Wealth & Risk Management Blog

William Byrnes (Texas A&M) tax & compliance articles

Archive for December, 2019

Online & Hybrid Learning Pedagogy Best Practices and Standards Development at AALS on Thursday, January 2

Posted by William Byrnes on December 30, 2019


If you are attending the first afternoon of AALS Thursday, please join our discussion Online & Hybrid Learning Pedagogy Best Practices and Standards Development at Marriot Wardman Park Hotel’s Roosevelt Room 4, from 3:30-5:15 p.m. on Thursday, January 2 in a Q&A format.  Discussants include Dean April Barton (Duquesne), Dean James Hackney (Northeastern), Dean Megan Carpenter (New Hampshire), Prof. Rebecca Purdom (Emory), John Mayer (CALI), David Thomson (Denver), and Prof. William Byrnes (Texas A&M).

The discussants will help lead an audience conversation: “Since the publication of the first set of best practices and model rules, what have we learned? What should the community be considering now?

Our goal for this discussion is to test whether there is an appetite for an updated set of best practice standards and model rules. The five-year project sponsored by the Harvard Project on the Legal Profession to draft a set of best practices and model standards for online learning in legal education, Distance Learning in Legal Education: Delivery and Recommended Practices, is published by CALI: download here.  This conversation will continue next summer at SEALS and at the 2021 AALS meeting.

Specific discussion points may include:

  • Do we need to modernize best practices? Were we wrong about anything five years ago?
  • Do we need to update model rules? Who/what organization is the target for model rules? How should the ABA and regional accreditors review online law classes?
  • Some states still restrict how many online classes students may count toward taking the bar. Does this affect the growth of online law programs? Should it? Should this community engage those states? How?
  • Many online offerings by law schools are in their non-JD degree programs. How should the accreditation discussion for these programs consider online offerings? How will their regulation affect online JD classes?
  • Some law schools report status differences between faculty who teach online, and faculty who teach residential classes. Is this status difference a problem? If so, how should the problem be approached?
  • Some law schools heavily use adjuncts to teach online law classes. Is this a problem? If so, what steps should be taken?
Hope that you can join our discussion this Thursday at AALS!

Posted in Education Theory | Leave a Comment »

U.S. IRS Data for Country-by-Country Reports, Tax Year 2017 and 2016

Posted by William Byrnes on December 20, 2019


Six new tables presenting data from Form 8975, Country-by-Country Report, and Form 8975 Schedule A, Tax Jurisdiction and Constituent Entity Information, are now available on SOI’s Tax Stats Web page. The tables present data from the estimated population of corporate and partnership returns filed for Tax Year 2017. Five tables display the number of filers, revenues, profit, income taxes, earnings, number of employees, and tangible assets. The first three tables are classified by major geographic region and selected tax jurisdiction. The fourth table is classified by major industry group, geographic region, and select tax jurisdiction. The fifth table is classified by effective tax rate of multinational enterprise subgroups. A sixth table displays number of constituent entities classified by major geographic region, selected tax jurisdiction, and main business activities.

Country-by-Country Report: Tax Jurisdiction Information

Data Presented: Number of Filers, Revenues, Profit, Income Taxes, Earnings, Number of Employees, Tangible Assets

Classified by: Major Geographic Region and Selected Tax Jurisdiction
Tax Years: 2017 | 2016
Classified by: Major Geographic Region and Selected Tax Jurisdiction with Positive Profit Before Income Tax
Tax Years:  2017 | 2016
Classified by: Major Geographic Region and Selected Tax Jurisdiction with Negative or Zero Profit Before Income Tax
Tax Years: 2017 | 2016
Classified by: Major Industry Group, Geographic Region, and Selected Tax Jurisdiction
Tax Years: 2017 | 2016
Classified by: Effective Tax Rate of Multinational Enterprise Sub-groups
Tax Years: 2017 | 2016

Country-by-Country Report: Constituent Entities

Data Presented: Number of Constituent Entities

Classified by: Major Geographic Region, Selected Tax Jurisdiction, and Main Business Activities
Tax Years: 2017 | 2016

William Byrnes’ 4th Edition of his industry-leading Practical Guide to U.S. Transfer Pricing treatise was published on December 19, 2019 by Matthew Bender LexisNexis.  William Byrnes is the author or co-author of nine Lexis titles and an advisory board member of Law360’s International Tax journal.

