International Tax Blog

Five New IRS Practice Units

Yesterday the IRS published five new practice units titled: BEAT Overview (2021) 453A Interest on Deferred Tax Liability (2021) Treaty Exemptions - NRA Students, Trainees, Teachers and Researchers (2021) Flow-Through Entities Effects on FTC (2021) Tax Shelter Promoter Investigations Under IRC 6700 (2021) The practice unit titled "Flow-Through Entities Effects on FTC" was an update to a prior practice unit with the same title. The update was made to reflect the recently finalized regulations under... 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: 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 →

13 New Charts Published

Today we published 13 new situational tax charts to AndrewMitchel.com (charts listed in topical order and charts listed in alpha-numeric order). We have over 1300 charts for FREE on our website. The recently published charts include: Rev. Rul. 68-289 (Merger of Partnerships: Deemed Transactions (Assets-Over Form)) Rev. Rul. 76-364 (Stock Redemption: Lost Control Where Acting In Concert With One Other Shareholder) Rev. Rul. 80-240 (Shareholder Treated As AgentTo Borrow Funds For Corp) Rev. Rul. 85-198... 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 →

U.S. Partnerships Owning CFCs

It has been over a year since the final GILTI regulations were published. The GILTI rules for domestic partnerships in the final regulations were dramatically different than in the proposed regulations. In general, a domestic partnership that owns a CFC does not have a GILTI inclusion amount. However, a partner in the domestic partnership may have a GILTI inclusion amount if the partner is a U.S. shareholder of the CFC (typically meaning that the partner... Read more →

5 New Tax Charts Published

Today we published 5 new situational tax charts to AndrewMitchel.com (charts listed in topical order and charts listed in alpha-numeric order). We have over 1200 charts for FREE on our website. The recently published charts include: Rev. Rul. 2008-39 (Upper-Tier Partnership Sec. 212 Expenses Must be Separately Stated) Reg. 1.267(a)-3(b)(4), Example 1 (Interest Expense of Accrual Taxpayer Not Deductible Until Paid) Prop. Reg. 1.864-6(c)(3)(i), Example 1 (NRA With a US Tax Home Selling Foreign-Produced Inventory... Read more →

Eaton Corp. v. Commr., 152 T.C. No. 2 (2019)

Earlier this week the Tax Court concluded that the earnings and profits (E&P) of certain upper-tier CFCs was increased by the amount of Subpart F Income inclusions and Code §956 inclusions (Code §951(a) inclusions) that flowed up from lower-tier CFCs through a U.S. partnership. Below is a chart of the entity structure in the Eaton case. 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 →

New Videos - October 2016

Over the last month we have published videos on our YouTube channel Andrew Mitchel Tax discussing several of our situational charts, linked to below. Rev. Rul. 2004-59, Partnership Conversion to Corporation Rev. Rul. 2004-77, Disregarded Entity With Two Owners Rev. Rul. 2004-83, Related Stock Purchase & Liquidation Treated as a D Reorganization Rev. Rul. 2004-85, "F" Reorganization of an S Corp Did Not Terminate Qsub Election for Subsidiary Plantation Patterns - Shareholder/Guarantor Treated as Borrower... Read more →

New Videos - September 2016

Over the last month we have published videos on our YouTube channel Andrew Mitchel Tax discussing several of our situational charts, linked to below. Rev. Rul. 99-6, Situation 1, Partnership to Disregarded Entity Rev. Rul. 99-6, Situation 2, Partnership to Disregarded Entity Notice 2001-17, Contingent Liability Tax Shelter Rev. Rul. 2004-3, Foreign Partner Deemed to be Engaged in the Conduct of U.S. Trade or Business You can view the situational charts and associated videos, on... Read more →

New Videos - August 2016

Over the last month we have published videos on our YouTube channel Andrew Mitchel Tax discussing several of our situational charts, linked to below. Rev. Rul. 90-112, Investment in U.S. Property Thru Partnership Rev. Rul. 92-85, Situation 1, FDAP Withholding on a Section 304 Transaction Rev. Rul. 92-85, Situation 2, FDAP Withholding on a Section 304 Transaction Rev. Rul. 99-5, Situation 1, Disregarded Entity to Partnership (Sale) Rev. Rul. 99-5, Situation 2, Disregarded Entity to... Read more →

Charts of 704(c) Traditional Method & Trad. Meth. With Curative Allocations

The I.R.S. recently published Notice 2015-54, which announced that it intends to issue regulations under Code §721(c) to ensure that, when a U.S. person transfers certain property to a partnership that has foreign partners related to the transferor, income or gain attributable to the property will be taken into account by the transferor either immediately or periodically. Treas. Reg. §1.704-3(a)(1) provides that the purpose of Code §704(c) is to prevent the shifting of tax consequences... Read more →

Recent Publications

Below are several interesting authorities or publications related to international tax that have been released recently. The U.S. Senate Permanent Subcommittee on Investigations (PSI), held a hearing on July 30, 2015 exploring the impact of the U.S. corporate tax code on foreign acquisitions of U.S. businesses and the ability of U.S. businesses to expand by acquisition. The associated report, "Impact of the U.S. Tax Code on the Market for Corporate Control and Jobs," details transactions... Read more →

Chart of CCA 201420017: Code §956: Funneling of Loan through One CFC Partner is Disregarded

Last week the IRS released Chief Counsel Advice 201420017. The IRS addressed the issue of a foreign partnership loaning money to one of its partners, a controlled foreign coporation ("CFC"), and the CFC partner loaning the amount to its U.S. Parent. U.S. Parent indirectly wholly owned CFC Partner 1 and CFC Partners. DE 1, a disregarded entity of FPS, a foreign partnership, made a loan of cash to CFC Partner 1. CFC Partner 1 then... Read more →

Chart of Rev. Rul. 70-253 - Payment of Compensation to Partnership Employee Deductible by Partner under §162(a)

Below is a chart of Rev. Rul. 70-365 in which the I.R.S. held that payment of compensation to a partnership employee by a partner is deductible under Code §162(a) when such employee performs duties previously delegated to the partner. The chart can be viewed as a PDF file here: Rev. Rul. 70-253 Read more →

International PLRs for the 43rd week of 2013

This week the IRS published the following Private Letter Rulings and Chief Counsel Advice relating to international taxation. PLR 201343011 - Late IC DISC election. Form 4876-A, Code §992(b)(1)(A). PLR 201343014 - Late Canadian registered retirement savings plan ("RRSP") deferral elections. Form 8891. Rev. Proc. 2002-23. PLR 201343017 - Late Canadian registered retirement savings plan ("RRSP") deferral elections. Form 8891. Rev. Proc. 2002-23. CCA 201343019 - A Cypriot holding corporation qualifies for benefits under the... Read more →

Partnership Definition

It is sometimes difficult to determine whether an arrangement should be considered a partnership for U.S. tax purposes. Last week in a non-international related Chief Counsel Advice (CCA), the I.R.S. published a good summary of the definition of a partnership under U.S. tax principles. The following is an excerpt from the CCA: Whether a partnership exists for federal tax purposes is a matter of federal, not state, law. Comm’r v. Tower, 327 U.S. 280, 287-288... Read more →