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Tag Archive for New York

IRC Section 965 Transition Tax – Part 10

John-Richardson- Investigating the Transition Tax

Individuals Subject to U.S. State Tax Jurisdiction, the Response of New York State

This is the tenth in my series of posts about the Sec. 965 Transition Tax and whether/how it applies to the small business corporations owned by taxpaying residents of other countries (who may also have U.S. citizenship). These small business corporations are in no way “foreign”. They are certainly “local” to the resident of another country who just happens to have the misfortune of being a U.S. citizen.

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Senior Tax Manager/ International Tax (Rutherford, New Jersey)

Tax Job, Senior Tax Manager - International

Position is responsible for providing technical tax leadership, with an emphasis on international tax. Position is responsible for international tax matters for the Americas consolidated group including preparation and/or review of international portions of the consolidated tax provision, preparation and/or review of international reporting requirements for the US consolidated return and transfer pricing. Transfer pricing responsibilities include managing documentation processes, preparation and review of various analyses, providing guidance to Brand Finance and Operations teams and intensive interaction with HQ transfer pricing team. Responsible for transfer pricing in a complex inbound, multinational group. Position is responsible for ensuring timely compliance and reporting by the international affiliates in the group for both income and transaction taxes. Highly visible position especially regarding transfer pricing. Significant interaction with the business as well as accounting teams.

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District Court Broadens Scope Of Willful Requirement In Applying Enhanced FBAR Penalities

A new U.S. District court case has added to the recent upswing in cases tackling the issue of defining “willful” for purposes of applying the more severe penalties for failure to file the FBAR.

In U.S. v. Garrity, 2018 U.S. Dist. LEXIS 56888 (D. Conn. 2018), a United States District Court of Connecticut judge ordered that in moving to the next phase of trial, the IRS must prove the elements of its FBAR penalty claim only by a preponderance of the evidence, and the IRS can satisfy its burden to prove willfulness by evidencing reckless conduct by the taxpayer. Read more

2017 IRS Data Book Shows Chances Of Being Audited

The IRS has published the 2017 version of its annual IRS Data Book, which contains statistical information about the IRS and taxpayer activities during the previous year. The IRS Data Book helps illustrate the breadth and complexity of the U.S. tax system. According to the Data Book, during fiscal year 2017 (Oct. 1, 2016 to Sept. 30, 2017), the IRS collected overall more than US$ 3.4 trillion from taxpayers, processed more than 245 million tax returns and other forms, and issued more than $436 billion in tax refunds.

The IRS also audited almost 1.1 million tax returns during fiscal year 2017.  Almost 90% of the audited returns were individual income tax returns. While the percentage of overall returns audited was relatively low at 0.5% overall, the percentages were significantly higher for two types of taxpayers – wealthy individuals and individuals filing international returns. Read more

Important Facts To Know About IRS Levy

A levy is a legal seizure of your property to satisfy a tax debt. Refusal to pay the tax will have the following result. The IRS will usually issue a levy after they assess the tax and send a tax bill or a Notice and Demand for Payment.

If you still refuse to pay, then the IRS will issue a Final Notice of Intent to Levy and Notice of Your Right to a Hearing at least 30 days before the levy. The IRS may give you this notice in person, leave it at your home or business, or send it to your last known address by certified or registered mail with return receipt request. Read more

Due Date Clarified For Transition Tax On Foreign Company Owners

Of all the income tax provisions in Trump’s major tax reform legislation, the so-called “transition tax” is perhaps the most unusual in its scope and breadth. For many U.S. persons owning foreign companies that trigger the transition tax, a certain degree of panic set in at the beginning of this year, because the transition tax statute (IRC Section 965), if read strictly, seems to give a hard deadline of April 15 for paying the first portion of the tax under the statute’s payment installment plan. Read more

FBAR Penalties Rise Again Due To Inflation

As with many numbers in the U.S. tax code (for example, the foreign earned income exclusion maximum amount), FBAR penalties increase periodically due to inflation.

Recently, the IRS announced that FBAR penalties for noncompliance would be increased for penalties assessed after January 15, 2017. A brief summary of the FBAR requirement and the new penalty amounts are the subjects of this blog.

The FBAR Requirement – A Quick Background Read more

Italy’s Supreme Court Rules That No Transfer Taxes Apply To The Transfer Of Property Into A Trust

With its ruling n. 975 issued on January 18, 2018 Italy’s Supreme Court held that the transfer of an asset (real estate property) to an irrevocable trust falls outside the scope of Italy’s registration, cadastral and mortgage taxes (transfer taxes), charged at the aggregate rate of 10 percent, on the theory that it is a transitory step before the final transfer of the property to the beneficiaries of the trust actually occurs, at which time the transfer taxes should apply.

The ruling is consistent with a previous decision of the Supreme Court on the same issue, that is, ruling n. 21614 of October 26, 2016 (which we also commented upon on this blog). Read more

Major New US Tax Reporting Requirement For Foreign-Owned LLCs

Are you a non-US person with a US LLC? Then you need to be aware of the major new US reporting requirement for foreign-owned LLCs. The deadline is coming up soon.

Previously, foreign-owned single-member LLCs enjoyed an exemption from US tax reporting requirements. Starting with the 2017 tax year however LLCs that are wholly owned by foreign persons and did not elect to be treated as corporations for tax purposes, are subject to new IRS reporting requirements. Read more

U.S. Tax Considerations For The Digital Nomad Living Abroad

In today’s age of “digital nomads,” the idea of working remotely overseas continues to grow in popularity. New programs, such as Remote Year, have further facilitated overseas commuting by organizing year-long trips for employees and freelancers to live in multiple cities abroad. Participants, for example, travel in groups to live in multiple cities throughout Europe, Asia and South America, for one month each over a year period.

Working abroad presents a number of unique U.S. income tax issues and opportunities for the digital nomad.  One main issue is qualification for the Foreign Earned Income Exclusion (“FEIE”), which allows U.S. citizens living abroad to exclude their foreign earned income from U.S. federal taxation. Another important issue is a digital nomad’s potential liability for state and local taxation even during their time living and working abroad. Read more

Deducting Your Mortgage Interest After The Tax Reform

This past week, the IRS offered guidance on its website on the new restrictions placed by the Tax Cuts and Jobs Act (“TCJA”) on the home mortgage interest deduction.

The guidance is noteworthy for the U.S. expat community, because when it comes to the home mortgage interest deduction, the tax code does not distinguish between a home in the U.S. and a home abroad. In appropriate circumstances, the mortgage interest deduction can be an important tax saving method for citizens living abroad.

The Home Mortgage Interest Deduction Read more

Italian Tax Code: Economic Nexus Rule And Changes To Permanent Establishment

With the Budget Law for 2018 (Law n. 205 of December 27, 2017), Italy amended the definition of the term “permanent establishment” set forth in article 162 of the Italian Tax Code.

The term permanent establishment now covers situations in which a foreign enterprise does not have a physical nexus with Italy, but it has a regular and continuous economic presence in the country; engages in ancillary activities that are an essential component of its core business, or operates through commissioners or other agents who do not enter into contracts in the name of the enterprise, but procure the conclusion of contracts that are eventually signed by the principal with no material modifications. Read more

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