A Joint Committee on Taxation report’s language raises questions about the running of the statute of limitation for liability for the Sec. 965 transition tax.
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Topics
Repatriation Tax, GILTI & BEAT
Treasury provides guidance on the interaction of DCLs with Pillar Two taxes
Proposed regulations would harmonize dual consolidated losses with the Organisation for Economic Co-operation and Development’s Global Anti-Base Erosion Model Rules.
Implications of the Supreme Court’s Moore decision
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.
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.
Off the BEAT-en path: Planning opportunities
Three scenarios model planning strategies for managing the Sec. 59A base-erosion and anti-abuse (BEAT) tax.
Impact of the OECD global anti–base erosion model rules on GILTI
The recent focus of the OECD on overhauling the current corporate cross-border tax rules is in response to the digital economy and current operational trends of multinational organizations in low-tax jurisdictions.
Redetermining foreign taxes in a post-TCJA world
Changes by the law known as the Tax Cuts and Jobs Act, P.L. 115-97, and regulations to the foreign tax redetermination rules increase taxpayers’ likelihood of having FTRs and a greater administrative burden.
FDII deduction: Options for determining taxable income
This discussion highlights uncertainties that may arise in determining a corporation’s taxable income for purposes of calculating its foreign-derived intangible income deduction under Sec. 250.
What the Inflation Reduction and CHIPS acts could mean for US importers
This item discusses what the Inflation Reduction and CHIPS acts could mean for U.S. importers, beginning with the CHIPS Act.
Proposed regs. provide rules for repatriation of intangible property
The regulations would terminate the continued application of the Sec. 367(d) annual inclusion in certain cases when intangible property is repatriated to the United States after previously being transferred to a foreign corporation.
Reversing a gap period transaction through late check-the-box election
The IRS permitted a taxpayer effectively to undo planning undertaken during the so-called gap period (described later).
IRS provides new guidance on accounting method changes for CFCs
For a limited time, the IRS is allowing automatic change procedures for CFCs changing to the ADS method and has clarified the process and certain aspects of audit protection.
Automatic procedures to change a CFC’s depreciation method
The IRS issued Rev. Proc. 2021-26, which contains procedures for certain foreign corporations to obtain automatic consent to change their methods of accounting for depreciation to the alternative depreciation system.
Foreign-derived intangible income: Issues and practical strategies
This article discusses issues that have evolved around FDII where there has been little guidance and outlines ways to better take advantage of the FDII regime.
COD income and cross-border considerations
This item provides an overview of the federal tax rules that apply to debt modifications and restructurings, with a primary focus on how U.S. corporate shareholders of CFCs are affected.
Assessment statutes of limitation and the Sec. 965 transition tax
As the IRS focuses more attention on Sec. 965, it is vital that taxpayers with Sec. 965 tax liabilities and their advisers understand the potentially applicable periods of limitation on assessment.
Refundable credits and foreign tax credits
This item discusses how new rules would affect taxpayers’ ability to claim FTCs for foreign income taxes that are offset with refundable tax credits in a foreign jurisdiction.
Bridging the gap: GILTI and AAA
IRS Notice 2020-69 provided a new entity election that allows an S corporation to compute the deemed inclusions at the entity level, as opposed to at the shareholder level. This item provides background on the new election, illustrates its effects, and highlights opportunities and traps to consider when contemplating the election.
IRS finalizes rules for 100% dividends-received deduction, GILTI
The IRS issued final rules on the Sec. 245A extraordinary disposition rule and the Sec. 951A disqualified basis and disqualified payment rules, as well as reporting requirements to facilitate the rules.
GILTI and Subpart F treatment of distributions of appreciated property
Under the Subpart F regime, income subject to the regime is initially defined by what it includes, while under the GILTI regime, income subject to the regime is initially defined by what it excludes. This article discusses the application of these different approaches in the context of nonliquidating distributions from a controlled foreign corporation to a U.S. shareholder.
employee benefits & pensions
Profits interests: The most tax-efficient equity grant to employees
By granting them a profits interest, entities taxed as partnerships can reward employees with equity. Mistakes, however, could cause challenges from taxing authorities.
