Skip to Main Content
 

Worldwide Tax Daily Quotes Clark Armitage: Exempts Score Win with GILTI Unrelated Business Income Exclusion

August 22, 2018, Tax Notes

The IRS is paying heed to commentators' calls for an exclusion of global intangible low-taxed income from the calculation of exempt organizations' unrelated business taxable income.

. . .

J. Clark Armitage of Caplin & Drysdale said the similar treatment of GILTI to subpart F income for UBTI was broadly anticipated.

It would be so difficult to distinguish what’s clearly an intent to have these two things treated in a like manner, Armitage said. They had to come up with a reason to treat them differently, and I can’t think of any ready answer. Both of them involve income that's currently included that’s earned by a controlled foreign corporation . There’s nothing different about the quality of the income or the nature of the relationship of the exempt organization to that income.

For support, Armitage also cited ST>to<ST statutory language in section 951A that would treat GILTI in the same manner as subpart F. While that statute lists many different statutory provisions for which that treatment is appropriate, section 512 is not specifically enumerated there.

. . .

This little nuance is important in reflecting the broader view of the drafters here of this notice that unless Congress gave them really specific direction to treat GILTI income differently from subpart F income, they’re not going to do it, Armitage said.

For the full article, please visit Tax Notes’ website (subscription required). See also Meghan Biss’ related quote in the article “Guidance on UBTI Allocations Allows ‘Good Faith' Interpretations” by Fred Stokeld for Tax Notes.

Excerpt taken from the article “Exempts Score Win with GILTI Unrelated Business Income Exclusion” by Andrew Velarde for Tax Notes.

________________________________________________

About Caplin & Drysdale
Having celebrated our 50th Anniversary in 2014, Caplin & Drysdale continues to be a leading provider of legal services to corporations, individuals, and nonprofits throughout the United States and around the world. We are also privileged to serve as legal advisors to accounting firms, financial institutions, law firms, and other professional services organizations.

The firm's reputation over the years has earned us the trust and respect of clients, industry peers, and government agencies. Moreover, clients rely on our broad knowledge of the law and our keen insights into their business concerns and personal interests. Our lawyers' strong tactical and problem-solving skills -- combined with substantial experience handling a variety of complex, high stakes, matters in a boutique environment -- make us one the nation's most distinctive law firms.

With offices in New York City and Washington, D.C., Caplin & Drysdale's core practice areas include:
For more information, please visit us at www.caplindrysdale.com.
Washington, DC Office:
One Thomas Circle NW
Suite 1100
Washington, DC 20005
202.862.5000
New York, NY Office:
600 Lexington Avenue
21st Floor
New York, NY 10022
212.379.6000

___________________________

Disclaimer
This communication does not provide legal advice, nor does it create an attorney-client relationship with you or any other reader. If you require legal guidance in any specific situation, you should engage a qualified lawyer for that purpose. Prior results do not guarantee a similar outcome.

Attorney Advertising
It is possible that under the laws, rules, or regulations of certain jurisdictions, this may be construed as an advertisement or solicitation.
© 2018 Caplin & Drysdale, Chartered
All Rights Reserved.

Related Professionals

Related Practice Area(s)