NOTABLE QUOTABLE

I’m introducing it […] the earnings stripping. The Republicans failed to move on inversions and as long as they fail, there will be more and more inversions.”

– House Ways and Means Ranking Member Sandy Levin Feb. 18, 2016

LEGISLATIVE  LANDSCAPE

Levin Sets Sights on Earnings Stripping. House Ways and Means Ranking Member Sandy Levin is planning to roll out a bill this week that would specifically address earnings stripping — a tax maneuver that makes it easier for companies to shift profits abroad. In simplest terms, the practice allows U.S. subsidiary to take loans from its foreign parent and then take a tax deduction on the ensuing debt.

Levin will likely unveil the bill on or before ...

W&M Hearing to Talk International Tax Reform. On Feb. 24, the House Ways and Means Committee will hold a hearing on international tax reform. The witness panel is largely composed of experts from academia: Professor Michelle Hanlon of MIT Sloan School of Management; Associate Professor Itai Grinberg of Georgetown University Law Center; and Professor Edward Kleinbard of the University of Southern California’s Gould School of Law. Raymond Wiacek, a partner at Jones Day, rounds out the panel. “Our outdated international tax rules and sky-high corporate tax rate continue to create an unfriendly environment that ultimately hurts our economy and American workers […]. Our upcoming hearing will be an important step in our plan to address this serious problem,” Chairman Kevin Brady said upon announcing the hearing. Look for the committee to revisit ...

REGULATORY WORLD

Broker Reporting Rules Finalized. The Internal Revenue Service issued final regulations  on the reporting requirement of brokers as it relates to transactions with debt instruments and  options, including the reporting of original issue discounts on tax-exempt obligations. The regulations generally provide ...

SEIA Seeks More Section 48 Qualifying Property . In a letter to the IRS, the Solar  Energy Industries Association (SEIA) argued that the types of energy equipment that are eligible for credit under Section 48 should be expanded. In addition to identifying qualifying solar energy property, SEIA also re-affirms ...

U.S. Model Tax Treaty Released. The Treasury Department recently released the U.S.  model income tax treaty, reaffirming the department’s position that treaties should reduce double taxation without increasing opportunities for avoiding or evading taxes. Last year, Treasury opened the ...

LINE ITEMS

  • Sen. Ted Cruz’s tax proposal would cost the federal government about $8.6 trillion over ten years according to the latest analysis by the Tax Policy Center. The report also concludes that the biggest tax cuts would benefit high-income taxpayers.
  • According to an analysis by Third Way, Sen. Bernie Sanders’ tax proposals for middle class families would actually increase their effective tax rate from 19.7 percent to 26.3 percent. Read more here.

LOOKING AHEAD

Relevant Congressional Activity

Wednesday, 2/24

House Ways and Means Committee

The  full  committee  will  hold  a  hearing  on  “Global  Tax  Environment  in  2016  and Implications for International Tax Reform.” Read more here.

Relevant Agency Activity

Thursday, 2/25

Internal Revenue Service

The IRS holds a meeting on regulations regarding special enrollment examination user fees for enrolled agents and proposed rulemaking. For more information, contact Regina Johnson, 202.317.6901.

Friday, 2/26

Internal Revenue Service

The IRS holds a meeting on proposed regulations relating to disguised payments for services under section 707(a)(2)(A) of the Internal Revenue Code. For more information, contact Oluwafunmilayo Taylor, 202.317.6901.

Other Activity

Thursday, 2/25

Urban  Institute-Brookings

The Tax Policy Center holds a discussion titled, “Tax Policy in 2016: What’s New and What’s Next.” Read more here.

Friday, 2/26

G-20

G-20 Finance Ministers and Central Bank Governors meet in Shanghai, Feb. 26-27.