Opportunity Zone Fund Regulations – Long-Awaited Guidance Should Help Investors and Sponsors Get Off the Sidelines
(10/23/2018)
The US Department of the Treasury and Internal Revenue Service released much-anticipated guidance on investments in the new Opportunity Zone Funds. The regulations provide direction to taxpayers, investors, sponsors, and the private equity and real estate industry, all of which have been waiting to see how the IRS would implement this new statutory scheme introduced as part of the 2017 tax reform package. However, open questions remain unanswered and further guidance is still needed.
Notice 2018-78: Additional Guidance on Section 965 Proposed Regulations
(10/03/2018)
In a recent notice published by the US Department of Treasury and Internal Revenue Service, the agencies provide additional guidance on the proposed regulations under Internal Revenue Code Section 965, including on stock basis adjustment elections, single entity treatment for certain consolidated group foreign cash position calculations, and relief for certain taxpayers affected by Hurricane Florence.
The GILTI Rules – A Comprehensive Q&A on the New Proposed Regulations
(09/21/2018)
The US Department of the Treasury and the Internal Revenue Service provided guidance on the Global Intangible Low Taxed Income rules, answering some, but by no means all, of the questions raised by taxpayers and practitioners since the enactment of the Tax Cuts and Jobs Act in December 2017. This LawFlash discusses some of the more significant issues in the guidance in a detailed Q&A, and lists topics on which Treasury and the IRS are seeking taxpayer comments.
IRS Proposed Regulations Under Internal Revenue Code Section 965
(September 2018)
On August 1, 2018, the Internal Revenue Service took the first step in providing significant and detailed guidance on provisions of the Tax Cuts and Jobs Act with the issuance of proposed regulations (the Proposed Regulations) under Section 965 of the Internal Revenue Code of 1986, as amended, or the so-called “Repatriation Tax.”
5 Tips For Meeting Tax Bill’s Challenges On Executive Pay, Law360
(04/09/2018)
Morgan, Lewis & Bockius LLP partner Mims Maynard Zabriskie spoke with Law360 on how the firm is counseling clients on the new tax deduction limits, especially for foreign companies that may never have had to think about tax restrictions on executive compensation in the past.
Illinois Weighs In on Federal Tax Reform
(03/21/2018)
The Illinois Department of Revenue has published guidance on the impact of federal tax reform on Illinois taxpayers, including with respect to the repatriation transition tax, prepaid property tax, and small business expensing.
Tax-Exempt Organization Restructurings Made Easier, Law360
(03/16/2018)
In a Law360 article, Morgan, Lewis & Bockius LLP partner Matthew Elkin and associate Shira Helstrom detailed how tax-exempt organizations can now change their state of organization and retain their current tax exemption. Revenue Procedure 2018-15 provides that, in most circumstances, tax-exempt organizations no longer need to file new exemption applications if they change their organizational forms or states of incorporation.
Recent Tax Law Changes Affect Hardship Distributions, ML BeneBits
(03/08/2018)
The tax reform legislation commonly referred to as the Tax Cuts and Jobs Act (Act), signed into law on December 22, 2017, modifies the Internal Revenue Code (Code) in a way that impacts many qualified plan (and 403(b) plan) hardship withdrawal provisions. The Act adds a paragraph to Section 165 of the Code restricting the deduction for casualty losses to those losses that are attributable to a federally declared disaster.
New US Tax Law Provides Tax Deferral Opportunity for Certain Private Company Equity Grants
(03/07/2018)
The adoption of Internal Revenue Code Section 83(i) under recent US tax reform will allow certain private company employees to defer federal income tax on eligible stock options and restricted stock units for up to five years following their respective exercise or settlement. While additional clarification from the Internal Revenue Service is still needed, and there are a number of technical requirements under Section 83(i) that must be satisfied, Section 83(i) could be useful for bridging the gap between when an employee is subject to income tax and when the employee’s shares can be liquidated.
How Tax Reform Changes The Treatment Of Fringe Benefits, Law360
(02/21/2018)
In a recent Law360 article, three Morgan Lewis lawyers detailed how the recent tax reform legislation, HR 1, makes significant changes to the treatment of fringe benefits under the Internal Revenue Code, most of which are effective for taxable years beginning on and after January 1, 2018.
Guide To The New Rules For The Deductibility Of ‘Misconduct’ Payments
(February 2018)
Recent US tax reform legislation P.L. 115-97, commonly known as the Tax Cuts and Jobs Act, made sweeping changes to when and how a taxpayer will be able to deduct payments made to settle claims of particular acts of misconduct, specifically government- and quasi-government-imposed fines and payments related to sexual harassment.
TCJA Significantly Impacts Secondary Sales Of Fund Interests, Law360
(01/30/2018)
Morgan Lewis tax attorneys Daniel A. Nelson, Richard S. Zarin, Sarah-Jane Morin, and Gabriel A. Quihuis, wrote an article for Law360 about the significant implications of the new tax legislation that introduces a 10 percent withholding tax on the sale of certain partnership interests.
IRS, Treasury Issue Guidance on Section 965 Deemed Repatriation Rules, Signal Important Form 5471 Exception
(01/23/2018)
Notice 2018-13 details the government’s intent to issue regulations addressing additional Section 965 computational issues. The new regulations will clarify, among other things, that US shareholders will be permitted to elect an “alternative method” of computing positive or negative aggregate post-1986 earnings and profits as of November 2, 2017. Notice 2018-13 also states that the IRS intends to amend the instructions to Form 5471 so as to provide an exception to the filing obligation for any US person that is a US shareholder with respect to a controlled foreign corporation, only as a result of “downward attribution” of stock ownership in the CFC.
How Tax Reform Will Change the Treatment of Fringe Benefits
(01/22/2018)
Several employer deductions will be reduced or eliminated, including the cost of business-related entertainment expenses and qualified transportation fringe benefits, but employers may be able to claim a credit for a percentage of wages paid to qualifying employees on family and medical leave. Among other changes, the law repeals the deduction of alimony payments, and employees can no longer exclude moving expense reimbursements they receive from employers or deduct moving expenses they pay themselves.
State Tax Implications of Federal Tax Reform
(01/10/2018)
Federal tax reform will have a significant and possibly unexpected impact on state taxes, including on individual deductions and, for corporations, reporting methods and limitations regarding net operating losses and interest expense.
Immediate Action Required: Reduction in Maximum Tax Withholding on Equity Compensation, ML BeneBits
(01/02/2018)
The tax bill formerly known as the Tax Cuts and Jobs Act (the Act) reduces tax rates for individuals, lowering the top marginal tax rate from 39.6% to 37%, effective January 1, 2018. Employers should make sure that the tax rates used for federal tax withholding on equity awards are reduced to correspond to the lower rates under the Act, in order to avoid adverse financial accounting consequences.
Tax Reform Legislation Addresses UBIT and Segregation of UBTI Investments
(12/26/2017)
Adopting the Senate’s approach, tax reform legislation will not require governmental pension plans to be subject to unrelated business income tax, and tax-exempt entities subject to tax on unrelated business taxable income will need to segregate taxable income and loss for each unrelated trade or business activity.
Actions to Take Before Year End in Response to IRC Section 162(m) Changes, ML BeneBits
(12/18/2017)
We expect that the Tax Cuts and Jobs Act (the Act) will be signed into law by the end of this week. The Act would make significant changes to Section 162(m) of the Internal Revenue Code, all of which would be effective for taxable years beginning on and after January 1, 2018. These changes potentially affect all awards payable in and after 2018, unless the company takes action now.
