Federal

IRS Funding Cuts Unlikely To Hinder Agency In Short Term

David van den Berg

President Joe Biden has signed legislation immediately rescinding $1.4 billion of unspent IRS funding, including a side deal by lawmakers and the White House to strip $10 billion more in both fiscal 2024 and 2025, but the cuts aren't likely to change much at the agency in the near future. 

Income Tax Economic Nexus Is Open Question Post-Wayfair

Maria Koklanaris
Senior Tax Correspondent

The economic nexus laws that states rushed to pass after the Wayfair decision established concrete thresholds for sales and use taxes, but a vastly different landscape remains for corporate income taxes, as agencies and businesses must often negotiate nexus according to various qualitative criteria.

The Tax Angle: Stock Buybacks On Dems' Chopping Block

Stephen K. Cooper
Editor-at-Large

More than a dozen House Democrats are making the case that the new 1% excise tax on corporate stock buybacks doesn't go far enough to persuade companies to invest more money in their workers and should be replaced with a buyback ban.

3 Developments That May Usher In A Nuclear Energy Revival

A recent advancement in nuclear energy technology, targeted provisions in the Inflation Reduction Act and a new G7 agreement on nuclear fuel supply chains may give nuclear power a seat at the table as a viable, zero-carbon energy source, say attorneys at Vinson & Elkins.

What Tax-Exempt Orgs. Need From Energy Credit Guidance

Guidance clarifying the Inflation Reduction Act’s credit regime, expected from the U.S. Department of the Treasury this summer, should help tax-exempt organizations determine the benefits of clean energy projects and integrate alternative energy investments into their activities, say attorneys at Morgan Lewis.

Unconventional Profits Interest Structures Find New Support

A recent U.S. Tax Court ruling should provide comfort that less-than-plain-vanilla profits interest structures, created to achieve complicated economic arrangements, can succeed in generating more optimal tax outcomes, provided the terms are properly drafted, says Daren Shaver at Hanson Bridgett.

Roadblocks For Cannabis Employers Setting Up 401(k) Plans

Though the Internal Revenue Code and the Employee Retirement Income Security Act generally allow cannabis businesses to establish 401(k) plans for their employees, companies must still pick their way through uncertainties around tax deductions and recruiting reliable vendors, say attorneys at Shipman & Goodwin.

How Foreign Info Return Penalty Case May Benefit Taxpayers

The U.S. Tax Court's recent decision that the Internal Revenue Service cannot penalize taxpayers for failing to file foreign corporation information returns may give similarly situated taxpayers an opportunity to also avoid penalties, provided they protect their rights before the decision is overturned or mooted by legislation, say attorneys at Arnold & Porter.

What's Unique — And What's Not — In Trump Protective Order

A Manhattan judge's recent protective order limiting former President Donald Trump's access to evidence included restrictions uniquely tailored to the defendant, which should remind defense attorneys that it's always a good idea to fight these seemingly standard orders, says Julia Jayne at Jayne Law.

The Nuts And Bolts Of IRS Domestic Content Tax Credit

Recent IRS guidance provides specifics on how renewable energy projects can qualify for bonus tax credits by meeting U.S. domestic content rules, but also creates a qualification framework that will be complicated for project developers to navigate, say Scott Cockerham and Wolfram Pohl at Orrick.

How Cities Can Tackle Post-Pandemic Budgeting Dilemmas

Due to increasing office vacancies around the country, cities may consider politically unpopular actions to avoid bankruptcy, but they could also look to the capital markets to ride out the current real estate crisis and achieve debt service savings to help balance their budgets, say attorneys at Cadwalader.

Guidance Adds Clarity To Energy Communities Bonus Credits

Recent IRS guidance on the Inflation Reduction Act's changes to tax credits for renewable energy projects offers much-needed pointers for developers and financing parties, and should allow them to more comfortably incorporate special bonus credits for projects in energy communities into their transactions, say Jorge Medina and Ira Aghai at Shearman.

Taxing The Digital Economy: The Good, The Bad And The Ugly

U.S. tech companies should watch for important developments in international taxation, including the resolution of Apple's decade-old state aid case, growing frustration with the Organization for Economic Cooperation and Development's global tax plan and adoption of the digital services tax instead, says Joyce Beebe at Rice University's Baker Institute for Public Policy.

Big Tax Changes For Multinational Cos. In Budget Proposal

The Biden administration’s fiscal year 2024 budget proposes changes that would materially alter decades-old Internal Revenue Code provisions, requiring a shift in multinational corporations' tax planning strategies comparable to that required after enactment of the Tax Cuts and Jobs Act, say Xenia Garofalo and Kyle Colonna at Eversheds Sutherland.

SVB Collapse Reinvigorates Bank Accounting Debate

Silicon Valley Bank's sudden collapse revives questions over whether fair value or amortized cost accounting is the most appropriate for banks' financial reporting — a controversy that's crucial for understanding what information could have helped market participants better understand SVB's financial condition, say consultants at Analysis Group.

Brownfield Renewables Guidance Leaves Site Eligibility Murky

Recent IRS guidance sheds some light on the Inflation Reduction Act's incentives for renewable energy development on contaminated sites — but the eligibility of certain sites for brownfield status remains uncertain, say Megan Caldwell and Jon Micah Goeller at Husch Blackwell.