USA, McDermott Will & Emery updates

Corporate Tax

Contributed by McDermott Will & Emery
IRS issues practice unit on Section 965 transition tax
  • USA
  • 02 April 2021

One of the most pressing audit issues for large taxpayers today centres on the Internal Revenue Code Section 965 transition tax. The Internal Revenue Service has designated Section 965 as a campaign issue and is actively auditing taxpayers' transition tax calculations and positions, along with other tax reform items. The stakes are high, particularly given the potential to pay this tax over eight years.

Exxon prevails in $200 million tax penalty case
  • USA
  • 19 February 2021

The US District Court for the Northern District of Texas recently ruled in favour of Exxon Mobil Corporation in its battle against the government over tax penalties. Exxon had filed amended returns for its 2006 to 2009 tax years seeking a $1.35 billion tax refund based on a change of character of certain transactions. The government disallowed the refund claims and imposed a $200 million penalty pursuant to Section 6676 of the Internal Revenue Code. Exxon paid the penalty and filed suit for a refund.

New Jersey reconsiders financial transaction tax
  • USA
  • 25 September 2020

A troubling New Jersey financial transaction tax proposal, which appeared to be gaining popularity over the past few months, has reportedly been left out of the 2021 budget deal that Governor Phil Murphy recently struck with legislative leaders. The decision to drop the transaction tax from the deal came days after the Wall Street Journal reported that prominent stock exchanges with data centres in New Jersey were prepared to exit the state if the tax plan was adopted.

IRS issues proposed regulations intended to clarify carried interest rules
  • USA
  • 04 September 2020

The Internal Revenue Service recently issued proposed regulations under Section 1061, a provision enacted as part of the Tax Cuts and Jobs Act 2017 that recharacterises certain net long-term capital gain with respect to applicable partnership interests as short-term capital gain. The proposed regulations provide clarity on some of the statutory provisions. This article discusses some of the noteworthy provisions in the proposed regulations.

Section 965 statutes of limitations for partnerships
  • USA
  • 03 July 2020

The Internal Revenue Service (IRS) recently issued guidance on the period of limitations for Section 965 of the Internal Revenue Code transition tax-related adjustments of partnerships. Typically, pursuant to Section 6501, the IRS has three years to assess a tax liability for a tax year. However, Section 6501(e)(1)(C) states that if the taxpayer omits from gross income an amount properly includible in income under Section 951(a), the tax may be assessed at any time within six years after the return was filed.

Employment & Immigration

Contributed by McDermott Will & Emery
COVID-19 vaccine Q&A for employers
  • USA
  • 17 March 2021

With the COVID-19 vaccination process underway, employers are navigating unprecedented issues within their workforce. This article explores the most pressing questions that employers are asking – including whether employers can (and should) mandate vaccination – as well as other novel workplace challenges stemming from the roll-out of a COVID-19 vaccine.

COVID-19 vaccine: what can employers require?
  • USA
  • 10 March 2021

With the COVID-19 vaccination process underway, employers are navigating unprecedented issues within their workforce. This article explores employers' obligations when implementing mandatory vaccination programmes, issues concerning employee data that is provided as proof of vaccination or pre-vaccination screening and defining 'reasonable accommodation' and potential Americans with Disabilities Act concerns.

COVID-19 vaccine FAQs for employers
  • USA
  • 13 January 2021

Employers can implement a mandatory COVID-19 vaccination policy, subject to some conditions and exceptions. There are a number of factors that employers should consider when determining whether to make a COVID-19 vaccine mandatory or voluntary, including the administrative burden, legal exposure and public relations issues. This article answers employers' key questions on the matter.

Cal/OSHA adopts emergency COVID-19 workplace standards
  • USA
  • 09 December 2020

California's Division of Occupational Safety and Health (Cal/OSHA) recently adopted emergency temporary standards on COVID-19 prevention in the workforce. These temporary standards will require most Californian employers to implement a written COVID-19 prevention programme meeting certain criteria. While many employers have already followed Cal/OSHA guidance to minimise employees' exposure to COVID-19, the new requirements warrant an immediate review of current policies to ensure compliance.

Executive order on workplace training for federal contractors and federal grant recipients released
  • USA
  • 04 November 2020

President Donald Trump recently issued an executive order which prohibits federal contractors and federal grant recipients from conducting any workplace training that implies, among other things, reverse discrimination. This requirement applies to all contracts and grants entered into after the order's effective date and takes effect 60 days after the order's effective date, potentially affecting many organisations that currently receive federal assistance through contracts, grants or other programmes.

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