RICs Can Defer Distributing Transition Tax Amount

In a Revenue Procedure, the IRS has allowed regulated investment companies (RICs) to postpone to 2018 the inclusion of the Code Section 965 transition tax in gross income for purposes of computing their required distributions. RICs can be any of several financial entities, from mutual fund trade funds to real estate investment rusts or unit … Continued

All Combat-Zone Contract Workers Now May Qualify for Income Exclusion

U.S. citizens or resident aliens, and specifically contractors or their employees supporting the U.S. Armed Forces in combat zones, may qualify for the foreign earned income exclusion.  Qualified individuals may exclude from gross income, subject to certain limitations, wages or self-employment income earned for services performed outside the United States. To be entitled, however, a … Continued

Do you own any part of a Foreign Disregarded Entity?

If your answer is yes, you have a minimum requirement to file Form 8858. The amount of your involvement is a deciding factor for the requirement of filing additional forms such as Schedules C, H and M, to list a few. Form 8858 is a common form missed by many taxpayers year after year and … Continued

IRS Adds to Lists of Countries with Reporting Requirements

The IRS has updated two lists of countries with which the U.S. has an agreement that requires certain payments to be reported to the United States. One list is of countries with which the United States has an income tax or other treaty or a bilateral agreement; the other is of countries with which the … Continued

Federal Claims Court Rules FBAR Willful Failure Reg Is Invalid

Coming to the opposite conclusion reached by two district courts, the U.S. Court of Federal Claims has held that a reg is invalid if it doesn’t reflect a statutory increase in the penalty for willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR). The court also determined that a taxpayer’s failure … Continued

IRS Explains Intermediaries’ Obligations on Foreign Tax-Free Savings Accounts

The IRS has revised its frequently asked questions (FAQs) on Qualified Intermediaries (QIs), Withholding Foreign Partnerships (WPs), and Withholding Foreign Trusts (WTs), in relation to the Foreign Account Tax Compliance Act (FATCA). The changes are aimed at providing guidance on a QI’s obligations under the 2017 and 2014 QI Agreements with respect to certain tax-free … Continued

Despite Huge Spending, IRS Falters on FATCA Compliance Efforts

Despite Huge Spending, IRS Falters on FATCA Compliance Efforts TIGTA determined that the IRS has taken limited or no action on most of the planned activities outlined in the FATCA Compliance Roadmap. The purpose of the roadmap, which was last updated in January 2016, is to document compliance planning involving FATCA data and to provide … Continued

IRS Finalizes Regs that Close Corporate Inversion Loopholes

IRS Finalizes Regs that Close Corporate Inversion Loopholes Basically, corporate inversions (also called “expatriation transactions”) generally involve a U.S. corporation engaging in a series of transactions with the effect of moving its headquarters from the U.S. to a lower-taxed foreign jurisdiction. The transactions might be affected in two ways: 1.By the U.S. corporation becoming a … Continued

IRS Clarifies ‘Willfulness’ Under FBAR Rules

IRS Clarifies ‘Willfulness’ Under FBAR Rules In a Program Manager Technical Advice, the IRS has concluded that the standard for willfulness is the civil, rather than criminal, standard and that it includes not only knowing of violations of the FBAR requirements, but also willful blindness to and reckless violations of them. A U.S. person must … Continued

International Tax Monthly – June Issue

Australia Outlines Approach to Cross-Border Financing In a long-awaited move, the Australian Taxation Office (ATO) released draft guidelines setting out its approach to cross-border related party financing arrangements. The guidance will apply to existing and new financing arrangements beginning July 1, 2017. The ATO views these arrangements as a major tax compliance risk. The release … Continued