Overview
Tax Court Rejects IRS Revenue Ruling 91-32 Approach to Determining ECI on Disposition of Partnership Interest: On July 13, the Tax Court in Grecian Magnesite Mining, Industrial & Shipping Co., SA, v. Commissioner, 149 T.C. No. 3, rejected the IRS’s approach for determining whether income from the disposition of a partnership interest is effectively connected with a US trade or business. The court refused to defer to the IRS’s approach to the issue in Rev. Rul. 91-32, 1991-1 C.B. 107, stating that the ruling “lacks the power to persuade” and criticizing its discussion of the partnership rules as “cursory.”
Click here for DTU In Depth coverage of the decision.
Appropriations Committee Approves IRS Spending Bill: The House Appropriations Committee approved the fiscal year 2018 Financial Services and General Government Appropriations bill on a vote of 31-21. Under the bill, funding for the IRS would be cut by $149 million from the fiscal year 2017 enacted level. The bill also would include a number of tax policy riders, including: a prohibition on a proposed regulation related to political activities and the tax-exempt status of 501(c)(4) organizations; a prohibition on funds to implement new IRS guidance on syndicated conservation easements; and a prohibition on funds to determine church exemptions unless the IRS commissioner has consented and Congress has been notified.