Larry's Tax Law

It is hard to believe it, but 2019 is coming to an end. We have had a truly interesting year in the world of tax law, the primary impetus of which was the aftermath of the Tax Cuts and Jobs Act (“TCJA”).  During the past 12 months, we have explored several aspects of the TCJA as well as other interesting developments in tax law, including:

• • Opportunity Zone Funds – Part I—Overview of the Law
  • Opportunity Zone Funds – Part II—Due Diligence Required
  • Opportunity Zone Funds – Part III—Lots of Questions But Few Answers
  • Opportunity Zone Funds – Part IV—The Second Round of Proposed Regulations
  • Oregon’s New Corporate Activity Tax
  • Now You See It – Now You Don’t. Like Magic, the City of Portland Disallows Depreciation Deductions Otherwise Allowable as a Result of Code Section 754
  • Referendum to Repeal Oregon Corporate Activity Tax Has Wind Taken Out of Its Sails – The New Tax May Be Here to Stay
  • The Oregon Department of Revenue Plans to Publish Much Needed Guidance on the Newly Enacted Corporate Activity Tax
  • IRS Cleaning House at the Office of Professional Responsibility
  • Be Aware – The CAT Is on the Prowl – the Oregon Department of Revenue’s Town Hall Meetings Begin Tonight
  • School is Back in Session and the CAT is Among the Most Popular Courses
  • The CAT Continues to Be on the Prowl – the Oregon Department of Revenue’s Town Hall Meetings Roadshow Made It to Portland
  • The CAT Has Gone Telephonic
  • Hold the Phone, but Not Your Questions – Recent Oregon CAT Updates
  • The IRS Continues Taking Measures to Enhance Security – the EIN Application Process Changed Earlier This Year
  • Continue to Keep Your Eyes Peeled and Your Ears Tuned-In for CAT Developments—They Are Rolling In

Recent Announcements

The Oregon Department of Revenue (the “Department”) has made several recent announcements regarding Oregon’s new Commercial Activity Tax (the “CAT”).

In an email dated December 4, 2019, the Department said it anticipated sharing initial drafts of the first batch of temporary administrative rules on its website in December 2019.

In the same email, the Department also announced that some issues will not be addressed in its rules. For example, the Department has determined that there is no way to provide guidance with respect to how businesses may properly estimate the amount of CAT liability attributable to particular transactions. The Department goes on to tell us, however, that many frequently asked questions will be addressed in forms, instructions, publications and/or FAQs on the Department’s website.

Importantly, the Department has made it clear that the CAT “does not prohibit any business subject to the CAT from passing the tax along to its customers.”

With data breaches becoming a common event throughout the world, the Internal Revenue Service (“IRS”) has been undertaking a number of initiatives aimed at enhancing its security of taxpayer information and preventing the filing of fraudulent tax returns by taxpayer impersonators.  Many of these initiatives are invisible to the public.

The IRS has joined forces with state taxing agencies, tax professionals, software developers and financial institutions to form the “Security Summit.”  This coalition is organized into six working groups, namely: