Federal
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June 28, 2024
In Chevron Case, Justices Trade One Unknown For Another
The U.S. Supreme Court's decision to overrule a decades-old judicial deference doctrine may cause the "eternal fog of uncertainty" surrounding federal agency actions to dissipate and level the playing field in challenges of government policies, but lawyers warn it raises new questions over what rules courts must follow and how judges will implement them.
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June 28, 2024
The Tax Angle: IRS Budget Vote, TCJA's Racial Impact
From a look at an upcoming vote on IRS funding for fiscal 2025 to an analysis of GOP claims that tax incentives in the 2017 Tax Cuts and Jobs Act benefited Black Americans, here's a peek into a reporter's notebook on a few of the week's developing tax stories.
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June 28, 2024
IRS Finalizes Broker Rules For Digital Asset Sales
Brokers of digital assets such as cryptocurrency and non-fungible tokens will face tax reporting requirements for the first time similar to those for brokers of securities and other financial instruments under final regulations issued Friday by the Internal Revenue Service.
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June 28, 2024
Final Rules Exempt REITs From Stock Buyback Tax
Real estate investment trusts and regulated investment companies may be able to avoid the stock buyback tax but would still be required to keep records under final regulations on reporting and paying the tax released by Treasury and the IRS Friday.
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June 28, 2024
IRS Plans To Quickly Finalize Partnership Basis-Shifting Regs
The IRS is moving quickly to finalize partnership rules that target abusive tax avoidance using basis shifting within related partnerships, the agency's top attorney said Friday, asking practitioners to weigh in on the rulemaking so enforcement can properly target the problematic transactions.
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June 28, 2024
IRS Improves Availability But Can Do More, TIGTA Says
The Internal Revenue Service has improved the accessibility and availability of customer services in underserved, underrepresented and rural communities, but it could do more to expand into other geographic areas, the Treasury Inspector General for Tax Administration said Friday.
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June 28, 2024
IRS Whistleblower Office Overhaul In Process, Chief Says
The Internal Revenue Service is working through initiatives to improve its whistleblower program that were laid out in the agency's strategic operating plan, including improving systems and processes and drastically increasing staffing, the director of the agency's Whistleblower Office said Friday.
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June 28, 2024
NY Law Firm Botched Gas Co. Sale, Ex-Client Says
Albany, New York-based Whiteman Osterman & Hanna LLP is facing a lawsuit in New York federal court alleging it failed to properly structure the sale of a gas company and caused its owner to incur an avoidable tax liability.
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June 28, 2024
IRS Reminds Marijuana Businesses They Can't Get Tax Breaks
The Internal Revenue Service sought to remind taxpayers Friday that businesses selling marijuana, even in states where it's legal, are not entitled to federal tax deductions, saying some taxpayers are filing invalid claims for refunds through amended returns.
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June 28, 2024
Chevron Ruling No Sea Change For Tax Court, Judge Says
The U.S. Tax Court will continue to rely on the IRS and Treasury's expertise in the tax code following the U.S. Supreme Court's landmark decision to overturn the 40-year-old Chevron doctrine that directed courts to defer to federal agencies' interpretations of ambiguous law, a judge said Friday.
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June 28, 2024
Spouse's Prenup Payments Count As Income, IRS Says
Support payments to a taxpayer from a former spouse made before they officially divorce constitute alimony and should be included in the taxpayer's gross income, the Internal Revenue Service said in a private letter ruling released Friday.
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June 28, 2024
IRS Revokes Variable Annuity Ruling From 2014
The IRS revoked part of a 2014 private letter ruling regarding an annuity option with variable payments that a taxpayer had planned to offer, saying in a ruling released Friday that it no longer agreed with its former position.
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June 28, 2024
Taxation With Representation: Kirkland, Vinson, Skadden
In this week's Taxation with Representation, Aareal Bank AG and Advent International sell a property management and maintenance software company, Webtoon Entertainment Inc. and Tamboran Resources Corp. price initial public offerings, SM Energy Company acquires oil and gas assets, and Nokia sells Alcatel Submarine Networks to the French state.
