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Daily Tax Report: State

IRS Pushes Back Against Treatment of Grants in New Jersey Program

Oct. 11, 2019, 9:17 PM

The Tax Court erred in concluding that grants used as contributions to capital aren’t taxable gross income, the IRS said in a brief filed Oct. 11.

The IRS assessed more than $43.6 million in tax deficiencies originating from grants BrokerTec Holdings Inc., a financial services company, received from New Jersey’s Economic Development Program. The program was meant to attract businesses to move to the state.

There weren’t restrictions on the use of the grants and no requirement that companies make capital investments. But the Tax...

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