Some U.S. corporations have overestimated the windfall they’ll receive from the 2017 tax law, The Wall Street Journal’s Theo Francis and Richard Rubin report.
In one example, Las Vegas Sands Corp. had to reverse a $670 million tax benefit based on foreign tax credits claimed in early 2018 after new regulations released in November limited their use. In another example, FedEx recently reported a 2-cents-a-share charge based on a recalculation of its deferred tax liabilities.
One big factor at play is the fact that the interpretation of the hastily-written tax legislation by the IRS is still a work in progress. “Treasury is still writing regulations for the new corporate tax law, and that means corporate earnings are going to bounce around for a while,” Rubin said.