In December 2018,  the U.S. District Court for the Southern District of New York ruled that New York’s $600 million fee on the sale of opioids into the state unconstitutionally prohibits pharmaceutical companies from passing the cost onto consumers. Furthermore, the Court ruled that the Opioid Stewardship Act (OSA) violated U.S. Constitution’s dormant commerce clause and, therefore, was unconstitutional. The OSA would have forced manufacturers and distributors of opioid medications to pay pro rata shares of a $100 million annual penalty (using a volumetric calculation based on opioid strength, rather than price) while forbidding manufacturers and distributors from passing any portion of that annual cost to New York purchasers.

Please see this Law360 article to read more about the case.

In this Ropes & Gray podcast, Alec Oveis, an associate in the tax and benefits group is joined by Kat Gregor, a partner in the tax group and co-founder of the tax controversy group, and Andy Howard, a partner in the tax group, to discuss the investigations now underway in Europe involving so-called “cum-ex dividend trades.”

August 2018 brought two major developments in the Department of Treasury’s race to finalize its partnership audit reform regulations before partnerships begin in early 2019 filing tax returns for the first time under the new regime. First, on August 7, the Department of Treasury (“Treasury”) issued final regulations for partnership representatives. Second, on August 13, Treasury issued new proposed regulations implementing the centralized partnership audit regime, consolidating, amending, and releasing its prior regulations issued in 2017 and early 2018. Our prior coverage of these initial regulations can be found here and here. Both sets of regulations issued in August include certain substantive changes due to comments received by the IRS.

To read the full article, click here.

In a recent International Financial Law Review article, tax partner Jim Brown provides insight on how the IRS has joined tax authorities from the UK, Canada, the Netherlands and Australia to create the Joint Chiefs of Global Tax Enforcement, a sign regulators are getting serious about cryptocurrency. Jim notes that there are questions on how non-U.S. investors will be taxed, and these investors “may require help in navigating [the rules].”

Click here to read the full article.

In a recent Tax Notes article, the author addresses a recent IBA conference panel focused on OECD’s implementation of the base erosion and profit-shifting (BEPS) program. Kat Gregor, who was a speaker on this panel, provides commentary on BEPS’ penalty fallout. Kat provides insight on the positive and negative implications of the program and notes how practitioners should address their tax planning needs, both in the EU and the US.

To read the full article, please click here.

On October 1, Charles Rettig began his term as 49th Commissioner of the IRS. This gives the IRS a Commissioner for the first time in approximately one year, since his predecessor John Koskinen, an Obama appointee, stepped down in fall 2017. David Kautter, the Treasury Department’s assistant secretary for tax policy, had been running the IRS in the interim.

Continue Reading Rettig Starts Four-Year Term as IRS Commissioner

In Veg Corp. v. U.S., No. 2:17-cv-02893 (D. Nev. July 30, 2018), the district court refused to analyze compliance with IRS document requests in a vacuum, and, instead, considered the parties’ understanding of the document requests. Continue Reading District Court Clarifies Rules Related to IRS Formal Document Requests for Documents Outside the U.S.

In this Ropes & Gray podcast, Ben Simmons, an associate in the tax group, is joined by David Saltzman, a partner in the tax group, to discuss the recent Tax Court memorandum decision, Illinois Tool Works Inc. & Subsidiaries v. Commissioner of Internal Revenue. This case involved a strategy designed to permit a U.S. multinational to repatriate cash from its foreign subsidiaries without incurring current U.S. federal income tax.