Critics Offer Ways to Revamp IRS Cloud-Income Sourcing Rules

If the IRS were to roll back or significantly revamp its proposed rules on determining the source of cloud-transaction income, business groups and tax practitioners have a host of ideas for what they’d like to see instead.

The regulations, proposed in January, lay out a framework for calculating how much of a taxpayer’s cloud-transaction income should be deemed as coming from the US versus foreign sources for tax purposes. The regulations have drawn criticism as too complex and too rigid, and some business advocates and practitioners are calling for the IRS to withdraw them altogether.

But they differ on how ...