April 28, 2017

LB&I Audit Insights: Using a Code §6038A Summons When a U.S. Corporation is 25% Foreign Owned

April 28, 2017/ Ruchelman P.L.L.C.

Code §6038A provides that a U.S. corporation that is 25% or more foreign-owned must provide the I.R.S. with information on certain transactions with its 25% foreign owner and any other foreign related party. The goal is to obtain access to documents that are helpful in determining the correctness of the U.S. tax return. In an I.P.U., LB&I explains how it plans to obtain documents held outside the U.S. This may include a requested exchange under a tax information exchange agreement or a summons served on a domestic agent appointed to receive a summons that is enforceable abroad. Galia Antebi and Stanley C. Ruchelman explain the process that will be followed by the I.R.S.

September 29, 2016

Insights Vol. 3 No. 8: Updates & Other Tidbits

September 29, 2016/ Ruchelman P.L.L.C.

Fanny Karaman, Galia Antebi, and Nina Krauthamer address recent developments involving (i) the U.S. Treasury Department’s Priority Guidance Plan in the international arena, (ii) the negotiation of a new income tax treaty between the U.S. and Ireland, and (iii) a recently discovered abuse when a disregarded L.L.C. owned by a single foreign member sells U.S. real estate.

May 23, 2016

Insights Vol. 3 No. 5: Updates & Other Tidbits

May 23, 2016/ Ruchelman P.L.L.C.

In this month’s update, Elizabeth V. Zanet and Nina Krauthamer report on (i) attacks on cash pooling arrangements as part of earnings-stripping rules under Code §385, (ii) the latest regulations aimed at increasing financial transparency, including adoption of a customer due diligence (“C.D.D.”) final rule, (iii) proposed beneficial ownership legislation, and (iv) new reporting rules for foreign-owned, single member L.L.C.’s that engage in business with the foreign owner; as well as a new wave hiring by the I.R.S. of enforcement officers.

April 29, 2016

Foreign Owned, Single-Member L.L.C.’s: Proposed Regulations Imminent?

April 29, 2016/ Ruchelman P.L.L.C.

The offshore community often accuses the I.R.S. of having insufficient U.B.O. reporting for offshore companies forming single-member L.L.C.’s that serve as U.S. fronts for global business. The L.L.C. conducts business, but the I.R.S. treats the taxpayer as foreign. If no effectively connected income is generated, no U.S. tax returns are filed. The I.R.S. announced that information reporting will be required, much like partnership reporting by U.S. partnerships not having U.S. members or U.S. effectively connected income. Galia Antebi and Rusudan Shervashidze explain.