Law360 Speaks with Peter Barnes on Whether Companies Will Bring Intellectual Property and Its Revenue Back to the U.S.

Ending complex offshore structures through which companies squirrel away valuable IP in tax havens was one of the early goals of tax reform, in keeping with the “America First” mantra that swept President Donald Trump into office. But despite the law's many incentives, tax practitioners believe it's unlikely companies will seek to bring back their IP, along with the cash.

“I think a lot of it is going to stay right where it is,” said Peter A. Barnes, a former tax counsel to General Electric and professor at Duke University School of Law.  Mr. Barnes is also Of Counsel to Caplin & Drysdale's International Tax practice Group.

In fact, companies' reluctance to bring home IP and other intangible assets they have placed in low-tax jurisdictions for foreign use may be why Republican tax writers dropped a provision that would have allowed those assets to be repatriated without incurring a potentially significant tax cost to reflect their appreciation in value. As legislators looked for items to ax to meet revenue goals, the $34 billion provision may have been an easy target.

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Excerpt taken from the article "Tax Pros Skeptical New Law Will Bring IP Home" by Alex M. Parker for Law360.