The Service’s denial of regulatory relief to elect a 70% immediate deduction of the fees contradicts previous rulings and Rev. Proc. 2011-29’s policy goals.
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C Corporation Income Taxation
Decision holding Corporate Transparency Act unconstitutional appealed
The U.S. Justice Department filed an appeal Monday challenging the district court’s decision that the law, which requires businesses to report beneficial ownership information, is unconstitutional.
Plaintiffs: FinCEN should pause all CTA enforcement
The plaintiffs who won a summary judgment that bars enforcement of the Corporate Transparency Act against them said the Financial Crimes Enforcement Network should pause beneficial ownership information reporting requirements for all businesses.
Federal court holds Corporate Transparency Act unconstitutional
While acknowledging that the law is well intentioned, the opinion from a U.S. district court in Alabama said Congress lacked authority to enact the business ownership information reporting requirement.
Recent developments in Sec. 355 spinoffs
Tax-free reorganizations under Sec. 355 may pose unforeseen complications, including implications for the new corporate alternative minimum tax and stock repurchase excise tax.
The research credit: Documenting qualified services
Court decisions delineate common pitfalls for companies claiming the Sec. 41 credit of substantiating qualified research expenditure amounts and whether the company followed a process of experimentation.
Tax Court rules cancellation of debt is part of gain realization
Determining whether debt cancelled as part of a property sale is recourse or nonrecourse — a crucial factor in determining whether its cancellation gives rise to Sec. 1001 gain or cancellation-of-debt income — is made more difficult when the debtor is a disregarded entity.
Income tax treatment of loyalty point programs
The Tax Court held that Hyatt Hotels’ gross income included customer reward program revenues, denying that the company could exclude them under the trust fund doctrine.
FinCEN guide lists rules for some financial institutions’ access to BOI
The rules in the Small Entity Compliance Guide apply to access for some financial institutions and cover security and confidentiality, authorized use, administration of requests, and violations.
The clean-energy direct-pay election for not-for-profits and governmental entities
Under the Sec. 6417 direct-pay election, tax-exempt organizations, including not-for-profits and governmental agencies, can claim certain energy credits on their federal income tax returns, but to claim them for 2023, the direct-pay election must be made on a timely filed 2023 federal income tax return.
No ‘gotcha’ enforcement of BOI regulations, FinCEN chief vows
Andrea Gacki, director of the Financial Crimes Enforcement Network, reassured a House committee that the agency can act only against willful violations of the new beneficial ownership information reporting rule.
Recapture of foreign loss does not exempt other gain from tax
Gain on the disposition of controlled foreign corporation stock, in excess of the amount of gain required to be recognized as foreign income to offset a taxpayer’s overall foreign loss under Sec. 904(f)(3), is not exempt from tax.
Digital asset question added to more forms for 2023 tax returns
IRS adds a question about digital assets to forms covering partnerships, corporations, S corporations, and estates and trusts.
Draft form, instructions posted for corporate AMT
The IRS instructions say that all corporations must file Form 4626, unless they fall under one of four exclusions, to determine whether they are an applicable corporation, and, if so, to calculate the tax.
LB&I announces updates to 2024 CAP program
Changes to the IRS’s Large Business and International Division’s Compliance Assurance Process program include making the Bridge Plus phase mandatory.
R&E expenses: Amortization if the company ceases to exist
In Notice 2023-63, the IRS offered guidance on deducting remaining amortized specified research or experimental expenditures when applicable property is retired, abandoned, or disposed.
Energy credit prevailing wage and apprenticeship rules
The IRS and Treasury released a guidance package to help taxpayers engaged in qualified renewable energy projects comply with the prevailing wage and apprenticeship requirements created by the Inflation Reduction Act, P.L. 117-169.
The self-rental rules: Risks and opportunities
Be aware of the self-rental rules when a taxpayer owns an operating business and leases property to it through a separate entity that the taxpayer also owns. Self-rentals can create both tax planning risks and opportunities.
Proposed regulations would update rules for consolidated returns
Proposed regulations for corporations that file U.S. federal consolidated income tax returns would update guidance under Sec. 1502 for statutory changes made over the last 50 years, modernize and clarify language, and facilitate taxpayer compliance.
Apportioning tax benefits among members of a controlled group
A controlled group can choose how it apportions tax benefits and other items among its members, with rules for certain credits and for pension and profit-sharing plans.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
