LexisNexis® Legal Newsroom
    IRS' Debt-Equity Rule In Jeopardy Under New Administration

    Recently finalized regulations that characterize debt as equity for tax purposes could potentially be revoked under President-elect Donald Trump’s administration and a Republican-controlled Congress, according to House Ways and Means Committee Chairman ...read more

    IRS May Shrink To 3 Smaller Units Under House GOP Tax Plan

    The existing structure of the Internal Revenue Service could be on shaky ground with Republicans controlling Congress and a proposal to shrink the agency to three smaller units focused on individual taxation, corporate taxes and dispute resolution based ...read more

    Wash. High Court Wary Of Florist's Same-Sex Objections

    In a case pitting religious freedom against the new right to gay marriage, the Washington Supreme Court on Tuesday appeared reluctant to shield a Christian florist from discrimination liability for refusing to serve same-sex weddings. ...read more

    MLB Stars Are Witnesses In Cuban Player Smuggling Trial

    Major League Baseball All-Stars Jose Abreu and Yoenis Cespedes are among more than a dozen major league players the U.S. government listed as witnesses Monday for the upcoming trial of a sports agent accused of smuggling ballplayers from Cuba. ...read more

    IRS Gets Briefs Barred In Microsoft Transfer Pricing Row

    A Washington federal judge on Monday blocked the U.S. Chamber of Commerce and others from filing court briefs in support of Microsoft's refusal to release certain documents during an audit of the company's transfer pricing practices, agreeing ...read more

    House GOP To Keep Same Leaders At Helm

    House Republicans united behind much of their existing leadership Tuesday, setting up Speaker Paul Ryan for another term as the chamber's head and to embrace conservative legislative priorities ranging from an Affordable Care Act repeal to tax code ...read more

    NJ High Court To Hear Fight Over Jersey City Tax Abatement

    The New Jersey Supreme Court has agreed to determine whether or not a developer can apply a 2003 change in state law that let builders keep more profits under municipal tax abatement deals to agreements it struck with Jersey City in 2000 and 2001. ...read more

    Conn. Woman's Estate Takes $68M Gift Tax Row To Court

    The estate of a wealthy Connecticut woman is fighting $68 million in gift tax deficiencies and penalties asserted by the IRS in connection with stock transfers to her children, countering that the transactions were “bona fide” deals for which ...read more

    IRS Aims To Block NAM Brief In Anti-Inversion Rule Fight

    The Internal Revenue Service slammed the National Association of Manufacturers for trying to weigh in on a suit over a recent corporate inversion rule, arguing Tuesday in Texas federal court that the claims not only come too late but are also nearly identical ...read more

    Ex-Chicago Alderman Indicted In Legal Fee Tax Scheme

    A former Chicago alderman and attorney has been charged as part of a scheme to conceal payments he and another attorney received from a $9.3 billion settlement between the state of Illinois and several cigarette manufacturers, according to an indictment ...read more

    IRS Chief's Impeachment Must Proceed, Ohio Rep. Says

    Rep. Jim Jordan, R-Ohio, called for continued efforts to impeach IRS Commissioner John Koskinen after the agency denied a conservative advocacy group nonprofit status, saying Monday that the IRS “has not changed its ways” since being accused ...read more

    Chicago Homeowners Say Airbnb Rule Is Unconstitutional

    Four Chicago homeowners on Tuesday filed a suit in state court challenging the city's "draconian and unintelligible" shared-housing ordinance, arguing it requires homeowners renting rooms through services like Airbnb Inc. to submit to warrantless ...read more

    New Jersey Tax Court Analyzes Credit Card Receipt Sourcing

    By Douglas Upton and Andrew Appleby

    The New Jersey Tax Court determined that credit card issuers must source to New Jersey all of their interest and interchange fee receipts, and half of their credit card service fees, from New Jersey accountholders. The Tax Court concluded that the Division of Taxation’s regulations required the taxpayers to source their interest receipts based on the location of their cardholders, rejecting the taxpayers’ argument that the interest receipts were not so integrated with a business carried on in New Jersey as to acquire a New Jersey tax situs. The Tax Court further determined that credit card interchange fees constituted interest for corporation business tax purposes, noting that the taxpayers treated the interchange fees as an original issue discount for federal income tax purposes and that the interchange fees amounted to a fee charged for the use of money. The Tax Court also held that the Division of Taxation’s 25/50/25 sourcing regulation (i.e., sourcing 25% of receipts to the where the service originates, 50% to where the service is performed, and 25% to where the service terminates) applied to source 50% of credit card service fees from New Jersey cardholders to New Jersey because the service was performed where the cardholder received the benefit of such service, in New Jersey.  Finally, the Tax Court found that the Division of Taxation could not apply the throwout rule to any of the taxpayers’ receipts because the Division of Taxation failed to point to any state that would not have jurisdiction to tax the taxpayers’ sales if New Jersey’s economic nexus standard applied.  Bank of Am. Consumer Card Holdings v. N.J. Div. of Taxation, __ N.J. Tax __, 2016 WL 5899786 (N.J. Tax. Ct. Oct. 6, 2016).

