Tax Matters

Each edition of Tax Matters consists of free-flowing responses by three tax practitioners to a question regarding a current issue in tax law and policy. Tax Matters commentaries provide insightful perspectives on a broad range of topics, making important contributions to the dialogue within the tax bar about cutting-edge issues. Although the commentaries are certainly of interest to the academic community, they are primarily directed toward tax professionals and their clients.

Vol 10., No. 1

August 7, 2019

Section 59A of The Tax Cuts and Jobs Act of 2017 created the new Base Erosion and Anti-Avoidance Tax, which denies deductions for payment made to foreign related persons.  The BEAT has created a number of issues with regards to its relationship with international treaties and obligations. 

Vol. 9, No. 2

August 7, 2019

The Tax Cuts and Jobs Act of 2017 (“TCJA”) contains a provision that on its face appears to be a blatant violation of the WTO’s Subsidies and Countervailing Measures (SCM) rules. New IRC section 250 applies a reduced 13.125% tax rate to “foreign derived intangible income” (FDII), which is defined as income derived in connection with (1) property that is sold by the taxpayer to any foreign person for a foreign use or (2) services to any foreign person or with respect to foreign property. In other words, this category comprises exports for property and services, including royalties from the licensing of intangibles.

Vol. 9, No. 1

August 7, 2019

Like the federal government, most states offer tax incentives for charitable giving. These incentives typically take the form of an income tax deduction, though states sometimes provide more generous tax incentives in the form of tax credits for some subset of gifts. A review of state tax codes reveals over 100 state charitable tax credits in 33 states.

Vol. 8, No. 2

August 7, 2019

Prompt on the Tax Treatment of a Marijuana Business

Currently, twenty-eight states and the District of Columbia allow the use of marijuana for medical purposes and permit the conduct of a business marketing of marijuana for that purpose.  Eight of those states and the District of Columbia permit the recreational use of marijuana.  There is reason to believe that more states will decriminalize the marketing of marijuana.  

Vol. 8, No. 1

August 7, 2019

Corporate privacy is an oxymoron.

Individuals have a right to privacy, which the Supreme Court has recognized at least since Griswold v. Connecticut (1965). Warren and Brandeis’ famous defense of the right to privacy (1890) clearly applied only to individuals, because only individuals have the kind of feelings that are affected by invasions of privacy:

Vol. 7, No. 1

August 7, 2019

Prompt on the Obergefell v. Hodges Case

In the oral argument before the Supreme Court in Obergefell v. Hodges, Justice Alito asked Solicitor General Verrilli about the tax implications if the Court were to hold that the Constitution guaranteed a right to same-sex marriage: “Well, in the Bob Jones case,[1] the Court held that a college was not entitled to tax exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or college if it opposed same-sex marriage?” 

Vol. 6, No. 1

August 7, 2019

Once again, the U.S. Supreme Court will be deciding the fate of Obamacare—in the case of King v. Burwell. Also, once again, the future of American healthcare reform will turn on how the Supreme Court reviews a provision of Obamacare that was enacted through the tax code.

Vol. 5, No. 2

August 7, 2019

Each edition of Tax Matters consists of free-flowing responses by three tax practitioners to a question regarding a current issue in tax law and policy. Tax Matters commentaries provide insightful perspectives on a broad range of topics, making important contributions to the dialogue within the tax bar about cutting-edge issues. Although the commentaries are certainly of interest to the academic community, they are primarily directed toward tax professionals and their clients.

Vol. 5, No. 1

August 7, 2019

United States taxation of worldwide income combined with a high corporate tax rate disadvantages US-headed multinational groups compared with groups with the same income mix but a non-US parent. The disadvantage has become more pronounced in recent years as more countries move to territorial systems and lower rates.

Vol. 4, No. 2

August 7, 2019

In 2010 the United States Congress enacted sections 1471 to 1474 of the Internal Revenue Code, commonly known as “FATCA”.  Under FATCA, foreign financial institutions (“FFIs”) are generally required to report information on financial accounts of U.S. persons and foreign entities with significant U.S. ownership (“U.S. accounts”) to the IRS beginning in 2015, or be subject to a withholding tax on the gross amount of certain payments from U.S. sources and the proceeds from the disposition of certain U.S. investments.

Vol. 4, No. 1

August 7, 2019

In several recent private letter rulings, the IRS appears to apply an expansive interpretation of the definition of “real property” and “rents from real property” in relation to real estate investment trusts (REITs). As REITs purchase properties that include renewable assets, such as solar panels and wind turbines, the continuing development of such assets puts further pressure on the definition of real property and rents from real property. Although private letter rulings do not have precedential effect, some practitioners may look to them for guidance regarding specific issues, especially if a transaction comes squarely within, or close to, the four corners of a ruling.

Vol. 3, No. 2

August 7, 2019

IRS Announcement 2010-75 created a reporting requirement that certain corporations with audited financial statements file a Schedule UTP (Uncertain Tax Position) Form beginning with the 2010 tax year. In the Schedule UTP, a corporation must disclose all uncertain US tax positions taken in its tax return for which the corporation has recorded a tax reserve for financial accounting purposes.

Vol. 3, No. 1

August 7, 2019

The enactment of the Leahy-Smith America Invents Act on September 16, 2011 addressed a decade-long controversy over the propriety of granting tax strategy patents, denying patents to “any strategy for reducing, avoiding, or deferring tax liability, whether known or unknown at the time of the invention or application for patent.” The Act’s stated purpose was to keep the ability to interpret the tax law in the public domain, available to all taxpayers and their advisors.How will the new legislation affect tax practice and the development of tax-saving strategies? 

Vol. 2, No. 2

August 7, 2019

Each edition of Tax Matters consists of free-flowing responses by three tax practitioners to a question regarding a current issue in tax law and policy. Tax Matters commentaries provide insightful perspectives on a broad range of topics, making important contributions to the dialogue within the tax bar about cutting-edge issues. Although the commentaries are certainly of interest to the academic community, they are primarily directed toward tax professionals and their clients.