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Supreme Court Justices Signal Narrow Ruling in Repatriation Tax Case. On Dec. 5, the U.S. Supreme Court heard oral arguments in Moore v. United States, a case relating to the mandatory repatriation tax (MRT) from the Tax Cuts and Jobs Act (TCJA, Pub. L. 115-97). The MRT required U.S. citizens to pay a one-time repatriation tax on the earnings of foreign companies held by U.S. shareholders. The tax applies to earnings from controlled foreign corporations, even if they are distributed to U.S. shareholders. The provision was included in the TCJA as part of the transition from a worldwide to a quasi-territorial tax system for U.S. companies and their shareholders.
House Republicans Express Interest in Year-End Tax Deal. On Nov. 29, Rep. Rudy Yakym (R-IN) led a group of about 150 House Republicans in a letter to House Speaker Mike Johnson (R-LA), urging the House to consider restoring several expired tax provisions from the Tax Cuts and Jobs Act (TCJA). The letter specifically identified three TCJA-era provisions: immediate research and development (R&D) expensing, bonus depreciation, and restoration of a broader limit on interest deductibility. The letter asserts that restoring these provisions would incentivize economic growth, and that “failing to act quickly will jeopardize hundreds of thousands of American jobs.” Adding to the voices of support include a group of 1,000 small businesses, who sent a letter to the leadership of the Senate Finance and House Ways and Means committees urging Congress to renew the R&D expensing credit, stating that the expiration will “inadvertently stifle American innovation and compromise our nation’s leadership in science, technology, and innovation.”
Tax Court Rules In IRS’ Favor on Limited Partnership Taxation. On Nov. 28, the U.S. Tax Court ruled that a “limited partner” label does not automatically exempt its founders from self-employment taxes on partnership-allocated earnings. The decision was closely watched by investment funds and other firms organized as limited partnerships, and Soroban Capital Partners LP, the petitioner in the case, still has the opportunity to appeal.
IRS Issues Guidance on Cash or Deferred Arrangements Under Section 401(k). On Nov. 27, the Internal Revenue Service (IRS) released a notice of proposed rulemaking that would amend the rules applicable to plans that include cash or deferred arrangements under section 401(k) to provide guidance with respect to long-term, part-time employees. The proposed regulation would affect participants in, beneficiaries of, employers maintaining, and administrators of plans that include cash or deferred arrangements. The notice also notes that a public hearing on the proposed regulation has been scheduled for March 15, 2024.
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The need for fact-based reporting of issues important to multi generational businesses and protecting a lifetime of savings has never been greater. Now more than ever, multi generational businesses and family businesses are under fire. That's why Family Enterprise USA is passionately working to increase the awareness of issues important to generationally-owned family businesses built on hard work, while continuing to strengthen our presence on Capitol Hill. The issues we fight for or against with Congress in Washington DC include high income tax rates, possible elimination of valuation discounts, increase in capital gains tax, enactment of a wealth tax, and the continued burden of the gift tax, estate tax and generation skipping tax.
Family Enterprise USA promotes generationally owned family business creation, growth, viability, and sustainability by advocating for family businesses and their lifetime of savings with Congress in Washington DC. Since 2007, Family Enterprise USA has represented and celebrated all sizes, professions and industries of family-owned enterprises and multi-generational employers. It is a bi-partisan 501.c3 organization. Family foundations can donate.
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