International Tax ADVISORY: Land of the Freely Inverting Corporation

Written by

Alston & Bird’s International Tax Group reviews congressional proposals to curb corporate inversions amid debate over the need for comprehensive tax reform.

The advisory is provided on the Alston & Bird website: http://www.alston.com/advisories/int-tax-aug-2014/

Federal Tax ADVISORY: Hook Stock Split Down

Written by and
LTR 201404002 Rev. Proc. 2014-3 provides that the IRS won’t issue rulings on “the treatment or effects of hook equity, including as a result of its issuance, ownership, or redemption.” It defines hook equity as “an ownership interest in a business entity (such as stock in a corporation) that is held by another business entity in which at least 50 percent of the interests (by vote or value) in such latter entity are held directly or indirectly by the former entity.” But a recent ruling involved hook stock and predated the no-rule. LTR 201404002 involved a surprising but somewhat common Read more [...]

International Tax ADVISORY: Taxpayer Settles for Less than 150 Percent FBAR Penalty after Jury Found Willful Failure to File

Written by and

This advisory discusses United States v. Zwerner, which raised important questions not only about the FBAR penalties at issue, including their constitutionality, but also about the IRS’ administration of the Offshore Voluntary Disclosure Program.

The advisory is provided in PDF on the Alston & Bird website: http://www.alston.com/advisories/june-intl-tax/

Federal Tax ADVISORY: Last Granite Trust Ruling LTR 201419011

Written by
This advisory discusses GraniteTrust Co. v. U.S., which ruled that a parent’s sale of more than 20 percent of the stock of a subsidiary to an unrelated person was a proper set up for a taxable liquidation of the subsidiary, and how even though the IRS announced it would no longer rule on Granite Trust -type liquidations, there are still several rulings in the pipeline—most recently, LTR 201419011. The advisory is provided on the Alston & Bird website: www.alston.com/advisories/fed-tax-june-2014 Read more [...]

REIT Real Property Regulation Proposed

Written by
Prop. Reg. section 1.856-10 will define real property that will satisfy the income and asset requirements for REITs. It will replace Reg. section 1.856-3(d). It claims to be a clarification of existing law and not a modification that would cause significant reclassifications for existing REITs, and that seems to be true. It embodies the positions stated in the much briefer current regulation, plus several revenue rulings and letter rulings issued over the years. The regulation aims to rationalize the process of identifying real property so that REITs can decide for themselves whether they own Read more [...]

Tax ADVISORY: Notice Announces FATCA Enforcement Relief for 2014 and 2015 and Regulatory Amendments to Ease Implementation

Written by
This advisory discusses the IRS’ release of Notice 2014-33, setting out additional guidance on the implementation of the Foreign Account Tax Compliance Act. The notice also announces several amendments to the FATCA regulations, which are intended to facilitate compliance. Additionally, the advisory explains the IRS’ announcement of modifications and clarifications to be made to the “Killer B” regulations under Section 367(b), which reflects the IRS’ belief that taxpayers have been misinterpreting, if not exploiting, the Killer B regulations in ways that are inconsistent with their policy. The Read more [...]

State & Local Tax ADVISORY: Several Organizations Support Equifax’s Petition for Certiorari to the United States Supreme Court

Written by and
This advisory discusses amicus curiae briefs filed with the United States Supreme Court in support of the Petition for a Writ of Certiorari to the Supreme Court of Mississippi in the case of Equifax, Inc., et. al. v. Mississippi Department of Revenue. Joining Equifax in its attempt to overturn the Mississippi Supreme Court’s decision were the Institute for Professionals in Taxation (IPT), the Council on State Taxation (COST) (joined in its brief by the Mississippi Economic Council and Mississippi Manufacturers Association) and the Georgia Chamber of Commerce. The advisory is provided in Read more [...]

Federal Tax ADVISORY: Federal Tax Crimes

Written by and

Few taxpayers are aware of the operations of the Criminal Investigation Division of the IRS, and rightly so. Out of hundreds of millions of tax returns filed, only 3311 persons were convicted of tax crimes in the government’s FY 2013, according to the Report of the CI Division. Nevertheless, the small number masks the extreme seriousness of tax crimes to those involved.

The advisory is provided in PDF on the Alston & Bird website: www.alston.com/advisories/fed-tax-april-2014

International Tax ADVISORY: Treasury Presents… More FATCA Regulations

Written by and
This advisory discusses the U.S. Treasury and IRS release of two sets of regulations relating to the Foreign Account Tax Compliance Act (FATCA). The new regulations were published in the Federal Register on March 6. Enacted by the 2010 HIRE Act, FATCA imposes a 30-percent withholding tax on certain payments to foreign financial institutions (FFIs) and passive non-financial foreign entities (NFFEs) that do not report information about their U.S. accounts and substantial U.S. owners, respectively. One set of the new regulations (T.D. 9657) modifies various provisions of the “final” FATCA Read more [...]

Federal Tax Advisory: An Unusual F/D(?) Reorganization

Written by and

This advisory discusses IRS LTR 201406005, which evidently blessed as an F or D reorganization the transfer by a subsidiary of all of its assets to its parent corporation, despite the fact that the parent had previously bought an asset from its parent by assuming a liability greater than the value of the asset.

The full advisory is provided on the Alston & Bird website: http://www.alston.com/advisories/fed-tax-march-2014/