In this article, Layla Asali and David Zimmerman discuss tax planning in light of the push for reform of the tax code, which would provide new tax planning opportunities and obstacles.

"In recent years, the Internal Revenue Service (IRS) instigated a 10 week expedited process for obtaining a private letter ruling on a proposed transaction," Zimmerman said. "But in the last 12 months, with staffing shortages at the IRS and with the effects of sequestration coming into play, the mechanism really wasn't being allowed to work and really became a dead letter. So it has now been formally withdrawn, meaning we are essentially back where we started."

Asali said that planning work relating to transactions is still going ahead, but that fundamental tax reform is now in the back of taxpayers' minds when entering transactions. "Taxpayers are considering how planning they are looking at would fare under a reformed tax code," Asali said, "particularly how it would fare if territoriality is introduced because taxpayers are taking that proposal serious given that it would bring the US more in line with international norms."

Another area of focus is the concept of base erosion and profit shifting (BEPS). According to Zimmerman, a recent OECD report has "had a lot of attention" but many taxpayers are unsure what to make of it. "US multinationals do feel targeted by the language used in the report, and there is a feeling of being regarded with a jaundiced eye," Zimmerman said.

"From our viewpoint, though, nothing has really changed despite the new 'base erosion' buzzword," Asali added. "We have always been very careful in advising clients anyway, and encouraged them not to take shortcuts or skirt boundaries. This is clearly an area of extra focus now, and the US authorities are increasing their staffing in the international area."