International Tax Blog

Updated IRS Practice Units by Topic Page

The IRS publishes Practice Units (“PUs”) (formerly "International" Practice Units) on its website. PUs provide IRS staff with explanations of general tax concepts, as well as information about specific types of transactions. These PUs discuss many U.S. international tax issues that are applicable to businesses. The IRS website does not categorize them by topic therefore it can be difficult to find PUs on a particular topic. Our page Practice Units by Topic categorizes the PUs... Read more →

Tax Court Declines to Follow Rev. Rul. 91-32

Last week, the Tax Court released an important opinion in Grecian Magnesite Mining, Industrial & Shipping Co., SA v. Commissioner, 149 T.C. No. 3, where the court declined to follow Rev. Rul. 91-32. For more than 25 years the IRS has maintained that gain on a foreign partner’s disposition of an interest in a partnership that conducts business in the U.S. is subject to U.S. tax. To arrive at this conclusion, the IRS applied the... Read more →

Failures to Adjust for Inflation

If Congress pursues tax reform this year, it should consider allowing inflation adjustments for the items discussed below. Each year, the IRS publishes inflation adjustments that modify the tax law as originally enacted. We regularly post about the inflation adjustments in the international tax arena. However, there are some significant values in the international tax area that are not adjusted for inflation. In one case, the value has remained unchanged for over eighty years. FBAR... Read more →

15 New Tax Charts

Today we added 15 new situational charts to andrewmitchel.com dealing with a variety of topics. Am. Metallurgical Coal Co. v. Commr. T.C. Memo 2016-139: Transfer Was For Equity And Not For Debt; Post Transfer Payments Were Dividends In Re DeCoro USA Ltd U.S. Bankruptcy Court, M.D.N.C., Case No. 09-10846C-11G: Inbound Furniture Sales: Sales Comm. Model vs. Distributor Model Revenue Ruling 67-202: Contribution & Liquidation Was An Asset Reorganization & Section 269 Did Not Apply Revenue... Read more →

IRS International Practice Units By Category

The IRS drafts publications that summarize in plain English U.S. tax rules for a variety of tax topics. A few of the publications discuss U.S. international tax issues. However, most of the IRS international publications deal with the U.S. taxation of individuals, and not with the U.S. taxation of businesses. For example, IRS publications do not cover Subpart F Income, outbound transfers to foreign corporations, transfer pricing, etc. To learn about these rules, one would... Read more →

Chart of PLR 201411006 - Combination of Two Consolidated Groups Owned by Foreign Parent

Last week the IRS published PLR 201411006, where a foreign parent operated two different consolidated groups in the U.S. and proposed a series of transactions which would combine the two consolidated groups into one. The IRS applied the allocation of basis rules under Code §358 to the transaction. One of the first transactions involved making entity classification ("check-the-box") elections for the foreign holding corporations to treat them as disregarded entities, which would trigger a deemed... Read more →

Chart of Rev. Rul. 90-76 - Foreign Corporations: Liquidating Distributions of USRPIs

Below is a chart of Rev. Rul. 90-76 in which the I.R.S. addressed where gain must be recognized when foreign corporations liquidate, distributing U.S. Real Property Interests ("USRPIs"). The chart can be viewed as a PDF file here: Rev. Rul. 90-76 Read more →

Loan With “Kicker” is a USRPI

Treas. Reg. §1.897-1(c) defines the term “United States real property interest” (“USRPI”) to mean any interest, other than an interest solely as a creditor, in either: (i) real property located in the United States or the Virgin Islands, or (ii) a domestic corporation unless it is established that the corporation was not a U.S. real property holding corporation within the period described in section 897(c)(1)(A)(ii). Treas. Reg. §1.897-1(d)(2) provides that an interest in real property... Read more →