Funding the Government On Monday evening, congressional negotiators announced a deal in principle on border security to avert a government shutdown at midnight tomorrow, provided it passes both chambers and the President agrees to sign it into law. The agreement provides $1.375 billion for 55 miles of physical barriers on the southern border, well below the President’s initial $5.7 billion request. The funds are included in a seven-bill omnibus appropriations package that also funds the…
Some situations can lead to odd tax results and often additional efforts a taxpayer had to go through to get the right result (or close to it). A case from November 2018 fits this category. Here is a brief summary and some observations. Czerw v. Lafayette Storage & Moving Corp., et al, #16-CV-6701-FPG (WD NY, 11/9/18) – C started working for L as a mover in 1993. L started having financial problems in 2014 causing…
STEP Mid Atlantic Webinar: Kat Gregor will be a featured webinar panelist on “What Private Wealth Planners Need to Know About the EU’s Mandatory Disclosure Directive DAC 6.” This panel provided an overview of the elements of DAC 6, provided a comparison to existing US mandatory disclosure rules, explained when foreign tax planning may implicate US criminal conduct, and, through hypotheticals, offered suggestions as to how to navigate the DAC 6 requirements. ABA Tax Section
In a recent Law360 article, tax partner and tax controversy group co-founder Kat Gregor, tax controversy counsel Elizabeth Smith and litigation associate Liz Tolon explore the tax privilege nuances associated with attorney-client privilege and other relevant analogs that exist to protect client confidentiality. Their article discusses applicable privileges in the tax context, as well as two key exceptions: waiver and the crime-fraud exception. It also examines three recent cases that highlight the practical implications of these…
On December 21, 2018, IRS and Treasury issued final regulations implementing the partnership audit regime (T.D. 9844). The final regulations largely adopt, with some changes, the proposed regulations issued in August 2018. By issuing almost 200 pages of preamble, the final regulations provide extensive discussion of which comments were incorporated and why others were not.  Likely, IRS is thinking ahead to litigation over the validity of the regulations by issuing such broad discussions of…
On November 20, 2018, IRS issued a memo on its new voluntary disclosure program (“Voluntary Disclosure Program” or “Program”), following the offshore voluntary disclosure program’s termination on September 28, 2018. The Voluntary Disclosure Program provides taxpayers with a process for voluntarily disclosing tax noncompliance for both domestic and offshore assets to avoid potential criminal liability and prosecution. IRS has discretion to apply the Voluntary Disclosure Program’s procedures to all domestic voluntary disclosures received on or…
The two primary constitutional weapons used to combat the application of state tax laws are the Due Process Clause and the Commerce Clause.  That said, for decades Due Process Clause arguments were often afterthoughts to those made under the Commerce Clause.  All that changed when the U.S. Supreme Court’s decision in South Dakota v. Wayfair.  The Court’s holding in Wayfair calls into question the going forward usefulness of taxpayer challenges brought under the Commerce Clause. …
House Hearings House Committee on Energy and Commerce, Subcommittee on Health: Texas v. United States: The Republican Lawsuit and Its Impacts on Americans with Pre-Existing Conditions On Feb. 6, the House Committee on Energy and Commerce’s subcommittee on health held a hearing on how a federal judge’s ruling in Texas could affect protections of pre-existing conditions under the Affordable Care Act (ACA). Find a link to witness testimonies, member statements and the hearing live feed here.
On December 13, 2018, the IRS published proposed regulations (REG-104259-18) on the Base Erosion and Anti-Abuse Tax (the “BEAT”), a new tax regime under the Tax Cuts and Jobs Act (“TCJA”).  BEAT is designed to discourage multinational corporations from profit-shifting behavior by making deductible payments to their foreign affiliates, such as interest, high-margin service payments, rents and royalties.  While the proposed regulations shed light on the implementation mechanism of BEAT, there are some unwelcome surprises…

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