William Byrnes’ completely revised 4th Edition Practical Guide to U.S. Transfer Pricing (2020) has been expanded to 2,000 pages of analyses and practice notes, 47 chapters divided over six parts: Part I: U.S. regulatory analysis, application of transfer pricing methods, and jurisprudence; Part II: OECD; Part III: United Nations; Part IV: European Union; Part V: Industry topics; and Part VI: Country practice and tax risk management. Professor Byrnes brings together 50 of the industry’s eminent transfer pricing counsel, economists, and financial accountants to provide a comprehensive two-volume “go-to” resource for tax risk management.

William Byrnes explained, “I am fortunate to be able to call upon and work with the industry’s leading transfer pricing professionals from firms such as Alston, Covington, Pillsbury, Jones Day, McDermott, Duff & Phelps, Miller Chevalier, PwC, KPMG, and multinational companies like Vertex and Veritas.” Sixty contributors add subject matter expertise on technical issues faced by tax and risk management counsel.

Last chance to join one of the case study teams for TRANSFER PRICING taught live online, using Zoom, by Dr. Lorraine Eden, Prof. William Byrnes, and many industry experts… The courses are for tax attorneys, accountants, or economists and count toward the Texas A&M’s INTERNATIONAL TAX Master degree (taught online).

The class of a maximum of 18 students will be grouped into teams of 3 students each. The 6 teams meet using Zoom to prepare a weekly TP Aggiespresentation to respond to a real-world post-BEPS client study. Then all teams meet together online via Zoom twice each week at 8:00am Dallas time Wednesdays and Sundays to discuss and present the case study solutions. Students are provided without charge textbook materials, videos with PPT, and podcasts, and granted access to a large online law & business database library including Lexis, Bloomberg, IBFD, Kluwer/CCH, Thomson, among many other tax resources.

To apply for the transfer pricing courses and international tax courses, contact Jeff Green, Graduate Programs Coordinator, T: +1 (817) 212-3866, E: jeffgreen@law.tamu.edu or contact David Dye, Assistant Dean of Graduate Programs, T (817) 212-3954, E: ddye@law.tamu.edu. Texas A&M Admissions website: https://law.tamu.edu/distance-education/international-tax  (applications and previous university transcripts must be received by Admissions before Wednesday, January 8th at 5pm Texas time). Note that the university is closed for the holidays from Dec. 20 until Jan. 2, 2020.

Posted in book, Transfer Pricing | Tagged: , | Leave a Comment »

What’s New in the 4th Edition Practical Guide to U.S. Transfer Pricing?

Posted by William Byrnes on December 20, 2019


Highlights

In this release, Professor William Byrnes launches a new 4th Edition of Practical Guide to U.S. Transfer Pricing, in which chapters have been reorganized, substantially revised and expanded to align the publication to the Tax Cuts and Jobs Act, the 2017 OECD Transfer Guidelines and BEPS, and the 2017 UN Practical Manual.

His new edition has 47 chapters, 1,800 pages of technical, jurisprudence, and regulatory analysis to advise clients from a tax risk management perspective and to mitigate controversy. Order a copy here: https://store.lexisnexis.com/products/practical-guide-to-us-transfer-pricing-skuusSku60720

There are 29 U.S. specific chapters (Part I), 7 OECD/BEPS/EU chapters (Part II, IV), 9 industry-specific chapters (Part V), 2 foreign country chapters (Part VI).

New Country Chapters. India (Chapter 121) and Brazil (Chapter 120).

