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Archive for January 20, 2021

Mere Change? – “F” Reorganization Qualifies In Spite Of Change In Plan

Mere Change? - “F” Reorganization Qualifies In Spite Of Change In Plan

Former British Prime Minister Winston Churchill once said, “Plans are of little importance, but planning is essential.” Perhaps that quote is a tad strong to apply generally to corporate reorganizations under Section 368 of the Internal Revenue Code. Plans, after all, are very important—if not essential—in the context of corporate reorganizations. However, based on a recent Private Letter Ruling, the Internal Revenue Service (“IRS”) noted that the “plan of reorganization” requirement for an “F” reorganization was not undermined by a subsequent change to the plan midstream. Effectively, in this instance, a change to the plan was “of little importance.”

Corporate Reorganizations, Generally

Generally, corporate reorganizations are defined under Section 368(a)(1)(A)-(G) and may take many different forms.[1]An “A” reorganization, for example, is defined as a plain statutory merger or consolidation. An “E” reorganization is defined as a recapitalization. These corporate reorganizations must generally meet certain requirements to potentially qualify for tax-free treatment:

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Tax Professionals: Give Your Tax Blogs Worldwide Distribution

Promote Your Tax Blogs On TaxConnections

More than ever, taxpayers desire a connection to tax professionals who make taxes easy to understand. TaxConnections serves as a platform connecting taxpayers with a wide range of tax professional expertise. Our members do an extraordinary job discussing tax issues in a language people can understand. Our members keep taxpayers more informed on taxes issues.

Tax increases are here, and as a result, taxpayers are even more interested in connecting to TaxConnections Members through our platform. If you are a tax professional who wants to increase your client acquisition opportunities, reach people interested in hearing about tax rules and regulations, and how taxpayers are affected, we invite you to join as a TaxConnections Member.

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Business And Tax Climate In Oklahoma

Business And Tax Climate In Oklahoma

This month brings us to the Sooner State of Oklahoma. The state’s nickname, “The Sooner State,” is in reference to the non-native settlers who stated their claims on land before the official opening date of lands in the western Oklahoma Territory.

The state is in the Gulf of Mexico watershed, generally sloping from the high plains of its western boundary to the low wetlands of its southeastern boundary. With small mountain ranges, prairies, mesas and eastern forests, most of the state lies in the Great Plains, Cross Timbers, and the U.S. Interior Highlands, a region prone to severe weather.

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IRS Notice: Employers Can Withhold, Make Payments Of Deferred Social Security Taxes From 2020

IRS States: Employers Can Withhold, Make Payments Of Deferred Social Security Taxes From 2020

The Internal Revenue Service today released Notice 2021-11 PDF addressing how employers who elected to defer certain employees’ taxes can withhold and pay the deferred taxes throughout 2021 instead of just the first four months of the year.

In response to a presidential memorandum signed August 8, 2020, Notice 2020-65 was issued on August 28, 2020, giving employers the option to defer certain employees’ Social Security taxes from September 1, 2020, to December 31, 2020. This applied to employees paid less than $4,000 every two weeks, or an equivalent amount for other pay periods, with each pay period considered separately. The taxes, which are technically called Old Age, Survivors and Disability Insurance, or OASDI, are calculated at 6.2% of employees’ wages.

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