Tax

Expert Analysis

• New Data Shows BigLaw's True Profitability

  

  Based on an analysis adjusting BigLaw operating income and revenue to account for equity partners and taxes, the profitability of firms is lower than commonly thought, says Madhav Srinivasan at Hunton.

• Kentucky Tax Talk: What Governor Candidates Would Change

  

  From Gov. Matt Bevin’s pledge to continue pro-business changes to challenger Andy Beshear’s focus on legalizing gaming, Mark Sommer and Daniel Mudd of Frost Brown outline the tax reform promises of the two Kentucky gubernatorial candidates.

• Why Trump's Orders On Agency Guidance Are Significant

  

  ​Two recent executive orders ​​on the use of guidance documents by federal agencies​ represent a major change for virtually every executive agency ​and a historic assertion of the president’s authority under Article II to oversee the independent regulatory agencies, says Paul Noe, former counselor to the administrator of the White House Office of Information and Regulatory Affairs.

• Strategies For Recovery Of Capitalized Transaction Costs

  

  The tax code and regulations require companies to capitalize most transaction costs, but there are exceptions, including one provided by a recent IRS publication on the allocation of transaction costs in a corporate separation, says Annette Ahlers at Pepper Hamilton.

• NJ Tax Stop: GILTI Guidance Gaps Need Filling

  

  Although New Jersey is moving to make state adjustments for global intangible low-taxed income and foreign-derived intangible income more workable and equitable, further guidance for the calculation of the state apportionment of this income is overdue, says Philip Hirschfeld of Cole Schotz.

• Opinion

  Direct Taxes: Pa. Corporate Nexus Test Is Deeply Flawed

  

  Rather than take a measured approach to developing an appropriate nexus standard for corporate income taxes, the Pennsylvania Department of Revenue recently issued a bulletin that violates cardinal principles of statutory interpretation, say Martin Eisenstein and David Bertoni of Brann & Isaacson.

• IRS Crypto Guidance Clarifies A Few Things For Investors

  

  Though questions remain, last week’s IRS cryptocurrency guidance is welcome news as it provides, for the first time, specifics about how airdrops and hard forks should be treated for tax purposes, says Robin Singh of Koinly.

• Opinion

  Courts Keep Rejecting Litigation Funding Discovery Campaign

  

  As shown by recent case law, including a New Jersey federal court holding last month in Valsartan Products Liability Litigation, there is no "shifting tide" in favor of disclosing litigation funding arrangements, say Matthew Harrison and Stephanie Southwick of Bentham IMF.

• How Emotionally Intelligent AI Could Assist With E-Discovery

  

  While artificial intelligence has already revolutionized the e-discovery field, the development of emotionally intelligent AI promises to explore data in an even more nuanced and human way, thereby further reducing the burden on legal teams, say Lisa Prowse and Brian Schrader at e-discovery services provider BIA.

• How The Opportunity Zone Rules Can Work For Entrepreneurs

  

  Recent guidance from the U.S. Department of the Treasury establishes three safe harbors businesses can satisfy to be considered as operating in an opportunity zone. Doug Jones at McGinnis Lochridge provides illustrative examples of what may turn out to be common fact patterns of entrepreneurs taking advantage of the program.

• Preventable Risks Your Law Firm May Be Overlooking

  

  Although most lawyers are well-prepared to defend or justify the value of an insurance claim for clients, often law firms have not clearly identified their own potential liabilities, planned for adequate insurance or established prudent internal risk management practices, says Victor Sordillo at Sompo International.

• 6 Ethics Tips For Attorneys Making Lateral Transfers

  

  With lateral transfers between law firms on the rise, it is more important than ever for partners to understand the steps they must take to adhere to ethics rules and other requirements when making a transition, say attorneys at Harris Wiltshire.

• Calif. Ruling May Curb Aggressive Foreign LLC Taxation

  

  When the California Office of Tax Appeals decision in Jali becomes precedential, it will likely marginalize the relevance of the controversial Franchise Tax Board rulings, which attempted to justify assertion of taxable nexus over out-of-state members of California limited liability companies, say Tim Gustafson and Peter Hull of Eversheds Sutherland.

• New CFC Rules Too Narrow To Fix Tax Overhaul Misfire

  

  Recently issued tax rules don’t go far enough to remedy an unintended consequence of the Tax Cuts and Jobs Act that has resulted in U.S. affiliates of foreign parent companies being taxed as controlled foreign corporations, say attorneys at Sidley.

• Opinion

  President’s Private Business Interests Are Not Above The Law

  

  President Donald Trump's New York federal court case against the Manhattan district attorney's subpoena of the president's tax returns insists that his private businesses and business associates are immune from state criminal investigation, but this immunity does not appear in the Constitution or any statute or treaty, say Arthur Middlemiss and Marc Scholl at Lewis Baach.