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Navigating US Tax Reform
On December 22, 2017, US President Donald Trump signed HR 1, the tax bill formerly known as the Tax Cuts and Jobs Act, enacting fundamental changes to the US tax code. The changes affect all sectors of the economy and the wide-ranging implications span major issues including cross-border/international federal tax issues, inbound investments, pass-through entities, investment funds and their managers, state and local tax issues, executive compensation, and tax-exempt organizations, among others.
Our top-tier tax team—which includes former tax legislative counsel and international tax counsel at the US Treasury Department, legislation counsel for the US Congress’s Joint Committee on Taxation, and IRS Chief Counsel lawyers, including a former IRS chief counsel—assists clients in virtually all the major industries around the globe in understanding how these important changes will affect their businesses and how to navigate the changing tax law landscape.
To learn more about upcoming Morgan Lewis tax programs and to receive our Tax LawFlashes and other publications, please subscribe to our Morgan Lewis Tax mailing list.
Past Events & Recordings
Where possible, we have provided access to recordings and/or slides from our past tax reform programs covering the following issues and industries:
LawFlashes & Articles
Internal Revenue Service Notice 2019-09 gives tax-exempt organizations interim guidance on how to identify covered employees, calculate remuneration, and allocate excise tax under Section 4960.
The proposed modifications would create opportunities for enhanced CFC credit support.
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.
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 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.
Morgan Lewis partner Casey August authored an article for Corporate Taxation detailing the Section 199A “pass-through” deduction for businesses in the Tax Cuts and Jobs Act.
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.”
Morgan Lewis partner-elect Sarah-Jane Morin authored an article for Tax Notes about how tax practitioners are changing their tried-and-true methods of handling the tax aspects of mergers and acquisitions in the wake of tax reform.
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.
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.
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.
Due to the varying methods of state conformity to the Internal Revenue Code, both the prior and current versions of Section 162(m) continue to be a consideration for state taxes.
Many tax-exempt organizations can now change their state of organization and retain their current tax exemption.
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.
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.
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.
Morgan Lewis tax attorneys Casey August, Barton Bassett and Peter Daub authored an article in Law360 that breaks down additional guidance by the IRS and Department of Treasury.
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.
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.
The Internal Revenue Service confirms in writing that recharacterizing 2017 Roth IRA conversions will be permitted until October 15, 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.
Sarah-Jane Morin, Gregory Hartker, and Daniel A. Nelson discuss the impact of the new tax provisions on structuring mergers and acquisitions. These provisions include the limitations on the use of NOLs, the transition tax on certain deferred foreign income, and immediate capital expensing.
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.
On Dec. 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act, P.L. 115-97. TCJA enacts fundamental changes to US tax law, affecting all sectors of the economy including nonprofits. Here are key highlights of the new tax law.
HR 1 makes Roth IRA conversion recharacterizations a thing of the past, but is silent on whether recharacterizing 2017 Roth IRA conversions in 2018 will be permitted.
Settlements with the government and those related to sexual harassment claims, as well as certain attorney’s fees, will be impacted by newly disallowed deductions.
Earlier today the IRS issued new withholding tables for 2018, along with an explanatory news release and a frequently asked questions document.
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.
New tax provisions have significant impact on structuring mergers and acquisitions.
It answers some questions but leaves many issues unresolved.
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.
New provisions will have a significant impact on secondary sales of fund interests and partnership M&A transactions.
Tax-exempt bond financing, an anticipated impact to philanthropic donations, repeal of the individual mandate, and taxation of highly compensated executives are among the changes for 2018.
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.
Today, US President Donald Trump signed H.R. 1, enacting fundamental changes to the US tax law that affect all sectors of the economy, including nonprofits.
The Tax Cuts and Jobs Act (the Act) was passed by the House and Senate and is expected to be signed into law by President Trump soon.
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.
Included in both the Senate and House tax reform bills is a reduction in the corporate tax rate from 35% to 20% (but, it appears the reconciled bill includes a corporate tax rate of 21%). The Senate plan cuts the corporate tax rate effective in 2019 and the House plan in 2018.
In the Media
Morgan Lewis partner Alex Reid spoke with Bloomberg Tax on the IRS’s final regulation that doesn’t allow sports teams to qualify for a 20 percent income deduction. Alex says in the article that teams may look at restructuring their business to take advantage of other tax deductions.
In a year-end wrap-up, Law360 highlights the 10 most-read tax columns, including an article by partner Alex Reid about how the Tax Cuts and Jobs Act fundamentally impacts nonprofits and charities, as certain key provisions affect their operations and tax incentives for potential contributors have changed.