Financial Industry Chapters. Financial Industry Transfer Pricing Issues (Chapter 92), Determining Arm’s Length Interest (Chapter 93), Defending Intercompany Debt (Chapter 94), Performance Guarantees (Chapter 95).

Business Structuring Chapters. Business Restructuring: U.S. Tax and Transfer Pricing Rules (Chapter 27), Mergers and Acquisitions (Chapter 96), International Strategy for Transfer Pricing Compliance: A Checklist for Multinationals (Chapter 90), Transfer Pricing Aspects of Business Restructurings (Chapter 43).

Hybrid Rules and Transfer Pricing. New Chapter 45.

Cost Sharing casesAmazon and Altera, analyzed in depth and contrasted. see Chapter 13 and Chapter 10.

Tax Cuts and Jobs Act. Revision of U.S. Business Restructuring Chapter 27 includes the impact of GILTI, FDII, BEAT, Transition Tax, on U.S. business’s transfer pricing exposure. BEAT and Service Cost Method are discussed in Chapter 14.

Digital Taxation and Transfer PricingSee new Chapter 44.

Transfer Pricing Review Panel and Transfer Pricing Examination Process Updates. See Chapter 20, Examination and Appeals.

Value Chain Analysis. See Chapter 42, Porter’s Value Chain Analysis Case Study of Amazon; Chapter 97, Value Chain Study of Coffee Industry; Chapter 98, Value Chain Study of the Tobacco Industry.

Taxpayer First Act of 2019. Impact on LB&I Discussed in Chapter 20.

Impact of 2015 APA and Competent Authority Revenue Procedures. Analysis of trends and risks in Chapter 21, APAs and in Chapter 22, Competent Authority.

* * * * * * * * * * * * * * * * * * *

Lexis Advance Tax Platform Includes Treatise Library Analyzing

Management of Operational and Transactional Tax Risk

It’s all here.

Faster research: Streamline tax analysis with one search across the broadest array of leading tax publishers on a single platform. Predictable, fixed-rate pricing covers full use of nearly 1,400 subscription sources you’ll see—no added charges.

Superior tax content: Enhance your productivity with access to the widest array of tax sources on a single platform. Matthew Bender® titles, including more than 80 federal, state and international tax treatises.

Advisors will discover a rich selection of Lexis titles examining hot, cutting-edge issues like: Practical Guide to U.S. Transfer PricingLexis Guide to FATCA Compliance; a country-by-country examination of anti-money laundering laws; Taxation of Intellectual Property and TechnologyFederal Taxation of Oil and Gas Transactions; and Foreign Tax & Trade Briefs, which provides summaries of the tax laws and systems of over 120 countries. Nine treatises are authored or co-authored by Professor William H. Byrnes (Texas A&M University Law School) who leads teams of contributing subject experts in analyzing the management of operational and transactional risk confronting tax officers and their advisors, and providing compliance and planning insights.

Comprehensive results: Be confident you’re providing the most complete and accurate tax guidance:

Leverage proven strategies and practical approaches by leading tax practitioners.

Quickly validate IRS Administrative rulings with exclusive Shepard’s® signals indicators.

Keep informed about current developments with exclusive current awareness resources from Law360 and other premier publishers.

Lexis Advance Tax—What you need when you need it …

Call: 800-227-4908 or visit: http://www.lexisnexis.com/en-us/products/lexis-advance-tax.page.

Looking for Lexis Advance Tax?: Sign in at www.lexisadvance.com and look for the scroll-down menu called “Lexis Advance Research” in the upper left-hand corner. Click on the down arrow and select Lexis Advance Tax.

Posted in book, Transfer Pricing | Tagged: , | Leave a Comment »

William Byrnes’ 4th Edition Practical Guide to U.S. Transfer Pricing Treatise Published December 19, 2019

Posted by William Byrnes on December 19, 2019


William Byrnes’ 4th Edition of his industry-leading Practical Guide to U.S. Transfer Pricing treatise was published December 19, 2019 by Matthew Bender LexisNexis.  William Byrnes is the author or co-author of nine Lexis titles and an advisory board member of Law360’s International Tax journal.

