When Do a Foreign Fund’s Lending & Underwriting Activities Constitute a U.S. Trade or Business?

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In Chief Counsel Advice 201501013, the IRS determined that a foreign fund was engaged in a U.S. trade or business ("ETBUS") based on lending and underwriting activities conducted on the fund's behalf by a U.S. resident fund manager under a management agreement. The IRS attributed the manager's activities to the fund, for purposes of the ETBUS analysis, finding the activities to be "considerable, continuous, and regular." The CCA further concluded that the foreign fund's activities did not qualify for the "trading safe harbors" under Section 864, exploring the fine distinction between "traders" [...]Read more

Taxpayers Can Be Somewhat “GRAteful” for New Rules on Gain Recognition Agreements

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This November the IRS has given some taxpayers subject to reporting on outbound property transfers to foreign corporations something to be thankful for. Under Section 367(a) of the Code, if a US person transfers property to a foreign corporation in a Section 332, 351, 354, 356, or 361 transfer or exchange, the foreign corporation generally is not treated as a corporation for purposes of determining the US transferor’s gain on the transfer. This rule typically means that the US person will recognize gain on what would otherwise be a non-taxable transfer. The regulations offer exceptions [...]Read more

Federal Tax ADVISORY: Economic Substance Doctrine Confusion

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In this month’s federal tax advisory, our Federal Tax Group explores how IRS Notice 2014-58 creates more confusion over the definition of “sham transaction doctrine.”

This advisory is provided on the Alston & Bird website: www.alston.com/advisories/economic-substance-doctrine/

Tax Policy Update – Nov. 1 – What to Expect From the Lame Duck Session

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What does Congress NEED to get done in a lame duck session?  The continuing resolution (CR) Congress passed just before leaving for the campaign trail funds the federal government just through December 11, so Congress will need to extend funding.  That’s clearly a driving force in the lame duck. There are also tax provisions that many would like to see addressed – the CR extended the Internet Tax Freedom Act  just through December 11, and there are a whole host of business and individual tax provisions (including the very popular R&D credit) that expired at the end of 2013 or will expire [...]Read more

State & Local Tax ADVISORY: The MTC’s Transfer Pricing Audit Program Comes into Focus

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This advisory reviews the Multistate Tax Commission’s efforts to create an Arm’s-Length Adjustment Service program to streamline states’ ability to effectively evaluate multistate transfer-pricing issues.

This advisory is provided on the Alston & Bird website: http://www.alston.com/advisories/MTC-transfer-pricing/

International Tax ADVISORY: IRS Complicates Withholding Agents’ Responsibilities

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Our International Tax Group explains how withholding agents must be especially vigilant in their reliance on foreign persons’ documentation of withholding certificates under new advice from the IRS.

This advisory is provided on the Alston & Bird website: http://www.alston.com/advisories/int-tax-10-15-14/

Federal Tax ADVISORY: The Attractive C Corporation

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The Federal Tax Group explores factors in the revived interest in the C corporation, including the potential reduction in the corporate tax rate, reduced pressure to distribute earnings and cash flow savings.

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

International Tax ADVISORY: Land of the Freely Inverting Corporation

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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: Two Supreme Court Tax Decisions

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During the current term, the Supreme Court of the United States decided very few taxes cases. Two of those—United States v. Clarke and Ford Motor Co. v. United States—seem quite limited in scope, until you delve under the surface.ine

This advisory is provided on the Alston & Bird website: www.alston.com/advisories/Fed-Tax-august-2014/