Generated by All in One SEO Pro v4.9.10, this is an llms.txt file, used by LLMs to index the site. # San Francisco Tax Lawyers DIOSDI & LIU, LLP ## Sitemaps - [XML Sitemap](https://sftaxcounsel.com/sitemap.xml): Contains all public & indexable URLs for this website. ## Posts - [Blog](https://sftaxcounsel.com/blog/) - Want to stay up to date on recent tax law and foreign account updates? Welcome to the legal tax blog at SFX Counsel, where we keep you up to date. - [Valuation Considerations For SDIRA SPVS that Hold Shares in Pre-IPO Companies Such as SpaceX, OpenAI, or xAI](https://sftaxcounsel.com/blog/valuation-considerations-for-sdira-spvs-that-hold-shares-in-pre-ipo-companies-such-as-spacex-openai-or-xai/) - Explore the intricacies of valuing pre-IPO assets within SDIRAs. Learn how to navigate tax implications and ensure compliance during Roth conversions. - [What Foreign Investors Should Know About the Branch Profits Tax](https://sftaxcounsel.com/blog/what-foreign-investors-should-know-about-the-branch-profits-tax/) - Learn what foreign investors need to know about the Branch Profits Tax. Explore how U.S. taxation applies to income from trade or business activities in the US - [An Overview of the California Tax Residency Rules for Executives from Foreign Countries](https://sftaxcounsel.com/blog/an-overview-of-the-california-tax-residency-rules-for-executives-from-foreign-countries/) - Unravel California's tax residency complexities with help from Anthony Diosdi. Consult a seasoned attorney for residency audits and tax strategies. - [How QDOTs Work for Estate Planning Purposes](https://sftaxcounsel.com/blog/how-qdots-work-for-estate-planning-purposes/) - Understand the essential tax aspects of QDOTs, particularly with foreign real estate. Learn from experts like Mr. Diosdi for effective planning and compliance - [Form 5471 Schedule J PTEP Reporting Explained](https://sftaxcounsel.com/blog/form-5471-schedule-j-ptep-reporting-explained/) - Learn Form 5471 Schedule J PTEP reporting with our comprehensive guide. Understand the intricacies of earnings categorization and compliance with IRS rules. - [‘Blocker’ Corporation Considerations for Self-Directed IRA Investors](https://sftaxcounsel.com/blog/blocker-corporation-considerations-for-self-directed-ira-investors/) - Explore the benefits of using a blocker corporation in your self-directed IRA. Understand how to reduce UBTI and UDFI taxes for better investment outcomes. - [Are Criminal Defendants Permitted a Deduction of Legal Fees Relating to Criminal Activity?](https://sftaxcounsel.com/blog/are-criminal-defendants-permitted-a-deduction-of-legal-fees-relating-to-criminal-activity/) - Are criminal defense attorney fees tax-deductible? Explore the rules and exceptions under the Internal Revenue Code to understand your potential deductions. - [The Top Three IRS Defenses to Section 7508A Pandemic Postponement](https://sftaxcounsel.com/blog/the-top-three-irs-defenses-to-section-7508a-pandemic-postponement/) - There has been a lot of talk about how the Internal Revenue Service (“IRS”) tax deadlines accidentally got turned off for three years and as a result, taxpayers assessed interest and penalties during this period are entitled to refunds. However, there has not been much said about the defenses that the IRS will raise that - [How SDIRA SPVS Can Value Pre-IPO Companies Such as SpaceX, OpenAI, or xAI](https://sftaxcounsel.com/blog/how-sdira-spvs-can-value-pre-ipo-companies-such-as-spacex-openai-or-xai/) - Uncover the leading pre-IPO firms such as Databricks and OpenAI. Find out how to leverage SPVs and SDIRAs for strategic investments in private markets. - [How Do I Get a U.S. Residency Certificate?](https://sftaxcounsel.com/blog/how-do-i-get-a-u-s-residency-certificate/) - U.S. residents can minimize foreign withholding taxes by claiming treaty benefits. Explore the requirements for Form 8802 and get a Residency Certificate - [Live Happily Ever After With A Properly Structured Roth IRA Conversion](https://sftaxcounsel.com/blog/live-happily-ever-after-with-a-properly-structured-roth-ira-conversion/) - For a variety of reasons, self-directed individual retirement account (“IRA”) holders transfer assets to a self-directed Roth IRA. Converting a self-directed IRA asset or assets can be extremely beneficial if the IRA holds an asset that is expected to appreciate readily in the future such as pre-IPO stocks. Converting a self-directed IRA asset or assets - [Section 482: Intercompany Agreement Considerations](https://sftaxcounsel.com/blog/section-482-intercompany-agreement-considerations/) - Learn about Section 482 intercompany agreement considerations to enhance compliance and strategic tax planning for your international operations. - [A Deep Dive Into the Anti-Hybrid and Anti-Conduit Regulations](https://sftaxcounsel.com/blog/a-deep-dive-into-the-anti-hybrid-and-anti-conduit-regulations/) - Explore the complexities of anti-hybrid and anti-conduit regulations. Understand their implications for international tax strategies and compliance requirements. - [The IRS Form 5471 Schedule P Explained for the 2026 Filing Season](https://sftaxcounsel.com/blog/the-irs-form-5471-schedule-p-explained-for-the-2026-filing-season/) - Learn how to report PTEP on IRS Form 5471 Schedule P for 2026. Get clarity on basket rules, ownership categories, and tax credit impacts for CFC filers. - [The IRS Form 5471 Schedule J Explained for the 2026 Filing Season](https://sftaxcounsel.com/blog/the-irs-form-5471-schedule-j-explained-for-the-2026-filing-season/) - Understand IRS Form 5471 Schedule J requirements for 2026. Get clarity on reporting rules and what U.S. shareholders must file this tax season. - [Tax Shelter Litigation and the Importance of Relevancy](https://sftaxcounsel.com/blog/tax-shelter-litigation-and-the-importance-of-relevancy/) - Uncover the essentials of tax shelter litigation and the importance of relevancy. Equip yourself with knowledge to navigate legal challenges effectively. - [Is Regulation 301.7508A-1(f) Example 5 the Next Chapter in Section 7508A Tax Litigation?](https://sftaxcounsel.com/blog/is-regulation-301-7508a-1f-example-5-the-next-chapter-in-section-7508a-tax-litigation/) - Explore how Regulation 301.7508A-1(f) Example 5 could reshape Section 7508A tax litigation. Stay informed on the latest developments in tax law. - [FIRPTA and Transfers Between Mixed Status Spouses](https://sftaxcounsel.com/blog/firpta-and-transfers-between-mixed-status-spouses/) - Discover how FIRPTA impacts transfers between mixed status spouses. Understand the tax implications and navigate your financial responsibilities effectively. - [Can U.S. Taxpayers Claim Foreign Tax Credits Against NIIT on Capital Gains?](https://sftaxcounsel.com/blog/can-u-s-taxpayers-claim-foreign-tax-credits-against-niit-on-capital-gains/) - Foreign tax credits may not offset NIIT on capital gains for US taxpayers. See how the rules work, key limits, and planning considerations. - [FIRPTA Rules Explained](https://sftaxcounsel.com/blog/firpta-rules-explained/) - FIRPTA rules affect foreign owners selling US real estate. See withholding requirements, exemptions, and steps to reduce or avoid unexpected tax liability. - [The United States-Canada Income Tax Treaty Explained](https://sftaxcounsel.com/blog/the-united-states-canada-income-tax-treaty-explained/) - The United States-Canada tax treaty governs cross border taxation and withholding rules. Key provisions cover residency, benefits, and relief from double taxation. - [The United States-Cyprus Tax Treaty and Its Unusual LOB Explained](https://sftaxcounsel.com/blog/the-united-states-cyprus-tax-treaty-and-its-unusual-lob-explained/) - U.S. Cyprus tax treaty includes an unusual limitation on benefits rule affecting treaty relief eligibility. See who qualifies and key planning insights. - [Is Section 7508A the Ultimate Defense to IRS Interest and Penalties?](https://sftaxcounsel.com/blog/is-section-7508a-the-ultimate-defense-to-irs-interest-and-penalties/) - Section 7508A may suspend IRS interest and penalties during COVID-19. See how recent rulings impact refund claims and tax controversy strategy. - [The IRS Form 5472 Explained in Detail](https://sftaxcounsel.com/blog/the-irs-form-5472-explained-in-detail/) - IRS Form 5472 reporting rules apply to foreign-owned U.S. entities and related party transactions. Get a line-by-line breakdown, penalties, and compliance tips. - [A Comprehensive Guide of the IRS Form 3520-A](https://sftaxcounsel.com/blog/a-comprehensive-guide-of-the-irs-form-3520-a/) - Form 3520-A is required for foreign trusts with U.S. owners under grantor trust rules. Review filing deadlines, penalties, income reporting, & compliance steps. - [The IRS Form 3520: A Comprehensive Guide](https://sftaxcounsel.com/blog/the-irs-form-3520-a-comprehensive-guide/) - Form 3520 reporting is complex and carries penalties for errors. Get guidance on filing rules, foreign trust reporting, and avoiding costly IRS penalties. - [An Overview of the Rules Governing Intercompany Transactions