International

The Tax Angle: Extenders, Energy Credits And Budgets

Stephen K. Cooper
Editor-at-Large

From a look at the possibility of a December tax extender bill to Republican budget plans and GOP complaints of wasteful energy tax incentives, here's a peek into a reporter's notebook on a few of the week's developing tax stories.

Digital Asset Rules Spark Demands For More Clarity On NFTs

Kat Lucero

The Internal Revenue Service's classification of non-fungible tokens as digital assets under new proposed reporting rules for brokers has prompted the blockchain industry and other stakeholders to demand more clarity on regulations governing NFTs, which can be classified as collectibles or financial instruments.

Treasury May See Limits In Getting Foreign Digital Asset Info

Natalie Olivo
Senior Tax Correspondent

The U.S. Treasury Department may face practical hurdles in enforcing its proposed digital asset reporting rules against foreign trading platforms, but joining the OECD's cross-border information exchange system — which could help Treasury obtain offshore data — could entail its own complications.

Private Equity Owners Can Remedy Law Firms' Agency Issues

Nonlawyer, private-equity ownership of law firms can benefit shareholders and others vulnerable to governance issues such as disparate interests, and can in turn help resolve agency problems, says Michael Di Gennaro at The Law Practice Exchange.

How Taxpayers Can Prep As Justices Weigh Repatriation Tax

The U.S. Supreme Court might strike down the 2017 federal tax overhaul's corporate repatriation tax in Moore v. U.S., so taxpayers should file protective tax refund claims before the case is decided and repatriate previously taxed earnings that could become entangled in dubious potential Section 965 refunds, say Jenny Austin and Gary Wilcox at Mayer Brown.

OFAC Designation Prosecutions Are Constitutionally Suspect

Criminal prosecutions based on the Office of Foreign Assets Control’s sanctions-related listing decisions — made with nearly unfettered discretion through an opaque process — present several constitutional issues, so it is imperative that courts recognize additional rights of review, say Solomon Shinerock and Annika Conrad at Lewis Baach.

How The OECD Global Tax Proposal Could Affect M&A

Following agreement on the Organization for Economic Cooperation and Development’s Pillar Two proposal to introduce a global minimum tax, domestic implementation is expected to have a significant impact on international M&A transactions, with financial modeling, deal structuring, risk allocation and joint venture arrangements likely to be affected, say lawyers at Freshfields.

UK Shares-Tax Proposals Offer Long-Awaited Modernization

The U.K. government's recent consultation on the introduction of a new tax on transactions in securities raises detailed legal and practical issues, but the prospect of a single digital stamp tax offering both streamlined legislation and administration will be welcomed, say Zoë Arnautov and Mark Sheiham at Simmons & Simmons.

IRS Foreign Tax Credit Pause Is Welcome Course Correction

A recent IRS notice temporarily suspending application of 2022 foreign tax credit regulations provides wanted relief for the many U.S. multinational companies and other taxpayers that otherwise face the risk of significant double taxation in their international operations, say attorneys at Mayer Brown.

IRS Criminal Probe Spells Uncertainty For Malta Pension Plans

The IRS’ recent scrutiny of Malta pension plan arrangements — and its unusual issuance of criminal administrative summonses — confirms that it views many of these plans as illegal tax evasion schemes, and the road ahead will not be smooth and steady for anyone involved, say attorneys at Kostelanetz.

IRS Announcement Will Aid Cos. In Buyback Tax Planning

Recent IRS transitional guidance regarding current requirements for reporting and payment of the stock repurchase excise tax will help corporate taxpayers make decisions about records retention and establishing reserves for future tax payments, say Xenia Garofalo and Kyle Colonna at Eversheds Sutherland.

Flawed Analysis Supports Common Law Tax Deficiency Ruling

The Colorado federal district court’s recent decision in Liberty Global, holding that the U.S. Department of Justice may assert a common law tax claim without the notice of tax deficiency required by the Internal Revenue Code, relies on a contorted reading of the statute and irrelevant case law, say Loren Opper and Christie Galinski at Miller Canfield.

Review Of Repatriation Tax Sets Justices On Slippery Slope

The U.S. Supreme Court’s recent decision to review the constitutionality of the repatriation tax in Moore v. U.S. has implications for many tax rules involving unrealized amounts and could leave the court on the brink of invalidating large swaths of the Internal Revenue Code, say attorneys at Eversheds Sutherland.

What To Make Of IRS' New Advance Pricing Guidance

Recent guidance on the IRS' goals for its advance pricing agreement system provides helpful insight into review and decision-making procedures for advance pricing agreement requests, but it also raises questions about the IRS' objectives, say Richard Slowinski and Stefanie Kavanagh at Alston & Bird.

Reserved Investor Fund Would Plug Gap In UK Finance Market

The reserved investor fund recently proposed by HM Treasury has the potential to be a welcome tax-efficient addition to the U.K.’s canon of products for real estate investments, with attractive features for companies and, in particular, large asset managers, say lawyers at Herbert Smith.

The Reciprocal Tax Bill Is A Warning Shot At Pillar 2

A bill recently introduced in the House of Representatives to reciprocally tax countries deemed to have imposed discriminatory taxes on U.S. citizens and businesses takes aim at countries implementing the global minimum tax treaty known as Pillar Two, with which the U.S. has not complied, says Alan Cole at the Tax Foundation.