Federal Tax ADVISORY: Unusual Like-Kind Exchanges

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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:
http://www.alston.com/advisories/like-kind-exchanges/

 

FBAR Deadline Will Move to April 15, 2017 for 2016 Year

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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

Federal Tax ADVISORY: Investor-Owned Life Insurance

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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:
http://www.alston.com/advisories/investor-owned-life-insurance/

Delaware Governor Signs Unclaimed Property Overhaul Into Law

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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

Final Anti-Inversion Regulations Keep Strict 25 Percent Tests for Substantial Business Activities

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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

Scapegoats: How Foreign Taxpayers’ Credits & Refunds Could Be Limited by Withholding Agents’ Non-Compliance

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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

What is the best way for a tax-exempt organization to engage in lobbying?

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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

Dead or Alive in West Virginia: Must Life Insurance Companies Search for Due Proof of Death?

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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

A Simple Spinoff

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A simple spinoff is usually not a simple thing. LTR 201511001 is one of the few “significant issue” rulings issued by Chief Counsel (Corporate) since it stopped ruling generally on most nonrecognition transactions in Subchapter C. As spinoffs go, the transactions addressed in the ruling should  be simple, yet it took a lot of tax engineering to get to “yes”.

Read the full advisory.

Connecticut Revenue Commissioner Suggests That States “Ramp Up” Economic Nexus for Sales Tax Purposes

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In a provocative op-ed published in the March/April issue of the Journal of Multistate Taxation and Incentives, the Connecticut Commissioner of Revenue Services (Kevin Sullivan) argues that given Congress’s apparent unwillingness to pass the Marketplace Fairness Act, the states should consider taking matters into their own hands and simply act as if Quill is no longer good law. The Commissioner appears to have been emboldened by Justice Kennedy’s concurrence in the U.S. Supreme Court’s recent decision in Direct Marketing Association v. Brohl, No. 13-1032, __ S. Ct. __ (Mar. 3, 2015), in [...]Read more