William Byrnes’ completely revised 4th Edition Practical Guide to U.S. Transfer Pricing (2020) has been expanded to 2,000 pages of analyses and practice notes, 47 chapters divided over six parts: Part I: U.S. regulatory analysis, application of transfer pricing methods, and jurisprudence; Part II: OECD; Part III: United Nations; Part IV: European Union; Part V: Industry topics; and Part VI: Country practice and tax risk management. Professor Byrnes brings together 50 of the industry’s eminent transfer pricing counsel, economists, and financial accountants to provide a comprehensive two-volume “go-to” resource for tax risk management.

William Byrnes explained, “I am fortunate to be able to call upon and work with the industry’s leading transfer pricing professionals from firms such as Alston, Covington, Pillsbury, Jones Day, McDermott, Duff & Phelps, Miller Chevalier, PwC, KPMG, and multinational companies like Vertex and Veritas.” Sixty contributors add subject matter expertise on technical issues faced by tax and risk management counsel.

“Transfer Pricing is one of the most complex and changing areas of tax risk in the United States and globally,” continued Byrnes. “The big-ticket cases, ones with over a half-billion-dollar adjustment, are almost always transfer pricing.  And with the renewed government focus on this topic around the world, transfer pricing audits will both increase in number and in actions taken, not just for the IRS, but most countries’ revenue authorities. U.S. companies are often the target.”

Byrnes shared, “Dr. Lorraine Eden (Texas A&M) and I will be using the treatise to teach transfer pricing online from January 13 through April 20 as part of the Texas A&M international tax curriculum”.

 

 

Posted in book, Transfer Pricing | Tagged: , | Leave a Comment »

Transfer Pricing case studies online course Jan 13 – Apr 19, 2020

Posted by William Byrnes on December 18, 2019


Last chance to join one of the case study teams for TRANSFER PRICING taught live online, using Zoom, by Dr. Lorraine Eden, Prof. William Byrnes, and many industry experts… The courses are for tax attorneys, accountants, or economists and count toward the Texas A&M’s INTERNATIONAL TAX Master degree (taught online).

The class of a maximum of 18 students will be grouped into teams of 3 students each. The 6 teams meet using Zoom to prepare a weekly TP Aggiespresentation to respond to a real-world post-BEPS client study. Then all teams meet together online via Zoom twice each week at 8:00am Dallas time Wednesdays and Sundays to discuss and present the case study solutions. Students are provided without charge textbook materials, videos with PPT, and podcasts, and granted access to a large online law & business database library including Lexis, Bloomberg, IBFD, Kluwer/CCH, Thomson, among many other tax resources.

To apply for the transfer pricing courses and international tax courses, contact Jeff Green, Graduate Programs Coordinator, T: +1 (817) 212-3866, E: jeffgreen@law.tamu.edu or contact David Dye, Assistant Dean of Graduate Programs, T (817) 212-3954, E: ddye@law.tamu.edu. Texas A&M Admissions website: https://law.tamu.edu/distance-education/international-tax  (applications and previous university transcripts must be received by Admissions before Wednesday, January 8th at 5pm Texas time). Note that the university is closed for the holidays from Dec. 20 until Jan. 2, 2020.

