Federal

Expert Analysis

• Lessons From Tax Court's Nixing Of Investor's Energy Credits

  

  The U.S. Tax Court's recent ruling in Olsen v. Commissioner, the first of 200 cases involving individual taxpayers who invested in a tax shelter involving solar equipment, is a case study in how not to structure an energy tax credit investment, says David Burton at Norton Rose.

• Partial Repeal Could Resolve Biden's SALT Cap Dilemma

  

  Lawmakers' calls to repeal the cap on federal deductions for state and local taxes are controversial because doing so could cost over $600 billion, but a partial repeal could be accomplished on a revenue-neutral basis, providing relief to some, if not most, affected taxpayers, says Joseph Mandarino at Smith Gambrell.

• Alcohol Taxation Provides Good Model For Cannabis Taxes

  

  Although the alcohol taxation system isn't perfect, it could serve as a useful template for cannabis taxation with a three-tier licensing scheme and tax rates based on potency, says Louis Terminello at Greenspoon Marder.

• US Advance Pricing Agreements, Amid COVID And Before

  

  Steptoe & Johnson's Matthew Frank, former director of the U.S. Advance Pricing Agreement Program, shares insights from an Internal Revenue Service report revealing an uptick in APA completions amid the pandemic, discusses trends over the program's 30-year history, and suggests ways taxpayers and the IRS could bolster program participation.

• High Court Hotels.com Case Could Alter Appellate Strategy

  

  If the U.S. Supreme Court upholds the Fifth Circuit in the upcoming San Antonio v. Hotels.com case, ruling that district courts may not amend taxable appellate costs, it could reprioritize the incentive structure and decision-making calculus of appeals, says Patrick Hammon at McManis Faulkner.

• Choosing A Branch Or Subsidiary For Overseas Expansion

  

  Samuel Pollack and Naoko Watanabe at Baker McKenzie examine the corporate and U.S. tax law considerations involved in deciding whether a branch or subsidiary is the most efficient way to expand operations overseas, now that recent Treasury regulations clarified the complicated international tax regime created by the Tax Cuts and Jobs Act.

• Why S Corporation Payments Are Almost Always Wages

  

  The recent U.S. Tax Court ruling in Lateesa Ward v. Commissioner has employment and income tax lessons about why payments from an S corporation to its sole shareholder are wages and not distributions of profit in most cases, says Bryan Camp at Texas Tech University School of Law.

• 3 Arthrex-Adjacent High Court Cases Could Affect PTAB's Fate

  

  As patent practitioners await a decision on the constitutionality of Patent Trial and Appeal Board judges in U.S. v. Arthrex, they should keep their eyes on three other pending U.S. Supreme Court cases that, while not IP-related, involve overlapping legal issues, including the severability doctrine, says William Milliken at Sterne Kessler.

• Surveying Global Tax Updates For Sovereign Wealth Investors

  

  As the market transitions to a post-pandemic phase, sovereign wealth fund and other foreign institutional investors must evaluate how recent U.S., EU and U.K. tax changes may affect their private fund investments, say attorneys at Morgan Lewis.

• Offshore Wind Push Is Good News For NYC Building Owners

  

  With a surge of federal and state support for offshore wind power in New York state, the projects now in development should greatly benefit New York City building owners seeking to comply with the city's Climate Mobilization Act, says Raymond Pomeroy at Stroock.

• Coke, 3M Tax Cases May Not Settle Blocked Income Debate

  

  Even if the challenged U.S. Department of the Treasury regulation on blocked income is struck down by the U.S. Tax Court in the pending Coca-Cola and 3M cases, the obligations of a taxpayer that had, but failed to avail itself of, alternative means to secure payment will remain an open question, say Matthew Frank and Amanda Varma at Steptoe & Johnson.

• OCC Rule Misaligned With Some Tax Equity Safe Harbors

  

  The Office of the Comptroller of the Currency's recently finalized rule on national banks' participation in tax equity financings aligns with safe harbor guidance for renewable energy investments, but not with safe harbor structures for historic preservation and carbon capture tax credits, say attorneys at Nixon Peabody.

• IRS Should Level The Field For R&D Tax Credits

  

  A recent increase in denials of research and development tax credits to small businesses in the architectural, engineering and construction community shows the Internal Revenue Service should issue new guidance to ensure a fair playing field and an opportunity to continue innovating in the U.S., says Julio Gonzalez at Engineered Tax Services.