The Tax Exchange - February 2016

IRS provides significant relief under FATCA

Earlier this year, the Treasury Department issued a notice announcing its plan to amend select regulations under the Foreign Account Tax Compliance Act (FATCA). The notice contains four main elements...

Partner's investment in state tax credits ruled a disguised sale

In January 2016, the Fourth Circuit Court of Appeals ruled that a capital contribution to a partnership followed by an immediate allocation of Virginia state tax credits to the partner was a disguised sale of property.

Michigan issues guidance on the application of sales tax to cloud computing

On Jan. 6, 2016, the Michigan Department of Treasury issued a notice to taxpayers conceding that the department’s stated policy in RAB 1999-5 is inconsistent with the decision of the Michigan Court of Appeals in Auto-Owners Insurance Company v. Department of Treasury and, therefore, invalid.

IRS approves restructuring around 100-shareholder limit for S corporations

S corporations that are adding shareholders have typically faced a challenge as they approach the 100-shareholder limit–change entities or reduce shareholders? The IRS recently ruled that an S corporation could proactively restructure its ownership in order to avoid exceeding the 100-shareholder limit that applies to S corporations.

PATH Act provides several changes to FIRPTA

The recently enacted Protecting Americans from Tax Hikes Act of 2015 (PATH Act) provides significant benefits for non-U.S. investors in U.S. real estate, through modifications to FIRPTA rules.

Nontax purpose of a family LLC and gifts of LLC interest respected

In a recent case out of Washington state, the IRS challenged the nontax purpose for the creation of a family limited liability company (LLC) and the present interest treatment for gifts of the family LLC interest.

IRS guidance backs treatment of identity protection services as an employee benefit

With the increasing concerns over security and privacy—from corporate hacking to credit card fraud to IRS taxpayer ID theft—you may be considering (or find yourself being required to consider) whether to offer identity protection services to your employees.