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