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

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.

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

Gregg Sincoff
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Tel: +1 (646) 471 1335

Nancy Regan
Tel: +1 (646) 471 6104

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