International Tax News

IRS Closes Corporate Inversion Loopholes

IRS Finalizes Regs that Close Loopholes for Corporate Inversions The IRS has issued final regs aimed at curbing inversion tactics that corporations use to avoid U.S. income taxes. Basically, corporate inversions (also called “expatriation transactions”) generally involve a U.S. corporation engaging in a series of transactions with the effect of moving its headquarters from the U.S….

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IRS Clarifies FBAR “Willfulness”

IRS Clarifies ‘Willfulness’ Under FBAR Rules The IRS has set out the definition of “willfulness,” and the standard of proof for establishing violations under the rules for submitting a Report of Foreign Bank and Financial Accounts (FBAR). In a Program Manager Technical Advice, the IRS has concluded that the standard for willfulness is the civil, rather…

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Foreign Tax Credit Update

IRS Explains Exhaustion of Administrative Remedies for Foreign Tax Credit In an International Practice Unit (IPU), the IRS explains how it determines that a taxpayer has exhausted administrative remedies for a foreign tax for purposes of the tax being considered creditable. Both the U.S. and foreign countries may tax the foreign source income of U.S….

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Federal Circuit Sides with Taxpayer in Extraterritorial Income Dispute

The Court of Appeals for the Federal Circuit agreed with a film production company that it was entitled to transitional relief afforded by the American Jobs Creation Act (AJCA) for extraterritorial income (ETI). The ETI was received from transactions in 2005 and 2006, including income recognized after those years. The ruling reversed and remanded for…

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Million-Dollar FBAR Penalty Stands

Supreme Court Lets Million-Dollar FBAR Penalty Stand The U.S. Supreme Court declined to review a Ninth Circuit Court of Appeals ruling that an IRS penalty imposed on a taxpayer wasn’t excessive and that the tax agency didn’t violate a treaty with Switzerland. The IRS assessed a penalty of approximately $1.2 million against the taxpayer for…

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