In a recent Law360 article, tax partner and tax controversy group co-founder Kat Gregor, tax controversy counsel Elizabeth Smith and tax associate Stefan Herlitz analyze the costly risks that loom if retailers collect too much sales tax including private class action lawsuits seeking refunds of over-collected sales tax.

The authors explain that the trend of consumer sales tax class action suits will grow with the proliferation of states’ Wayfair sales tax collection regulations, and retailers’ struggling to keep up with the requirements. In response, more retailers may add class action waivers to their terms of use.

Please click here to read the full article.

 

Tax partner and tax controversy group co-founder Kat Gregor recently spoke on a panel of leading experts on “Hidden Wealth”: The Global Campaign for Tax Transparency –the Latin Response” at the 12th Annual U.S. and Latin America Tax Practice Trends Conference on June 13th in Miami, Florida. Topics included the Common Reporting System (CRS); Golden Passports; Economic Substance Requirements for Shell Companies; Beneficial Ownership Disclosure; Tax Haven Black Lists; and the OECD Global Forum on Tax Transparency. Please click here to view the slides used during the presentation.

On June 7, 2019, the Ninth Circuit re-issued a decision in Altera v. Commissioner, upholding an IRS Regulation that had been previously struck down by the Tax Court.  (This follows a decision in the same case that had previously been released by the Ninth Circuit on July 24, 2018, only to be precipitously withdrawn on August 7, 2018, as previously reported by Ropes & Gray with respect to the July 2018 and August 2018 decisions).

At issue is Treasury Regulation 1.482-7A(d)(2)’s requirement that related parties allocate stock-based compensation costs when entering into cost-sharing agreements to develop intangible assets.  The Ninth Circuit upheld the Treasury Regulation 1.482-7A(d)(2) (the “Regulation”), reversing the Tax Court’s decision.  The court held that the Regulation did not exceed the authority delegated to the Commissioner by 26 U.S.C. §482, regarding the allocation of income and deductions among taxpayers.  The court then applied Chevron deference to conclude that the Regulation was a reasonable method for achieving the results required by 26 U.S.C. §482.  The decision was again 2-1, with Chief Judge Sidney R. Thomas and Judge Susan P. Graber in the majority, and Judge Kathleen M. O’Malley again dissenting.  The decision is available here.

Kat Gregor was recently quoted in a Law360 article, “Foreign FATCA Criticism Unlikely To Spur Changes, which discussed how the U.S. Department of the Treasury is unlikely to change reporting requirements of the U.S. Foreign Account Tax Compliance Act in response to European complaints. Her remarks were also published in POLITICO Pro’s “Morning Tax” roundup.

Kat explained that it would be out of character for the U.S. Treasury to roll back FATCA reporting requirements, especially if Congress does not change the law that requires American citizens to pay taxes on their worldwide income. “Very few instances in history have I ever seen the Treasury Department decide as a policy matter that they’re just not going to collect tax,” she said.

She also noted if FATCA requirements were rolled back, the common reporting standard may need to be implemented. The Organization for Economic Cooperation and Development designed the standard as the global framework for tax administrations to share individuals’ bank account information.

To read the full Law360 article, including additional insight from Kat, please click here.

Tax controversy counsel Elizabeth Smith recently moderated a panel of leading experts on “Administrative Practice Committee Important Developments” at the ABA Section of Taxation May Meeting on May 10 in Washington D.C. Topics included, Treasury and IRS guidance and regulations, court decisions, and other items germane to tax administration. Please click here to view the slides used during the presentation.

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.