Members of Ruchelman P.L.L.C. contribute to publications throughout the world and the Firm’s monthly tax journal, Insights.
What constitutes adequate disclosure? This topic continues to be a source of dispute between taxpayers and the I.R.S. Sheryl Shah and Nina Krauthamer discuss the statute of limitations consequences when a taxable gift that is not “adequately shown.”
Read MoreNewly issued temporary regulations (T.D. 9733) modify three of the six ways that rental or royalty income can qualify for the active exception to foreign personal holding company income (F.P.H.C.I.) under Subpart F. The new Treas. Reg. §1.954-2T addresses who can perform the required functions when a controlled foreign corporation (C.F.C.) leases or licenses property to an unrelated person, as well as the treatment of cost sharing arrangements.
Read MoreThe I.R.S. recently released temporary and proposed regulations to limit the use of foreign partnerships to avoid income inclusions under Code §956. The Temporary Regulations are more limited in their scope while the Proposed Regulations are quite broad. If finalized in the current form, the Proposed Regulations would cause most C.F.C. loans to partnerships with related U.S. partners to be investments in U.S. property.
Read MoreWe address the I.R.S.’s latest attempt to shut down schemes to avoid U.S. taxation by cracking down on what some may have considered a loop-hole under applicable partnership rules. In Notice 2015-54, 2015-34 IRB 210 (8/06/2015), the I.R.S. announced that it intends to issue regulations that would change the nonrecognition rules on certain property contributions to partnerships and L.L.C.’s with foreign partners. The new regulations would require that income or gain attributable to property be taken into account by the U.S. transferor, either immediately or periodically. Regulations would also be issued under §§482 and 6662 of the Internal Revenue Code (the Code) that apply to controlled transactions involving partnerships to ensure appropriate valuation of such transactions.
Read MoreAs the conclusion of the O.E.C.D.’s B.E.P.S. Project draws ever nearer, Rusudan Shervashidze examines domestic implementation efforts in a number of foreign countries and the unanticipated tax ramifications for multinational enterprises. In their attempts to meet these requirements, countries are making some of the most significant changes to international taxation policy that we have seen in decades.
Read MoreAmid a global context of widespread budget deficits, it seems that politicians have finally discovered that multinational enterprises, entrepreneurs, and high net worth individuals have recourse to legal frameworks that allow for the tax efficient structuring of investments. This article addresses the evolution of international tax planning through the use of Luxembourg S.P.V.’s from its origins to its heyday and future prospects in light of ongoing discussions at the level of the O.E.C.D. and the European Commission.
Read MorePublished in Taxsutra: September 2015.
Read MorePublished in Taxsustra: September 2015.
Read MorePublished by the American Bar Association in the Real Property Trust & Estate eReport, August 2015.
Read MoreAs Democrats and Republicans attempt to revamp the U.S. tax system, there is renewed discussion of lowering the corporate tax rate. In other national news, U.S. expatriation numbers are down in Q2 of 2015, the I.R.S. Transfer Pricing Operations Unit is officially here to stay, and three more banks agree to disclose activities to D.O.J.
Read MoreJuly and August were busy months for F.A.T.C.A. developments. We explain the highlights: The I.R.S. notified countries with early I.G.A.’s that more favorable provisions are available, but the notice may escalate the on-boarding controversy with Canada and the U.K. The Common Reporting Standard (C.R.S.) is moving forward – either with or without U.S. participation – and global F.I.’s must adjust reporting systems. Iceland and the United Arab Emirates publish F.A.T.C.A. guidance. Belarus ratified the I.G.A. with the U.S. Italy published an implementation decree for exchange of information. Turkey and Slovakia signed Model 1 I.G.A.‘s. Mauritius and Luxembourg extend local F.A.T.C.A. reporting deadlines.
Read MoreThe I.R.S. proposal to deny refunds of excess withholding tax in cases were the withheld tax is stolen by the withholding agent was harshly criticized by the Information Reporting Program Advisory Committee. It seems the I.R.S. does not have the authority to pass the loss onto the party that suffered withholding. Elizabeth V. Zanet and Andrew P. Mitchel discuss the issue in detail.
Read MoreThe EDF experience in France demonstrates that State Aid in Europe comes in many forms, and it can be harshly treated when discovered. Beate Erwin looks at the case against France’s main electricity provider and other developments in the European Commission’s attack on State Aid through private tax rulings. She finds that the result in the EDF case is not an anomaly.
Read MoreThe I.R.S. has discovered that related taxpayers have been renegotiating existing intercompany loans to allow operating companies within the group to pay a higher rate of interest to a related party benefitting from favorable tax attributes without violating Code §482 principles. Andrew P. Mitchel and Sheryl Shah explain how the I.R.S. is taking aim at this new approach to self-help.
Read MoreMany advisers believe that the interest-charge Domestic International Sales Corporation (D.I.S.C.) is the last great international tax planning idea because a portion of the export profits are taxed at low rates for shareholders that are individuals. Some believe it is even better when the benefit is channeled to a Roth I.R.A. that provides tax forgiveness rather than tax deferral. But in a recent case won by the I.R.S., we see how too much of a good thing may be bad.
Read MorePoliticians have led us to believe that inverted corporations are not eligible for U.S. government contracts. However, the manufacturing giant Ingersoll-Rand has a different view and the Department of Homeland Security appears to be in agreement.
Read MoreThe busy season for the B.E.P.S. Project opened at the end of July, as O.E.C.D. Working Parties completed their assignments. Readers may wish to see how the world will look after all B.E.P.S. Actions are completed. Galia Antebi and Stanley C. Ruchelman discuss several developments.
Read MoreIn April, the I.R.S. proposed regulations (REG-108214-15) that provide exceptions for P.F.I.C. treatment for offshore insurance companies, unless they are formed by hedge funds intending to defer or reduce tax. Andrew P. Mitchel and Christine Long look at comments of industry representatives. Many professionals deem these regulations too restrictive, needlessly subjecting legitimate insurance businesses to the harsh tax treatment of P.F.I.C.’s.
Read MoreFavorable long-term capital gains tax treatment for managers of hedge funds has been under attack by the Obama Administration. While the industry defended itself from outright changes to favorable tax treatment, the I.R.S. recently proposed to disallow favorable treatment where a manager’s right to payments bears no entrepreneurial risk. Nina Krauthamer, Philip R. Hirschfeld, and Kenneth Lobo explain.
Read MoreIs the Altera case important because it struck down the I.R.S.’s stock-based compensation regulations related to cost sharing agreements? Or is it important because of the procedural analysis, which enabled the Tax Court to be in position to strike down a regulation? Beate Erwin, Stanley C. Ruchelman, and Michael Peggs explain why the case is important for both reasons.
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