United States

The Tax Exchange - July 2016

IRS addresses deferred revenue treatment in taxable stock acquisition

IRS addresses deferred revenue treatment in taxable stock acquisition

In situations where the target is deferring revenue, a taxable stock acquisition may create an inconsistency between the total amount of revenue recognized under generally accepted accounting principles (GAAP) and the amount of revenue recognized for income tax purposes.

  • July 29, 2016
Controlling shareholder is liable as a transferee for corporate level tax

Controlling shareholder is liable as a transferee for corporate level tax

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed the Tax Court’s decision to hold a controlling shareholder liable for the unpaid corporate-level taxes of the company he sold. The case involved a tax shelter (Midco) transaction designed to eliminate corporate-level tax on the company’s sale of its assets.

  • July 27, 2016
Proposed regulations could affect subchapter S status

Proposed regulations could affect subchapter S status

Corporate inversions and the related erosion of the domestic tax basis have been hot topics recently. In an attempt to address the issue, the Treasury released proposed regulations that would in certain circumstances give the IRS the ability to recast related-party debt as equity (or as part debt and part equity).

  • July 25, 2016
Review advised for multinationals with Indian or Singapore investments

Review advised for multinationals with Indian or Singapore investments

India and Mauritius recently announced a protocol to amend their tax treaty to restore India’s right to tax capital gains. Many multinational entities have traditionally chosen to invest through a Mauritius intermediary in order to obtain the favorable capital gains treatment available under the treaty.

  • July 21, 2016
Global survey reveals BEPS middle market impact

Global survey reveals BEPS middle market impact

RSM and Euromoney Institutional Investor recently conducted a global survey regarding the Base Erosion and Profit Shifting (BEPS) Project, which will undoubtedly result in the most significant changes in international taxation in decades.

  • July 19, 2016

Potential tax traps for employees who become partners

Recently proposed regulations have renewed discussions regarding the IRS position that a partner in a partnership cannot also be an employee of that partnership.

  • July 13, 2016

Research tax credit limitations for partners and S corporation shareholders

When determining the extent to which a shareholder in an S corporation or a partner in a partnership may benefit from the tax credit for qualified research activities performed by the pass-through entity, it is important to understand the special rule that applies to the pass-through of the research tax credit.

  • July 11, 2016

IRS accommodates some delays in Affordable Care Act information reporting

Since 2015 is the first year businesses have had to file Affordable Care Act (ACA) information returns, the IRS is working with you to accommodate delays caused by new processes and systems. It has also indicated that it will work with businesses that have made a good faith effort to comply, but that may come up short.

  • July 08, 2016

Grantor's death can compromise S corporation's status

For estate tax purposes, individuals often establish living or ‘grantor’ trusts to hold their assets. Although the assets are held in trust, the grantor is typically treated as the owner of the assets for income tax purposes.

  • July 06, 2016

Plan sponsors must pay health plan fee by July 31, 2016

The patient-centered outcomes research (PCOR) fee on health plans for plan years ending in 2015 is due by July 31, 2016. The plan sponsor must pay the fee if the health plan is self-insured, whereas the insurance company pays the fee for insured plans.

  • July 04, 2016

Missouri Supreme Court takes narrow view of grocery exemption

Missouri and many other states provide reduced sales tax rates and exemptions for groceries that are not intended to apply to prepared food sold in restaurants and similar establishments, and a wide variety of definitions and thresholds are used to distinguish between the two.

  • July 01, 2016