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June 28, 2024
Estate Owes $4.9M For Son-Of-Boss Scheme, US Says
An estate owes $4.9 million in tax liabilities for a couple's scheme to artificially cancel out their capital gains, the federal government said in a complaint in Michigan federal court, arguing that the Son-of-Boss scheme constitutes fraud and its proceeds aren't entitled to bankruptcy protection.
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June 28, 2024
Weekly Internal Revenue Bulletin
The Internal Revenue Service's weekly bulletin, issued Friday, included an extension of the penalty relief for entities that fail to make estimated quarterly payments of the corporate alternative minimum tax.
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June 28, 2024
Supreme Court Strikes Down Chevron Deference
The U.S. Supreme Court on Friday overturned a decades-old precedent that instructed judges about when they could defer to federal agencies' interpretations of law in rulemaking, depriving courts of a commonly used analytic tool and leaving lots of questions about what comes next.
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June 27, 2024
Biden, Trump Spar Over Fate Of 2017 Tax Cuts In 1st Debate
President Joe Biden and former President Donald Trump debated the GOP's 2017 tax policy overhaul Thursday night, with Trump praising its economic benefits and Biden criticizing the tax cuts for favoring the wealthy and increasing federal deficits.
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June 27, 2024
IRS To Offer Combined Filing For Energy Investment Credits
The Internal Revenue Service will let clean energy project owners that are claiming investment tax credits for more than 200 facilities file the claims with a single form, an agency official said Thursday.
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June 27, 2024
Corp. Tax Cuts Worsen Racial, Income Inequality, Report Says
In the first year of a corporate tax break, white U.S. households receive 88% of the benefits while Black and Hispanic households each receive just 1%, according to a study published Thursday by the Institute on Taxation and Economic Policy and an advocacy organization.
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June 27, 2024
TurboTax Maker Wipes Out 2 Of 3 Software Patents At PTAB
The Patent Trial and Appeal Board delivered a mixed bag of decisions in patent challenges brought by Intuit against a small software outfit that claims to have invented the idea of "co-browsing."
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June 27, 2024
High Response To IRS Transfer Pricing Letters, Official Says
Most taxpayers that received letters from the Internal Revenue Service pursuant to a compliance campaign warning them of a transfer pricing issue have responded, an IRS official said Thursday.
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June 27, 2024
Congress Shouldn't Rush OECD Tax Package, Group Says
Congress should avoid "rubber-stamping" the two pillars of the Organization for Economic Cooperation and Development's plan to fight tax base erosion and profit shifting and instead gather more information on its impact on the U.S., a conservative advocacy group said Thursday.
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June 27, 2024
IRS Criminal Chief Says COVID Fraud Work To Hold Steady
IRS Criminal Investigation agents expect to spend as much time this year on coronavirus assistance policy-related fraud as last year, the division chief said at a conference Thursday.
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June 27, 2024
IRS Tells 10th Circ. To Deny Liberty Global's $110M Refund Bid
The U.S. government urged the Tenth Circuit on Thursday to reject telecommunication giant Liberty Global's push for a $110 million tax refund, arguing a lower court correctly deduced that the company's business restructurings were carried out solely to avoid tax.
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June 27, 2024
$2.1B Danish Tax Fraud Suspect Won't Testify, Court Says
A New York federal court denied dueling requests from U.S. pension plan investors accused of participating in a $2.1 billion Danish tax fraud scheme and from Denmark's tax agency to bring in the man that both sides say masterminded the scheme, or to bring in one of his employees.
Expert Analysis
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Recent Bills Show Congress' Growing Maturity On Cannabis
Though two recently introduced cannabis reform bills, the Prepare Act and the Small Business Tax Equity Act, are unlikely to pass in this Congress, they demonstrate a new level of focus and sophistication on the part of lawmakers as it relates to cannabis at the federal level, says Irina Dashevsky at Greenspoon Marder.
