Daily Tax Report ®

New York’s Cuomo Running Out of Time to Make Budget Choices

Yellen to Restore Treasury-Fed Cooperation, With Eye on GOP

Top Stories

TurboTax Maker Intuit Wins U.S. Antitrust Nod for Credit Karma

Intuit Inc., the software company behind TurboTax, won U.S. antitrust approval for its $7.1 billion takeover of personal finance website Credit Karma Inc.

Brexit Deal Will Leave Carbon Market Question Wide Open

The Brexit trade deal still under negotiation between the U.K. and European Union will probably exclude any explicit agreement on carbon trading, leaving it to authorities in London to decide on how to price pollution starting Jan. 1.

OECD Aims to Give Companies Covid Tax Guidance

The OECD will likely release guidance this year on how to interpret transfer pricing rules during the pandemic, the organization’s tax chief said.

Chicago Passes $12.8 Billion Budget With More Taxes

The Chicago City Council on Tuesday approved a $12.8 billion budget for 2021 that relies on higher property and fuel taxes as well as a half billion dollars in savings from a large debt refinancing.

Philippines Dangles Corporate Tax Cuts to Woo Foreign Investors

The Philippines is opening its doors to foreign investment as it tries to bounce back from the pandemic, Trade Secretary Ramon Lopez said Wednesday, touting corporate income tax cuts and structural reforms that can withstand political successions.

Double Tax Worries Hang Over OECD Digital Plan, Official Warns

Negotiators are struggling with how to prevent multinationals from being hit with a double tax under an OECD-led effort to set a global minimum rate, a U.K. official said.

Affordable Housing Projects Would Benefit from IRS Relief

Developers of affordable housing projects need more time to meet deadlines to qualify for maximum low-income housing tax credits due to challenges stemming from the coronavirus pandemic, an attorney representing one such client said.

Gun Rights Properly Revoked for Tax Fraud, Third Circuit Rules

A defendant who pleaded guilty to tax fraud isn’t entitled to exercise her Second Amendment right to bear arms because the charge counts as a serious crime, the Third Circuit said Tuesday.

A Biden Administration Should Delay Taxes, Says Hubbard

Nov.06 -- Glenn Hubbard, former chairman of the Council of Economic Advisers, says a Biden administration would be wise to delay raising taxes to focus on a recovery package because of the likelihood for bipartisan support. He joins David Westin on "Bloomberg Wall Street Week."

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Tax Developments

IRS PLR: Corporate Reorganization Transactions ‘Circular,’ Disregarded for Federal Tax Purposes (IRC §351)

Series of transactions in an international corporate reorganization are circular and therefore disregarded for U.S. federal income tax purposes, the IRS ruled in 10 rulings spelling out “as if” treatments of transfers of target assets (assets and liabilities of certain foreign branches of two subsidiaries and one disregarded entity). Rulings 1, 2, 3: As if “Sub 1” and “Sub 2” respectively contributed “Sub 1 Country C Branch” target assets to “Sub 2” and “Sub 3,” and as if Sub 3 transferred such target assets to “FPRS 2.” Rulings 4, 5, 6: As if Sub 1 and Sub 2 contributed “Sub 1 Country D Branch” target assets to Sub 2 and Sub 3, and as if Sub 3 transferred such assets to FPRS 2. Rulings 7, 8: As if Sub 2 contributed a portion of “DRE 11” target assets to Sub 3, and as if Sub 3 transferred a portion of such assets to FPRS 2. Rulings 9, 10: As if Sub 2 contributed a portion of “Sub 2 Country E Branch” target assets to Sub 3, and as if Sub 3 transferred a portion of such assets to FPRS 2. Each transferee will be treated as receiving the property it was deemed to receive, the IRS stated. The general rule of tax code Section 351, Transfer to Corporation Controlled by Transferor, is that no gain or loss is recognized in the case of property transferred to a corporation by one or more persons solely in exchange for stock in that corporation and, immediately after the exchange, such persons are in control. [PLR 202048003]

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IRS PLR: Disregarded Entity Election Extension Granted (IRC §7701)

Foreign companies granted extension of time to file Form 8832, Entity Classification Election, to elect to be classified as disregarded entities for federal tax purposes under Treasury Regulations Section 301.7701-3(c). The ruling was contingent on the companies filling, within 120 days, all required federal income tax and information returns for all open years consistent with the requested relief. [PLR 202048006, PLR 202048007]

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IRS PLR: Partnership Election Extension Granted (IRC §7701)

Foreign company (“X”) granted an extension of time to file Form 8832, Entity Classification Election, to elect to be classified as a partnership for federal tax purposes under Treasury Regulations Section 301.7701-3(c) when X failed to timely the Form. The ruling was contingent on X filling, within 120 days, all required federal income tax and information returns for all open years consistent with the requested relief. [PLR 202048008]

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