Involving Intangibles for Multinational Corporations](https://sftaxcounsel.com/blog/an-overview-of-the-rules-governing-intercompany-transactions-involving-intangibles-for-multinational-corporations/) - Explore IRS Section 482 rules for pricing intercompany IP transfers. Understand arm's-length methods, compliance risks, and profit-based adjustments. - [An Overview of the IRS Form 5471 Schedule Q](https://sftaxcounsel.com/blog/an-overview-of-the-irs-form-5471-schedule-q-2/) - Understand IRS Form 5471 Schedule Q reporting for CFC income, deductions, and taxes. Stay compliant with subpart F, GILTI, and foreign tax credit rules. - [IRS Form 5471 Schedule E Explained for the 2026 Tax Season](https://sftaxcounsel.com/blog/irs-form-5471-schedule-e-explained-for-the-2026-tax-season/) - Understand IRS Form 5471 Schedule E and E-1 for 2026 reporting. Review filer categories, foreign tax credit rules, and compliance for foreign corporations. - [The United States- People’s Republic of China Income Tax Treaty Explained](https://sftaxcounsel.com/blog/the-united-states-peoples-republic-of-china-income-tax-treaty-explained/) - The US China income tax treaty outlines rules for residency, exemptions, and tax relief. Learn how treaty tie breakers and benefits apply to individuals. - [The Complete Tax Planning Guide For Foreign Real Estate Investors](https://sftaxcounsel.com/blog/the-complete-tax-planning-guide-for-foreign-real-estate-investors/) - Learn how foreign investors are taxed on U.S. real estate, including FDAP and FIRPTA rules, plus estate & gift tax planning strategies and structuring options. - [OBBA Giveth and Taketh Away Section 958(b)(4) Downward Attribution Rules](https://sftaxcounsel.com/blog/obba-giveth-and-taketh-away-section-958b4-downward-attribution-rules/) - OBBA restores Section 958(b)(4) limits on downward attribution after 2025, but new Section 951B adds complexity for U.S. shareholders of foreign corporations. - [Malta Pension Plans: The Anatomy of a Foreign Tax Shelter](https://sftaxcounsel.com/blog/malta-pension-plans-the-anatomy-of-a-foreign-tax-shelter/) - Learn how Malta pension plans are targeted by the IRS as listed transactions and the key reporting duties Form 3520 3520 A 8938 and FBAR. - [How Cryptocurrency Mining Through a Self-Directed IRA are Taxed](https://sftaxcounsel.com/blog/how-cryptocurrency-mining-through-a-self-directed-ira-are-taxed/) - Learn how cryptocurrency mining inside a self directed IRA can trigger UBTI and UDFI tax exposure Form 990 T filing and trust rate taxation. - [Foreign-To-Foreign Mergers and Reorganizations Explained](https://sftaxcounsel.com/blog/foreign-to-foreign-mergers-and-reorganizations-explained/) - Learn how foreign to foreign mergers and reorganizations can trigger U.S. tax under Sections 367 and 368 and when nonrecognition may apply. - [Can Inverting Corporations Use a Foreign Partnership to Avoid the Anti-Inversion Rules?](https://sftaxcounsel.com/blog/can-inverting-corporations-use-a-foreign-partnership-to-avoid-the-anti-inversion-rules/) - Explains whether foreign partnerships can be used to avoid U.S. anti-inversion rules under IRC Section 7874 and related regulations. - [The Taxation of Covered Gifts and Bequests Explained](https://sftaxcounsel.com/blog/the-taxation-of-covered-gifts-and-bequests-explained/) - Learn how IRC Section 2801 taxes covered gifts and bequests from covered expatriates, who must pay, key exclusions, and Form 708 filing rules. - [Strategies to Recharacterize Gain From Certain Stock Sales With Untaxed Foreign Earnings](https://sftaxcounsel.com/blog/strategies-to-recharacterize-gain-from-certain-stock-sales-with-untaxed-foreign-earnings/) - Learn how IRC Sections 1248 and 245A can recharacterize stock-sale gain tied to untaxed foreign E&P, including CFC rules, GILTI, and planning. - [Everything You Want to Know About Cryptocurrency, Digital Assets, and Placing These Assets in Self-Directed Retirement Plans](https://sftaxcounsel.com/blog/everything-you-want-to-know-about-cryptocurrency-digital-assets-and-placing-these-assets-in-self-directed-retirement-plans/) - Learn crypto and NFT tax rules plus custody risks, and key ERISA issues for holding digital assets in self-directed IRAs and 401(k) plans. - [Everything You Need to Know About Cryptocurrency Estate Planning](https://sftaxcounsel.com/blog/everything-you-need-to-know-about-cryptocurrency-estate-planning/) - Learn how to protect cryptocurrency through proper estate planning, including custody, wallets, crypto memorandums, and