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What To Make Of IRS' New Advance Pricing Guidance
Recent guidance on the IRS' goals for its advance pricing agreement system provides helpful insight into review and decision-making procedures for advance pricing agreement requests, but it also raises questions about the IRS' objectives, say Richard Slowinski and Stefanie Kavanagh at Alston & Bird.
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Compliance Obligations Still Murky For Superfund Excise Tax
Comments on the IRS' reinstatement of the Superfund chemicals excise tax show that, given taxpayers' lack of institutional knowledge and the government's previous failure to finalize clarifying guidance, further regulatory action is needed to help taxpayers understand their obligations, say Nicole Elliott and Mary Kate Nicholson at Holland & Knight.
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The Reciprocal Tax Bill Is A Warning Shot At Pillar 2
A bill recently introduced in the House of Representatives to reciprocally tax countries deemed to have imposed discriminatory taxes on U.S. citizens and businesses takes aim at countries implementing the global minimum tax treaty known as Pillar Two, with which the U.S. has not complied, says Alan Cole at the Tax Foundation.
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3 Developments That May Usher In A Nuclear Energy Revival
A recent advancement in nuclear energy technology, targeted provisions in the Inflation Reduction Act and a new G7 agreement on nuclear fuel supply chains may give nuclear power a seat at the table as a viable, zero-carbon energy source, say attorneys at Vinson & Elkins.
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What Tax-Exempt Orgs. Need From Energy Credit Guidance
Guidance clarifying the Inflation Reduction Act’s credit regime, expected from the U.S. Department of the Treasury this summer, should help tax-exempt organizations determine the benefits of clean energy projects and integrate alternative energy investments into their activities, say attorneys at Morgan Lewis.
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Unconventional Profits Interest Structures Find New Support
A recent U.S. Tax Court ruling should provide comfort that less-than-plain-vanilla profits interest structures, created to achieve complicated economic arrangements, can succeed in generating more optimal tax outcomes, provided the terms are properly drafted, says Daren Shaver at Hanson Bridgett.
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Roadblocks For Cannabis Employers Setting Up 401(k) Plans
Though the Internal Revenue Code and the Employee Retirement Income Security Act generally allow cannabis businesses to establish 401(k) plans for their employees, companies must still pick their way through uncertainties around tax deductions and recruiting reliable vendors, say attorneys at Shipman & Goodwin.
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How Foreign Info Return Penalty Case May Benefit Taxpayers
The U.S. Tax Court's recent decision that the Internal Revenue Service cannot penalize taxpayers for failing to file foreign corporation information returns may give similarly situated taxpayers an opportunity to also avoid penalties, provided they protect their rights before the decision is overturned or mooted by legislation, say attorneys at Arnold & Porter.
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What's Unique — And What's Not — In Trump Protective Order
A Manhattan judge's recent protective order limiting former President Donald Trump's access to evidence included restrictions uniquely tailored to the defendant, which should remind defense attorneys that it's always a good idea to fight these seemingly standard orders, says Julia Jayne at Jayne Law.
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The Nuts And Bolts Of IRS Domestic Content Tax Credit
Recent IRS guidance provides specifics on how renewable energy projects can qualify for bonus tax credits by meeting U.S. domestic content rules, but also creates a qualification framework that will be complicated for project developers to navigate, say Scott Cockerham and Wolfram Pohl at Orrick.
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How Cities Can Tackle Post-Pandemic Budgeting Dilemmas
Due to increasing office vacancies around the country, cities may consider politically unpopular actions to avoid bankruptcy, but they could also look to the capital markets to ride out the current real estate crisis and achieve debt service savings to help balance their budgets, say attorneys at Cadwalader.
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Guidance Adds Clarity To Energy Communities Bonus Credits
Recent IRS guidance on the Inflation Reduction Act's changes to tax credits for renewable energy projects offers much-needed pointers for developers and financing parties, and should allow them to more comfortably incorporate special bonus credits for projects in energy communities into their transactions, say Jorge Medina and Ira Aghai at Shearman.