The Moore decision could support other forms of recognition of undistributed earnings by entities to their shareholders or members, particularly in the international sphere, as well as new proposed taxes on other forms of wealth.
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International Tax
FBAR penalties can violate Excessive Fines Clause
Because penalties for failure to report foreign bank and financial accounts reports are punitive in nature, they can violate the clause in the Eighth Amendment, the Eleventh Circuit held in Schwartzbaum.
Capital gains treatment for dividends from foreign corporations
Determining qualified dividend income from foreign corporations may require examining tax treaties and U.S. statutory exclusions, as well as studying the potential effect of pending regulations.
Bidding farewell to US citizenship: Understanding the exit tax
Potentially costly and far-reaching tax liabilities of covered expatriates should give individuals pause before renouncing U.S. citizenship or permanent resident status.
Pillar Two and nonprofit organizations
Although the Organisation for Economic Co-operation and Development’s Inclusive Framework on Base Erosion and Profit Shifting excludes nonprofit organizations, they may be subject to the rules if a subsidiary or group member engages in a trade or business.
Mandatory repatriation tax is constitutional
In Moore, the Supreme Court rebuffed a challenge to the one-time Sec. 965 tax on undistributed earnings of controlled foreign corporations attributed to U.S. shareholders.
Regulations create a new approach to the creditability of foreign taxes
Despite foreign tax credit guidance in recent years, questions remain regarding the Organisation for Economic Co-operation and Development’s Pillar 2 top-up taxes and related concerns.
Foreign partnership reporting requirements
U.S. persons owning an interest in a foreign partnership may be required to file Form 8865, and the partnership may also face additional U.S. filings.
Revisiting FIRPTA and return-of-capital distributions
Although the Foreign Investment in Real Property Tax Act applies to foreign holders of U.S. real property interests, U.S. real property holding corporations also may find it advantageous to apply for a withholding certificate.
Supreme Court issues narrow opinion upholding Sec. 965 transition tax
The Supreme Court upheld the mandatory repatriation tax as a valid exercise of Congress’s taxing authority. The Court did not reach the question of whether income must be realized to be taxable.
Taxpayer-initiated transfer pricing adjustments in MAP
When multinational enterprises proactively initiate transfer pricing adjustments to avoid penalties or for other reasons, a tax treaty’s mutual agreement procedure (MAP) can help prevent double taxation, but additional issues should be considered.
IRS steps up enforcement of the individual expatriation tax
The Sec. 877A exit tax applies to specified expatriating U.S. citizens and long-term residents on gains from a deemed sale of assets. Expatriates’ numbers have risen, and the IRS is emphasizing compliance.
E-invoicing mandates and intercompany transactions
Value-added tax increasingly entails mandatory use of electronic invoicing and other “continuous transaction control” systems — even for intercompany transactions.
Trends in enforcement of VAT remote-seller rules
Guidelines have emerged for assessing value-added taxes in the global digital economy, although jurisdictions employ their own approaches to enforcing them.
Foreign trust transactions and large gifts addressed in proposed regs.
The proposed regulations implement Secs. 643(i), 679, 6039F, 6048, and 6677, which were added or modified to prevent efforts by U.S. taxpayers to use foreign trusts and offshore arrangements to avoid U.S. taxes.
Sec. 338(g) elections for foreign corporations and ‘creeping acquisitions’
Electing a qualified stock purchase can offer advantages when acquiring a foreign target corporation but also present a pitfall when it is done in stages.
State income tax considerations for non-US corporations
Foreign corporations operating in the United States need to be aware of state income tax rules, including those involving nexus, determining state taxable income, and filing methods.
Dual consolidated losses: Recapture considerations
An interesting issue can arise when a corporation must recapture dual consolidated losses on the sale of a foreign entity.
Off the BEAT-en path: Planning opportunities
Three scenarios model planning strategies for managing the Sec. 59A base-erosion and anti-abuse (BEAT) tax.
Offshore and out of mind: Reporting foreign assets and gifts
This article provides an overview of the federal tax reporting requirements by U.S. persons for foreign assets and gifts, including addressing prior noncompliance.
TAX PRACTICE MANAGEMENT
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AICPA members in tax practice assess how their return preparation software performed during tax season and offer insights into their procedures.
