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Excise Tax

ACA excise tax transition relief for student health coverage arrangements

ACA excise tax transition relief for student health coverage arrangements

Notice 2016-17, 2016-9 IRB In a Notice, IRS has provided a transition period for the application of certain market reforms to certain arrangements offered by institutions of higher education to their students, that are designed to reduce the cost of student health coverage. This relief apples for plan years beginning before Jan. 1, 2017. Background. The […]

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Studies find reducing sugary drinks cuts calories, but only a few

Studies find reducing sugary drinks cuts calories, but only a few

LONDON (Reuters) – Studies from Britain and Mexico suggest reducing sugar in sweetened drinks or taxing it more to cut consumption can help people limit their calorie intake and lower their risk of developing diabetes, but not by much. Two separate pieces of research published on Thursday in the British Medical Journal and The Lancet […]

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IRS revokes prior ruling on “cascading” foreign reinsurance excise tax

IRS revokes prior ruling on “cascading” foreign reinsurance excise tax

Rev Proc 2016-3, 2016-3 IRB In light of a recent decision of the Court of Appeals for the District of Columbia Circuit, IRS has reconsidered and revoked Rev Rul 2008-15, 2008-1 CB 633, which involved application of the foreign reinsurance excise tax under Code Sec. 4371(e). Background. Code Sec. 4371 imposes a tax on premiums paid […]

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Private foundation’s radio broadcasts subjected it to legislative activity excise tax

Private foundation’s radio broadcasts subjected it to legislative activity excise tax

Parks, (2015) 145 TC No. 12 The Tax Court has concluded that expenditures by a private foundation for the production and broadcast of 30- and 60-second radio messages were for the most part taxable expenditures under Code Sec. 4945(d), subjecting the Foundation and its manager to excise taxes under Code Sec. 4945(a)(1) and to additional […]

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IRS seeking comments on allocation of frequent flyer miles redeemed for other than air travel

IRS seeking comments on allocation of frequent flyer miles redeemed for other than air travel

Notice 2015-76, 2015-46 IRB In a Notice, IRS stated that it is considering issuing rules that would exclude, from the Code Sec. 4261(a) excise tax on taxable transportation, amounts attributable to mileage awards (i.e., frequent flyer miles) that are redeemed for purposes other than taxable air transportation, such as restaurant gift cards or magazine subscriptions. […]

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Court of Appeals 6th Circuit affirms; regular SOL rules apply to ESOP-owned securities excise tax

Court of Appeals 6th Circuit affirms; regular SOL rules apply to ESOP-owned securities excise tax

Law Office of John H. Eggertsen, P.C., (CA 6 9/08/2015) 116 AFTR 2d ¶2015-5214 The Court of Appeals for the Sixth Circuit, in a divided opinion in which it affirmed the Tax Court and agreed with IRS, has held that the general statute of limitations (SOL) on assessment rules contained in Code Sec. 6501 apply […]

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IRS issues more proposals on rules for Cadillac health plan tax

IRS issues more proposals on rules for Cadillac health plan tax

IRS has recently issued a second Notice that outlines a number of potential approaches it might take in future proposed regs on the Code Sec. 4980I’s excise tax on high cost employer-sponsored health coverage. Unusually expensive health insurance plans are sometimes referred to as “Cadillac plans.” Thus, this excise tax is sometimes referred to as […]

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IRS provides further insight on rules to be included in regs on Cadillac health plan tax

IRS provides further insight on rules to be included in regs on Cadillac health plan tax

Notice 2015-52, 2015-33 IRB IRS has issued a second Notice which describes potential approaches with regard to a number of issues under Code Sec. 4980I, which could be incorporated in future proposed regs, and invites comments on these potential approaches. Code Sec. 4980I provides for the excise tax on high cost employer-sponsored health coverage. Note: […]

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Small employers cautioned: relief for paying employee’s health insurance premium ended June 30

Small employers cautioned: relief for paying employee’s health insurance premium ended June 30

Small employers—i.e., employers who are not applicable large employers (ALEs)—who reimburse or pay a premium for an individual health insurance policy for an employee should be aware that they may be subject to a $100 per day ($36,500 per year), per employee excise tax. Transition relief from the Code Sec. 4980D excise tax ended June […]

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Medical device qualifies for retail exemption to manufacturer’s excise tax

Medical device qualifies for retail exemption to manufacturer’s excise tax

PLR 201520006 In an internal legal memorandum (ILM), IRS concludes that a medical device isn’t subject to the Code Sec. 4191 2.3% manufacturer’s excise tax. On the total facts and circumstances, the device falls within the retail exemption to the excise tax, even though it cannot be bought by non-medical professionals in person, by phone […]

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Proposed reliance regs issued on excise tax on foreign procurement payments

