Kat Gregor, tax partner and co-founder of the tax controversy group, was recently appointed to both Law360’s Tax and Tax Authority Federal Editorial Advisory Boards. The purpose of these boards, according to the announcement, is “to get feedback on Law360’s coverage and gain insight from experts in the field on how best to shape future coverage.”
To learn more about Kat and the other elected board members, please click here and here.
On March 21, 2019, the IRS announced it is temporarily suspending two revenue rulings addressing tax-free spinoffs. The suspended rulings had arguably required the distributing corporation and the spun-off corporation to each independently generate current revenue. This development is welcome news for life sciences, technology, and other research and development (R&D)-focused business organizations that did not pursue a tax-free spinoff because of a perceived revenue requirement. The move comes on the heels of the IRS’s September 2018 announcement that it is prepared to issue favorable rulings on the tax-free treatment of corporate spinoffs by research-intensive business ventures that do not currently collect income, while the IRS studies the issue.
Click here to read the full alert.
As first published in the March 22nd issue of Tax Journal, London tax partner, Andrew Howard, examines the Court of Justice of the European Union’s (the CJEU) landmark ruling on withholding tax and abuse of rights in the Danish conduit cases. In the Danish conduit cases, the CJEU has found that the establishment of holding companies in European jurisdictions can amount to an abuse of rights in some circumstances. Abusive holding companies will not qualify for withholding tax exemption under the Parent-Subsidiary Directive or the Interest and Royalties Directive, even where exemption would otherwise apply under domestic rules.
Click here to read the entire article.
STEP Mid Atlantic Webinar: Kat Gregor will be a featured webinar panelist on “What Private Wealth Planners Need to Know About the EU’s Mandatory Disclosure Directive DAC 6.” This panel provided an overview of the elements of DAC 6, provided a comparison to existing US mandatory disclosure rules, explained when foreign tax planning may implicate US criminal conduct, and, through hypotheticals, offered suggestions as to how to navigate the DAC 6 requirements.
ABA Tax Section 2019 Midyear Tax Meeting: Kat Gregor was a featured panelist on “I’m a US Lawyer, What’s the EU Got To Do With Me? – Navigating Ethics in Global Practice.” This panel explored various international initiatives that have implemented increased tax transparency measures and have potential ethical impact on U.S. tax professionals, including lawyers.
In a recent Law360 article, tax partner and tax controversy group co-founder Kat Gregor, tax controversy counsel Elizabeth Smith and litigation associate Liz Tolon explore the tax privilege nuances associated with attorney-client privilege and other relevant analogs that exist to protect client confidentiality. Their article discusses applicable privileges in the tax context, as well as two key exceptions: waiver and the crime-fraud exception. It also examines three recent cases that highlight the practical implications of these exceptions.
To read the full article, please click here.
On December 21, 2018, IRS and Treasury issued final regulations implementing the partnership audit regime (T.D. 9844). The final regulations largely adopt, with some changes, the proposed regulations issued in August 2018. By issuing almost 200 pages of preamble, the final regulations provide extensive discussion of which comments were incorporated and why others were not. Likely, IRS is thinking ahead to litigation over the validity of the regulations by issuing such broad discussions of the comment process. The most significant changes to the proposed regulations are changes to the definition of partnership-related items and changes allowing administrative adjustment of partnership-related items.
To read the full article, please click here.
On November 20, 2018, IRS issued a memo on its new voluntary disclosure program (“Voluntary Disclosure Program” or “Program”), following the offshore voluntary disclosure program’s termination on September 28, 2018. The Voluntary Disclosure Program provides taxpayers with a process for voluntarily disclosing tax noncompliance for both domestic and offshore assets to avoid potential criminal liability and prosecution. IRS has discretion to apply the Voluntary Disclosure Program’s procedures to all domestic voluntary disclosures received on or before September 28, 2018. Taxpayers have long been able to disclose voluntarily their tax noncompliance to IRS, either pursuant to IRS’s long-standing practice of allowing voluntary disclosure, under IRM 9.5.11.9, or using the streamlined compliance procedures. However, the Voluntary Disclosure Program is arguably better for taxpayers, in that it provides precise procedures and guarantees that participant taxpayers will not be criminally prosecuted. Under the prior practice, voluntary disclosure was only a factor taken into consideration when determining whether to prosecute criminally.
Continue Reading IRS Announces Voluntary Disclosure Program for Domestic and Offshore Assets
On December 13, 2018, the IRS published proposed regulations (REG-104259-18) on the Base Erosion and Anti-Abuse Tax (the “BEAT”), a new tax regime under the Tax Cuts and Jobs Act (“TCJA”). BEAT is designed to discourage multinational corporations from profit-shifting behavior by making deductible payments to their foreign affiliates, such as interest, high-margin service payments, rents and royalties. While the proposed regulations shed light on the implementation mechanism of BEAT, there are some unwelcome surprises and open questions that taxpayers should be aware of.
To read the full article, please click here.
Data analysis is not a new concept, but it nonetheless is the center of a social and technological revolution. In recent months, we have gained significant insight into how the IRS and state taxing authorities are leveraging advanced technology and machine learning to mine the petabytes of taxpayer data that they collect and retain.
To read the full article, which was recently posted to Law360, please click here.
The Internal Revenue Service (IRS) and other global taxing authorities are continuing to focus on bringing taxpayers who hold cryptocurrencies into compliance.
As cryptocurrencies have made some investors very wealthy, concern has arisen that investors are not reporting gains to taxing authorities. Internationally, governments are committed to bringing these investors into compliance. The most important compliance-related variables are how to characterize gains and losses, and at what point a reporting obligation arises. While many questions remain to be answered, taxing authorities have issued initial guidance on the treatment of cryptocurrencies, and have scored important victories in obtaining access to information necessary to bring taxpayers into compliance.
Continue Reading IRS Makes Cryptocurrency a Compliance Priority