An excerpt from GC Cheat Sheet: The Hottest Corporate News Of The Week
IRS Issues Final Rules to Discourage Tax Inversions
The Internal Revenue Service has issued its final rules aimed at making it harder for U.S. businesses to reap the tax benefits of inversions, transactions that see businesses merging with foreign companies and moving corporate assets overseas. Additionally, it adopted temporary regulations that tweak the de minimis exception to the rule, which disregards foreign company stock resulting from prior inversions or acquisitions of U.S. companies from the calculation that determines the company's ownership percentage and thus whether the IRS treats the transaction as an inversion.
The rule is aimed at companies that engage in several inversions or acquisitions in order to manipulate their sizes to avoid the inversion threshold. Under the most recent version of the regulations, when the de minimis exception applies, the disqualified stock rule does not apply. The IRS is seeking comments on the temporary regulations.
The U.S. Department of the Treasury and the IRS will also now consider only the ownership of former domestic entity shareholders or partners individually rather than collectively, in an effort to stroke "the appropriate balance between preventing the de minimis exceptions from applying in inappropriate circumstances and addressing the practical difficulties" that commenters raised.
FCC Says It Has a Key Role in Cybersecurity Policy
In a white paper published Wednesday, the Federal Communications Commission's Public Safety and Homeland Security Bureau said cybersecurity was one of the commission's top priorities and that it is "uniquely situated" to address the issue. The FCC said shifting oversight of cyber risk to a nonregulatory body would "not be good policy" and it recommended initiatives for collaboration and greater cooperation with internet stakeholder groups and government agencies. It noted that internet service providers "naturally" consider risk to the firm when deciding to invest in cyberprotections.
"Unfortunately," the FCC said, "relying on market forces alone fails to adequately weigh the risks imposed on third parties who rely on the networks and services they provision. A cybersecurity gap confronts the public."
Going forward, the FCC will focus on issues including the internet of things, risks for small and medium carriers, 5G security, the next-generation broadcast standard ATSC 3.0, and the emergency alert system, according to the paper.
For more corporate news visit Law 360.
Jiminian Law PLLC is devoted to helping clients in all areas of business, copyrights, trademark, sports and entertainment law. Providing knowledgeable and effective representation are the keys to my success. Contact me for matters pertaining to the formation and maintenance of your business as well as corporate compliance matters, contracts, trade secrets, employment and more. I am available for a free consultation if you call me at 917.388.3574 or 929.322.3546 or email me at danny@djimlaw.com
IRS Issues Final Rules to Discourage Tax Inversions
The Internal Revenue Service has issued its final rules aimed at making it harder for U.S. businesses to reap the tax benefits of inversions, transactions that see businesses merging with foreign companies and moving corporate assets overseas. Additionally, it adopted temporary regulations that tweak the de minimis exception to the rule, which disregards foreign company stock resulting from prior inversions or acquisitions of U.S. companies from the calculation that determines the company's ownership percentage and thus whether the IRS treats the transaction as an inversion.
The rule is aimed at companies that engage in several inversions or acquisitions in order to manipulate their sizes to avoid the inversion threshold. Under the most recent version of the regulations, when the de minimis exception applies, the disqualified stock rule does not apply. The IRS is seeking comments on the temporary regulations.
The U.S. Department of the Treasury and the IRS will also now consider only the ownership of former domestic entity shareholders or partners individually rather than collectively, in an effort to stroke "the appropriate balance between preventing the de minimis exceptions from applying in inappropriate circumstances and addressing the practical difficulties" that commenters raised.
FCC Says It Has a Key Role in Cybersecurity Policy
In a white paper published Wednesday, the Federal Communications Commission's Public Safety and Homeland Security Bureau said cybersecurity was one of the commission's top priorities and that it is "uniquely situated" to address the issue. The FCC said shifting oversight of cyber risk to a nonregulatory body would "not be good policy" and it recommended initiatives for collaboration and greater cooperation with internet stakeholder groups and government agencies. It noted that internet service providers "naturally" consider risk to the firm when deciding to invest in cyberprotections.
"Unfortunately," the FCC said, "relying on market forces alone fails to adequately weigh the risks imposed on third parties who rely on the networks and services they provision. A cybersecurity gap confronts the public."
Going forward, the FCC will focus on issues including the internet of things, risks for small and medium carriers, 5G security, the next-generation broadcast standard ATSC 3.0, and the emergency alert system, according to the paper.
For more corporate news visit Law 360.
Jiminian Law PLLC is devoted to helping clients in all areas of business, copyrights, trademark, sports and entertainment law. Providing knowledgeable and effective representation are the keys to my success. Contact me for matters pertaining to the formation and maintenance of your business as well as corporate compliance matters, contracts, trade secrets, employment and more. I am available for a free consultation if you call me at 917.388.3574 or 929.322.3546 or email me at danny@djimlaw.com
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