President Donald Trump signed one executive order and three memorandums this past weekend after negotiations on another economic support plan on Capitol Hill collapsed.
Whether the president can actually do most of what he did depends on whom you talk to. So rather than engage in that particular back and forth, we'll focus on the thing he did that he can do: deferring collection of payroll taxes.
Quite a lot has been going on:
The GILTI High-Tax Exclusion and the Tested Unit Standard: New Administrative Burdens Await for
On July 23, 2020, the US Department of the Treasury and the Internal Revenue Service (IRS) published final regulations addressing the global intangible low-taxed income (GILTI) high-tax exclusion (85 FR 44620) (the “Final Regulations”). One notable development in the Final Regulations is the adoption of a new standard for determining whether items of income generated by controlled foreign corporations (CFCs) or their separate business units qualify as high-taxed.
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The Proposed Regulations applied a QBU-by-QBU approach to identify the relevant items of income that may be eligible for the GILTI high-tax exclusion, which aimed to minimize the “blending” of income subject to different foreign tax rates and more accurately identify income subject to a high rate of foreign tax.
PwC expands corporate managed tax services business in response to coronavirus | Accounting Today
PricewaterhouseCoopers has been building its managed tax services business since bringing over the tax department at General Electric in 2017, but now it sees an opportunity to help companies who are dealing with the ever-changing tax laws and regulations this year during the novel coronavirus pandemic.
The CARES Act and the extensions of the tax due dates this year, along with other tax changes, have made it difficult for corporate tax departments to keep up with it all while trying to operate remotely as many offices around the country remain closed while the COVID-19 pandemic spreads across states. Other countries too have introduced various tax changes and relief packages to help their citizens and businesses survive.
Final regs. issued on payments to charitable organizations - Journal of Accountancy
The new final regulations update the current Sec. 162 regulations to reflect statutory changes on how Sec. 162 applies when taxpayers make a payment to a Sec. 170(c) charitable organization for business purposes. They also provide safe harbors under Sec. 162 for payments made by businesses to Sec. 170(c) organizations and under Sec. 164 for payments made to a Sec.
The preamble to the final regulations notes that it retains the proposed amendments to Regs. Sec. 1.162-15(a), which clarify that a taxpayer's payment or transfer to a Sec. 170(c) entity may constitute an allowable deduction as a trade or business expense under Sec. 162, rather than a charitable contribution. The final regulations also retain the examples demonstrating the application of this rule with minor clarifications.
Were you following this:
SF California: Real Estate Transfer Tax May Double
This November, the residents of the City of San Francisco will either approve or disapprove a ballot measure that will double city transfer taxes on residential and commercial sales over $10 million. Real estate investors need to be cognizant of this potential tax increase in drafting their purchase and sale agreements, leases, and other real estate documents. If it passes, the amended transfer tax ordinance will become operative on January 1, 2021.
INSIGHT: Vietnam—Tax Implications for Foreign Individuals
Valerie Teo and Nguyen Tan Tai, of Grant Thornton Vietnam, discuss the tax implications for foreign individuals who are assigned to work in Vietnam and the tax protection available under a double taxation agreement.
In the globalization of Vietnam's economy, many international business organizations have been carrying on doing cross-border business in Vietnam without establishing a subsidiary. Under some business structures, an international company enters into a service provision contract with a Vietnamese party where they assign their expatriate employees to Vietnam to execute the contract.
IRS & Treasury Department Issue GILTI Regulations
On July 20, 2020, the US Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued final section 951A regulations ("Final Regulations") on an election to exclude high-tax global intangible low-taxed income (GILTI) from a US shareholder's gross income. The Final Regulations carry over similar features of the proposed regulations with some modifications intended to make the election more administrable and accessible.
The Final Regulations permit a US shareholder to exclude certain high-taxed income from a controlled foreign corporation's (CFC) tested income and, in turn, from the scope of section 951A. Section 951A requires a US shareholder of a CFC to include in gross income the GILTI inclusion amount, arising (in part) from the US shareholder's pro rata share of a CFC's tested income that exceeds a deemed 10% return on the CFC's tangible assets less certain interest expense.
Regulating Compliance Robots | The Regulatory Review
In 2020, as governments respond to COVID-19, new laws and changes to existing laws are emerging with remarkable speed. Governments are dialing up some regulatory obligations while dialing other regulations down. It requires a lot of candle power—or computing power—to keep up with the increasing complexity.
What enables legal complexity? In part, private computing power. TurboTax and other tax software programs have made unbearably complex tax laws administrable. Private automated systems—or compliance robots—also help administer the increasing legal complexity that results from changing legal rules such as those resulting from the response to COVID-19.
Happening on Twitter
"None of this is true. Trump did not 'extend' federal unemployment benefits—he cut them. Trump did not impose an 'e… https://t.co/ZDw5Tl7on2 BillKristol Mon Aug 10 13:27:48 +0000 2020
Trump's "executive action suspending collection of payroll taxes hands the Dems the kind of issue that can sink a c… https://t.co/KehZ50uyds tribelaw Sun Aug 09 21:13:01 +0000 2020
-- SEN. BEN SASSE (R-Neb.): "The pen-and-phone theory of executive lawmaking is unconstitutional slop... President… https://t.co/vku6jr8rPk tribelaw Sun Aug 09 15:13:17 +0000 2020
Then-Candidate Donald Trump promised that he would never touch Social Security. Well guess what: deferring the pay… https://t.co/bYIXfvcJjF SenSchumer (from New York, NY) Mon Aug 10 22:25:34 +0000 2020
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