 

 

 

 

Course I: Tangibles, Methods

  • Week 1 January 13 Arm’s Length Standard (v Formulary Approach) case study
  • Week 2 Jan 20 CUP & Comparables case study
  • Week 3 Jan 27 Cost Plus & Resale Minus case study
  • Week 4 Feb 3: Comparable Profits Method & TNMM case study
  • Week 5 Feb 10 Profit Split case study
  • Week 6 Feb 17 Best Method case study

Course II: Intangibles, Services

  • Week 1 March 2 Intangibles Royalty Rates CUT and CPM case study
  • Week 2 March 16: CSA Intangibles Buy In/Out case study
  • Week 3 March 23: Digital Business Unitary Apportionment case study
  • Week 4 March 30 Digital Value Chain, Internet of Things case study
  • Week 5 April 6 U.S. v OECD v UN Manual case study Extractive Industries, Financing
  • Week 6 April 13 Restructuring the Business, Services case study

Posted in Courses | Tagged: | Leave a Comment »

Transfer Pricing case studies online course Jan 13 – Apr 19 (live Zoom based classes, small team groups)

Posted by William Byrnes on December 13, 2019


Interested to join one of the case study teams for TRANSFER PRICING taught live online, using Zoom, by Dr. Lorraine Eden, Prof. William Byrnes, and many industry experts January 13 – April 19. The courses are for tax attorneys, accountants, or economists and count toward the Texas A&M INTERNATIONAL TAX online Master curriculum.

The class is divided into teams of 3 or 4 students, each team meets internally using Zoom to prepare a team response and presentation for a real-world post-BEPS client study. Then the entire class meets twice each week: (A) on Wednesdays to discuss the case study with the Subject Matter Expert and Prof. William Byrnes, and (B) on Sundays each team presents interactively their positions and solutions in a friendly rivalry against the other teams, facilitated by William Byrnes and the Subject Matter Expert professor.  Students are provided textbook materials, videos with PPT, and podcasts, while learning to use a robust online law & business database library. The weekly lead Subject Matter Experts listed below and several more will be joining to explain specific tools and issues.

To apply for the transfer pricing courses and international tax courses, contact Jeff Green, Graduate Programs Coordinator, T: +1 (817) 212-3866, E: jeffgreen@law.tamu.edu or contact David Dye, Assistant Dean of Graduate Programs, T (817) 212-3954, E: ddye@law.tamu.edu. Texas A&M Admissions website: https://law.tamu.edu/distance-education/international-tax  (applications with all previous degree academic transcripts must be received by Admissions before Wednesday January 8th at 5pm Texas time)

Texas A&M Law offers the premier online program in international tax with a multidisciplinary, risk-management-focused approach. Our TP Aggiesunique, industry-based online curriculum is vetted by and focuses on the needs of multinational corporations, large firms, and governments. Though one of the largest U.S. public universities of 70,000 students and an annual budget exceeding $6 billion (FY2020), Texas A&M’s international tax curriculum offers small class sizes (maximum 30) to ensure personal faculty and in-class engagement. Smaller class sizes also allow stronger engagement and connections to develop among classmates who learn from each other’s corporate experiences.

  • Class meeting time is 60  – 120 minutes each Wednesday and Sunday at Central (Texas) time 08:00 (am) (i.e. 15:00 Paris; 18:00 Dubai; 22:00 Shanghai). The sessions are normally recorded if students are unable to attend because of client commitments or must sign off early.
            Capstone Week April 20 – 26: students teams build case studies that winning teams can present next year in the courses

Posted in Courses | Tagged: | Leave a Comment »

Byrnes & Bloink’s TaxFacts Intelligence Weekly for Financial Advisors (December 12 edition)

Posted by William Byrnes on December 12, 2019


Texas A&M University School of Law has launched its International Tax online graduate curriculum for tax professionals. Apply now for Jan 13 – April 19 transfer pricing courses.  Texas A&M University is a public university and is ranked 1st among public universities for its superior education at an affordable cost (Fiske, 2018) and ranked 1st of Texas public universities for best value (Money, 2018). To apply for the inaugural cohort opportunity, contact Jeff Green, Graduate Programs Coordinator, T: +1 (817) 212-3866, E: jeffgreen@law.tamu.edu or contact David Dye, Assistant Dean of Graduate Programs, T (817) 212-3954, E: ddye@law.tamu.edu. Texas A&M Admissions website: https://law.tamu.edu/distance-education/international-tax

