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Department of the Treasury Releases Updated Priority Guidance Plan

On February 7, 2018, the Department of the Treasury released an update to its 2017-2018 Priority Guidance Plan.  The Priority Guidance Plan describes the various guidance priorities of Treasury and the IRS for the period from July 1, 2017 through June 30, 2018. 

The update describes eighteen guidance projects relating to the initial implementation of the Tax Cuts and Jobs Act (TCJA), including:

  • Computational, definitional and anti-avoidance guidance with respect to the deduction for qualified business income under Code Section 199A;

  • Computational, definitional and other guidance with respect to the limitation on the deductibility of interest under Code Section 163(j);

  • Guidance related to the new opportunity for immediate expensing of qualified property under Code Section 168(k); and

  • Guidance regarding various international provisions of the TCJA.

Treasury and the IRS have already issued guidance with respect to the implementation of certain international provisions of the TCJA.  Notice 2018-7 provided guidance with respect to the one-time tax on accumulated offshore earnings under Code Sections 951 and 965; Notice 2018-8 provided a suspension of the withholding requirement that otherwise would have been imposed under Code Section 1446(f) on the disposition of certain publicly traded partnership interests; and, most recently, Revenue Procedure 2018-17 modifies the circumstances under which certain foreign corporations can change their annual accounting periods in order to prevent abuse under Code Section 965.

Treasury has indicated, on an informal basis, that it plans to use the traditional regulatory process – pursuant to which Treasury issues proposed regulations, followed by a review and comment period during which the public may provide written feedback on the proposed regulations, followed by the issuance of final regulations – as a means of providing guidance under the TCJA.  Although Treasury and the IRS intend to issue additional limited-scope notices that address narrow issues, notices generally will be issued more sparingly than in the past, including as compared with the guidance period following the 1986 Tax Reform Act.

Treasury expects that guidance under the TCJA will be developed over the next 18 to 24 months.

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About this Author

Elizabeth McGinley, Energy, Tax, Attorney, Bracewell law firm

Elizabeth McGinley is the head of the firm's tax practice. She represents a variety of clients in the oil and gas and electric power industries, including private equity firms investing in oil and gas exploration, production and infrastructure. Her experience includes complex debt and equity financing, joint ventures and project finance, as well as experience with volumetric production payment (VPP) transactions. 

In addition, Elizabeth has experience in partnership and corporate transactions including mergers and acquisitions and spin-off...

Steven Lorch, Tax Attorney Bracewell Law Firm

Steven Lorch advises publicly-held businesses and private clients, including private equity sponsors and investors, on the U.S. tax aspects of mergers, acquisitions, divestitures and joint venture transactions, with a particular focus on  energy and infrastructure transactions.  His clients have included parties to midstream and upstream oil and gas joint ventures, sponsors and investors in development and financing of infrastructure and power projects, and private equity investors in a broad range of transactions, both within and without the energy and infrastructure sectors.  Steven has significant experience in a broad range of complex capital markets and lending transactions,  and has represented creditors and distressed borrowers in restructuring transactions and workouts.  Steven also advises foreign and domestic clients with respect to various U.S. tax issues inherent in cross-border transactions, including those related to capital structure, income tax treaties, and controlled foreign corporation and passive foreign investment company status.

In addition, Steven maintains an active pro bono tax practice with a particular focus on advising nonprofit organizations on matters related to their federal tax-exempt status.