administration risks. - [Britney Spears Goes to Tax Court: How is a Tax Court Case Litigated and What Can Britney Spears Expect](https://sftaxcounsel.com/blog/britney-spears-goes-to-tax-court-how-is-a-tax-court-case-litigated-and-what-can-britney-spears-expect/) - Learn how a US Tax Court case works, from notice of deficiency to trial and briefs, and what a taxpayer can expect when disputing IRS assessments. - [What George Clooney and Americans Residing in France Need to Know About French Succession and Tax Laws](https://sftaxcounsel.com/blog/what-george-clooney-and-americans-residing-in-france-need-to-know-about-french-succession-and-tax-laws/) - Learn how French succession and tax laws affect Americans living in France, including forced heirship, trusts, estate planning, and cross border tax issues. - [How the Anti-Inversion Rules Tax Expatriating Corporations](https://sftaxcounsel.com/blog/how-the-anti-inversion-rules-tax-expatriating-corporations/) - Learn how U.S. anti inversion rules under IRC Section 7874 tax expatriating corporations and limit the benefits of corporate inversion transactions. - [When Does a Beneficiary of a Foreign Usufruct Need to Report the Gift on a Form 3520](https://sftaxcounsel.com/blog/when-does-a-beneficiary-of-a-foreign-usufruct-need-to-report-the-gift-on-a-form-3520/) - Learn when a U.S. beneficiary of a foreign usufruct must report a gift on Form 3520 and how IRS guidance affects reporting timing. - [Litigation Considerations When Facing the Economic Substance Doctrine](https://sftaxcounsel.com/blog/litigation-considerations-when-facing-the-economic-substance-doctrine/) - Learn key litigation considerations under the economic substance doctrine, including IRC Section 7701(o), penalties, case law, and constitutional defenses. - [An Introduction to the Taxation of Mergers and Acquisitions](https://sftaxcounsel.com/blog/an-introduction-to-the-taxation-of-mergers-and-acquisitions/) - This article provides an overview of how mergers and acquisitions are taxed, including taxable asset and stock sales and key Internal Revenue Code provisions. - [Can a Foreign Corporation be Reorganized into a U.S. Corporation for QSBS Purposes?](https://sftaxcounsel.com/blog/can-a-foreign-corporation-be-reorganized-into-a-u-s-corporation-for-qsbs-purposes/) - This article explains whether a foreign corporation can reorganize into a U.S. corporation for QSBS purposes and outlines key Section 1202 requirements. - [International Corporate Tax-Free Spinoffs in the U.S. Inbound Context](https://sftaxcounsel.com/blog/international-corporate-tax-free-spinoffs-in-the-u-s-inbound-context/) - This article explains how foreign corporations can structure U.S. inbound tax free spinoffs under Sections 355 and 367 and the impact on U.S. shareholders. - [Is a SAFE a "safe" Planning Option for the Anti-Inversion Rules?](https://sftaxcounsel.com/blog/is-a-safe-a-safe-planning-option-for-the-anti-inversion-rules/) - Explore whether a SAFE can help avoid adverse tax consequences under the Section 7874 anti-inversion regime and how SAFEs may be treated for tax. - [Aircraft Trusts: Why they are Necessary for Nonresident Aircraft Owners](https://sftaxcounsel.com/blog/aircraft-trusts-why-they-are-necessary-for-nonresident-aircraft-owners/) - A guide for nonresident aircraft owners on why aircraft trusts are needed for FAA registration and what trust tax rules apply in the U.S. - [What Foreign Investors Need to Know About Estate Planning and Treaties](https://sftaxcounsel.com/blog/what-foreign-investors-need-to-know-about-estate-planning-and-treaties/) - A clear overview of U.S. estate and gift tax for foreign investors and key treaty options to reduce U.S. transfer tax on real estate and investments. - [Facebook’s CSA in the Metaverse and How Facebook Substantially Reduced its Platform Contribution Payment](https://sftaxcounsel.com/blog/facebooks-csa-in-the-metaverse-and-how-facebook-substantially-reduced-its-platform-contribution-payment/) - Learn how Facebook reduced its platform contribution payment under a cost sharing agreement and what the 2025 Tax Court ruling means for IRS transfer pricing cases. - [Does the IRS Have the Authority to Assess International Penalties Associated with Form 5472?](https://sftaxcounsel.com/blog/does-the-irs-have-the-authority-to-assess-international-penalties-associated-with-form-5472/) - Learn if the IRS can assess penalties for failing to file Form 5472 under Section 6038A, based on the Farhy v. Commissioner decision and its impact. - [Does the U.S.