The IRS recently granted relief to certain U.S. persons who own stock in certain foreign corporations affected by the repeal of Internal Revenue Code Section 958(b)(4) under the Tax Cuts and Jobs Act. Revenue Procedure 2019-40 limits the inquiries that U.S. persons must make to determine whether certain foreign...
Various dollar figures related to international tax are adjusted annually for cost-of-living increases. These adjustments reflect a measure of inflation that was revised by the Tax Cuts and Jobs Act (TCJA) called the average “chained Consumer Price Index (CPI) for all-urban customers.” The adjustments are for the 12-month period...
In a recent revenue procedure, the IRS updated two lists of countries with which the United States has agreements that require payers to report certain deposit interest paid to nonresident alien individuals who are residents of the other country. One list is of countries with which the United States...
The IRS has revised its general frequently asked questions (FAQs) on the Foreign Account Tax Compliance Act (FATCA). The revisions focus on certification and periodic review requirements involving Qualified Intermediaries (QIs), Withholding Foreign Partnerships (WPs) and Withholding Foreign Trusts (WTs). Here are the pertinent changes: FAQ 2: How should...
The IRS recently issued final regulations on the operation of a safe harbor rule that’s used in determining whether allocations of partnership creditable foreign tax expenditures (CFTEs) to partners are deemed to be in accordance with the partners’ interests in the partnership. The final regs issued in July adopt...
The IRS recently issued questions and answers (Q&As) regarding the transition tax imposed by Internal Revenue Code Section 965. Under finalized regs issued early in 2019, Sec. 965 generally requires U.S. shareholders to pay a “transition tax” on the untaxed foreign earnings of certain specified foreign corporations as if...
In January 2017, the IRS announced a new audit strategy for its Large Business and International (LB&I) Division known as “campaigns.” With the campaigns, LB&I essentially shifts its examinations based on compliance issues that the Division determines present greater levels of compliance risk. By targeting certain issues, the IRS...
If you have an interest in (or authority over) a foreign financial account, you may have to electronically file a form called the “Report of Foreign Bank and Financial Accounts” (FBAR). Failing to file a required FBAR can result in penalties. In the recent case of U.S. v. Park,...
In June, the IRS finalized certain proposed regs pertaining to the foreign tax credit (FTC). The final regs include changes to the rules that address the interaction between the FTC and Internal Revenue Code (IRC) Section 965(n) rules on not applying the net operating loss deduction when calculating the...
The IRS has issued proposed regs that would ensure that the income of an S corporation will continue to be subject to U.S. income tax even when a nonresident alien (NRA) is a deemed owner of a grantor trust that elects to be an electing small business trust (ESBT)....
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