1. TAX

Corporation income taxation

How a major beer importer is planning for tax reform

Constellation Brands, the third-largest beer seller in the United States, for instance, is modeling several scenarios related to a possible increase in taxes on imported goods.

LLC’s sole member is held liable for employment taxes

An LLC is treated by default as a disregarded entity, the Tax Court holds.

Earnings-stripping rules make many changes from proposed regs.

Bifurcation is delayed indefinitely, some entities are excepted, and the effective dates are delayed.

Forfeited deposits are ordinary income

Income from forfeited deposits of terminated contracts related to Sec. 1231 property is not eligible for capital gain treatment under Sec. 1234A.

S corporation’s payments on its owner’s behalf are held not to be wages

Despite a lack of promissory notes, interest, or repayment terms, the Tax Court treats an owner’s advances to his business as loans and its payment of his personal expenses as repayments.

Earnings-stripping rules make many changes from proposed regs.

The new rules are part of the Treasury Department’s larger effort to curb corporate inversions.

Deduction allowed for unredeemed ‘fuelperks!’

The Third Circuit reverses the Tax Court on accrual-basis retailer’s customer reward program.

Tax-free REIT spinoffs are curtailed

The IRS issued regulations restricting the ability of C corporations to use this method.

IRS’s inversion rules include earnings-stripping provisions

These new rules aim to curtail an inverted company’s ability to access foreign subsidiaries’ earnings without paying U.S. tax.

President’s budget proposes many tax changes

In addition to a proposed spending blueprint for the government, President Barack Obama’s proposed FY 2017 federal budget contains a wide variety of tax law changes that would affect individuals and businesses.

Profit shifting: Effectively connected income and financial statement risks

Multinational corporations may face high levels of tax on effectively connected income.

Overview of the ECI rules

This sidebar provides a brief explanation of the Internal Revenue Code’s effectively connected income (ECI) rules that may impose direct U.S. tax on certain income earned by any foreign corporation.

Tax extender legislation introduced in Congress

The Consolidated Appropriations Act introduced in Congress on Wednesday would extend a large number of expired tax provisions.

New corporate anti-inversion rules issued

the IRS announced additional rules designed to curtail the ability of an inverted company to access foreign subsidiaries’ earnings without paying U.S. tax.

Substance-over-form doctrine used to nix growth within Roth IRAs

Purported DISC commissions paid to Roth IRAs as owners of a holding company are recharacterized as dividends to shareholders and excess contributions.

Tax Court to reconsider its previous denial of stockholders’ transferee liability

Ninth Circuit remands a case for analysis of a stock sale’s economic substance.

Tax Court invalidates stock-based compensation rule in cost-sharing agreements

The Tax Court held that Regs. Sec. 1.482-7(d)(2), requiring entities to share stock-based compensation costs under qualified cost-sharing agreements, failed to meet the reasoned decision-making standard and was invalid.

Helping S corporations avoid unreasonable compensation audits

The IRS aggressively audits S corporations to make sure they do not disguise compensation as distributions to shareholders. Here’s what tax preparers need to know to avoid red flags in S corporation returns.

Tax practice responsibilities involved in Schedule UTP

The need to file Schedule UTP, Uncertain Tax Position Statement, may have taken many corporate taxpayers by surprise in 2014, since the asset threshold for compliance was lowered from $50 million to $10 million.

Sec. 4980D excise tax relief is available for certain small employers

IRS gives limited transition relief for employer payment plans and 2% S corporation shareholder arrangements.
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