What is a “Foreign Country” for Income Tax Purposes?
United States citizens are subject to tax in the U.S. on their worldwide earnings and income. This includes wages earned for work performed in foreign countries. There are exceptions to this treatment,...
View ArticleU.S. International Tax Withholding & Reporting (Explained)
International tax law is a complex and ever-evolving area of law that governs the taxation of income earned by individuals and businesses across different countries. As globalization continues to...
View ArticleForeign Branch Income & the Research Tax Credit
The research tax credit is one of the most complicated provisions in our tax code. The international tax law aspects of this credit are even more difficult to follow. In Deere & Company v....
View ArticleTax on Nonresident Alien Gambling Winnings
Are non-resident aliens who receive gambling winnings while visiting the U.S. able to deduct the gambling expenses incurred in earning the gambling winnings? And can they avoid the withholding tax on...
View ArticleTIGTA Suggests IRS Follow Transfer Pricing Roadmap
Transfer pricing is and has been the most significant and difficult issue the IRS audits. The audits are typically closed with the IRS agents proposing unreasonably large adjustments and IRS appeals...
View ArticleCourt Decides Transfer Pricing Buy-in Payment Case
The transfer pricing disputes often involve transfers of property offshore. Taxpayers make these transfers so that the post-transfer profits earned from the offshored property are not subject to tax in...
View ArticleU.S. Foreign Tax Credit Not Impacted by Repayment of Foreign Tax Refund
The tax assessment and collection process in most foreign countries is markedly different than the process in the U.S. These differences can present a number of challenges for U.S. citizens who reside...
View ArticleNo Tax Due on Foreign Corporation’s Redemption of U.S. Partnership Interest
Many businesses that operate outside of the U.S. want to do business in the U.S. and they want to limit their exposure to U.S. income taxes. To do this, many in-bound investments are structured as U.S....
View ArticleIntercompany Receivable Results in Section 956 Inclusion for U.S. Corp.
The Subpart F rules can result in foreign profits being subject to tax in the U.S. In the recent Crestek v. Commissioner, 49 T.C. 5 (2017), the court addresses unpaid advances a controlled foreign...
View ArticleAirline Pilot Stationed Overseas & the Section 911 Foreign Income Exclusion
U.S. income tax laws can be challenging for U.S. citizens who live outside of the U.S. This is particularly true for airline pilots who accept jobs overseas. The recent Acone v. Commissioner, T.C....
View ArticlePayments to Foreign Student Studying in U.S. Subject to Tax
We get quite a few questions from students who are in the U.S. on student visas as to whether their research awards are taxable in the U.S. The answer depends in large part on the terms of the...
View ArticleFBAR Not Limited to $100,000, Willfulness Upheld
There have been a number of recent court cases involving foreign bank accounts or FBAR reporting penalties. This is likely due to the significant amount of the penalty and that many do not fully...
View ArticleU.S. Taxpayer With U.S. Residence & Foreign-Earned Income
There are a number of international tax issues that U.S. citizens and residents who live abroad have to consider. One of these is whether they qualify to exclude their foreign-earned income in...
View ArticleForeign Government Use U.S. Court to Collect From U.S. Person?
If a U.S. person commits tax fraud under the laws of a foreign county, can the foreign country’s tax collector use the U.S. court system to collect from the U.S. person? This is an international tax...
View ArticleCan LLC Use Crewman’s Exemption for Employment Taxes?
This is a question about international tax laws. Can a U.S. citizen who owns and operates a vessel outside of the U.S. avoid paying U.S. employment taxes for its crewmen by using a foreign legal...
View ArticleCan the IRS Get Records from Foreign Corps Doing Business in the U.S.?
In CCA 2019060408545121, the IRS asked its tax attorneys whether a foreign corporation that conducts business with a limited partner in the U.S. had to produce records. Our tax laws provide address...
View ArticleForeign Trust Beneficiary Liable for a Double Tax Penalty?
Can the sole owner of a foreign trust who is also its sole beneficiary be penalized twice for not filing a single Form 3520? Can the IRS choose the higher penalty for the beneficiary in this situation?...
View ArticleForeign Corp Tax Returns Must Be Filed Timely
The IRS refocused its efforts on international tax issues about ten years ago. This effort has yielded scores of transfer pricing, foreign tax credit, and similar tax disputes. While not as prominent...
View ArticleForeign Trust Owner Liable for 35% IRS Penalty
The IRS shifted its focus to international issues about ten years ago. This included having the penalty group within the IRS’s Small Business/Self-Employed division focus on international reporting...
View ArticleDefense Contractor Able to Exclude Foreign Income
United States citizens pay tax on their worldwide income. This general rule can result in double taxation–with the United States imposing tax on the same income that was already taxed by a foreign...
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