David Rosenbloom Speaks to Law360 on "Closing Gaps In GILTI Opens Up Authority Questions"

Closing Gaps In GILTI Opens Up Authority Questions

Recent rules on the international provisions of 2017's tax law attempt to resolve gaps and contradictions in the legislation's framework for global intangible low-taxed income — and in doing so, raise questions about whether they exceed regulatory authority.

The regulations, released by the U.S. Department of the Treasury on Friday, include a new proposed rule creating a high-tax exception to the Tax Cuts and Jobs Act 's GILTI provision, as well as final rules for determining the GILTI tax liability for partnerships with interests in foreign entities.

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David Rosenbloom, director of New York University School of Law's international tax program and a member of Caplin & Drysdale Chtd, said Treasury had the authority to make the exception, but not necessarily to make it an election.

“I don't see any authorization for that in the statute,” he said of the election. “I didn't see Treasury justifying the electivity. They do a reasonable job of justifying the rule, but there's two pieces to this rule.”

Read the full article at Law360.