IRS Provides New ACA Transition Relief for Employer Reporting

As usual, the IRS has released transition relief to extend the deadline for providing Form 1095-C to individuals from January 31, 2020 to March 2, 2020. However, unlike other years, the March 2 deadline is now a firm deadline and the IRS has indicated that it will no longer respond to requests for extension beyond that deadline. Form 1094-C and Form 1095-C that must be provided to the IRS are not subject to the extension. The employer must furnish these filings to the IRS by February 28, 2020 if the filing is on paper and March 31, 2020 if the employer is filing electronically. For 2019 forms, the IRS has extended the relief that may allow employers to escape liability if they make a good faith effort to comply with all filing requirements. Because the individual mandate has been reduced to $0, the IRS will also not impose a penalty under IRC Section 6722 upon employers who fail to provide Form 1095-B if certain requirements are satisfied. For more information, visit Tax Facts Online. Read More

December 31 Deadline to Take Full Advantage of Opportunity Zone Deferral is Fast Approaching

The Tax Cuts and Jobs Act introduced opportunity zones into the tax code, which allow taxpayers to defer certain gains if certain deadlines and requirements are satisfied. However, the law only gives taxpayers a limited amount of time to take full advantage of the deferral provisions. Specifically, December 31, 2019, is the deadline for taxpayers who wish to make opportunity zone investments and take full advantage of the 15% step-up in the deferred gains. Taxpayers who invest after this deadline (but before December 31, 2020) and hold the opportunity zone investment through 2026 will be entitled to take 10% step-up in basis (10% of the amount deferred) on the deferred tax. For more information on the opportunity zone rules, including the gain deferral provision, visit Tax Facts Online. Read More

Unpacking the New Section 6050Y Reporting Requirements for Life Insurance Reportable Policy Sales

The new 6050Y regulations create new reporting obligations for many who issue, acquire or sell life insurance policies in a reportable policy sale post-tax reform. An “issuer” under the new regulations is anyone that bears any part of the risk associated with the life insurance contract, including those collecting premiums and paying death benefits. However, where there are multiple issuers, the reporting obligations are satisfied if only one issuer or designee reports on a timely basis. New forms released by the IRS to complete the reporting obligations include Form 1099-LS, Reportable Life Insurance Sale and Form 1099-SB, Seller’s Investment in Life Insurance Contract. While some reporting requirements have been delayed, it’s important to understand the basics of these forms now. Form 1099-LS must be filed by anyone who acquires a life insurance policy (or interest therein) in a reportable policy sale. Basic information about the sale, policy, acquirer and seller must be included. Form 1099-SB must be filed by the issuer of the life insurance policy to report both the seller’s investment in the contract and the surrender amount if the sale is a reportable policy sale (or transferred to a foreign person). For more information on the new 6050Y reporting requirements, visit Tax Facts Online. Read More

2020’s Tax Facts Offers a Complete Web, App-Based, and Print Experience

Reducing complicated tax questions to understandable answers that can be immediately put into real-life practice, Tax Facts works when and where you need it….on your desktop, at home on your laptop, and on the go through your tablet or smartphone.  Questions? Contact customer service: TaxFactsHelp@alm.com800-543-0874

Posted in Retirement Planning, Taxation | Tagged: , , , | Leave a Comment »

Byrnes & Bloink’s TaxFacts Intelligence Weekly for Financial Advisors (December 5 edition)

Posted by William Byrnes on December 6, 2019


Texas A&M University School of Law has launched its International Tax online graduate curriculum for tax professionals. Apply now for Jan 13 – April 19 transfer pricing courses.  Texas A&M University is a public university and is ranked 1st among public universities for its superior education at an affordable cost (Fiske, 2018) and ranked 1st of Texas public universities for best value (Money, 2018). To apply for the inaugural cohort opportunity, contact Jeff Green, Graduate Programs Coordinator, T: +1 (817) 212-3866, E: jeffgreen@law.tamu.edu or contact David Dye, Assistant Dean of Graduate Programs, T (817) 212-3954, E: ddye@law.tamu.edu. Texas A&M Admissions website: https://law.tamu.edu/distance-education/international-tax

