Tax partner and tax controversy group co-founder Kat Gregor and tax controversy group counsel Elizabeth Smith were participants in the International Bar Association (IBA) Working Group that submitted comments to the OECD Centre for Tax Policy and Administration regarding the OECD/G20 Inclusive Framework on BEPS Public Consultation Document entitled Tax Challenges Arising from Digitalisation — Report on the Pillar One Blueprint.  The OECD’s Pillar One and Pillar Two proposals seek to change the taxation of the digital economy and develop a global minimum tax for multinational companies.  The OECD published the public consultation documents to further refine the Pillar One and Pillar Two proposals and seek input regarding unaddressed issues.  The IBA submitted its comments on December 14, 2020.

Please click here to view the comments.

In a recent Bloomberg Tax article, tax partner and tax controversy group co-founder Kat Gregor, tax controversy counsel Elizabeth Smith and tax controversy associate Isabelle Farrar examine seven potential areas of focus for IRS enforcement in 2021, including TCJA-related audits and increased partnership tax compliance.

On December 21, 2020, a bipartisan agreement was reached on the Consolidated Appropriations Act 2021 (Phase 4 Stimulus), in furtherance of the fourth phase of the federal government’s response to the COVID-19 crisis. (The bill was passed on December 21, 2020 by both the House of Representatives and the Senate.) The key tax provisions of the Phase 4 Stimulus are summarized in this Alert, and include an expansion of the employee retention credit, an additional deferral of payroll taxes, additional economic impact payments for individuals, and a second round of the Paycheck Protection Program (PPP).

To read the full alert, please click here.

Virtual ABA 2021 Midyear Tax Meeting: Brittany Cvetanovich will moderate “The Future of Impact Investment Funds” panel during the virtual ABA Midyear Tax Meeting on January 28, 2021. The panel will examine the current state of impact investment funds in light of a new adverse ruling issued to a fund manager that sought tax-exempt status.

Virtual UT Law 2021 Nonprofit Organizations Institute: Brittany Cvetanovich moderated a session on “Impact Investing” during the UT Law CLE 2021 Nonprofit Organizations Institute on January 21, 2021.  Using real-life examples, the session will explore how key exempt organization considerations affect structure, economics, and talent issues when investing for impact.

BBA Webinar: Privilege in Tax: Practical Implications of Attorney-Client, Work Product, and Tax Practitioner Privileges:  Elizabeth Smith participated in a Boston Bar Association webinar titled “Privilege in Tax: Practical Implications of Attorney-Client, Work Product, and Tax Practitioner Privileges” on January 20, 2021. The webinar will address the practical applications of attorney-client privilege, work product doctrine, and IRC section 7525 tax practitioner privilege.

IFA USA International Tax Conference: The Tax Cuts and Jobs Act – A Three-Year Review: Kat Gregor was a panelist on “International Tax Controversy” during the virtual IFA USA International Tax Conference on December 16.  The panel addressed the recent LB&I’s transfer pricing and TCJA audit initiatives and discussed current tax controversy developments, including possible challenges to the validity of TCJA regulations.

 Tax Audits and Litigation Series: A Closer Look at Section 965 Campaigns: Kat Gregor was a speaker during part 2 of the Tax Audits and Litigation Committee of the D.C. Bar Taxation Community’s remote series, “A Closer Look at Section 965 Campaigns” on December 2.

Tax partner Kat Gregor and tax counsel Elizabeth Julia Smith published a chapter in the International Comparative Legal Guide – Corporate Tax 2021 entitled “Taxing the Digitalizing Economy: Corporate Tax Laws and Regulations 2021.” A link to the chapter is here.

The chapter looks at how jurisdictions around the world are attempting to adapt their tax codes to capture revenue given the ways in which advanced technologies have changed the delivery of products and services to customers. Kat and Elizabeth discuss the ways in which jurisdictions are reevaluating their existing frameworks to determine the right to tax income from digital sources.

The ICLG Legal Guide cover common issues in corporate tax law and regulations, including capital gain, overseas profits, real estate, anti-avoidance, BEPS and the digital economy in 22 jurisdictions.

On December 8, 2020, Massachusetts extended its COVID guidance relating to the sourcing of employee income that was set to expire on December 31, 2020, via emergency regulation 830 CMR 62.5A.3 and via technical information release TIR 20-15.  (TIR 20-15 supersedes both TIR 20-10 and TIR 20-05.) The only change to the COVID guidance is that it will now remain in force until 90 days after the COVID-19 state of emergency in Massachusetts expires.  Within TIR 20-15, the Massachusetts Department of Revenue noted that the extension is made “[i]n light of the continuing state of emergency.”

Please click here to read the full article.

On July 28, 2020, the Treasury Department and the IRS issued final and proposed regulations (the “Final Regulations” and “New Proposed Regulations”) under Section 163(j) of the Internal Revenue Code (the “Code”). The Final Regulations and New Proposed Regulations amend prior proposed regulations issued on November 26, 2018 (the “Prior Proposed Regulations”). Section 163(j) of the Code generally limits business interest expense deductions and was substantially revised by the Tax Cuts and Jobs Act (the “TCJA”), which took effect on January 1, 2018. Section 163(j) was further revised by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020. Our coverage of the TCJA and the CARES Act can be found here and here, respectively. Certain key tax provisions of the CARES Act can be found here.

This client alert provides a high-level overview of some of the key guidance on Section 163(j) contained in the newly released regulations.

Please click here to read the full client alert.