Adnan Islam, Friedman Partner and Co-Practice Leader of the firm’s International Tax group, shares his insights with Accounting Today on the final BEAT regulations that the Internal Revenue Service just released.
The final BEAT regulations are generally taxpayer favorable and allow taxpayers to elect a BEAT waiver provision, according to Adnan Islam. “Consistent with prior proposed regulations, taxpayers may not decrease the amount of deductions waived by filing an amended income tax return, because if granted, it would not address the cliff effect of applicable taxpayer status.”
For short taxable years, he noted, the government was concerned that when a member doesn’t have a taxable year that ends with or within a short taxable year of a taxpayer, some taxpayers may take the view that excluding the gross receipts, base erosion tax benefits and deductions of the member from the taxpayer’s aggregate group is a reasonable approach. “These exclusions are not a reasonable approach for the government per the final regulations and there are regulatory examples of methods that may or may not constitute a reasonable approach,” he added.
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