Archive for Treasury Regulations

FinCEN Further Restricts North Korea’s Access to the U.S. Financial System and Warns U.S. Financial Institutions of North Korean Schemes

Willliam Byrnes, Tax Advisor

The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued a final rule under Section 311 of the USA PATRIOT Act that severs Bank of Dandong, a Chinese bank that acts as a conduit for illicit North Korean financial activity, from the U.S. financial system. FinCEN also issued today an advisory to further alert financial institutions to schemes commonly used by North Korea to evade U.S. and United Nations (UN) sanctions, launder funds, and finance the North Korean regime’s weapons programs.

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Treasury Issues Final & Temporary Section 385 Regs

Ron Marini

As part of the Obama administration’s announcement of a crackdown on inversions the U.S. Treasury issued final and temporary proposed regulations that would dramatically change the taxation of corporate debt issued to related corporations having nothing to do with inversions or foreign acquisitions.

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The Service Issues Final Treasury Regulations Governing R&D Tax Credit Claims

On October 3rd of 2016, the Internal Revenue Service (hereinafter “the Service”) issued Final Treasury Regulations setting forth guidance on research and development efforts in connection to Internal Use Software (hereinafter “IUS”) for purposes of claiming the Research & Development Tax Credit (hereinafter “RTC”) under I.R.C. § 41.

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QTIP Election Can Be Ignored Where It Was Not Necessary To Reduce The Estate Tax To Zero

Ron Marini

Revenue Procedure 2016-49 provides procedures to disregard and treat as null and void for transfer tax purposes a qualified terminable interest property (QTIP) election in situations where the QTIP election was not necessary to reduce the estate tax liability to zero.

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U.S. Treasury Seeks Comments On Form 8975—CbC Reporting Form

Ron Marini

On May 5, 2016, we posted Possible CbC Optional Reporting for 2016 Under Consideration by US Treasury, which discussed that the Treasury and IRS were working towards a solution that would allow optional country-by-country (CbC) reporting for 2016. Also, more work would be needed to ensure that allowing optional filing for 2016 in the US would be effective in obviating the need for local filing. The Treasury and IRS also requested that U.S. multinational corporations (MNCs) to engage in the global debate to ensure optional CbC reporting will be enough to protect U.S. MNCs from becoming subject to secondary reporting requirements.

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What Does The New U.S. Treasury Model Tax Treaty Mean For You?

John Richardson

On July 12, the U.S. Treasury released its 2016 Model Tax Treaty. I suspect that people will interpret this in terms of how it affects their individual tax situations. This gives a huge clue with respect to information exchange and how the U.S. views “double taxation,” citizenship-based taxation, and related issues.

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Treasury Announces Release of 2016 U.S. Model Income Tax Treaty With Info Sharing!

Today February 17, 2016, the Treasury Department issued a newly revised U.S. Model Income Tax Convention (the “2016 Model”), which is the baseline text the Treasury Department uses when it negotiates tax treaties.  The U.S. Model Income Tax Convention was last updated in 2006.

“The 2016 Model is the result of a concerted effort by the Treasury Department to further our policy commitment to provide relief from double taxation and ensure certainty Read more

The Service Issues New Administrative Authority Governing TPR De Minimis Safe Harbor Limits for Small Businesses

On November 24th of 2015, the Internal Revenue Service (hereinafter the “Service”) streamlined the compliance for the Tangible Property Regulations (hereinafter “TPR”) for small businesses by increasing the safe harbor threshold for deducting certain capital items from $ 500 to $ 2,500 under IRS Notice 2015-82. The scope affects businesses that do not maintain an Applicable Financial Statement (hereinafter “AFS”) such as an audited financial statement. It applies to amounts spent to acquire, produce or improve tangible property that would normally qualify as a capital item.

The new $2,500 threshold applies to any such item that is substantiated by an invoice. As a result, small businesses will be able to immediately deduct expenditures that would otherwise need to be spread over a period of years through annual depreciation deductions. The new $2,500 threshold takes effect starting with tax year 2016. Read more

IRS Intends To Amend Sections 1471-1474 Regulations to Extend the Time that FATCA Transitional Rules Will Apply

In Notice 2015-66 the Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) announced that they intend to amend regulations under sections 1471-1474 to extend the time that certain FATCA transitional rules will apply.  Specifically, the amendments will extend:

(1) the date for when withholding on gross proceeds and foreign passthru payments will begin;

(2) the use of limited branches and limited foreign financial institutions (limited FFIs); and

(3) the deadline for a sponsoring entity to register its sponsored entities and redocument such entities with withholding agents. Read more

More & More Swiss Banks Are Striking Deals With the DoJ!

On April 9, 2015, we posted More Swiss Banks Are Striking Deals With the DoJ Including Providing Your Tax Information! where we discussed that during the week of March 30, 2015, Swiss bank BSI SA became the first bank to reach a resolution under a voluntary disclosure program for tax-related offenses run by the Justice Department. BSI agreed to pay a $211 million penalty after admitting it had for decades assisted thousands of U.S. clients in opening accounts in Switzerland and hiding assets from tax authorities.

“I would stay tuned,” Acting Assistant Attorney General Caroline Ciraolo of the Justice Department’s Tax Division said in an interview late on Tuesday, adding that a number of non-prosecution agreements will be signed in the “very near future.”

On Friday, May 8, 2015 the The Department of Justice (DoJ ) announced that Vadian Bank AG (Vadian), located in St. Gallen, Switzerland, reached a resolution under the DOJ’s Swiss Bank Program.

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Incorrectly Issued Health Insurance Marketplace Statement Relief – Form 1095A

I had a grEAt conversation with my friend Bob Kerr Friday. We talked about the Department of the Treasury expanding the relief it announced previously on February 24, which will mitigate any harm to tax filers in regards to filing Form 1095A under the Affordable Care Act.

Basically, if you enrolled in Marketplace coverage, received an incorrect Form 1095-A, and filed your return based on that form, you do not need to file an amended tax return.

Additional points Bob brought up include:

• The IRS will not pursue the collection of any additional taxes from you based on updated information in the corrected forms. This relief applies to tax filers who enrolled through the Read more

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