NUMBER OF THE WEEK: 3
The number of major election forecasting models predicting an increased likelihood that Republicans will win the six Senate seats needed to secure a majority in the chamber, according to the Washington Post.
House and Senate: Both chambers are in recess until after the November midterm elections.
And the Gavel Goes To… Rep. Paul Ryan (R-WI), who is widely assumed to become the next chairman of the House Ways & Means Committee in 2015 when current Chairman Dave Camp (R-MI) retires, will not ascend to the helm of the tax-writing committee unopposed. House Ways and Means Committee member Kevin Brady (R-TX) formally announced on Sept. 25 that he will challenge Ryan for the position. Brady, who has more seniority on the committee than Ryan, told theWashington Post, “I’m a proven leader on tax reform, trade, and health care.” Read the fullWashington Post story here.
Tax Reform and a Permanent Highway Bill in Next Two Years? It’s “In the Realm of Possible.”So says House Speaker John Boehner. Read about Boehner’s comments on Sunday’s “This Week”here.
Inversion Rules a Boon for Foreign Firms? There has been increasing speculation since the Treasury Department released new anti-inversion rules last week that foreign-based companies may stand to benefit. In a Financial Times article, Barney Jopson writes that “[a]s a result of the measures, a US company’s offshore cash would become cheaper to access if it were acquired by a European rival than if the US company did an inversion,” he writes.
New Rules May Require New Deals. After digesting the Treasury Department’s new inversion regulations released last week, some companies in the midst of negotiating a deal to purchase a foreign firm and reincorporate abroad may have to revisit the terms of those not yet finalized deals,according to Reuters.
Treasury Officials Give Insiders’ View on OECD Base Erosion Project. The 44 nations participating in the Organisation of Economic Co-operation and Development’s base erosion and profit shifting (BEPS) project face ongoing challenges in their efforts to forge consensus on a single, comprehensive set of international tax policy recommendations to end the erosion of tax bases, according to Treasury Department officials speaking at a Washington, D.C., bar event Sept. 24.
Despite the OECD’s recent release of more than 1,800 pages of recommendations — its first installment of seven “deliverables” as part of the BEPS project — there remain considerable issues to iron out, including policies related to transfer pricing and details of the country-by-country reporting requirements, according to Robert Stack, the Treasury Department’s deputy assistant secretary for international tax affairs.
In addition, Michael McDonald, a financial economist with the Treasury Department, pointed out that some of the action items included in this first set of deliverables are necessarily vague or incomplete, both because of the interplay those recommendations will likely have with the forthcoming 2015 deliverables (the plan calls for 15 deliverables total) and because there is not yet full consensus on some of those issues.
Comments Sought on Domestic Transfer Guidance.
The Internal Revenue Service is asking for public comment on its previously issued guidance on treatment of domestic transfers to foreign corporations in reorganizations under tax code Section 367. Comments are due by Nov. 25, and details on what information is sought are available here.
COURTS & LEISURE
EU Ready to Release Details of Tax Probes. The European Commission will accuse Apple Inc. of benefiting from illicit state aid in Ireland, based on preliminary findings of an investigation into tax deals, the Financial Times reported, citing people familiar with the matter. The probe, details of which may be released as early as today, could result in billions of euros in fines for the company. The Irish government, in a statement in June, said it was confident that it has not breached state aid rules and will defend its position vigorously. Read more here.
The House and Senate will remain in recess until Nov. 12.