Final Regulations Confirm: No “Clawback” for Gifts Made Under Expanded Transfer Tax Exemption

The 2017 tax reform legislation significantly expanded the transfer tax exemption, which applies to exempt both lifetime and postmortem gifts from transfer taxes. However, the new provision is set to sunset after 2025, leading many taxpayers to question whether large gifts made while the provision is effective would be exempt once the exemption reverts to the much lower $5 million (as adjusted for inflation) limit. In general, the exemption applies first to gifts made during life and then to the individual’s remaining estate. Under the final regulations, estates are allowed to compute the available estate tax credit using the higher of the basic exclusion amount that applied to gifts made during life or the basic exclusion amount applicable on the date of death. Essentially, this rule provides certainty that taxpayers can make large gifts now (i.e., gifts that exceed the $5 million exemption) without generating transfer tax liability if the exemption amount is reduced in the future. For more information on the estate tax, visit Tax Facts Online. Read More

Court Finds Prudent Process Sufficient to Overcome DOL Fiduciary Liability

Many retirement plan sponsors and advisors have been left in uncertainty since the DOL fiduciary rule was vacated. A September 2019 case involving a DOL fiduciary enforcement action may shed light on resolution of fiduciary issues in the retirement plan context. In this case, the court found that retirement committee members were not liable under ERIA for a failure to monitor the committee’s investment manager more closely. The committee here had implemented processes and procedures, including regular meetings and reports, and acted in accordance with those procedures. After the DOL initiated action, the court agreed that the committee was entitled to rely upon those procedures. Once an error or problem arose and the committee became aware—or reasonably should have become aware—of the issue, the committee correctly increased its oversight until the issue was resolved. Here, that issue was that the committee’s instructions with respect to investments were not being followed. Once the committee noticed, they stepped up oversight. Importantly, this ruling shows that a prudent process is often sufficient to avoid fiduciary liability even if a decision results in investment losses. For more information on the fiduciary standard, visit Tax Facts Online. Read More

IRS Cracking Down on Syndicated Conservation Easements

In recently released IR-2019-182, the IRS announced that it has substantially increased resources to crack down on syndicated conservation easements. Under the IRC, a special rule allows taxpayers to take a deduction for donations of qualified conservation easements (an exception to the general rule prohibiting deductions for donations of less than an entire interest in property). A qualified conservation easement is a contribution of real property including a restriction (granted in perpetuity) for the use of the property, which must be used for conservation purposes. Syndications are often set up to purchase real property for conservation easements. Most syndications involve tiers of pass-through entities so that investors in the entities can more fully use the charitable deduction (which is subject to an adjusted gross income cap like any other charitable deduction). Often, the actual deduction will far exceed the amounts invested—sometimes because inflated property values are used. These and substantially similar arrangements are now classified as listed transactions, which must be disclosed to the IRS. Clients should be made aware of this increased potential for enforcement across several IRS divisions. For more information on the requirements for claiming a conservation easement deduction, visit Tax Facts Online. Read More

 

2020’s Tax Facts Offers a Complete Web, App-Based, and Print Experience

Reducing complicated tax questions to understandable answers that can be immediately put into real-life practice, Tax Facts works when and where you need it….on your desktop, at home on your laptop, and on the go through your tablet or smartphone.  Questions? Contact customer service: TaxFactsHelp@alm.com800-543-0874

Posted in Retirement Planning, Taxation | Tagged: , , , , | Leave a Comment »

Byrnes & Bloink’s Thanksgiving TaxFacts Intelligence for Wealth Advisors

Posted by William Byrnes on December 3, 2019


Texas A&M University School of Law has launched its International Tax online curriculum for graduate degree candidates. Admissions is open for Jan 13 – April 19 transfer pricing courses.  Texas A&M University is a public university and is ranked 1st among public universities for its superior education at an affordable cost (Fiske, 2018) and ranked 1st of Texas public universities for best value (Money, 2018). To apply for the inaugural cohort opportunity, contact Jeff Green, Graduate Programs Coordinator, T: +1 (817) 212-3866, E: jeffgreen@law.tamu.edu or contact David Dye, Assistant Dean of Graduate Programs, T (817) 212-3954, E: ddye@law.tamu.edu. Texas A&M Admissions website: https://law.tamu.edu/distance-education/international-tax

Often-Overlooked Section 1202 Tax Break for Small Business Adds New Value Post-Reform

Section 1202, while often overlooked by small business owners and investors alike, can provide a valuable tax benefit post-reform because many small businesses have transitioned to C corporation status to take advantage of the simpler 21 percent corporate tax rate. Section 1202 allows for an exclusion of up to 100 percent of gain realized when qualified small business stock is sold. To qualify, the stock must be acquired by the taxpayer when the stock was originally issued and held for at least five years. Further, the Section 1202 stock exclusion only applies to stock in C corporations with active businesses and assets of $50 million or less (measured when the stock is issued). Excluded gains are limited to the greater of: $10 million or 10 times the basis of the qualified small business stock. For more information on the exclusion, visit Tax Facts Online. Read More

IRS Expands Nondiscrimination Relief for Closed Defined Benefit Plans

Although the IRS has previously extended the nondiscrimination relief for closed DB plans in Notice 2014-5, newly released Notice 2019-60 also expands the relief to include relief from benefits, rights and features testing for closed plans. To qualify, the plan must have closed via amendments adopted before December 13, 2013. Notice 2019-60 does not change prior relief, but adds additional relief. Closed plans’ benefits, rights and features are treated as satisfying testing if the benefits, rights and features were provided at the time of the amendment closing the plan and one of two conditions are satisfied: (1) no amendments were adopted after January 29, 2016 that expanded or restricted eligibility for the benefits, rights and features or (2) if there was such an amendment, the benefit, right or feature does not benefit a relatively larger proportion of highly compensated employees (measured using the plan’s ratio percentage) than before the amendment. This relief is available for plan years ending after November 13, 2019 and before January 1, 2021. For more information on defined benefit plan nondiscrimination testing, visit Tax Facts Online. Read More

Advisory Fees Withdrawn From Annuity Not Treated as Distributions to the Owner

A recent IRS letter ruling found that investment advisory fees paid periodically from an annuity contract case value should not be treated as amounts received by the contract owner. The annuities in this case were nonqualified deferred annuities. As part of the annuity, the product owner would receive investment advice from a licensed advisor on how to allocate the case value of the contract. The fees were to be negotiated in an arm’s length transaction, but were not to exceed 1.5 percent of the annuity cash value. The fees were paid directly to the advisor (in other words, the owner would never receive the amounts deducted from the annuity value). The IRS found the fees “integral” to operation of the annuity contract based on the fact that the owner would receive ongoing investment advice. Further, the fees did not compensate the advisor for services related to any other asset (other than the annuity). The IRS concluded that the fees were an expense of the contract, not distributions to the owner. For more information on the tax treatment of nonqualified annuities, visit Tax Facts Online. Read More

2020’s Tax Facts Offers a Complete Web, App-Based, and Print Experience

Reducing complicated tax questions to understandable answers that can be immediately put into real-life practice, Tax Facts works when and where you need it….on your desktop, at home on your laptop, and on the go through your tablet or smartphone.  Questions? Contact customer service: TaxFactsHelp@alm.com800-543-0874

Posted in Retirement Planning, Taxation | Tagged: , , | Leave a Comment »

 
%d bloggers like this: