Base Erosion Rules Could Make It Harder For Companies to Move IP - Bloomberg Tax

John Warner, shareholder in the firm's Tax section, comments on the proposed base erosion anti-abuse tax and its potential impact on companies' benefit of moving intellectual property back to the U.S. in Bloomberg Tax's article "Base Erosion Rules Could Make It Harder For Companies to Move IP."

The proposed regulations address situations when a company transfers property to its affiliate "in the tax-free exchanges associated with reorganizations and corporate organizations - even though no dollars are ever paid by the U.S. corporation to the foreign transferor affiliate," John Warner, shareholder at Buchanan Ingersoll & Rooney PC in Washington, wrote in an email to Bloomberg Tax.

"The main complaint of tax professionals about this equal (equally bad) treatment is that, in reorganization and incorporation transactions, foreign persons are actually providing capital to U.S. taxpayers and therefore deductions arising from contributions of property should not be treated as really eroding the U.S. tax base," Warner added. "They really don't resemble deductible cash outflows in that respect."