For a closely held U.S. company engaged in export sales, an IC-DISC offers opportunities to both reduce the amount of revenue subject to the ordinary income tax rate and provide financial compensation to employees, shareholders, or other stakeholders.
Advertisement
Topics
International Tax
IRS Issues Regs. on Sec. 7874 Expatriated Entities
The IRS issued temporary regulations governing whether a foreign corporation has “substantial business activities” in a foreign country compared to the total business activities of the expanded affiliated group
When Becoming a U.S. Resident, Beware of PFIC Rules
As the workforce becomes more mobile, many non-U.S. citizens who become U.S. residents for work reasons have to deal with not only cultural adjustments but also the unanticipated workings of the PFIC tax regime.
Treasury Releases Model Intergovernmental Agreement for FATCA
Treasury released a model intergovernmental agreement designed to implement the information-reporting and withholding-tax provisions in FATCA.
Increased Focus on International Activities of Tax-Exempt Organizations
Many tax-exempt entities participate in the global economy by engaging in charitable or other exempt activities overseas and making foreign financial investments; These activities have drawn attention from the IRS as they examine the flow of tax-exempt funds around the world.
Employment Tax Liabilities of Foreign Entities
A number of technical questions are involved in determining status as an employer for federal employment tax purposes when a foreign business sends individuals to work in the United States.
FIRPTA Notice Requirements for Property Acquired in Foreclosure Sale
Parties involved in the disposition of a U.S. real property interest as the result of a repossession of or foreclosure on the property need to be aware of their ) withholding requirements, as well as the availability of alternative withholding and notice requirements for foreclosure dispositions.
Potential Pitfalls in PFIC Reporting
PFIC investors should be aware of new PFIC reporting requirements and should be alert to developments that may affect them.
Homeland Security May Contact U.S. Persons Living Abroad Who Owe Back Taxes
The IRS has established procedures to facilitate tax collection from taxpayers who live outside the United States, including submitting identifying taxpayer information to a database maintained by the Department of Homeland Security.
Issues Facing Partnerships Under FIRPTA
This item identifies several issues taxpayers should be aware of to the extent they invest in partnership structures that hold U.S. real property interests.
Interaction of the Subpart F Dual-Character Property and Majority-Use Rules
When a controlled foreign corporation (CFC) sells property used in its active business, any gain generally is not treated as subpart F income includible in its U.S. shareholders’ taxable income.
Final Regs. on Reporting Interest on Deposits Paid to Foreign Taxpayers
The IRS issued final regulations outlining the rules requiring U.S. financial institutions to report interest payments to certain nonresident alien individuals of $10 or more per year paid after 2012.
Temp. Regs. Issued on Obligations Arising From Certain Upfront Payments by CFCs
The IRS issued temporary regulations relating to the treatment of upfront payments made pursuant to certain notional principal contracts for U.S. federal income tax purposes.
IRS Releases New FAQs for Offshore Voluntary Disclosure Program, Announces Other Rules
The IRS released 55 questions and answers regarding its offshore voluntary disclosure program.
IRS Suspends Issuing ITINs Without Original Documentation
The IRS will no longer issue individual taxpayer identification numbers unless the applicants provide original documents, such as passports or birth certificates, or certified copies of those documents from the issuing agencies.
IRS Issues Regulations on “Expatriated Entities” Under Sec. 7874
The IRS issued final, temporary, and proposed regulations intended to prevent abusive corporate inversion transactions.
FATCA’s Withholding Requirements for Foreign Financial Institutions
FATCA imposes rigid new account identification, reporting, and tax withholding requirements on foreign financial institutions and other withholding agents.
Obligations Arising From Certain Upfront Payments Made by CFCs Are Not U.S. Property
The IRS issued temporary regulations relating to the treatment of upfront payments made pursuant to certain notional principal contracts for federal income tax purposes.
FBAR: Handle With Care
Failing to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), can result in severe civil and/or criminal penalties.
Foreign Limitations on Tax Loss Carryovers May Affect U.S. Foreign Tax Credits
Many foreign countries have recently made statutory changes to their tax loss carryover periods and limitations that may affect the U.S. accounting for income taxes of any U.S. company with foreign subsidiaries operating in jurisdictions where the limitations have been enacted.
TAX PRACTICE MANAGEMENT
2025 tax software survey
AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
