- IRS “practice units” (guidance for IRS personnel) publicly released this week concern the following topics or areas: (1) qualified business units; (2) IRC section 988 nonfunctional currency transactions; (3) character of exchange gain or loss on currency transactions; and (4) fixed, determinable, annual, or periodical (FDAP) income from sources within the United States that are not effectively connected with a trade or business in the United States.
- Temporary and proposed regulations concern the income inclusion rules under section 50(d)(5) that apply to a lessee of investment credit property when a lessor of that property elects to treat the lessee as having acquired the property. The regulations will affect lessees of investment credit property when the lessor of the property makes an election to treat the lessee as having acquired the property, and an investment credit is determined under section 46 with respect to such lessee.
- The U.S. Tax Court granted summary judgment for the taxpayer—a service company that conducted marine surveys—finding that the taxpayer’s marine surveys and the survey data licensed by the taxpayer to its customers were “geological and geophysical expenses paid or incurred in connection with the exploration for, or development of, oil and gas” as required under section 167(h). The court held that the term “geological and geophysical expenses” is not limited to expenses incurred by taxpayers that own oil and gas interests.
- In anticipation of questions concerning the FASB’s new standard on the recognition and measurement of financial assets and liabilities, a list of questions and answers (Q&As) is provided.
- IRS Announcement 2016-25 concerns the tax treatment of payments for relocation and cleaning expenses made to individuals because of a natural gas leak in an area of southern California.
- Oil, gas and mining companies operating in the United States, Canada, and the European Union required to file annual transparency reports may be able to use that same report to meet the U.S., Canadian, and EU requirements.
- The Alabama tax tribunal concluded that a restaurant intermediary (a website allowing customers to order food items from various local restaurants) was not liable for sales tax on the delivery fees charged to customers.
- The Minnesota tax court held that the income and factors of a foreign disregarded entity were to be included, along with those of its domestic owner, in the Minnesota combined group’s taxable income for the tax years at issue.
- The South Carolina Department of Revenue issued guidance (a revenue ruling) concluding that amounts paid for streaming television programs, movies, music, and other similar content are charges for communication services that are subject to South Carolina sales and use tax whether paid as part of a subscription service, per item or per event.
- Concerning the settlement of a property tax dispute with a city, the Wisconsin Supreme Court held that the taxpayer was entitled to a lower rate of interest on its recovery of the property tax refund from the city.
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- Draft Schedule H, “Hospitals”—that must be filed by tax-exempt hospitals with Form 990, “Return of Organization Exempt from Income Tax”—has been issued for 2016.
- An IRS private letter ruling concludes that a management contract entered into by an issuer of tax-exempt bonds for the management of a hotel will not result in private business use, notwithstanding that the contract did not qualify for an applicable safe harbor.
Read TaxNewsFlash-Exempt Organizations