Generic drugmaker Perrigo Co. is suing for a refund of taxes and penalties it claims were illegally collected by the IRS in connection with the company's overpayment of U.S. income tax for tax years 2009-2012 related to transactions involving the purchase and sale of over-the-counter (OTC) heartburn products and legal fees incurred during patent infringement lawsuits. Perrigo is due approximately $ 163.6 million from the United States, plus interest, according to an August 15 complaint filed in the U.S. District Court for the Western District of Michigan.
The House could take up a wide-ranging fiscal 2018 appropriations package the week of September 4 that includes $ 11.1 billion for the IRS and maintains a provision weakening the ban on partisan political activity by charities and churches. The House Rules Committee announced August 16 that it plans to meet that week to consider the "minibus" appropriations bill, which would fund several other departments in addition to Treasury and the IRS.
A reduced corporate income tax rate could put pressure on the IRS to simplify the consolidated return regulations under section 1502, according to Don Leatherman of the University of Tennessee College of Law. If under tax reform passthrough income continues to be taxed at individual rates rather than a reduced corporate rate, corporations could become a more attractive vehicle for taxpayers, which would "put pressure" on the consolidated return regs, the professor said during an August 16 American Bar Association webinar on the regulations.
Observers say that the loss of President Trump's two business advisory councils August 16 after multiple CEOs resigned in protest is unlikely to seriously hamper tax reform efforts - but it certainly will not help. The American Manufacturing Council and the President's Strategic and Policy Forum were both disbanded amid backlash over Trump's characterization of the white supremacist rally in Charlottesville, Virginia, that turned deadly August 12. The president made repeated efforts to assign blame to "many sides" and contended that counter-protesters also were culpable in the violence.
The top House taxwriter, speaking in the location where the last extensive changes to the tax code were signed into law, renewed his call August 16 to deliver comprehensive tax reform legislation in 2017 - even though the latest turmoil surrounding President Trump took some attention away from the event. During a pilgrimage to former President Ronald Reagan's ranch outside Santa Barbara, California, with three other House Ways and Means Committee Republicans, Chair Kevin Brady, R-Texas, took questions regarding the GOP's commitment to passing tax reform legislation this year, as well as Trump's response to the white nationalist-related violence in Charlottesville, Virginia.
The role that tax professionals play in tax system administration has contributed to the recent decline in new identity theft victims and another successful tax return filing season, IRS Commissioner John Koskinen said August 8. The 2016 filing season was "the smoothest filing season since I became commissioner," Koskinen said at a conference in Washington sponsored by the National Association of Tax Professionals. The IRS has received over 143 million individual returns and issued over 107 million refunds as of July 21, he said.
Officials on June 6 appeared willing to clarify provisions in controversial proposed regulations that would redefine the meaning of political subdivision in issuing tax-exempt bonds. At a hearing at IRS headquarters in Washington, Spence Hanemann, branch 5 attorney, IRS Office of Associate Chief Counsel (Financial Institutions and Products), acknowledged concerns expressed in more than 100 comments on REG-129067-15 (Doc 2016-3660), which came out in February and has been criticized by representatives of the public finance community who fear it will cause uncertainty and disruption in the financial markets. The proposed regs say that to qualify as a political subdivision, an entity must be governmentally controlled, with control defined as ongoing rights or power to direct significant actions of the entity. (Prior coverage (Doc 2016-3702).) A political subdivision must also serve a governmental purpose and provide a significant public benefit, with no more than incidental benefit to private persons. The proposed regs retain the requirement that a political subdivision be able to exercise at least one sovereign power -- eminent domain, police power, or taxing power.
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