In Tax Notes, tax partner Kat Gregor, tax counsel Brittany Cvetanovich and Elizabeth Smith, and associates Maggie Heine and Michelle Perry offer a response to a recent article in the publication concerning whether damages in a civil suit that alleges sexual abuse or rape are includible in the recipient’s taxable income. The Ropes &…

Boston Bar Association (BBA) Virtual CLE: Taxation of Cryptocurrency: IRS Guidance, State and Local Tax Approaches, and Enforcement Trends: Elizabeth Smith, tax counsel, is panelist during this BBA webinar. This webinar will provide an introduction to tax issues related to cryptocurrency. The presentation will begin with an overview of the taxonomy relevant to digital …

On February 7, 2022, the IRS’s Large Business & International Division (“LB&I”) announced a new compliance campaign focusing on partnership losses in excess of a partner’s basis.  The campaign will center on ensuring that partners reporting flow-through losses from partnership have adequate outside basis to deduct them. If a partner does not have adequate outside…

On January 24, 2022, the U.S. Supreme Court ruled in Hughes v. Northwestern University that the plaintiff-participants will get another opportunity to assert that the Northwestern retirement plan fiduciaries violated ERISA’s duty of prudence based on the following: the number of investment options included on the plan menu; the decision to contract with multiple recordkeepers…

Andrew Howard, Ropes & Gray tax partner, outlines his thoughts on the likely impacts on private equity of the ‘ATAD 3’ EC proposal, designed to prevent the misuse of shell entities for tax purposes

If adopted, the “Directive laying down rules to prevent the misuse of shell entities for tax purposes”, aka “ATAD 3” or the “Unshell Directive”, will deny the benefits of European directives and also the benefit of double tax treaties to EU-based holding companies which fail to meet minimum substance requirements from 2024. Per the draft directive, this applies not just to equity holding companies, but to holding companies for all forms of passive income including income from debt, IP and real estate.

Access to treaties or directives is generally important for holding companies because it is likely that this will ensure that withholding taxes, and in some cases capital gains, will be applied predictably and at the lowest achievable rate applied by the relevant jurisdiction.
Continue Reading ATAD 3 – How Will Private Equity Measure Up?

Until the U.S. Supreme Court’s June 2018 decision in South Dakota v. Wayfair, states could not require out-of-state sellers to collect and remit sales or use tax unless the seller had a physical presence in that state. The Wayfair court examined a South Dakota statute that did not require physical presence to establish sales…

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