Under Section 6045B of the Internal Revenue Code of 1986, as amended (the “Code”) many corporations are required to file a new return (Form 8937) with the IRS in connection with non-dividend distributions and other corporate actions affecting stock basis. More specifically, starting in 2011, the issuer of “specified securities” shall file a return with [...]

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In 2009 and 2011 the Internal Revenue Service (IRS) created two temporary initiatives to allow U.S. taxpayers with unreported income relating to undisclosed foreign bank or financial accounts to make a voluntary disclosure to get current with their taxes and information filing obligations. On Monday, January 9, 2012, the IRS announced a third initiative with [...]

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On Nov. 15, 2011 the Internal Revenue Service (IRS) released guidance on the application of the Section 108(e)(8) to cancellation of indebtedness (COD) income of partners and partnerships (the “Guidance”).  See T.D. 9557.  The new rules are effective Nov. 17, 2011.
Generally, Section 108(e)(8) provides that when a partnership transfers a capital or profits interest to [...]

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In our blog post from December 2010, we discussed the potential for investors to acquire certain qualified small business stock (“QSBS”) and be eligible to exclude 100% of the gain realized on a subsequent sale of that QSBS, if held for at least five years. That 100% gain exclusion for QSBS was enacted by Congress [...]

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Shareholders of Subchapter S Corporations frequently sell their stock and are inspired, either by their own tax professionals or the tax professionals of the buyer, to make a Section 338(h)(10) Election to treat such sale of stock as a sale of assets for tax purposes. The expectation is that the buyer can obtain a valuable [...]

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The Franchise Tax Board of California has announced the Voluntary Compliance Initiative 2 (VCI 2) as an opportunity for taxpayers with underreported California tax liabilities relating to either (i) abusive tax avoidance transactions (ATATs) or (ii) offshore financial arrangements (OFAs), to amend their tax returns for 2010 and prior years and obtain a waiver of [...]

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On August 31, the IRS Offshore Voluntary Disclosure Initiative is closing. The Initiative allows U.S. taxpayers with unreported income relating to undisclosed foreign bank or financial accounts to make a voluntary disclosure to get current with their taxes and information filing obligations for the past 8 years. When the program closes later this month, U.S. [...]

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For many years retailers and businesses have been paying California state sales and use taxes on transfers of prewritten software. California tax authorities have claimed that taxes were payable on such transfers, but in the recent case of Nortel Networks Inc. v. State Board of Equalization, the CA Court of Appeals ruled that a license [...]

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On Friday, June 3, 2011, Mayor Ed Lee addressed San Francisco’s current policy on taxing gains on stock options by signing into legislation an ordinance granting a partial tax exclusion on stock options for private companies in San Francisco. San Francisco is the only jurisdiction in the state to impose a payroll tax on stock options. [...]

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On June 2, the IRS updated the Q&A’s describing the 2011 Offshore Voluntary Disclosure Initiative.  The initiative is discussed in more detail in our March 3rd blog post, but generally it is a program that allows taxpayers with undisclosed foreign income or assets to come into compliance for a penalty that is below that which [...]

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