    Audit Recovery Co. Fights IRS' Bid For $36.5M Tax Bill

    Global audit recovery company Connolly Inc. has challenged claims by the IRS that it owes roughly $36.5 million in deficiencies and penalties for the tax year 2012 due to alleged gains by a management subsidiary, arguing the subsidiary possessed hardly ...read more

    Congress Likely Looking At Short Lame Duck

    The GOP-controlled Congress has little reason to pursue a lengthy lame-duck session, experts say, as legislators will likely do little beyond keeping the lights on and the government funded before a Trump administration moves into town. ...read more

    Congress Likely Looking At Short Lame-Duck Session

    The GOP-controlled Congress has little reason to pursue a lengthy lame-duck session, experts say, as legislators will likely do little beyond keeping the lights on and the government funded before a Trump administration moves into town. ...read more

    Railroad Cos. Tell 7th Circ. Stock Options Are Not Taxable

    Three Canadian National Railway Co. subsidiaries have asked the Seventh Circuit to revive their bid for a $13.3 million refund for taxes paid on employee stock options, arguing that the shares are not taxable compensation under the Railroad Retirement ...read more

    Merging Law Firms: Why Deals Fail Or Underperform

    While many law firm mergers have been successful, some have been spectacularly unsuccessful — to the point of firm dissolution. Some have exceeded expectations, while others have had little impact on the overall competitiveness of the combined firm. In ...read more

    IRS Defends Cost-Sharing Rule In Altera Row At 9th Circ.

    The IRS once again attacked a U.S. Tax Court decision scrapping its rule regarding stock-based compensation in cost-sharing agreements, telling the Ninth Circuit Thursday in a dispute with chipmaker Altera Corp. that the rule was the “product of ...read more

    Colo. Can't Appeal Case It Already Won, Retail Group Says

    Colorado’s victory in a dispute over tax-related reporting requirements for out-of-state retailers bars it from appealing to the U.S. Supreme Court to revisit a controversial 1992 ruling requiring retailers to have a physical presence in a state ...read more

    Fla. Atty Caught Hiding 'Drug Money' In Sting Gets 10 Months

    A Florida attorney who specialized in financial and tax matters was sentenced to 10 months in prison after being caught in a sting by the Drug Enforcement Administration structuring financial transactions to avoid currency reporting requirements, federal ...read more

    New Jersey Tax Court Rejects Application of 100% Apportionment Factor But Denies In-State Company's Bid to Use Three-Factor Formula

    By Zachary Atkins and Open Weaver Banks

    The New Jersey Tax Court held that apportioning all of a company’s income to New Jersey for corporate business tax purposes, even with the allowance of a credit for taxes paid to separate-return states, failed to fairly reflect the company’s business activities in New Jersey.  The court also rejected the company’s contention that it was entitled to use a three-factor formula. Prior to 2011, corporate taxpayers without a “regular place of business” outside New Jersey were required to use a 100% apportionment factor, while taxpayers that maintained a regular place of business outside the state were required to use a three-factor apportionment formula. The company in question, which was headquartered in New Jersey, did not have a regular place of business outside the state and so was required to use the 100% apportionment factor.  The Division of Taxation responded to the company’s request for relief on audit by allowing a credit for taxes paid to separate-return states. The tax court concluded that the 100% apportionment factor, even with the credit, did not fairly reflect the company’s in-state business activities because it produced tax liabilities that were, depending on the year, double or triple the tax liabilities produced by the three-factor formula. Nonetheless, that in itself did not entitle the company to use the three-factor formula, the court said. The court agreed with the Division that strict application of the three-factor formula would have produced an unfair result because, while the company’s offices, employees and operations were in New Jersey, the three-factor formula would have resulted in apportionment factors of approximately 30%.  The court noted, too, that because the company was in the business of offering equipment lease financing to customers of related entities, the leased equipment—located in all 50 states—reduced the company’s property factor. The court remanded the case to the Division so that further adjustments to the statutory apportionment factor could be considered. Canon Fin. Servs., Inc. v. Director, Div. of Taxation (N.J. Tax Ct. Oct. 13, 2016)

    Chamber Fights To Back Microsoft In Transfer Pricing Row

    The U.S. Chamber of Commerce hit back on Friday at the Internal Revenue Service’s opposition to court briefs being filed in support of Microsoft’s refusal to release certain documents during an audit of the software giant’s transfer ...read more

    IRS Says Tea Party Suit Need Go No Further

    The IRS urged a D.C. federal court to dismiss outstanding claims from several conservative advocacy groups accusing the agency of discrimination and political bias, saying Friday that the agency has taken permanent actions to correct its conduct and render ...read more

    8th Circ. Requires Rethink In Tax Liabilities Transfer Ruling

    An Eighth Circuit panel Monday upended a U.S. Tax Court ruling on the unpaid tax liabilities of four former shareholders in a Nebraska land-holding corporation, concluding the lower court should have looked at whether their sale of stock in the company ...read more