Search

The Supreme Court recently addressed the constitutionality of the mandatory repatriation tax (MRT) in the case of Moore v. United States. The MRT, which was enacted as part of the Tax Cuts and Jobs Act, imposed a one-time tax on accumulated and undistributed income of American-controlled foreign corporations to American shareholders. Two minority shareholders challenged the tax, arguing that it was unconstitutional because it was a direct tax that was not apportioned. However, the Court upheld the tax, stating that Congress has the authority to tax either the entity or its shareholders on undistributed income. The Court did not address whether "realization" is a constitutional requirement or other related issues. [Extracted from the article]

The IRS has announced a further delay in the implementation of amendments to information reporting requirements for third party settlement organizations (TPSOs). These requirements, outlined in Section 6050W of the Internal Revenue Code, mandate that payment settlement entities file information returns about reportable payment transactions. The American Rescue Plan Act of 2021 initially set the threshold for reporting at $600 in aggregate payments, but this has been delayed until calendar year 2023. The new IRS notice states that 2023 will be considered a transition period, and TPSOs will only be required to report if they meet the earlier requirement of $20,000 in aggregate payments and 200 transactions. [Extracted from the article]

The Supreme Court recently addressed the issue of whether life insurance proceeds must be included in the valuation of closely held corporate shares that were redeemed by the corporation. In the case of Connelly v. United States, two brothers had a buy-sell agreement where the surviving brother or the company could buy the deceased brother's shares. The company obtained life insurance on the brothers, and when the majority-interest brother died, his estate filed an estate tax return without including the value of the life insurance. The IRS audited the return and added the life insurance proceeds to the valuation of the corporation. The Supreme Court ultimately held that the value of the life insurance proceeds should not be offset by the redemption obligation, as a share redemption at fair market value does not affect any shareholder's economic interest. [Extracted from the article]

A recent addressed the tax consequences of wellness indemnity payments. The facts were that an employer provided comprehensive health coverage for its employees through a group health insurance policy. For Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) purposes, moreover, because the payment is made in connection with the employee's employment, it also constitutes "wages" for employment tax purposes. [Extracted from the article]

In Notice 2023-42, the IRS provided relief for addition to tax under § 6655 for the new corporate alternative minimum tax (CAMT). In the Notice, the Service announced that "the IRS will waive the addition to tax under § 6655 with respect to a corporation's CAMT liability under § 55 for any Covered CAMT Year.". [Extracted from the article]

Practitioners and advisers need to be aware of how direct changes of accounting methods can practically affect the limitation period. In tax practice, bright-line rules provide clarity and certainty for [...]

The Treasury Department and IRS issued proposed regulations to implement the advanced manufacturing investment credit that was part of the CHIPS Act of 2022. The regulations address eligibility requirements, an elective payment election, and a recapture rule, among other items. [Extracted from the article]

The Internal Revenue Service (IRS) has issued proposed regulations on long-term, part-time employees and § 401(k) plans in response to changes made by the SECURE Act and SECURE 2.0 Act. These regulations amend the requirements for cash or deferred arrangements (CODAs) under § 401(k), which allow for elective contributions to employer-provided retirement plans. The amendments specifically address employees who work two consecutive twelve-month periods and are credited with at least five hundred hours of service. This article provides an overview of the proposed regulations and their implications for employers and employees. [Extracted from the article]

The Notice also explains that the excise tax will be reported on IRS Form 720, "Quarterly Federal Excise Tax Return." On December 27, 2022, the Treasury Department and IRS issued Notice 2023-2, which provides interim guidance on this new stock buyback excise tax. [Extracted from the article]

Section 6050W of the Code requires that payment settlement entities file an information return for certain payments; these information returns are known as Forms 1099-K, which include, among other things, the names, taxpayer identification numbers, and gross amount of reportable payment transactions. On December 23, 2022, the IRS announced that it is delaying the implementation of the new $600 1099-K reporting threshold for third-party settlement organizations. [Extracted from the article]

