Internal Revenue Code Sec. 382 limits the use of net operating losses following a corporate ownership change. Of particular interest to a publicly held loss corporation is the extent to which it must track changes in its ownership.

Lewis T. Barr, in an article in Corporation Business Taxation Monthly, discusses how a loss corporation’s reliance on the existence or absence of SEC filings to determine if an ownership change has occurred under Code Sec. 382 is not always sufficient; there are times the loss corporation will need to make further inquiries, as explained in the recently published LTR 200747016.

Currently, in most states tangible personal property is subject to sales and use tax, while services are generally provided tax free. For decades, there has been increased pressure on states to provide more government services, causing them to look for new sources of revenue, particularly the taxation of consumer services.

In his article in the Journal of State Taxation, Jonathan Oppenheimer looks at the history of state taxation of services and examines whether it is prudent for states to include services in their sales and use tax base.

The computation of gain or loss on the sale of a partnership can be problematic if some, but not all, of the partner’s interest is sold. Additionally, if the selling partner has been allocated a share of the entity’s indebtedness under Code Sec. 752, a naïve application of the usual debt allocation rules can produce results that are inconsistent with the underlying economics of the transaction.

In an article in the Journal of Pass-Through Entities, Howard E. Abrams demonstrates how arriving at symmetric tax consequences between the selling and purchasing taxpayers can ensure sensible results.

Nonpayment and underpayment of employment taxes has been identified by the IRS as contributing $54 billion to the approximate $285 billion tax gap. The IRS has been receiving leads on cases in which workers may have been misclassified, with 19,000 requests since 2004 to make a determination on whether a worker is an employee or an independent contractor (“SS-8 inquiries”).

Kathryn Keneally and Charles P. Rettig, in their column in the Journal of Tax Practice & Procedure, give the details of how the IRS will carry out increased audits in this area.

The global positioning and navigation industry, once a small corner of a much larger and maturing industry, saw a sudden burst of growth with increased merger and acquisition activity following close behind. The major industry players are geographically diverse, creating a Petri dish of international tax techniques and traps in cross-border M & A transactions.

Richard E. Anderson, in his column in the International Tax Journal, uses the ongoing consolidation in this market as a template to conduct a high-level, transactionally organized review of the current state of play in the U.S. taxation of transnational acquisitions.