In response to the Coronavirus (COVID-19), the tax controversy group has put together a chart detailing tax controversy-related developments as they arise. Please refer to the following list of tax and tax controversy-related alerts for additional insight and guidance:
On January 17, 2020, a federal district court in Washington ordered Microsoft Corporation (“Microsoft”) to produce many documents to the Internal Revenue Service (“IRS”) that Microsoft asserted were privileged. Microsoft had argued that most of the documents were protected by protected by the work product doctrine and the federally authorized tax practitioner privilege set forth
In this Ropes & Gray podcast, Isabelle Farrar, an associate in the tax controversy group, is joined by Elizabeth Smith, counsel in the tax controversy group, and Jennifer Romig, a partner in the health care group, to discuss the state taxation of digital products, an evolving area in several states. Specifically, they will discuss
On October 9, 2019, IRS released Revenue Ruling 2019-24, 2019-44 IRB, which provides new guidance on the Service’s handling of cryptocurrencies and is the first of such guidance to be released since March 2014 when IRS issued Notice 2014-21. The ruling was issued after prodding from a bipartisan congressional coalition. The ruling, and attached Frequently
In its 2019 Spring Term, the Supreme Court published five decisions regarding tax matters, three of which limit states’ taxing authority. In a February decision, Dawson v. Steager, the Court held that a state cannot tax a federal retiree’s pension benefits while declining to tax a similarly situated state retiree. The March decision in
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in the same case that had previously been released by the Ninth Circuit on July 24, 2018, only to be precipitously withdrawn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 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
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.
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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,
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.