Insights & News

Tax Insights, December 30, 2015
Tracking Tax News You Need to Know

December 30, 2015

IRS Issues Proposed Regulations on Country-by-Country Reporting
The IRS issued proposed regulations that would require annual country-by-country reporting by U.S. persons that are the ultimate parent entity of a multinational enterprise group that has annual revenue for the preceding annual accounting period of $850 million or more.

IRS Rules That Ski Lift Towers Are Real Estate Assets for REIT Purposes
The IRS ruled, in Private Letter Ruling 201551007, that ski lift towers owned by a REIT and designed and constructed to remain permanently in place are considered inherently permanent structures qualifying as real property under Section 856 (section references are to the Internal Revenue Code of 1986, as amended), since they could not be readily moved, were usually discarded or sold for scrap metal if removed, and would remain in place following expiration of the taxpayer's ground lease or occupancy permit. The fact that ski lift towers support or are connected to assets not qualifying as real estate assets under Section 856 does not prevent the towers themselves from qualifying under the section.

IRS Issues Final Regulations on Non-Functionally Integrated Type III Supporting Organizations
IRS has issued final regulations setting the amount that a non-functionally integrated Type III supporting organization must annually distribute to its supported organizations. The regulations reflect changes to the law made by the Pension Protection Act of 2006. The final regulations adopt the annual distributable amount rule of the 2012 proposed regulations without changes. The IRS believes that a distribution requirement equal to the greater of 85 percent of adjusted net income or 3.5 percent of the net fair market value of an organization's nonexempt-use assets strikes an appropriate balance.

IRS Issues FAQs on Form 5500 Compliance Questions
The IRS released frequently asked questions (FAQs) clarifying some of the new compliance questions added to the 2015 . Informational copies of the Form 5500 series were recently released.

Pennsylvania Supreme Court Rules on BPT Refunds and Credits
The Pennsylvania Supreme Court in City of Philadelphia v. City of Philadelphia Tax Review Board, Pa. S.Ct., Dkt. Nos. 19-22 EAP 2014, 12/21/2015 affirmed a Commonwealth Court decision that upheld the denial of refunds of overpaid business privilege tax (BPT) but awarded a credit for the overpaid taxes sua sponte. The court agreed that the plain language of Philadelphia City Code Section 19-1703(1)(d) requires refund petitions to be filed within three years of the date the taxes were paid or within three years of when the payments were due, whichever is later. Nothing in Philadelphia Business Income and Receipts Tax Regulations Section 205 modifies that requirement, and because the ordinance is a statute in repose, any equitable extension is precluded. Based on this analysis, a refund of overpaid BPT was properly denied. The court also agreed with the Commonwealth Court in finding that credits and refunds are two very different things, so the limitations period for refunds cannot be applied to credits. The court noted that Philadelphia City Code Section 19-2610 is unambiguous, and under the plain language of the ordinance, credits will be granted for any overpayment of estimated tax, with no indication of any time limits.

Information contained in this publication should not be construed as legal advice or opinion or as a substitute for the advice of counsel. The articles by these authors may have first appeared in other publications. The content provided is for educational and informational purposes for the use of clients and others who may be interested in the subject matter. We recommend that readers seek specific advice from counsel about particular matters of interest.

Copyright © 2015 Stradley Ronon Stevens & Young, LLP. All rights reserved.

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