April 28, 2017

Insights Vol. 4 No. 4: Updates & Other Tidbits

April 28, 2017/ Ruchelman P.L.L.C.

This month, Astrid Champion, Nina Krauthamer, and Jennifer Lapper look briefly at several timely issues, including (i) instructions for Form 8975, Country-By-Country Report, and Schedule A, Tax Jurisdiction and Constituent Entity Information, for U.S.-based multinationals, (ii) tax breaks for midsized companies in China, (iii) an executive order calling for review of all I.R.S. regulations issued in 2016, with a view to their withdrawal, and (iv) the French Constitutional debate over penalties for nondisclosure of trust assets.

February 21, 2017

Debt v. Equity: Judicial Factors Still Applicable Post-§385 Regulations

February 21, 2017/ Ruchelman P.L.L.C.

The last quarter of 2016 saw the introduction of final regulations establishing benchmarks for treating a debt instrument as true debt for U.S. income tax purposes. These regulations apply to companies over a certain size issuing debt instruments exceeding $50 million. Debt issued by owner-managed companies are not covered by the regulations and, as a result, tests established by case law will continue to apply. Galia Antebi and Kenneth Lobo look at a relatively recent case, Sensenig v. Commr., in which the standard tests were applied – the equivalent of comfort food for tax lawyers.

December 22, 2016

The Resurrection of Code §385: Treasury Department Revises Regulations on Related-Party Debt

December 22, 2016/ Ruchelman P.L.L.C.

In 2016, the U.S. Treasury Department resurrected an area of the tax law that lay dormant for almost 40 years – the debt-equity regulations under Code §385. As we reminisce on the best of 2016, we offer detailed analysis of the new tax treatment adopted under Code §385. These comprehensive and detailed regulations address whether a debt instrument will be treated as true debt for U.S. income tax purposes or re-characterized, in whole or in part, as equity.

June 30, 2016

Insights Vol. 3 No. 6: B.E.P.S. Around the World

June 30, 2016/ Ruchelman P.L.L.C.

This month, we review steps toward implementation of anti-B.E.P.S. provisions in various countries and the E.U. Kenneth Lobo and Nina Krauthamer look at the latest items, including French tax raids on local offices of U.S. companies, disagreement with the E.U. over the adoption of blacklists and the tax treatment of C.F.C.’s, and pushback against proposed Code §385 regulations that deal with debt and equity.

May 23, 2016

Insights Vol. 3 No. 5: Updates & Other Tidbits

May 23, 2016/ Ruchelman P.L.L.C.

In this month’s update, Elizabeth V. Zanet and Nina Krauthamer report on (i) attacks on cash pooling arrangements as part of earnings-stripping rules under Code §385, (ii) the latest regulations aimed at increasing financial transparency, including adoption of a customer due diligence (“C.D.D.”) final rule, (iii) proposed beneficial ownership legislation, and (iv) new reporting rules for foreign-owned, single member L.L.C.’s that engage in business with the foreign owner; as well as a new wave hiring by the I.R.S. of enforcement officers.

May 23, 2016

Related-Party Debt: Proposed Code §385 Regulations Raise Major New Hurdles

May 23, 2016/ Ruchelman P.L.L.C.

In a follow-up piece on newly proposed anti-inversion regulations, Phillip R. Hirschfeld offers a detailed analysis of new debt equity regulations. Mind-boggling complexity is proposed for rules in an area of the tax law that lay dormant for almost 40 years.

April 29, 2016

Inversions Under Siege: New Treasury Regulations Issued

April 29, 2016/ Ruchelman P.L.L.C.

On April 4, 2016, the Treasury Department issued a third round of new rules under Code §7874 aimed at halting the wave of inversions. Already, at least one inversion transaction, involving pharmaceutical giants Pfizer and Allergan, has been scuttled. Beyond that, the new rules resuscitate regulations issued under Code §385. Philip R. Hirschfeld explains.