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Yearly Archives: 2015

IRS Issues IPU's For CFCs & Subpart F Income, Which State Their Subpart F Audit Positions!

November 10, 2015

On October 9, 2015 we posted LB&I Agents Lose Autonomy To Centralized Office That Will Be Using Data to Identify Compliance Risks For Audit!, where we discussed that tax practitioners will face new questions from examination teams as the IRS selects compliance risks based on data, in the Large Business and International Division's (LB&I) move from individual audits of multinationals to broader considerations involving risk assessment.

While LB&I is scheduled to implement the new structure in early calendar year 2016, in recently released new International Practice Units (IPUs), the IRS has provided additional guidance to its examiners on the audit of foreign base company sales income (FBCSI), a category of subpart F income. These IPUs focus on supply chain structures with foreign sales and/or manufacturing branches (including disregarded entities) that may be used by U.S. multinationals to avoid the application of the FBCSI rules.

As part of LB&I International’s knowledge management efforts, Practice Units are developed through internal collaboration and serve as both job aids and training materials on international tax issues. For example, Practice Units provide IRS staff with explanations of general international tax concepts as well as information about a specific type of transaction.  In general, IPUs identify strategic areas of importance to IRS and can provide insight as to how IRS examiners may audit a particular issue or transaction. However, they are not official pronouncements of law or directives and cannot be used, cited, or relied upon as such.


Since Dec. 15, 2014, IRS has released various IPUs, covering major international tax areas some of which we've listed below:

2015
11-04-2015 License of Intangible Property from U.S. Parent to a Foreign Subsidiary (PDF, 268KB)


10-29-2015 Sale by CFC to Unrelated Parties of Products Manufactured by Branch (PDF, 225KB)

10-29-2015 Conducting Functional Analysis for Foreign Base Company Income (FBCI) (PDF, 168KB)
10-29-2015 Concepts of Foreign Base Company Services Income (PDF, 200KB)
10-29-2015 Branch Rules for Foreign Base Company Sales Income (PDF, 222KB)
10-29-2015 Branch Sales to Unrelated Parties of Products Manufactured by CFC (PDF, 216KB)

Click here for the complete list of IPUs.

Whether you're being audited by the IRS and want to know how the IRS will view your and/or your client's tax positions or whether you're doing tax planning in this area; it would be advisable to review any applicable IPU so that you know the IRS's audit position on that particular issue.

Are You Being Audited by the IRS ?
 
Contact the Tax Lawyers at
Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at
www.TaxAid.us or www.TaxLaw.ms
or Toll Free at 888-8TaxAid (888 882-9243).

Read more at: Tax Times blog

Attorney Ronald A. Marini of Marini & Associates, P.A. has Achieved the AV Preeminent® Rating – the Highest Possible Rating from Martindale-Hubbell®.

November 9, 2015

Ronald A. Marini, a lawyer based in Miami, FL whose primary area of practice is International Tax Law & Tax Litigation Representation, has earned the AV Preeminent® rating from Martindale-Hubbell®

Miami, FL November 9, 2015 - Martindale-Hubbell® has confirmed that attorney Ronald A. Marini still maintains the AV Preeminent Rating, Martindale-Hubbell's highest possible rating for both ethical standards and legal ability, even after first achieving this rating in 2003.

For more than 130 years, lawyers have relied on the Martindale-Hubbell AV Preeminent® rating while searching for their own expert attorneys. Now anyone can make use of this trusted rating by looking up a lawyer's rating on Lawyers.com or martindale.com. The Martindale-Hubbell® AV Preeminent® rating is the highest possible rating for an attorney for both ethical standards and legal ability. This rating represents the pinnacle of professional excellence. It is achieved only after an attorney has been reviewed and recommended by their peers - members of the bar and the judiciary. Congratulations go to Ronald A. Marini who has achieved the AV Preeminent® Rating from Martindale-Hubbell®. 

To find out more or to contact Ronald A. Marini of Miami, FL, call 305-374-4424, or visit http://www.taxlaw.ms.

 Have A Tax Problem?

 
  

 

Contact the Tax Lawyers at 
Marini & Associates, P.A.

for a FREE Tax Consultation

Toll Free at 888-8TaxAid (888)882-9243.





 

Read more at: Tax Times blog

BVI – Proposed Changes to the Eligible Introducer Rules!

November 9, 2015

On October 15, 2015 the British Virgin Islands announced 2 changes to their compliance regime for BVI companies (see FINANCIAL SERVICES INDUSTRY NOTICE below :

1.  Eligible Introducers to Supply Beneficial Ownership Information for All Companies They Have Formed on Behalf of Their Clients.

  • Starting January 1, 2016, Eligible Introducers will need to provide to their registered agent information on the Beneficial Owner of any BVI companies formed on behalf of their clients.
  • The information required will include: Beneficial Owner’s name, date of birth, residential address and nationality.
  • BVI registered agents will have a transition period of 12 months from the implementation date to become compliant with these obligations.
  • The new information requirements for Eligible Introducers are scheduled to be introduced via amendments to the BVI’s existing Anti-Money Laundering legislation before the end of 2015.

