Features

Tax Developments in 2016
Part 1: Federal Tax Developments Under Sections 385, 355, and 382; and new rules on partnership audits dominate landscape

  This article reviews and analyzes recent law changes and IRS guidance for federal income tax issues this past year. Section 385 Proposed Regulations — Impact on Related-Party Financing Section 385 has been in the Internal Revenue Code since 1969. It was enacted to provide guidance for whether to classify… Read more »

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Corporate Integration: Chairman Hatch’s Straightforward Approach to Tax Reform
Want to have input on the proposal? There's no time like the present

There is consensus that business tax reform needs to occur, but disagreement over how best to achieve it. Earlier this year, Sen. Orrin Hatch (R-UT), chairman of the Senate Committee on Finance (Senate Finance), announced that he was developing a corporate integration proposal. Although Chairman Hatch has not yet issued… Read more »

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2016 State Tax Bellwethers — Some Cautionary Notes
Commerce is changing – and, not surprisingly, the state and local tax milieu is shifting as well – so taxpayers need to be on their toes

In 2016 several states have used a variety of tools in an attempt to manage challenges that plague all states. From contesting established United States Supreme Court precedents to making broad-sweeping statutory interpretations of state laws, the landscape of state and local tax is shifting to address the evolution of… Read more »

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House Blueprint for Tax Reform Pushes Consumption Taxes Onto Center Stage
Shifting away from 1986-style reform, the drama is definitely in the details

On June 24, with much fanfare, House Republicans laid out the framework of a new tax reform proposal, frequently called a “blueprint” for tax reform. To date, most of the focus of tax reform discussions and the major Congressional committee and Obama administration efforts on tax reform have involved so-called… Read more »

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TEI Roundtable No. 11: Tax Plans of the Presidential Candidates
Shockingly (Haha), Clinton and Trump Proposals Differ Dramatically

This is not your typical presidential election season. So, as we prepare this issue of the magazine, tax issues are not on the front burner. Who knows what will happen during the debates or as the campaign heads inexorably toward Election Day? For this roundtable, we convened a group of… Read more »

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Proposed Related-Party Debt vs. Equity Regulations: Section 385 — Reactions and Practical Responses
The proposed rules ignore commercial realities, create a bias toward third-party borrowing and equity investments, and mandate significant reporting obligations — but what can taxpayers do?

The proposed regulations ignore the commercial realities of doing business in a global economy. They create a bias toward third-party borrowing and equity investments in lieu of intercompany debt. If finalized in their current form, the proposed regulations will force companies to choose inefficient mechanisms for financing their operations and… Read more »

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TEI Roundtable No. 9: Technology Standards & the Tax Function
Hosting issues, cloud-based data aggregation, and cybersecurity protection — mixed in with corporate tax requirements — are among the key concerns.

As technology standards continue to change, so do their impact on the tax function and corporate tax professionals. Tax Executive convened a roundtable to discuss the burgeoning relationship among technology standards, tax requirements, and the changing dynamics of tax professionals. Kelly Necessary, senior director of tax at Time Warner Cable;… Read more »

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Sauce for the Goose: Standards Applicable to Taxpayers, Practitioners — and the IRS
The contention among the parties results not from a lack of reasonable standards, but rather from an apparent failure by some IRS personnel to follow those standards in practice and the relative lack of accountability.

The relationship between the Internal Revenue Service’s Large Business & International (LB&I) Division and its constituent taxpayers is complex, marked by alternating episodes of cooperation and contention. LB&I often invites taxpayers and their representative groups to participate in the agency’s critical self-evaluation and listens closely to suggestions and complaints. At… Read more »

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Trends and Developments in Canadian Tax Controversy and Jurisprudence
Transfer pricing issues, increases in voluntary disclosures, and procedural disputes are among major developments, but what will happen in 2016 — and beyond?

The Canada Revenue Agency (CRA) continues to employ a risk-based approach when auditing large corporate taxpayers, focusing on high-risk areas such as aggressive tax avoidance and international tax planning. Information-gathering involves the use of written requests and requirement letters to routinely attempt to compel delivery of taxpayer information. However, the… Read more »

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Canadian Sales Tax Reform
How the U.S. Neighbor to the North Transitioned From a Multistage Sales Tax to an Almost Fully Harmonized Single VAT — in Just One Century

The problem with good tax policy is that politics always gets in the way. And for the United States—a country whose sales tax system (at least from a nonresident’s perspective) cries out for reform—your neighbor to the north and our experience may offer a cautionary tale of inspiration. After all,… Read more »

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