Morgan Lewis partner Jennifer Breen spoke with Law360 about the Internal Revenue Service’s new regulations on auditing partnerships, saying that it was natural to “experience some growing pains” as the IRS begins its partnership audits under the new leadership.
Morgan Lewis partner Jennifer Breen spoke with Law360 about the Internal Revenue Service’s new regulations on auditing partnerships, saying that it was natural to “experience some growing pains” as the IRS begins its partnership audits under the new leadership.
Morgan Lewis partner Alex Reid spoke with Inside Higher Ed about how the tax reform package affects colleges and universities, specifically for donors worried about how their donations will be taxed.
Morgan Lewis partner Alex Reid was quoted in a Bloomberg BNA Daily Tax Report article regarding some recent provisions and reporting requirements for charities stemming from the tax reform law.
Morgan Lewis partner Alex Reid discusses the potential benefits of UBTI allocations.
Morgan Lewis partner Alex Reid was quoted in The Chronicle of Philanthropy about how nonprofits and charities might be affected by the suggested cut to the capital-gains tax.
Morgan Lewis partner Alex Reid was quoted by Bloomberg Law about how nonprofit hospitals and universities could be the most adversely affected by the change in the tax law that eliminated advance refunding bonds.
Morgan Lewis partner Alex Reid and associate Caroline Waldner authored an article for Bloomberg Tax on how the Tax Cuts and Jobs Act’s provision for a higher percentage limit for gifts of cash may affect donors and charities.
Partner Alex Reid spoke to Bloomberg BNA on the biggest tax law provisions that could affect tax-exempt groups—including changes to unrelated business income and excise taxes, which have caused some exempt organizations to ask about potential revisions.
Morgan Lewis partner Alex Reid spoke to Bloomberg Law on nonprofit hospitals are seeking guidance on how to interpret some of the provisions in the Tax Cuts and Jobs Act.
Morgan Lewis partner Alex Reid was quoted in Tax Notes drawing parallels between tax reform efforts in the 1980s and today’s Tax Cuts and Jobs Act, specifically citing the Economic Recovery Tax Act of 1981.
Associate Caroline Waldner participated as a panelist at the American Bar Association tax conference, which was covered by Law360. Caroline discussed how exempt organizations are evaluating how to treat UBTI under the new federal tax reform.
Morgan Lewis of counsel Sarah-Jane Morin talks to Law360 about how tax reform is changing the way buyers and tax practitioners approach mergers and acquisitions.
Morgan Lewis partner Alex Reid spoke to Accounting Today about potential legislation that would reshape the Internal Revenue Service. One of the changes suggested is the creation of an enhanced IRS Appeals, which Mr. Reid said would be welcome to practitioners.
Tax Notes Quoted: Alex Reid
Partners Jonathan Zimmerman and Mary “Handy” Hevener spoke with Law360 about novel trends in benefits.
Law360 Quoted: Nathan Hochman
Tax partner Alex Reid was quoted speaking to the Alliance for Charitable Reform program in Washington, urging charitable organizations to reach out to lawmakers to enact legislation protecting tax incentives for donations.
Bloomberg BNA Quoted: Mary B. Hevener
Law 360 Quoted: Joshua Richardson, Adam Beckerink, Michael Liu, and Matt Mock
Law 360 Quoted: Amy Pocino Kelly
Morgan Lewis tax partner Scott Farmer discusses with Law360 how he is advising clients on the impact the US Tax Cuts and Jobs Act is likely to have on transfer pricing cases.
SHRM Quoted: Mary B. “Handy” Hevener, Jonathan Zimmerman, and Anna Pomykala
The Wall Street Journal Quoted: Mary B. “Handy” Hevener
Bloomberg BNA Quoted: Daniel Dixon
CNN Money Quoted: Jonathan Zimmerman
Bloomberg BNA Quoted: Jennifer Breen
The Wall Street Journal Quoted: Mary B. “Handy” Hevener
Law360 Quoted: Alexander Reid
Law360 Quoted: Alexander Reid
The Recorder Quoted: Bart Bassett
Vox Quoted: Alex Reid
Barron’s Quoted: Mary B. “Handy” Hevener
The Wall Street Journal Quoted: Mary B. “Handy” Hevener
Politico Quoted: Alex Reid
Route Fifty Quoted: Richard Zarin
Law360 Quoted: Alex Reid
The Wall Street Journal Quoted: Bart Bassett
Bloomberg BNA Quoted: John Ryan
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