Tag Archive for Treasury

Treasury, IRS Issue Final And Proposed Regulations On Income Subject To A High Rate Of Foreign Tax

Treasury, IRS issue final and proposed regulations on income subject to a high rate of foreign tax

The Department of the Treasury and the Internal Revenue Service today issued a final regulation addressing the treatment of income earned by certain foreign corporations that is subject to a high rate of foreign tax.

The final regulations allow taxpayers to exclude certain high-taxed income of a controlled foreign corporation from their Global Intangible Low Taxed Income (GILTI) computation on an elective basis.

Treasury and the IRS today also issued a proposed regulation regarding the high-tax exception with the GILTI high-tax exclusion. Treasury and the IRS welcome public comments.

IR-2020-165

Written by | Posted in IRS • Proposed Regulations • Treasury Regulations

Treasury And IRS Release Draft Partnership Form To Provide Greater Clarity On International Tax Reporting

IRS Notice

The Treasury Department and the IRS released a proposed redesigned partnership form for tax year 2021 (filing season 2022). The proposed form is designed to provide greater clarity for partners on how to compute their U.S. income tax liability with respect to items of international tax relevance, including claiming deductions and credits.

The redesigned form and instructions provide guidance to partnerships on how to report international tax information to their partners in a standardized format. This proposed form would apply to a partnership required to file Form 1065 only if the partnership has items of international tax relevance (generally foreign activities or foreign partners). The proposed changes would not affect domestic partnerships with no international tax items to report.

This early release is intended to afford time for stakeholder input and engagement. Treasury and IRS invite comments from affected stakeholders through Sept. 14, 2020. Written comments should be sent to the following email address: lbi.passthrough.international.form.changes@irs.gov with the subject line: “International Form Changes.”
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Written by | Posted in IRS And Treasury

Gluten-Free Federal Tax Deduction

To be eligible to deduct the excess costs of a gluten-free diet under Internal Revenue Code Section 213, you must have a documented reason to require the observance of a gluten-free diet, along with a physician’s prescription to follow a gluten-free diet. This should provide sufficient documentation of eligibility.

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Written by | Posted in Tax Deductions

Approval Process Of International Tax Treaties By United States

Tom Kerester

Foreign countries across the world have intricate tax treaties with the United States, which include topics such as exchanging tax information with tax authorities. In order for these tax treaties to come to fruition, they must first pass through the Executive and Legislative Branches of the U.S. Government for approval.

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Written by | Posted in Tax Legislation

EU Commission Ante’s Up Texas Hold’em Bet, $13 Billion Against Apple

William Byrnes

The European Commission has concluded that Ireland granted undue tax benefits of up to €13 billion to Apple. This is illegal under EU state aid rules, because it allowed Apple to pay substantially less tax than other businesses. Ireland must now recover the illegal aid.

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Written by | Posted in Corporate • Europe • International • Tax Penalties

How Many Times To Tax Business Income?

Annette Nellen

A recent post (8/26/16) on the Tax Justice website was titled – Why We Must Close The Pass-Through Loophole? That caught my attention as I was trying to think what the “loophole” might be? A loophole is a provision that can be used beyond its intended purpose because the rule is not written specifically enough. When a rule is being used as intended, it is not a loophole. For example, sometimes the mortgage interest deduction is called a loophole, but it is not. People deducting interest on the mortgages on their primary and vacation homes is using the rule as intended.

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Written by | Posted in Corporate • Income Tax

Changing Taxation-Based Citizenship Through Regulation, Not Law

John RIchardson

This post is a continuation to my recent post: “The Internal Revenue Code does not explicitly define “citizen”, “citizenship” or require “citizenship-based taxation“.

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Written by | Posted in Citizenship • IRS • Tax Legislation

Treasury And IRS Issue Proposed Regulations On Disguised Sales And Partnership Liability Allocations

Summary

On January 30, 2014, Treasury and the IRS issued Proposed Regulations with respect to the disguised sale rules and the rules for allocating partnership liabilities (REG-119305-11). A major driving force behind these Proposed Regulations was the IRS’s victory in Canal Corporation and Subsidiaries, formerly Chesapeake Corporation and Subsidiaries v. Commissioner, 135 T.C. No. 9. (2010). In Canal, the Tax Court shot down a leveraged partnership structure by concluding that the contributing partner did not have a payment obligation with respect to the partner’s indemnity in large part because the terms of the indemnity were not commercially reasonable. Read More

Written by | Posted in Partnership • Small Business • Treasury Regulations • United States