Tax technical updates: PwC's Law Firm Services News Alerts

IRS re-releases proposed regulations t0 implement new partnership audit rules

On June 13 the IRS re-released proposed regulations (REG-136118-15, the Proposed Regulations) to implement the centralized partnership audit regime enacted as part of the Bipartisan Budget Act of 2015 (the BBA rules). The newly released version of the Proposed Regulations is essentially the same as the version that was unofficially released in January 2017 and then withdrawn in response to an executive order issued by the incoming Administration. It is significant that the IRS has now officially released the Proposed Regulations, set a deadline (August 14, 2017) for receipt of written comments, and scheduled a hearing on the proposed rules for September 18, 2017.

Update on CRA’s Proposed Treatment of Limited Liability Partnership (LLP) Formed Under the Laws of Delaware and Florida

On July 5, 2016, PwC issued a News Alert on the changes announced by the Canada Revenue Agency (“CRA”) at the May 2016 International Fiscal Association Conference (Canada branch) held in Montreal regarding the treatment of both limited liability limited partnerships (LLLP) and limited liability partnerships (LLP) formed under the laws of Delaware or Florida as corporations for Canadian tax purposes (subject to some transition rules). Click here to view the News Alert.

Trump Administration officials announce tax reform principles

Treasury Secretary Steven Mnuchin and White House National Economic Council (NEC) Director Gary Cohn unveiled last week the Trump Administration’s principles (the Principles) for tax reform that call for lowering business tax rates to 15 percent which will apply to both corporate and non-corporate entities. However there was no detail shared how this business tax rate will specifically apply to pass-through entities or if distributions will be taxed as well. Issued as a one-page document, the Principles also call for moving the US to a territorial tax system from the current worldwide tax system, and for enacting a one-time repatriation tax on the foreign earnings of US companies. Secretary Mnuchin stated that the specific rate for a repatriation tax would be the subject of negotiations with Congress.

Connecticut - Guidance on single-sales factor apportionment and market-based sourcing

On April 17, 2017, the Connecticut Department of Revenue Services (DRS) issued Special Notice 2017, providing guidance regarding single-sales factor apportionment and market-based sourcing, both applicable to the Corporation Business Income Tax beginning on or after January 1, 2016, and to the Income Tax (applicable to pass-through entities) beginning on or after January 1, 2017.

Proposed regulations would implement new partnership audit rules

On January 18, 2017, the IRS unofficially issued proposed regulations (REG-136118-15, the Proposed Regulations) regarding implementation of the centralized partnership audit regime enacted as part of the Bipartisan Budget Act of 2015 (the BBA rules). Two days later, however, the incoming Administration generally ordered heads of Executive Departments and Agencies to withdraw regulations that had not yet been published in the Federal Register. Since the Proposed Regulations had not yet been published, the IRS withdrew them. Nevertheless, the Proposed Regulations provide important insights into the IRS’s views at the time issued regarding implementation of the BBA rules, and they are expected to serve as a starting point for revisions as the rulemaking process continues.

Contact us

Gary Pogharian
US Law Firm Services Practice Tax Leader
Tel: +1 (646) 471 7202
Email

Gregg Sincoff
Managing Director
Email

Nancy Regan
Director
Email

Follow us