Tax

Massachusetts Allows Carry Forward of Losses for 20 Years and a Reduced Capital Gains Rate for Start-Ups

Tue, 17 Aug 2010 11:14:38 -0400

On August 5, 2010, Massachusetts Gov. Deval Patrick signed into law an economic development bill that provides favorable tax treatment under Massachusetts tax law. Specifically, the new law (1) allows corporations to carry forward losses for 20 years up from the current limit of 5 years and (2) reduces an investor's tax rate on capital gains earned on investments in start-up companies from 5.3 percent to 3 percent.

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IRS Announces Intention to Enforce Withholding Requirements

Tue, 29 Jun 2010 16:16:34 -0400

On Thursday, June 17th, Michael Danilack, IRS Deputy Commissioner (International), announced that the period of "leniency" in IRS enforcement of international withholding requirements must come to an end. This intention was reiterated during an NYU tax seminar on Friday, June 18th. During the seminar, IRS representatives stated that the IRS will be focusing extensively on enforcing (1) international withholding obligations and (2) information reporting requirements. Additionally, the IRS will seek to assess penalties related to both withholding and information reporting requirements. These penalties can be draconian.

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Textron: U.S. Supreme Court Denies Certiorari

Thu, 27 May 2010 10:37:04 -0400

On May 24, 2010, the U.S. Supreme Court declined to hear an appeal by Textron, Inc. ("Textron") of a 2009 adverse decision at the U.S. Court of Appeals for the First Circuit involving the application of the work product privilege. The U.S. Supreme Court's refusal to hear this matter will likely embolden the IRS in its attempts to request and obtain tax accrual work papers (and other related documentation) which were previously considered protected by most tax professionals.

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FBAR: IRS Provides Limited Relief for Foreign Hedge Funds & Private Equity Funds

Mon, 15 Mar 2010 11:15:29 -0400

The Internal Revenue Service ("IRS") has granted relief from the onerous FBAR - or Foreign Bank and Financial Account - filing requirements for certain foreign funds. FBAR reporting is generally required under U.S. law to advise the Treasury Department that certain persons have a financial interest in, or signature authority over, a foreign bank or other financial account. FBAR reports are due June 30th for the prior calendar year.

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UK Tax Points Worth Considering Now

Tracy Fisher (tfisher@brownrudnick.com) & Patrick Cox (pcox@brownrudnick.com) — Tue, 2 Mar 2010 14:52:34 -0500

In this difficult market, plans for corporate and business sales and the realisation of investments may be on a go-slow.

This is the time though that owner managers and private equity houses should be giving some thought to how well placed they and their businesses are to maximise the returns on offer once things start moving.

How can they ensure their management teams and employees stay incentivised in the meantime? Can their businesses attract the additional investment needed to see them through? How well placed will they be to realise their investment in the most tax efficient manner when the time comes?

In this alert we will look at some of the ways that proper and timely tax planning can help in addressing these issues.

In any given situation, much will depend on the particular facts and advice should always be sought on what is the best plan of action in the circumstances. However, the following should provide some food for thought.

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Like-Kind Exchanges of Trademarks and Trade Names: IRS Revises Position

Mon, 12 Oct 2009 17:20:12 -0400

Section 1031 of the Internal Revenue Code provides that certain exchanges of like-kind property may be exchanged without producing taxable income. However, the Treasury Regulations adopted to clarify and explain Section 1031 provide that the goodwill or going-concern value of a business is not of like-kind to the goodwill or going-concern value of another business. Based on the Treasury Regulations, exchanges of goodwill or going-concern value of a business for the goodwill or going-concern value of another business will not qualify for Section 1031 non-recognition treatment. Historically, the Internal Revenue Service (“IRS”) concluded that trademarks and trade names were too closely related to the goodwill or going-concern value of a business to be eligible for Section 1031 non-recognition (TAM 200602034). Recently, in Chief Counsel Advice 200911006, the IRS rejected this position and stated that intangibles such as trademarks, trade names, mastheads, and customer-based intangibles that can be separately described and valued apart from goodwill qualify as like-kind property under Section 1031.

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Textron: Work Product Doctrine Limited by First Court

Mon, 12 Oct 2009 17:18:13 -0400

On August 13, 2009, the U.S. Court of Appeals for the First Circuit held in United States v. Textron Inc.,2009 U.S. App. LEXIS 18103, that the work product doctrine does not protect tax accrual work papers from IRS discovery because the papers are prepared to support financial statements rather than "for use in possible litigation."

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THE AMERICAN RECOVERY AND REINVESTMENT ACT OF 2009: Grants in Lieu of Tax Credits for Renewable Energy

Mon, 29 Jun 2009 10:12:13 -0400

The American Recovery and Reinvestment Act of 2009 (the "Act") contains several provisions intended to provide incentives to developers and producers of renewable energy. Perhaps the most attractive renewable energy incentive in the Act is Section 1603, which allows taxpayers to elect to receive a grant, rather than a tax credit, when "specified energy property" is placed in service (the "Grant Program").

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IRS Enforces Report of Foreign Bank Accounts (FBAR) Rules

Fri, 19 Jun 2009 10:59:51 -0400

An often overlooked filing deadline -- June 30 -- is rapidly approaching. The "Report of Foreign Bank and Financial Accounts" -- commonly known as "FBAR" -- must be filed by all United States persons meeting certain requirements with respect to foreign bank and financial accounts.

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Renewable Energy Federal Tax Benefits The Emergency Economic Stabilization Act of 2008

Tue, 7 Apr 2009 14:26:35 -0400

Tax benefits available for renewable energy projects are an important incentive for developers, financial investors and sponsors of such projects.

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