June 14, 2018

Vol. 5 No. 5: Updates and Other Tidbits

June 14, 2018/ Ruchelman P.L.L.C.

This month, Rusudan Shervashidze and Nina Krauthamer look at several interesting updates and tidbits, including (i) limited relief for transition tax, (ii) a new twist to phishing that involves fake I.R.S. calls, (iii) another twist on phony correspondence requesting W-8BEN information that is used to obtain persona information often used by banks to confirm identities of customers, and (iv) new FinCEN money transmitter rules that apply to I.C.O.’s.

May 09, 2018

Insights Vol. 5 No. 4: Updates & Other Tidbits

May 09, 2018/ Ruchelman P.L.L.C.

This month, Tomi Oguntunde and Nina Krauthamer look briefly at several recent developments in international tax: (i) the Financial Accounting Standards Board continues to study the effect of the recent tax reform legislation on quarterly and annual reports, (ii) winners and losers under the recent tax reform legislation, and (iii) South Dakota v. Wayfair, Inc., a case involving the right of a state to impose an obligation on out-of-state internet retailers who maintain a “digital presence” in the state through internet sales.

April 01, 2018

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

April 01, 2018/ Ruchelman P.L.L.C.

This month, Tomi Oguntunde, Sheryl Shah, and Nina Krauthamer look briefly at four recent developments in international tax: (i) the E.U. counteroffensive to U.S. tax reform involving stricter tax rules, (ii) the amendment of Form 1023-EZ, which is a streamlined application for non-profit entities applying for tax exempt status, (iii) Spain’s crackdown on celebrities attempting to evade tax, and (iv) Luxembourg’s continued pushback against the Amazon State Aid case.

April 01, 2018

New York Resisting S.A.L.T. Cap Under Federal Tax Reform

April 01, 2018/ Ruchelman P.L.L.C.

When the T.C.J.A. capped the deduction for state and local income and property taxes at $10,000 – more tax can be paid, but only $10,000 can be deducted – state governments did not take the provision lightly. One proposal that has gained traction in Albany and other state capitals involves creating charitable funds that would raise voluntary capital for specific governmental purposes. The goal is for taxpayers to claim the charitable contributions as a deduction for Federal tax purposes and, at the same time, benefitting from a substantial credit against their state income tax liabilities. Another, less contentious proposal would utilize employer-side payroll taxes to offer employees a credit against state and local taxes. Nina Krauthamer, Elizabeth V. Zanet, and Sheryl Shah assess the viability of these proposals and the likely impact of tax reform on New York State. Opinions are not consistent. Stay tuned.

April 01, 2018

When "Defective" Is Desirable – Pre-Immigration Planning for Families with U.S. Persons

April 01, 2018/ Ruchelman P.L.L.C.

The term “intentionally defective” sounds problematic, but in reality, is quite favorable when it comes to estate planning. Intentionally defective grantor trusts are an especially useful tool when combined with pre-immigration planning for a family where only one spouse is a U.S. citizen because these trusts are disregarded for income tax purposes but respected for estate tax purposes. If set up and funded by a non-citizen spouse before arrival in the U.S., gift and estate tax planning can be achieved in a low tax environment. In these trusts, the settlor continues to pay tax on the income even though not a beneficiary. As a result, the beneficiary does not pay income tax on trust distributions and the tax payment by the grantor is not considered to be gift to the beneficiary. Hence, no gift tax. Fanny Karaman and Nina Krauthamer explain all.

February 28, 2018

Insights Vol. 5 No. 2: Updates & Other Tidbits

February 28, 2018/ Ruchelman P.L.L.C.

This month, Tomi Oguntunde, Sheryl Shah, and Nina Krauthamer look briefly at four recent developments in international tax: (i) an I.R.S. directive temporarily halting new examinations involving cost sharing agreements that do not include stock-based compensation costs, (ii) an I.R.S. appeal of a Texas District Court case in which certain anti-inversion rules were invalidated for nonconformance with the Administrative Procedures Act, (iii) Dutch measures to eliminate intragroup dividend withholding tax and address abusive tax planning channeled through the Netherlands, and (iv) a revised timeline for implementation of withholding tax on transfers involving effectively connected gain under Code §1446(f).

January 26, 2018

Insights Vol. 5 No. 1: Updates & Tidbits

January 26, 2018/ Ruchelman P.L.L.C.

This month, Neha Rastogi and Nina Krauthamer look briefly at three recent developments in international tax: (i) expired I.T.I.N.’s and how tax returns that use an expired I.T.I.N. will be treated by the I.R.S., (ii) the E.U. blacklist of uncooperative jurisdictions, which includes American Samoa and Guam, and (iii) and unanticipated tax demands on contributions to the Brexit campaign.

January 26, 2018

Individual, Corporate, and Trust News from France

January 26, 2018/ Ruchelman P.L.L.C.

The end of each year in France is marked by a fiscal legislative process to amend the current year’s finance law and to draft the law for the upcoming year. The year 2017 was no exception. Changes will be made to wealth tax, tax brackets, tax on investment income, corporate tax rates, and the 3% additional tax on dividend distributions (retroactively). Fanny Karaman and Nina Krauthamer explain the tax changes.

November 30, 2017

Insights Vol. 4 No. 11: Updates & Other Tidbits

November 30, 2017/ Ruchelman P.L.L.C.

This month, Sheryl Shah and Nina Krauthamer look briefly at two I.R.S. actions: (i) the roll out of a long-awaited passport denial program and (ii) the end of favorable rulings on certain worthless stock deductions and spinoffs.

November 30, 2017

Art and the Estate Part II – Nonresidents

November 30, 2017/ Web Developer

Foreign persons owning artwork physically located in the U.S. must be mindful of special income, estate, and gift taxes associated with that ownership. In the second of a series, Rusudan Shervashidze and Nina Krauthamer look at issues such as use tax, which is the U.S. equivalent of a reverse charge of V.A.T., estate tax, and gift tax.

October 24, 2017

Insights Vol. 4 No. 10: Updates & Other Tidbits

October 24, 2017/ Ruchelman P.L.L.C.

This month, Sheryl Shah, Neha Rastogi, and Nina Krauthamer look briefly at certain timely issues: (i) Swiss nexus requirements to be eligible for treaty benefits, (ii) the impact of technology tax reporting and information sharing, (iii) an I.R.S. pilot program expanding the scope of letter rulings to Code §355 stock and security distributions, and (iv) recent application of the 2016 anti-inversion regulations issued by the Obama Administration under Code §7874.

October 24, 2017

Art and the Estate: Why Planning is Important, Part I – U.S. Taxpayers

October 24, 2017/ Ruchelman P.L.L.C.

Taxpayers holding valuable works of art receive different tax treatment, depending on the characterization of the individual. Is the individual the artist, a dealer, an investor, or a collector? Rusudan Shervashidze and Nina Krauthamer examine various planning tools available, focusing mostly on the collector.

September 20, 2017

A Case of Nonacquiescence: I.R.S. Opposes Bartell Decision

September 20, 2017/ Ruchelman P.L.L.C.

Tax-smart investors in U.S. real estate understand that the principal method of disposing real property is to participate in a two-party swap transaction with the ultimate purchaser or a three-party deferred swap through a qualified intermediary. In Bartell v. Commr., the U.S. Tax Court allowed a replacement property to be purchased by an exchange accommodation title holder with whom it was parked for 17 months prior to its transfer. However, the I.R.S. has issued a notice of nonacquiescence, advising taxpayers that it disagrees with the holding of the court. Rusudan Shervashidze and Nina Krauthamer explain the facts in Bartell, the safe harbor that was published in Rev. Proc 2000-37, and the status of the facilitator as a beneficial owner for purposes of allowing tax deferral in the swap transaction.

September 20, 2017

Bilateral Investment Treaties: When Double Taxation Agreements Are Not Enough

September 20, 2017/ Ruchelman P.L.L.C.

