International Tax Blog

New IRS Practice Unit - 1120-F Delinquent Returns - Filing Deadline Waiver Process

Yesterday the IRS published a new practice unit titled “Allowance of Deductions and Credits on 1120-F Delinquent Returns.” Under Code §882(c)(2), an untimely foreign corporation filer is not entitled to deductions and credits. However, Treas. Reg. §1.882-4(a)(3)(ii) permits the filing deadline to be waived. This practice unit explains the deadline waiver process. This new practice unit has been added to our Practice Units By Topic page. Read more →

New IRS Practice Unit - NRA Deferred Compensation

Yesterday the IRS published a new practice unit titled “Deferred Compensation Received by Nonresident Alien Individuals.” The practice unit discusses payments to NRAs from four types of deferred compensation plans: Salary deferral – unfunded deferred compensation plans under which U.S. taxation is deferred until payment is made. Distributions from a tax-qualified retirement plan (usually a pension or profit-sharing plan) of a U.S. company. Payments made by a U.S. company under an unfunded “top hat” retirement... Read more →

Two New IRS Practice Units - NRA employee expenses & Form 1040NR for RGS

This past week the IRS published two new practice units titled: Examining Education Expenses Claimed by Nonresident Alien Individual Employees Form 1040NR Examination Adjustments in RGS The first practice unit mentioned above applies only to tax years beginning before 2018 and after 2025. The Tax Cuts and Job Acts of 2017 suspended the deductibility of unreimbursed employee expenses as itemized deduction from 2018 through 2025. The second practice unit mentioned above deals with how to... Read more →

New IRS Practice Unit - FTC (Business) General Principles

Yesterday the IRS published a new practice unit titled: FTC (Business) General Principles This new practice unit has been added to our Practice Units By Topic page. Read more →

2 New IRS Practice Units

Last week the IRS published two new practice units. One was titled: Transfers of Property to Partnerships with a Related Foreign Partner and the other was titled: Accuracy-Related Penalty on Understatements With Respect to Reportable Transactions These 2 practice units have been added to our Practice Units By Topic page. Read more →

New IRS Practice Unit: Overview of IRC 987 and Branch Operations in a Foreign Currency

Last week the IRS published a new practice unit titled Overview of IRC 987 and Branch Operations in a Foreign Currency. This practice unit has been added to our Practice Units By Topic page. Read more →

3 New IRS Practice Units

Yesterday the IRS published a new practice unit titled “IRC Section 250 Deduction: Foreign-Derived Intangible Income (FDII)”. In addition, Wednesday they published the practice unit “Revised ASC 730 Directive - Computing Qualified Research Expense”, and last week they published the practice unit "Foreign Tax Redeterminations". These 3 practice units have been added to our Practice Units By Topic page. Read more →

New IRS Practice Unit: Concepts of GILTI

Yesterday the IRS published a new practice unit titled “Concepts of Global Intangible Low-Taxed Income Under IRC 951A.” In addition, last week the IRS published a practice until titled “Partner’s Outside Basis.” Both of these practice units have been added to our Practice Units By Topic page. Read more →

New IRS Practice Unit: Allocation and Apportionment of Deductions

Yesterday the IRS published a new practice unit titled “Allocation and Apportionment of Deductions.” This practice unit discusses the allocation and apportionment of expenses and deductions for purposes of computing the foreign tax credit limitation. We have added this practice unit to our Practice Units By Topic page. Read more →

New IRS Practice Units - FTC Carryback and Carryover & Liquidating Distributions of a Partner’s Interest in a Partnership

Last week the IRS published 2 new practice units related to international tax: FTC Carryback and Carryover Liquidating Distributions of a Partner’s Interest in a Partnership PDF We have added these practice units to our Practice Units By Topic page. Read more →

New IRS Practice Unit: 965 Transition Tax

Yesterday the IRS published a new practice unit titled “IRC 965 Transition Tax Overview.” This practice unit discusses the section 965 transition tax that was enacted as part of TCJA. Section 965 deals with the treatment of deferred foreign income upon the transition to the participation exemption system of taxation. You can find links to this practice unit on our Practice Units By Topic page. Read more →

New IRS Practice Unit: Foreign Earned Income

Yesterday the IRS published a new practice unit titled “Foreign Earned Income for Purposes of IRC 911.” This practice unit discusses "foreign earned income" for purposes of Code §911, and rounds out the 10th practice unit on the foreign earned income exclusion ("FEIE"). The IRS now has the following practice units on the foreign earned income exclusion: Foreign Earned Income (2020) Physical Presence Test (2017) Bona Fide Residence Test (2015) Calculating the FEIE - Employee... Read more →

