Final regulations affect owners of foreign stock
Final and proposed regulations cover PFIC and CFC stock held through domestic partnerships and S corporations.
International Tax
Senate Finance Committee releases tax provisions of Build Back Better Act
The Senate Finance Committee’s text includes changes from the House’s version of the bill, including a removal of the House’s increase in the SALT deduction cap.
Tax provisions in the Build Back Better Act
The Build Back Better Act contains a large number of tax provisions, ranging from an extension of the advance child tax credit, to a wide variety of green energy tax incentives, and a minimum tax on corporations.
Tax treaties do not provide a foreign tax credit against net investment income tax
A U.S. taxpayer living abroad was not entitled to take a foreign tax credit against her net investment income tax based on provisions in the United States–France and United States–Italy tax treaties.
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 taxes on PTEP can provide additional foreign tax credits
This item focuses on the potential increase in the Sec. 904(a) foreign tax credit limitation when PTEP is distributed by a CFC to its corporate “U.S. shareholder.”
Penalty for failure to report distribution from foreign trust not reduced
The penalty for failure to report a distribution from a foreign trust is not reduced when the trust beneficiary is also the trust owner.
Foreign notional interest regimes may hinder deductions of US subsidiaries
Inbound structures involving interest or royalty payments by U.S. subsidiaries to foreign affiliates may trigger anti-avoidance rules where the foreign affiliates operate in countries that have notional interest deduction tax regimes.
Final regs. issued on qualified improvement property under FDII, GILTI
Final regulations clarify the treatment of qualified improvement property in FDII and GILTI, and foreign tax credit transition rules address post-2017 NOL carrybacks to pre-2018 tax years.
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.
Court says statutory language precludes substance-over-form analysis
The plain language of the statute allowed taxpayers to shelter income from all tax using a foreign sales corporation and Roth IRAs.
PFIC considerations for non-US SPACs
As SPAC activity has increased, non-U.S.-domiciled SPACs have become more prevalent and carry major U.S. tax-compliance ramifications due to their potential treatment as a PFIC for U.S. investors.
Failure-to-deposit penalty when tax is not withheld on payments of US-source income
This item provides an overview of potential penalties and presents an argument as to why the Sec. 6656 failure-to-deposit penalty may not apply in some instances.
Virtual currency update
Treasury takes a more aggressive stance on reporting of virtual currency transactions.
Penalty relief for Forms 5471, 5472, and 8865
Various options are available for mitigating penalties for noncompliance with foreign return filing requirements.
Transfer price adjustments don’t necessarily increase import duty costs
Importers should consider transfer-pricing arrangements in advance, based on the totality of the circumstances, to assess any potential refund of duties on adjusted prices to imported goods.
Unintended consequences of foreign branch reporting
Certain U.S. citizens and U.S. residents doing business abroad can have surprising tax reporting obligations as a consequence of the IRS's revised instructions to Form 8858.
Foreign financial asset filing requirements: Coming into compliance
This article summarizes the options available to taxpayers to come into compliance with FBAR and information reporting obligations.
Sec. 1446(f) regulations: The rules and unanswered questions
This article addresses certain aspects of the withholding rules of the final Sec. 1446(f) regulations, options to eliminate or reduce Sec. 1446(f) withholding, and some outstanding issues.
