Archive for Treasury Regulations

U.S. Treasury Publishes Official FBAR Exchange Rates for 2014

Anyone filing an “FBAR” (Report of Foreign Bank and Financial Accounts – FinCEN Form 114) or IRS Form 8938 (Statement of Foreign Financial Assets) for calendar year 2014 will be pleased to know that the official exchange rates for 2014 have been published. As U.S. law states that no other exchange rate is permitted, it is really helpful to have these exchange rates available so early in January.

Exchange rates for other currencies can be found by clicking here.

The rates for the major foreign currencies are listed below:

 

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Written by | Posted in FBAR • International • IRS • OVDP • Treasury Regulations

Treasury And IRS Issue Proposed Regulations On Disguised Sales And Partnership Liability Allocations

Summary

On January 30, 2014, Treasury and the IRS issued Proposed Regulations with respect to the disguised sale rules and the rules for allocating partnership liabilities (REG-119305-11). A major driving force behind these Proposed Regulations was the IRS’s victory in Canal Corporation and Subsidiaries, formerly Chesapeake Corporation and Subsidiaries v. Commissioner, 135 T.C. No. 9. (2010). In Canal, the Tax Court shot down a leveraged partnership structure by concluding that the contributing partner did not have a payment obligation with respect to the partner’s indemnity in large part because the terms of the indemnity were not commercially reasonable. Read More

Written by | Posted in Partnership • Small Business • Treasury Regulations • United States

IRS Practice And Procedure Alert

On July 2, 2014, the Department of Treasury issued a memorandum that provides guidance to Appeals employees on implementation of the Appeals Judicial Approach and Culture Project (hereinafter “AJAC Project”), which will affect multiple sections of the Internal Revenue Manual (hereinafter “IRM”). The AJAC Project is reinforcing Appeals’ quasi-judicial approach to the way it handles cases, with the goal of improving internal and external taxpayer perceptions of a fair, impartial and independent Office of Appeals.

The memorandum contains attachments that provide guidance pertaining to all Appeals employees who open and close cases and hold hearings, conferences or otherwise resolve open case issues in the affected Examination work streams in Appeals. The guidance generally applies to non-docketed cases and does not change any practice with Read More

Written by | Posted in IRS • Treasury Regulations

Recent Judicial Interpretation Provides Guidance on the Research & Experimentation Tax Credit Consistency Provisions

Introduction

In calculating the Research and Experimentation Tax Credit (hereinafter “RTC”) under I.R.C. § 41 and its corresponding treasury regulations, the consistency rules are a critical concept to understand in order to properly measure and compute the RTC and achieve a sustainable tax return filing position per Circular 230. In order to properly measure and compute the increase in qualified research and experimentation expenditures between the two periods measured to calculate the RTC, the consistency rule holds that the same standard must be applied in both periods. This critical concept was the focal point of a recent pivotal judicial interpretation handed down back in July of 2014 by the Fifth Circuit Court in Trinity Industries, Inc. v. United States. Read More

Written by | Posted in Income Tax • IRS • Treasury Regulations

The IRS Issued New Administrative Authority In Connection To Accounting Method Changes For Retail Inventory

The Internal Revenue Service (hereinafter “IRS”) has issued new administrative authority for changing a method of accounting for retail inventory. Newly issued Rev. Proc. 2014-48 provides the select procedures under which a taxpayer may obtain the IRS’s consent to change a method of accounting to comply with the final treasury regulations on the retail inventory method of accounting. The final treasury regulations clarify the computation of ending inventory values under the retail inventory method and provide alternative methods for taxpayers using the retail Lower of Cost or Market (hereinafter “LCM”) method of accounting to account for margin protection payments.

As set forth under Treas. Reg. § 1.471-8, a taxpayer may use the retail inventory method to compute the value of ending inventory at approximate cost (i.e., retail cost) or approximate Read More

Written by | Posted in IRS • Treasury Regulations

The Department of Treasury Issued Final Treasury Regulations Governing Research and Experimental Expenditures

Introduction

On Monday, July 21 of 2014, the Department of Treasury and Internal Revenue Service (hereinafter the “Service”) issued Final Treasury Regulations under T.D. 9680 to amend the definition of research and experimental expenditures pursuant to I.R.C. § 174. These Final Treasury Regulations finalized and replaced the previously issued Proposed Treasury Regulations that were published on September 6, 2013. As a reminder, Treasury Regulations provide the official interpretations of the Internal Revenue Code by the Department of Treasury and have the force and effect of law. The most common forms of Treasury Regulations include: Read More

Written by | Posted in R&D Credit Services • Treasury Regulations

A Special Report From Capitol Hill

Before Congress adjourned for its July 4th recess, a number of House and Senate committees and subcommittees deliberated over legislation to address the Highway Trust Fund (HTF), Corporate Tax Inversions, and Tax Extenders amongst other matters including, but not limited to, the subsequent highlights:

• The Senate Finance Committee Chairman Ron Wyden, D-Ore., on June 24 unveiled a measure, the Preserving America’s Transit and Highways (PATH) Bill, to raise $9 billion to temporarily bolster the HTF with modifications to heavy vehicle use taxes, distribution from inherited IRAs and a handful of other modest tax changes. However, two days later, a modified Chairman’s Mark for the PATH Bill fell short of the revenue needed. Wyden said the markup would resume during the week beginning July 7 when Congress returns from Read More

Written by | Posted in Tax Policy • Treasury Regulations

A Practical Guide To The Department of Treasury’s Amendment To Utilize The Alternative Simplified Credit Methodology On Amended Tax Returns

Introduction

On June 2, 2014, The Department of Treasury released for publication in the Federal Register both Temporary Treasury Regulations (T.D. 9666) and Proposed Treasury Regulations (REG-133495-13) in connection to the Alternative Simplified Credit (hereinafter “ASC”) methodology for purposes of the Research and Experimentation Tax Credit (hereinafter “RTC”). These revised Treasury Regulations represent a true paradigm shift from the previously issued set of Final Treasury Regulations which only allowed companies to take the RTC utilizing the ASC on originally filed tax returns.

Synopsis

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Written by | Posted in Treasury Regulations

What Is A US Tax Court Practitioner?

Recently I had a discussion with an individual about US Tax Court Practitioners in order to learn about this designation. What I discovered was this category of Court Practitioner was created to allow special dispensation to Non-US Lawyers (such as Enrolled Agents, CPAs and International Tax Attorneys) to gain access to the US Tax Court to represent taxpayers. As a member of the US Tax Court, US Tax Court Practitioners have the ability to litigate matters before the US Tax Court on behalf of their taxpayer clients. In order to qualify as a US Tax Court Practitioner you must pass a very difficult US Tax Court Bar Exam set by the Judges of the US Tax Court which takes place once every second year. What is not generally known is that since its inception in 1942, less than 300 US Tax Court Practitioners have ever passed and qualified to be admitted as a US Tax Court Read More

Written by | Posted in TaxConnections • Treasury Regulations • United States

Modified Treasury Regulations Serve As A Paradigm Shift For The Research & Experimentation Tax Credit

TaxConnections Picture - U.S.Treasury

On June 2, 2014, The Department of Treasury announced that modified treasury regulations (e.g., TD 9666) will enable companies to claim the Research and Experimentation Tax Credit (hereinafter “RTC”) utilizing the Alternative Simplified Credit (hereinafter “ASC”) methodology on amended tax returns. This represents a true paradigm shift from the previously issued set of treasury regulations which only allowed companies to take the RTC utilizing the ASC on originally filed tax returns.

This paradigm shift was made possible through the bipartisan support on both sides of the aisles in Congress including, but not limited to, Coons (D-DE), Cornyn (R-TX),Grassley (R-IA), Hatch (R-UT) Klobuchar (D-MN) Roberts (R-KS), Schumer (D-NY) and Wyden (D-OR), Brady (R-TX), Camp (R-MI), Gerlach (R-PA), Jenkins (R-KS), Read More

Written by | Posted in R&D Credit Services • Tax Policy • Treasury Regulations

Timely Filed Petition? Miami Tax Court

Miami Tax Court Report Back

Judge Ronald L. Buch – timely filed petition?

IRS filed a motion to dismiss for lack of jurisdiction. The USPS click and ship process was used by a representative of the taxpayer. She printed the label with payment from the USPS site at 11:48 pm. Petition had to be timely filed by 12 – 12 minutes later. IRS averred that it was impossible for her to print, stick and deliver the petition to the USPS in Jupiter, FL within 12 minutes as the petitioner’s address was about 20 minutes from the USPS. What IRS did not know, as testified, was that the petitioner had moved, and lived 3 minutes from the USPS. This evidence was led in court. So it was possible to timely mail Read More

Written by | Posted in Tax Controversy • Tax Risk Management • Tax Tips • Treasury Regulations

Congress Moves to Restrict Corporate Tax Inversions

On Tuesday, May 20th the Democrats in the House and Senate introduced legislation to tighten the restrictions on corporate tax inversions, limiting the ability of U.S.-based companies to avoid U.S. taxes by combining with a smaller foreign business and moving their tax domicile overseas. As a background, there have been dozens of corporate inversions in the last decade alone, costing the U.S. tax base billions of dollars, according to the bill’s proponents. The Treasury Department estimates that the President’s FY 2015 budget proposal set forth this past March on inversions would raise $17 billion in revenue over the next decade.

Under current law, a corporate inversion is not recognized for U.S. tax purposes if 80% or more of the new combined corporation incorporated offshore is owned by historic Read More

Written by | Posted in Corporate • Treasury Regulations
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