As part of The Bipartisan Budget Agreement of 2015, which the President signed into law on November 2, 2015, Congress repealed the complex and much-criticized partnership entity-level audit (“ELA”) rules under the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”), including the electing large partnership rules. The new law replaces the ELA rules with a set of “streamlined” entity-level audit (“SELA”) rules designed to enhance the IRS’s ability to audit more large partn… Read More

The presidential election is history and Donald J. Trump is President-elect. We all know that Mr. Trump has promised substantial reductions in the federal income tax rates applicable to both individuals and businesses in a major effort to stimulate our economy and provide for GDP growth in excess of 3.5% each year. His vision is to create 25 million new jobs over the next ten years. The outline of his proposals on federal taxation (the “Trump Tax Plan”) would further increase the standard de… Read More

In a press release of August 30, 2016 issued by the European Commission, the Commission held that Ireland granted undue tax benefits of up to €13 billion to Apple pursuant to an agreement (rulings) that it entered into with Apple in 1991. This was “improper illegal aid” in clear violation of the EU state aid rules which state quite simply that “Member States cannot give tax benefits to selected companies..”. See Article 107(1) of the Treaty on the Functioning of the European Union (TFE… Read More

Berkshire 2006-5, LLC, et al, v. Commissioner, T.C. Memo. 2016-25 (Buch, J.). The TEFRA partnership entity level audit rules are still with us for at least 5 years and cases will continue to be decided under the TEFRA legislation enacted in 1982. Under the new centralized partnership audit rules, which generally go into effect for partnership taxable years commencing in 2018, the ability of a notice partner to intervene in a partnership audit, appeal or in litigation will be denied. Under TEFRA… Read More

On April 4, 2016, the Treasury and the Internal Revenue Service issued proposed regulations on the treatment of certain interests in corporations as stock or indebtedness, or as partly stock and debt. REG-108060-15.[1] One of the stated purposes of the proposed regulations was to follow through on the anti-earnings stripping guidance that was issued by the Service in Notice 2014-62, 2014-42 IRB 712 (10/14/2014) and Notice 2015-79, 2015-49 IRB 775 (12/7/2015) to guard against post-inversion earni… Read More

Introduction All countries, including underdeveloped countries, are well aware of the strain that has been placed on tax administrators throughout the world in grappling with the billions if not trillions of revenue loss associated with base erosion techniques and strategies utilized by many multinational business enterprises (MNEs) that are principally driven by tax avoidance and not primarily based on sound business practices. This base erosion is visibly greater when comparing the aggregate t… Read More

There is much irony in the US Chamber of Commerce’s desire to prevent the Treasury and the current Administration from stopping inversions, at least unilaterally, by asking a Federal District Court to hold a part of the temporary regulations on inversions invalid. Viewed from a narrow lens of legality (and not legality and tax policy) the recently issued temporary (anti-inversion) regulations stray beyond permitted boundaries of proper rule-making. But looking through a wider lens into tax pol… Read More

For business organizations formed and operated as partnerships for federal and state income tax purposes it has long been assumed that when the partnership and its owners wish to take the business “to market” in terms of a public offering, it has been the general consensus that the partners needs to convert into a corporation before the IPO is effectuated. But that is not, however, the only available model for a partnership’s venturing into an IPO. In this regard, another model involves th… Read More