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:

In recent months, we have written extensively about Oregon’s new Corporate Activity Tax (the “CAT”).  As discussed in our last post, the Oregon Department of Revenue (the “Department”) recently announced that it would hold a dial-in meeting to solicit input regarding the Department’s rulemaking process from stakeholders located out of state or who otherwise could not attend the town hall meetings.  Peter Evalds attended the telephone meeting, which was held on Friday, October 25, 2019. 

This post continues our coverage of the CAT with an overview of new information we learned during the call.  This post also addresses questions and answers that the Department recently uploaded to the Frequently Asked Questions (“FAQs”) section of its CAT website.

We have written at length about Oregon’s new Corporate Activity Tax (the “CAT”). As discussed in our last post, the Oregon Department of Revenue (the “Department”) recently concluded a series of 12 town hall meetings around the state to solicit input from stakeholders regarding the Department’s rulemaking process.

As we talked about in our last post, the Department stated at the Portland town hall meeting its plan to conduct additional dial-in meetings for people who are located out of state or who otherwise could not attend the town hall meetings.

The NYU 78th Institute on Federal Taxation (IFT) takes place in New York City on October 20-25, 2019, and in San Francisco on November 10-15, 2019.  This year, I will be presenting a new White Paper entitled “The Road Between Subchapter C and Subchapter S – It May Be a Well-Traveled Two-Way Thoroughfare, but It Isn’t Free of Potholes and Obstacles.”  We will explore the obstacles and complexities that may impede travel on this two-way road, including the built-in-gains tax, LIFO recapture, excessive passive income, unreasonable compensation, personal holding company status, excessive accumulated earnings, and re-election hindrances and restrictions.

Joining me to co-present this expansive topic is my esteemed colleague Wells Hall of Nelson Mullins Riley & Scarborough LLP.

We have been covering Oregon’s new Corporate Activity Tax (the “CAT”) over the past few months.  As previously discussed, the Oregon Department of Revenue (the “Department”) has been conducting town hall meetings with stakeholders across Oregon.  The last meeting was held in Salem on October 4, 2019. 

In this post, we continue our coverage of the CAT with a discussion of the Department’s town hall meeting that Peter Evalds attended in Portland, Oregon on October 3, 2019.  We address significant issues discussed at the Portland meeting that were not discussed at the Beaverton meeting we covered a few weeks ago.

What We Learned from one of the Oregon Department of Revenue’s Town Hall Meetings

Over the past few months, we have written extensively on the blog about Oregon’s new Corporate Activity Tax (the “CAT”). As announced in our last post, the Oregon Department of Revenue (the “Department”) is in the process of conducting town hall meetings with stakeholders across Oregon. Peter Evalds attended the Department’s town hall meeting in Beaverton, Oregon on Thursday, September 19, 2019. In this post, we highlight some of the more significant issues that were discussed at that meeting.

Garvey Schubert Barer, PC and Foster Pepper PLLC have combined to create a mission-driven firm and to expand reach and services. Foster Garvey PC, created by the combination of these two legacy Pacific Northwest law firms, officially launches today, October 1, 2019.

I previously announced that the owners of Garvey Schubert Barer and Foster Pepper voted overwhelmingly to combine forces. Since then, both firms have been working closely to advance the shared goal of ensuring clients have access to a greater breadth and depth of service offerings, creating a one-stop shop for clients while continuing to preserve the relationships, culture and first-rate service clients have come to expect. 

We have recently discussed in several blog posts Oregon’s new Corporate Activity Tax (“CAT”), a gross receipts tax that will become effective January 1, 2020. As we announced in our most recent post on this topic, the Oregon Department of Revenue (the “Department”) will soon commence the rule drafting process. In order to obtain input from taxpayers and tax advisors, it will hold town hall meetings around the state.

Yesterday, the Department announced the schedule of these meetings. Surprisingly, the first meeting is scheduled for tonight in Newport, and meetings will take place later this week in Corvallis and Beaverton. Additional meetings throughout the state will occur over the next few weeks. The meeting in Portland will take place at the Portland State Office Building in the Lloyd District on Thursday, October 3, 2019, from 5:30 pm to 7:00 pm.