Federal

Tax Credit Transferability and Direct Pay Proposed Under the IRA
Potential for interactions with Section 174 complicate a seemingly simple program

The new tax credits in the Inflation Reduction Act (IRA) mean that more taxpayers will have access to more tax credits in the near future. But recent guidance highlights some uncertainties that taxpayers should be aware of before jumping in. The Treasury Department and the Internal Revenue Service recently released… Read more »

The Deference Doctrine—Its History and Possible Future
The Chevron doctrine has weathered changes since 1984, but the biggest one of all may be on the horizon

The doctrine of administrative deference, established in the Chevron case in 1984, requires deference to an agency’s reasonable interpretation of an ambiguous statute.1 The two-part test for requiring deference first addresses whether “Congress has directly spoken to the precise question at issue.”2 If so, the court must enforce the “unambiguous… Read more »

IRS Formalizes Process for Evaluating Advance Pricing Agreement Requests
Practical effects remain to be seen

The Internal Revenue Service has issued interim guidance on the process the Advance Pricing and Mutual Agreement Program (APMA) will follow when determining whether to accept taxpayer requests for an advance pricing agreement (APA).1 Existing guidance already states that APMA has discretion to reject an APA request and identifies some… Read more »

Excising Stock Buybacks From the Corporate Playbook
How will the excise tax be applied to taxpayers in light of the statutory language, Notice 2023-02, and Announcement 2023-18?

On August 16, 2022, the Inflation Reduction Act of 2022 (the IRA) was signed into law.1 Among a number of changes the IRA introduced to the Internal Revenue Code of 1986 was a new excise tax imposed on what are commonly referred to as stock buybacks by publicly traded corporations.… Read more »

New Developments in Canada’s General Anti-Avoidance Rule
Is Canada overreaching with proposed changes?

Editor’s note. This article was written in early May. In Deans Knight Income Corporation v. The King, on May 26 the Supreme Court of Canada reached a seven-to-one decision in favor of the government. The past twelve months have seen two very significant developments in the general anti-avoidance rule (GAAR)… Read more »

Oops! I Did It Again: Practical Implications of Revenue Procedure 2022-39
Regardless of how errors occur, they must be dealt with

A fact, well known in the tax community: every tax return contains at least one error. Except for the simplest Form 1040, this statement is invariably true, especially considering the increasing complexity of corporate returns.1 First, what is meant by an “error” on a tax return? No definition exists in… Read more »

Buying and Selling CFCs Under New Corporate Alternative Minimum Tax Regime
Statute may prove expensive and cumbersome

As part of the Inflation Reduction Act, Congress enacted a new corporate alternative minimum tax (CAMT) that may prove both expensive and cumbersome for large multinationals. Added to the insult of the minimum tax that must be paid is the injury of a rude awakening: that tax professionals can no… Read more »

TEI Roundtable No. 42: A Deep Dive Into the Murky Waters of UTPs

Uncertain tax positions (UTPs) offer taxpayers both opportunities and challenges. We wanted to take a closer look at this important issue, so, of course, we assembled a roundtable of knowledgeable tax professionals, including George Clarke, partner at the Washington, D.C., office of Baker McKenzie; George Hani, member with Miller &… Read more »

The New Corporate Alternative Minimum Tax: Five Not-So-Obvious Rule Applications to Consider
Like it or not, the CAMT rules have unexpected applications and potentially problematic effects

Editor’s note: This article was written in mid-December 2022. It is expected that by the time of publication, the US Department of Treasury and the Internal Revenue Service may release guidance to address some issues this article discusses. The corporate alternative minimum tax (CAMT) was enacted as part of the… Read more »

The “Most Interesting Man in the World” of R&D Tax Credits
Using Dan’s technology tips to improve your process today

Remember the Dos Equis beer ads where a bearded, distinguished-looking older gentleman wrestled bears, had drinks with Castro, and climbed Everest with his mom on his back as the bombastic voiceover recounted his daring exploits? “Bear hugs are what he gives bears. He lives vicariously through himself. His mom has… Read more »