Thursday, March 8, 2018
Wall Street Journal, Treasury Issues Tax Guidance Limiting Carried-Interest Provision:
The Treasury Department moved Thursday [Notice 2018-18] to limit a gap that could have let some investment-fund managers avoid higher taxes on their carried-interest income.
The formal move, previously announced by Treasury Secretary Steven Mnuchin, will be followed by regulations that will be retroactive to Jan. 1, the government said. ...
Treasury’s notice warns taxpayers that the government wants to act retroactively and they should disclose any positions on tax returns that are contrary to the government guidance, said Steve Rosenthal, a tax lawyer and senior fellow at the Tax Policy Center in Washington.
But, Mr. Rosenthal said, the notice is “skimpy,” lacks support in the law and stands in contrast with the plain words of the statute.
“Would I be given pause by this if I were advising clients?” he said. “No. I would tell clients, disclose and be ready for challenge. But in the end you’re likely to win.”