If you go by what Yogi Berra says, tax policy and baseball have a lot in common. Just as we head toward the end of the regular season of baseball and hope we make it to play-offs, Congress is doing the same. Having returned from the August recess, they are looking ahead at what they need to do to finish strong. As for déjà vu, the atmosphere surrounding expired tax provisions is markedly similar to what it was last year around this time. Will the result be different this year? Maybe. Let’s take a look at the issues and what’s happened so far.
Discussions of tax reform have [...]Read more
On September 14, 2015, the government released Notice 2015-59 and Rev. Proc. 2015-43, both relating to Section 355 spinoffs. They respond to government concerns about spinoff transactions that result in the distributing corporation or the controlled corporation owning a substantial amount of cash, portfolio stock or securities, or other investment assets, in relation to the value of all of its assets and its qualifying business assets. In the Notice, the government states that it has become aware, in part through private letter ruling requests, that these transactions may present evidence of device [...]Read more
Don’t overlook Section 1031 to move property around affiliated groups without gain recognition. Our Federal Tax Group explains why like-kind exchanges should be part of the tax planner’s tool kit.
The advisory is provided on the Alston & Bird website:
Beginning with foreign bank account reports (FinCEN Form 114, known as the FBAR) for the 2016 calendar year, FBARs will be due on April 15 of the following year. A six-month extension to October 15 will be available upon request.
FBARs of U.S. citizens and residents living abroad will be due on June 15 – with an additional four-month extension available to October 15. No additional two-month extension to December 15 will be allowed, however, as is permitted for the tax returns of U.S. persons living abroad.
These changes were part of the Surface Transportation and Veterans Health Care Choice [...]Read more
This month’s federal tax advisory discusses the recent U.S. Tax Court decision, Webber, that limits the extent a life insurance policy owner can direct the policy’s investments. Our Federal Tax Group looks into what the ruling means for practitioners facing this difficult issue.
The advisory is provided on the Alston & Bird website:
On July 22, 2015, Delaware Governor Jack Markell signed into law a significant piece of unclaimed property reform legislation, S.B. 141. Alston & Bird issued an advisory on June 23 analyzing the changes brought about by the bill. Our advisory is available here: www.alston.com/advisories/serious-property-reform.
To summarize, S.B. 141 will do the following:
Make permanent the Secretary of State's voluntary disclosure program.
Require the Department of Finance to provide holders with the opportunity to enter into the Secretary of State's VDA program before being subjected to [...]Read more
In June, the IRS and U.S. Treasury released final regulations under the anti-inversion provisions of Section 7874 (T.D. 9720). The final rules, effective for acquisitions completed on or after June 3, 2015, include a few changes from the regulations proposed in 2012. Most notably, the final rules retain the 25 percent bright-line tests for whether an expanded affiliated group (EAG) has “substantial business activities” in a foreign country for the purpose of determining whether the foreign parent of an inverted corporation will be treated as a “surrogate foreign corporation.” The controversial [...]Read more
In Notice 2015-10 (the “Notice”), the IRS announced that it and the Treasury will issue regulations to limit credits or refunds for withholding taxes under Chapter 3 (Sections 1441-1443) and Chapter 4 (Sections 1471-1472, aka FATCA) to the amount actually deposited by withholding agents. The hope is that this “deposit limitation” will lessen the Treasury’s financial risk of crediting or refunding more tax, based on Form 1042-S reporting, than it collects or can collect.
The Notice previews regulatory amendments to provide that a credit or refund for withheld tax is available only [...]Read more
Tax-exempt organizations under § 501(c)(3) of the Internal Revenue Code face strict rules about regulating lobbying activities. Breaking these rules can result in severe consequences such as loss of tax-exempt status and excise tax penalties. For those § 501(c)(3) organizations that wish to expand their operations to encompass lobbying activities, two primary options exist.
Create and Operate an Affiliated § 501(c)(4) organization
Unlike § 501(c)(3) organizations, § 501(c)(4) organizations may engage in unlimited lobbying activities with the caveat that the § 501(c)(4)’s primary [...]Read more
On April 8, 2015, the Supreme Court of Appeals of West Virginia heard oral arguments for Perdue v. Nationwide Life Insurance Company, et al. with regard to whether life insurance companies are statutorily obligated to search the Death Master File (DMF) for purposes of determining whether the dormancy period has been triggered on life insurance proceeds. In the latest in a series of skirmishes involving life insurance companies and state unclaimed property administrators, the state supreme court has to decide whether the West Virginia unclaimed property laws – which do not explicitly require [...]Read more