Overview
Non-Taxation of McDonald’s Profits in Luxembourg Did Not Constitute State Aid: The European Commission found that the non-taxation of certain McDonald’s profits in Luxembourg did not constitute illegal state aid, acknowledging that Luxembourg had correctly applied the Luxembourg-United States tax treaty.
Tax Court Rules in Favor of IRS in O’Kagu v. Commissioner: Today, the Tax Court ruled in favor of the IRS in O’Kagu v. Commissioner. The petitioner earned wages in 2014 and 2015 while working in Germany under a personal services agreement for the U.S. Department of State. The court held that, pursuant to 22 U.S.C. section 2669(c), petitioner is considered an employee of the US government for income tax purposes, and therefore is not entitled to the section 911 foreign earned income exclusion with respect to the wages.
Ways and Means Oversight Subcommittee to Hold Hearing on IRS Taxpayer Authentication: House Ways and Means Oversight Subcommittee Chairman Lynn Jenkins (R-KS) announced that the Oversight Subcommittee will hold a hearing entitled “IRS Taxpayer Authentication: Strengthening Security While Ensuring Access,” on Wednesday, September 26. The hearing will focus on how the IRS authenticates taxpayers using online tools and applications, as well as how the agency addresses weaknesses in its authentication process.
Miscellaneous Guidance:
Revenue Procedure 2018-49 modifies Revenue Procedure 2018-29 and Revenue Procedure 2018-31 to allow a taxpayer that early adopted a method of recognizing revenues described in the new financial accounting standards issued by the Financial Accounting Standards Board and International Accounting Standards Board to change its method of accounting for the recognition of income for federal income tax purposes.