The U.S. enters into bilateral investment treaties to protect and promote foreign investment. Unlike double taxation agreements, which relate exclusively to tax matters, they are not usually seen as a defense mechanism when dealing with foreign tax authorities. Interestingly, they are! Rusudan Shervashidze and Nina Krauthamer explain.

August 15, 2017

Insights Vol. 4 No. 8: Updates & Other Tidbits

August 15, 2017/ Ruchelman P.L.L.C.

This month, Neha Rastogi and Nina Krauthamer look briefly at certain timely issues: (i) a European parliament proposal to extend the scope of country-by-country (“CbC”) reporting by group members when the group parent is not obligated to report and (ii) regulations identified by the I.R.S. as imposing undue burden on taxpayers.

August 15, 2017

Foreign Partner Not Subject to U.S. Tax on Gain from Redemption of U.S. Partnership Interest

August 15, 2017/ Ruchelman P.L.L.C.

Hurray! After three years, the U.S. Tax Court ruled that gain from the sale of a partnership interest or the receipt of a liquidating distribution by a retiring partner is not subject to U.S. income tax even though the partnership conducts business in the U.S. Neha Rastogi, Elizabeth V. Zanet, and Nina Krauthamer explain the reasoning behind the decision and the magnitude of the defeat for the I.R.S. Unless the case is reversed on appeal, the decision invalidates the I.R.S. position announced in Rev. Rul 91-32.

June 29, 2017

Insights Vol. 4 No. 6: Updates and Tidbits

June 29, 2017/ Ruchelman P.L.L.C.

This month, Beate Erwin, Astrid Champion, and Nina Krauthamer look briefly at several timely issues, including (i) the return of foreign certified acceptance agents to the passport certification process in connection with the issuance of U.S. I.T.I.N.’s, (ii) the effect of the French election on French tax reform proposals, and (iii) demands for the U.S. to provide the same type of information as is supplied to I.G.A. partner countries.

June 27, 2017

I.R.S. Breaks the Silence with Rev. Rul. 2017-09, Issues Guidance on “North-South” Transactions

June 27, 2017/ Ruchelman P.L.L.C.

In Rev. Rul. 2017-09, the I.R.S. addressed “north-south” transactions. In these transactions, a shareholder transfers property to a corporation in a transaction structured to be free of tax under Code §351. At about the same time, the corporation distributes shares of its subsidiary to the shareholder in a spinoff. If the transactions are considered separate for income tax purposes, each can be effected free of gain recognition and the imposition of income tax. On the other hand, if the transactions are integrated into a single multi-step transaction, gain will be recognized and tax imposed on each step of the arrangement. The ruling announces that the I.R.S. will once again rule on the status of these transactions and provides guidance on the standard that the I.R.S. will apply. Rusudan Shervashidze and Nina Krauthamer explain the factual context and the approach of the I.R.S. in granting relief.

May 23, 2017

Insights Vol. 4 No. 5: Updates & Other Tidbits

May 23, 2017/ Ruchelman P.L.L.C.

This month, Astrid Champion and Nina Krauthamer look briefly at several timely issues, including (i) a novel claim of treaty residence in Ireland by a nonresident Irish domiciled individual subject to the domicile levy under Irish law and (ii) the introduction of a beneficial ownership register regime in the Cayman Islands regarding certain Cayman Islands corporations.

April 28, 2017

Insights Vol. 4 No. 4: Updates & Other Tidbits

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

This month, Astrid Champion, Nina Krauthamer, and Jennifer Lapper look briefly at several timely issues, including (i) instructions for Form 8975, Country-By-Country Report, and Schedule A, Tax Jurisdiction and Constituent Entity Information, for U.S.-based multinationals, (ii) tax breaks for midsized companies in China, (iii) an executive order calling for review of all I.R.S. regulations issued in 2016, with a view to their withdrawal, and (iv) the French Constitutional debate over penalties for nondisclosure of trust assets.