Tax Dispute Resolution Quarterly

Applying sec.1032 to share-based awards for
international employees
By Andrew Gewirtz, Global Mobility Services, and John Crucs,
International Tax
Multinational employers often grant employees of foreign subsidiaries sharebased
awards—stock options, restricted stock, and other equity-type awards—
that are satisfied with stock of the U.S. parent corporation. This article in the
May/June 2016 issue of Corporate Taxation explores some tax complications
associated with the granting of share-based awards to international employees.
Pre-filing agreement fee doubles in June and
quadruples in 2017
On May 4, the IRS released a revenue procedure updating the rules and
procedures for taxpayers seeking an IRS examination and resolution of
specific issues relating to tax returns before filing the returns. Available
only to taxpayers under the jurisdiction of the IRS Large Business and
International division, pre-filing agreements or PFAs have been a popular
and successful tool for the IRS and taxpayers alike. The program improves
the quality of tax compliance and provides the taxpayer early certainty while
reducing costs and other burdens related to tax administration.
Rev. Proc. 2016-30 increases the user fee from $50,000 to:
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$134,300 for requests submitted after June 2, 2016
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$218,600 for requests submitted after December 31, 2016
The new procedure also expands the scope of a PFA to include issues
related to changes in methods of accounting requested under the automatic
change procedures.
Tax and accounting issues in debt
restructurings and reorganization
Changes in market conditions and economic uncertainty can cause any
business to face financial challenges. These challenges may require an
organization to reform its capital structure and even seek bankruptcy protection.
Understanding the potential tax and accounting consequences of these
decisions is critical to the organization’s future success and long-term stability.
Senior professionals from the Tax Restructuring, Washington National Tax,
and Accounting Advisory practices of KPMG LLP focused on significant tax and
accounting issues in debt restructurings during an April 27 webcast. Among
issues addressed are planning for cancellation of indebtedness income and net
operating loss preservation, unique issues for partnership debt restructuring,
worthless stock deductions, and accounting for troubled debt and debt
extinguished in bankruptcy.
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