The Act also contains an excise tax on certain domestic stock repurchases (i.e., buybacks). The Act contains several tax-related provisions, including a corporate alternative minimum tax on adjusted financial statement income, a new stock-repurchase excise tax, and funding for the IRS. This short summary will discuss the new corporate alternative minimum tax and the new excise tax on certain stock repurchases. [Extracted from the article]

On en banc review, however, the full 9th Circuit disagreed with the earlier panel decision and agreed with the Tax Court that the partnership return was never "filed." The 9th Circuit noted that Supreme Court precedent informs that "limitations statutes barring the collection of taxes otherwise due and unpaid are strictly construed in favor of the Government", Badaracco v. Comm'r, 464 U.S. 386, 392 (1984), and therefore that there must be "meticulous compliance by the taxpayer with all named conditions in order to secure the benefit of the limitation." In the May 2022 Month-in-Brief, we discussed the 9th Circuit panel decision in Seaview Trading, LLC, which held that a partnership had effectively filed a delinquent tax return when it provided a copy of the return to an IRS official at his or her instruction. [Extracted from the article]

Several years later, however, the IRS issued the partnership a Final Partnership Administrative Adjustment (FPAA), noting that no return had been filed and disallowing items of income, loss, and expenses on the "unfiled tax return" provided by the partnership. In this case, the 9th Circuit reversed the Tax Court and held that a partnership had effectively filed a delinquent partnership tax return when it provided it directly to an IRS official at his or her instruction. The Tax Court, however, held that neither faxing a copy of the partnership return to a revenue agent nor mailing a copy to IRS counsel constituted filing a tax return. [Extracted from the article]

The Inflation Reduction Act of 2022 amended § 55 of the Code to impose a new corporate alternative minimum tax, which is based on the "adjusted financial statement income" (AFSI) of an applicable corporation for taxable years beginning after December 31, 2022. On December 27, 2022, the Treasury Department and the IRS issued Notice 2023-7, which provides interim guidance on the application of the new corporate alternative minimum tax. [Extracted from the article]

This study investigates the financial attributes, financial behaviors, financial‐advisor‐use beliefs, and investing characteristics associated with having used an automated investment solution (i.e., a robo‐advisor). Data are used from the 2015 National Financial Capability Study (both the State‐by‐State Survey and the Investor Survey) to investigate the use of robo‐advisors among 1,393 individuals with non‐retirement investment accounts. Multivariable results indicated that being younger, having low or midrange income, and having lower objective investment‐knowledge scores was positively associated with robo‐advisor use. This study provides important insight for policymakers, financial practitioners, and proprietors of robo‐advisors and other fintech products.

The article focuses on the treatment of safe harbor for professional sports teams trading personnel contracts and draft picks under the U.S. Tax Cuts and Jobs Act. Topics discussed include tax treatment of trading contracts or draft picks between teams; the treatment of Internal Revenue Service on same; and team's financial statements must not reflect assets or liabilities resulting from the trade other than cash for the purpose of safe harbour.

The article focuses on the issues of tax credits in bankruptcy. It informs on challenges surrounding retention of amounts attributable to tax credits and refunds; Segal v. Rochelle court case in which the court held that loss-carryback refund claims were property of the bankruptcy estate; and federal bankruptcy exemptions in tax laws.

The article discusess Bosamia case. In this case Fifth Circuit affirmed the Tax Court's holding that Internal Revenue Service (IRS) disallowance of an accrual method S corporation's related party deductions constituted a change in method of accounting, further, in calculating the resulting adjustment, the IRS was permitted to make an adjustment in the year of change to include adjustments from closed tax years.

The article discusses the 2015 court case Starr International Co. Inc. v. United States, wherein the Internal Revenue Service (IRS) has denied the Swiss company Starr's petition for discretionary tax benefits under the U.S.-Switzerland tax treaty. Topics discussed include the court deciding on whether the agency-discretion exception to judicial review applies in tax refund cases that are not brought under the U.S. Administrative Procedure Act and the provisions of the U.S.-Swiss tax treaty.