 Author
Tax Policy Group, Deloitte Tax LLP
House and Senate Clear Budget Blueprints – Heading into a two-week spring recess, the House and Senate finished up consideration of their respective budget resolutions for fiscal year 2009; but conference negotiators will have to iron out differences over reconciliation instructions and offsets for a one-year AMT patch once Congress gets back to work. IRS Reproposes Capitalization Rules for Tangible Property – The IRS issued comprehensive new proposed regulations on the treatment of amounts paid to acquire, produce, or improve tangible property. IRS Finalizes Regs on Diversification Requirements for Variable Annuity, Endowment, and Life Insurance Contracts – Final regulations on the diversification requirements under section 817 for variable annuity, endowment and life insurance contracts expand the list of permitted investors whose beneficial interests in an investment company, partnership or trust do not prevent a segregated asset account from looking through to the assets of the investment company, partnership or trust to satisfy the requirements. Regs Allow Exclusion for Some Gain on Intercompany Sales of Subsidiary Stock – The IRS issued proposed and temporary regulations that allow gain on an intercompany sale of subsidiary stock to be excluded in certain limited situations. IRS Clarifies Imposition of Reinsurance Excise Tax; Announces Compliance Initiative – A new IRS revenue ruling asserts that the reinsurance excise tax imposed under section 4371(3) is a "cascading tax" that applies to reinsurance premiums paid by one foreign insurer or reinsurer to another foreign reinsurer, unless the second foreign reinsurer issuing the policies is itself entitled to an exemption from the excise tax under an income tax treaty with the United States. House Passes Technical Corrections to Pension Protection Act – The House approved by voice vote legislation that would make technical corrections to the Pension Protection Act of 2006. Senate Confirms Shulman as IRS Commissioner – By unanimous consent, the Senate confirmed Douglas Shulman as IRS commissioner following the budget resolution debate. Proposed Contract Manufacturing Regs Permit Retroactive Application – Recently issued proposed regulations would affect the way that subpart F applies to a controlled foreign corporation that hires a "contract manufacturer" or that conducts selling, purchasing or manufacturing operations outside its country of incorporation.
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