2.  Establishment of a Private Register of Directors for all BVI Companies.
  • The BVI Business Companies Act will be amended to require the filing of registers of directors for all companies at a private registry.

One question we are all likely to receive is what happens if we do not provide the required information for existing companies by the end of the transitional period?

While we do not know exactly what penalties will be enforced; it is likely, that such companies may be liable for penalties and/or strike-off and whoever is your BVI corporate agent may also need to resign as registered agent, which would also ultimately lead to strike-off.

Do  You Have Concerns About Disclosing This 
Information About Your BVI Company?


Contact the Tax Lawyers at
Marini & Associates, P.A.


 for a FREE Tax Consultation Contact US at 
www.TaxAid.us or www.TaxLaw.ms
or Toll Free at 888-8TaxAid (888 882-9243).

FINANCIAL SERVICES INDUSTRY NOTICE

15th October, 2015

TO: Industry Association Heads

PROPOSED ENHANCEMENTS TO THE ELIGIBLE INTRODUCER REGIME

The Government of the British Virgin Islands (BVI) recognises the evolving international standards of transparency as promoted by The Financial Action Task Force (FATF) and the Organisation for Economic Co-operation and Development (OECD), as well as the aims of the Government of the United Kingdom. As a result, the BVI Government has been in dialogue with the private sector to modify the Eligible Introducer Regime by requiring those registered agents relying on Eligible Introducer Letters to maintain certain prescribed beneficial ownership information.

The Government believes that it is important that the systems utilised to access beneficial ownership information must be effective, efficient and fit for purpose, at the same time acknowledging that across jurisdictions, systems aimed at achieving this end may not be identical. We believe that they should be similarly effective and efficient but focus should be on achieving equivalent outcomes and not necessarily on using identical pathways to the outcome.

It is on this basis that I advise you that after consultation with representatives from the industry, as of 1ST January 2016, beneficial ownership information of BVI companies will be required to be held within the BVI and that relevant information requested by Competent Authorities will be provided expeditiously by a more effective and efficient system.

Service providers in the BVI will be required to become compliant with these requirements for existing companies within twelve (12) months, with a possible extension in specific circumstances. The information required to be held will include company beneficial owners' names, dates of birth, residential addresses and nationalities.

In addition to the introduction of these enhancements to the AML/CFT requirements, the BVI Business Companies Act, amongst other things, will be amended to include a requirement for the private filing of registers of directors for all companies.

The Government will continue to monitor the evolution of global standards and best practices and sustain our engagement with industry to ensure that the BVI remains a pioneering, vibrant and competitive financial center for global business.

I would encourage you to circulate this notice widely to your members.

Read more at: Tax Times blog

Issues Concerning Filing a Form 706NA?

November 5, 2015


On September 23, 2015, we posted "Some Nonresidents with U.S. Assets Must File Estate Tax Returns" where we discussed that deceased nonresidents who were not American citizens are subject to U.S. estate taxation with respect to their U.S.-situated assets.

Many foreigners owning property or assets in the United States are in violation of 706-NA filing requirements because of a number of misunderstandings. The basic rule is pretty clear-if a foreign decedent has assets in the United States with a gross value in excess of $60,000, the estate is supposed to file a tax return with the Internal Revenue Service. 

Many people think of numerous reasons not to file. The main one relates to mortgages or liens against the US property. Assume that a property in Florida is worth $150,000 and there is a $100,000 mortgage held by Bank of X. The owner of the property dies. Is a 706-NA required? Yes-you are not permitted to net the mortgage against the fair market value of the property. The only way you can do this is if the person who owns the property is a German domiciliary in which case the value can be netted on the tax return. This is a peculiarity of the German- United States estate tax convention. Cyst The deceased German domiciliary must still file the tax return because the gross value of the property, the criteria for filing a tax return, is still met. 


Other people look to tax treaties to avoid filing the tax returns even when the assets exceed $60,000. What most people do not realize is that in order to take advantage of a tax treaty, one needs to file a federal estate tax return and include a form 8833 with the return explaining the application of the treaty to this particular estate. If you fail to file the 706-NA, you would still technically owe tax on any US situs asset with a gross value in excess of $60,000.

 

Let's make it very simple for everyone- if you represent a foreign client with assets in the United States  with a gross value exceeding $60,000, you are required to file a federal estate tax.

Without the filing of the tax return, you are unable to take advantage of deductions, credits, and treaties benefits which might aid you in reducing the gross federal tax to a point of zero. Additionally, I might add, your client's estate is not in compliance with federal estate tax laws if no 706-NA is filed

 Have a US Estate Tax Problem?
 

Estate Tax Problems Require
an Experienced Estate Tax Attorney

Contact the Tax Lawyers at
Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).

Robert S. Blumenfeld  - 
 Estate Tax Counsel

Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS.

Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.

While with the IRS, he examined approximately 2,000 Estate Tax Returns and litigated various international and tax issues associated with these returns.As a result of his experience, he has extensive knowledge of the issues associated with and the preparation of U.S. Estate Tax Returns for Resident and Non-Resident Aliens, Gift Tax Returns, Form 706QDT and Qualified Domestic Trusts.




 

 
 



 

Read more at: Tax Times blog

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