Proposed reliance regs issued on excise tax on foreign procurement payments

Preamble to Prop Reg04/20/2015, Prop Reg § 1.5000C-1, Prop Reg § 1.5000C-2, Prop Reg § 1.5000C-3 , Prop Reg § 1.5000C-4, Prop Reg § 1.5000C-5, Prop Reg § 1.5000C-6 , Prop Reg § 1.5000C-7, Prop Reg § 301.6114-1; Notice 2015-35, 2015-18 IRB   IRS has issued proposed regs under Code Sec. 5000C on the 2% […]

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Preparer’s miscalculation of foundation’s business holdings justified excise tax abatement

Preparer’s miscalculation of foundation’s business holdings justified excise tax abatement

PLR 201448032 In a Technical Advice Memorandum (TAM), IRS has concluded that the first-tier excise taxes under Code Sec. 4943 on a private foundation’s excess business holdings for the years at issue should be abated under Code Sec. 4962. The foundation established that it had reasonable cause for the violation where it provided all relevant […]

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Bits ‘n Pieces – London mayor is poster boy for expat woes; House approves $42 billion tax break package; Gas tax – time for change?; House approves tax credit for wind energy; Britain and the Google tax

Bits ‘n Pieces – London mayor is poster boy for expat woes; House approves $42 billion tax break package; Gas tax – time for change?; House approves tax credit for wind energy; Britain and the Google tax

* London mayor is poster boy for expat tax woes. By Laura Saunders – The Wall Street Journal. Boris Johnson’s case is a perfect illustration of the dilemmas faced by many of the 7.6 million U.S. citizens living abroad as a result of U.S. authorities’ five-year campaign against secret offshore accounts. Link to The Wall […]

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Sale From Lease Allows Deferred Excise Tax Payment On Leased Medical Devices

Sale From Lease Allows Deferred Excise Tax Payment On Leased Medical Devices

PLR 201443016 Applying a number of arcane rules that apply to the manufacturers excise taxes imposed by chapter 32 of the Code, IRS has privately ruled that a manufacturer of medical devices who leased them to end users did not have to pay the 2.3% medical device excise tax imposed by Code Sec. 4191 up […]

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Study estimates expanding impact of Cadillac excise tax on health plans that takes effect in 2018

Study estimates expanding impact of Cadillac excise tax on health plans that takes effect in 2018

Almost half of large employers are expected to be subject to the Code Sec. 4980I health care “Cadillac tax” in 2018, according to a Towers Watson analysis of large employer health care programs. By 2023, the study found, the percentage of large employers to be hit by the tax is expected to rise to 82%. […]

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Supreme Court won’t review bankrupt airline CFO’s liability for responsible person penalty

Supreme Court won’t review bankrupt airline CFO’s liability for responsible person penalty

Nakano, (CA 9 2/18/2014) 113 AFTR 2d 2014-941, cert denied 5/27/2014. The Supreme Court has declined to review a Ninth Circuit decision holding that neither an airline corporation’s obligations resulting from its bankruptcy, nor legislation that provided relief to airlines after the Sept. 11, 2001 terrorist attacks, were adequate excuses for the corporation’s chief financial […]

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Private Letter Ruling: Party who subcontracted production was manufacturer for manufacturer excise tax purposes

Private Letter Ruling: Party who subcontracted production was manufacturer for manufacturer excise tax purposes

PLR 201420004. In a private letter ruling, IRS has ruled that a taxpayer who had all intellectual property rights with respect to a medical device and several other types of control of the manufacturing process for that device, but who subcontracted the actual production to another party, was the manufacturer of the device for purposes […]

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IRS Private Letter Ruling applies medical excise tax rules to convenience kits assembled abroad

IRS Private Letter Ruling applies medical excise tax rules to convenience kits assembled abroad

A new private letter ruling (PLR), PLR 201351002,  applies the Code Sec. 4191(a) taxable medical excise tax rules to the complex situation of a company that produces convenience kits assembled abroad, sometimes containing taxable medical devices manufactured abroad. Basic medical excise tax rules. For sales after Dec. 31, 2012, a tax equal to 2.3% of […]

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Manufacturer, not supplier, held liable for medical device excise tax

Manufacturer, not supplier, held liable for medical device excise tax

In Chemence Medical Products, Inc. v. Medline Industries, Inc. (DC GA 12/04/2013) 112 AFTR 2d ¶ 2013-5617, a district court has issued a declaratory judgment that a manufacturer, and not a supplier, was responsible for the Code Sec. 4191 medical excise tax. The court also found that the manufacturer was liable for the tax under […]

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CRS sheds light on which devices are subject to medical device excise tax

CRS sheds light on which devices are subject to medical device excise tax

The Congressional Research Service (CRS) has issued a report in which it summarizes many of the medical device excise tax rules and sheds some light on which devices are subject to that tax. Background. Subject to the exceptions described in the next paragraph, for sales after Dec. 31, 2012, a tax equal to 2.3% of […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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