New IRS Practice Units: Reasonable Cause and Good Faith & FTC Limitation

The IRS recently published two new practice units related to international tax: Reasonable Cause and Good Faith and FTC Limitation. The first practice unit discusses the reasonable cause exception for penalty relief. The second practice unit discusses the foreign tax credit limitation for individuals. Foreign tax credits are generally limited to the U.S. tax on foreign income. We have added these practice units to our Practice Units By Topic page. Read more →

New IRS Practice Unit: Flow-Through Entities Effects on FTC

Yesterday the IRS published a new practice unit titled “Flow-Through Entities Effects on FTC.” This practice unit discusses how flow-through entities affect an individual’s foreign tax credit. We have added this practice unit to our Practice Units By Topic page. Read more →

Two New (& One Updated) IRS Practice Units

Yesterday the IRS published some new practice units and updated an existing practice unit. The new units included: FEIE - Disallowance of FTCs for Foreign Taxes on Excluded Income (2020) PTI (now PTEP) Exchange Gain or Loss (2020) The updated practice unit was: Official versus Free Market Exchange Rate (2020) We have added these practice units to our Practice Units By Topic page. (The IRS also yesterday published a practice unit on 481(a) Adjustments for... Read more →

Three New IRS Practice Units

Yesterday the IRS published three new practice units: Substantiation Requirements for Claiming FTCs Foreign Currency Translation for FTCs Installment Method for Installment Sales We have added these practice units to our Practice Units By Topic page. Read more →

New IRS Practice Unit On The Statute Of Limitations

Yesterday the IRS published a new practice unit titled “Overview of Statute of Limitations on the Assessment of Tax.” This practice unit discusses the time limits under which the IRS can no longer assess additional tax, with a focus on international. We have added this practice unit to our Practice Units By Topic page. Read more →

New IRS Practice Unit for “Adjustments for Overwithholding on Form 1042”

Yesterday the IRS published a new practice unit titled “Adjustments for Overwithholding on Form 1042.” This practice unit discusses adjustments for overwithholding of tax done on payments of U.S. source income to foreign persons on Forms 1042 tax returns and Forms 1042-S information returns. As discussed in the practice unit, how corrections to overwithholding are made depends on the timing of when the overwithholding is discovered. Three time periods are discussed: Before last deposits for... Read more →

New IRS Practice Unit – FDAP Statistical Sampling in the Audit of a U.S. Withholding Agent

The IRS has published a new practice unit that deals with FDAP statistical sampling in audits of U.S. withholding agents. This practice unit would typically apply to the audit of a U.S. financial institution. To see all IRS Practice Units, click here. Read more →

New IRS Practice Units published in March

Last week the IRS released 3 new practice units titled: Competent Authority Revenue Procedure 2015-40 Guidance: Foreign-Initiated Adjustment(s) (03-21-2019) Introduction to Traditional Automatic Exchange of Information (03-15-2019) Competent Authority Process Under a MAP Article of a U.S. Income Tax Treaty (03-08-2019) We updated our IRS Practice Units By Topic page to add these new practice units. Read more →

New IRS Practice Unit: Creation of a Permanent Establishment (PE) through the Activities of a Dependent Agent in the United States

Yesterday the IRS released a new practice unit titled: Creation of a Permanent Establishment (PE) through the Activities of a Dependent Agent in the United States. We updated our IRS Practice Units By Topic page to add this new practice unit. Read more →

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 →

Updated - IRS Practice Units by Topic

Recently, the IRS published 11 new International Practice Units (“IPUs”) on its website. We have updated our resource page that categorizes the IPUs by topic. The new IPUs include: IRC 367(d) Transactions in Conjunction with Cost Sharing Arrangements (CSA) Hedge Fund Basics Summary of Foreign and Domestic Loss Impacts on the Foreign Tax Credit How to Assess Penalties for Failure to File Form 8886 Disclosing IRC 988 losses Sourcing of Exchange Gains or Losses in... Read more →

Updated IRS Practice Units by Topic

Recently, the IRS published 5 new International Practice Units (“IPUs”) on its website. We have updated our resource page that categorizes the IPUs by topic. The new IPUs include: Employee Share of Employment Taxes - U.S. Citizens and Resident Aliens Working Abroad Self-Employment Taxes - U.S. Citizens and Resident Aliens Working Abroad Portfolio Debt Exemption – Requirements and Exceptions Source of Income for Nonresident Alien Individuals Identifying Foreign Goodwill or Going Concern 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 →