The IRS announced additional rules designed to curtail the ability of an inverted company to access foreign subsidiaries’ earnings without paying U.S. tax.
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International Tax
IRS Provides Guidance on FBAR Penalties
The guidance provides procedures to ensure consistency and efficiency in the IRS’s administration of the FBAR compliance program.
Rules Are Proposed on Sec. 2801 Tax on Gifts and Bequests From Expatriates
Taxpayers who receive gifts or bequests from individuals who gave up U.S. citizenship or residency will be subject to tax under proposed rules.
OECD Proposes Widespread Changes to International Tax Rules
The Organisation for Economic Co-operation and Development (OECD) issued proposals to address corporate international tax avoidance and harmonize global tax rules.
The Problematic Use of Transparent U.S. LLCs by Foreign Taxpayers
This item explores some common issues encountered by foreign taxpayers adopting transparent U.S. LLCs to invest or operate in the United States.
BEPS Action 7: Preventing the Artificial Avoidance of Permanent Establishment Status
The stated purpose of Action 7 is to attack certain “artificial” arrangements nonresident enterprises have entered into to avoid having a taxable presence in a country.
U.S. Enters First Agreements Implementing Automatic Information Exchange
The IRS announced that the United States has entered into agreements with Australia and the United Kingdom implementing procedures to automatically exchange financial account information pursuant to the Foreign Account Tax Compliance Act (FATCA).
IRS Issues Dividend-Equivalent Rules for Notional Principal Contracts and Equity-Linked Investments
The IRS issued regulations under Sec. 871(m) that govern withholding on dividend equivalents received by nonresident individuals and foreign corporations from sources within the United States.
Transfer-Pricing Arm’s-Length Standard and Transfers of Foreign Goodwill Clarified
Taxpayers will be required to consistently value transfer-pricing transactions for purposes of all Code sections under rules issued by the IRS.
Proposed Rules Govern Taxation of Gifts and Bequests From Covered Expatriates
Taxpayers who receive gifts or bequests from certain individuals who gave up their U.S. citizenship or residency will be subject to tax under rules proposed by the IRS on Wednesday.
Regulations Prevent CFCs From Using Partnerships to Avoid Sec. 956
The IRS issued temporary and proposed regulations governing the treatment of property held by a controlled foreign corporation in connection with certain transactions involving partnerships.
Money Can’t Buy Love, but It Can Keep You Out of Prison
Seventh Circuit upheld a district court’s decision to spare Beanie Babies billionaire prison time for evading taxes by hiding assets in a Swiss bank account.
Foreign Tax Credit: When Is It Too Late to Change Your Mind?
The IRS has effectively made the 10-year window for switching between credit and deduction a one-way street that only allows a change from deduction to credit.
Constructive Presence Would Count Under Proposed Residency Rules
The IRS issued proposed regulations that, for purposes of establishing bona fide residency in a U.S. territory, would allow individuals additional days of “constructive presence” in the territories if certain conditions are met.
U.S. Tax Implications of Alimony Payments to U.S. Nonresidents
This item explains the tax implications for the payers and recipients of alimony from an international perspective.
Sec. 962 to the Rescue
International tax provisions, including the anti-deferral regime and mechanics of the foreign tax credit, can present significant and unique challenges to maintaining a tax-efficient structure.
Final Rules Define Substantial Business Activities Under Sec. 7874
The IRS issued final regulations to determine when an expanded affiliated group will be considered to have substantial business activities in a foreign country, which could allow a foreign corporation to escape application of the inversion rules.
Tax Treatment and Planning Strategies for Nonresident Individuals
This article provides an outline of the basic tax-compliance rules, as well as tax planning strategies, for nonresident aliens.
Basis Adjustments in CFC Stock Held by Partnerships for Subpart F Inclusions, PTI Distributions
Application of PTI rules to partnerships can be tricky, in part because domestic partnerships are treated as U.S. persons, but foreign partnerships are not. Therefore, a domestic partnership can be a U.S. shareholder of a CFC and entitled to a Sec. 961(a) basis adjustment for the CFC stock it owns, but a foreign partnership, even if owned by U.S. persons, is not so entitled.
Relief From Penalties for Late-Filed International Information Returns
Penalties apply for failure to report the information required under Secs. 6038 and 6038A by failing to timely file Form 5471, 5472, or 8865. There are two procedural paths for a taxpayer that files a late form.
INDIVIDUALS
Current Developments in Taxation of Individuals: Part 1
This update surveys recent federal tax developments involving individuals, including court cases, rulings, and guidance issued during the six months ending October 2025.