-Korea Tax Treaty Offer Relief from Double Taxation of Income Received from U.S. Patents?](https://sftaxcounsel.com/blog/does-the-u-s-korea-tax-treaty-offer-relief-from-double-taxation-of-income-received-from-u-s-patents/) - Learn how the U.S.-Korea Tax Treaty impacts royalties and foreign tax credits. Our San Francisco tax attorneys explain key sourcing & double-taxation rules - [Can Partners of Law Firms be Treated as Employees for Employment Tax Purposes?](https://sftaxcounsel.com/blog/can-partners-of-law-firms-be-treated-as-employees-for-employment-tax-purposes/) - When are law firm partners treated as employees for employment tax? We explain the IRS 20-factor test, right-to-control, and misclassification risks. - [How to Substantiate a Foreign Tax Credit](https://sftaxcounsel.com/blog/how-to-substantiate-a-foreign-tax-credit/) - Learn how to properly substantiate a foreign tax credit under U.S. law. Our San Francisco tax attorneys explain key IRS requirements & audit procedures - [The Foreign Tax Credit Explained](https://sftaxcounsel.com/blog/the-foreign-tax-credit-explained/) - U.S. taxpayers are generally subject to U.S. tax on their worldwide income, but may be provided a tax credit for foreign taxes paid or accrued. The main purpose of the foreign tax credit is to mitigate the double taxation of foreign source income that might occur if such income is taxed by both the United - [Potential U.S. Tax Consequences for Foreign App Developers that Utilize U.S. Platforms to Sell Apps to Customers](https://sftaxcounsel.com/blog/potential-u-s-tax-consequences-for-foreign-app-developers-that-utilize-u-s-platforms-to-sell-apps-to-customers/) - On January 14, 2025, the Internal Revenue Service (“IRS”) and the Department of Treasury made significant changes to the digital content and cloud regulations. For this purpose, digital content means a computer program or any other content, such as books, movies, and music, in digital format that is protected by copyright law or no longer - [Can Foreign Withholding Tax on Patent Infringement Damages Qualify for a Foreign Tax Credit?](https://sftaxcounsel.com/blog/can-foreign-withholding-tax-on-patent-infringement-damages-qualify-for-a-foreign-tax-credit/) - There has been an increase in cross-border patent litigation that has been driven by the globalization of innovation. These types of cases are often resolved through settlement agreements. For a U.S. corporation or individual receiving payment of a patent infringement damage award from foreign entity, the U.S. patent holder will have distinct tax considerations. First, - [Does the Payment of a Title 26 Offshore Penalty Through the Streamlined Procedures Create an Enforceable Contract with the IRS?](https://sftaxcounsel.com/blog/does-the-payment-of-a-title-26-offshore-penalty-through-the-streamlined-procedures-create-an-enforceable-contract-with-the-irs/) - The Streamlined Filing Compliance Procedures is an Internal Revenue Service (“IRS”) program, which, according to the IRS website, isa available to United States taxpayers holding foreign accounts not previously disclosed to the IRS, in order to promote voluntary disclosure of those accounts and to resolve existing tax obligations, including certain penalties related to those previous - [Something Old, Something New … Self-Directed IRA Planning in the 21st Century](https://sftaxcounsel.com/blog/something-old-something-new-self-directed-ira-planning-in-the-21st-century/) - Since 1974, the IRS has permitted individuals to totally “self-direct” investments made within their Individual Retirement Plans (“IRAs”). Self-directed IRAs are also authorized by federal law and are held by a trustee or custodian that permits investments in a broader range of assets than is permitted by traditional IRAs. See Levine v. Entrust Grp., Inc., - [What Americans Need to Know About Succession Planning and Tax in France](https://sftaxcounsel.com/blog/what-americans-need-to-know-about-succession-planning-and-tax-in-france/) - As a result of current political issues in the United States, more and more Americans are moving to France and becoming residents of France. Anytime an American considers becoming a resident of a foreign country, he or she must consider their succession planning. This is particularly if the American is considering acquiring French assets such - [How Subscription Based Platforms Such as Netflix and Amazon Prime are Taxed Under the Final Cloud Regulations](https://sftaxcounsel.com/blog/how-subscription-based-platforms-such-as-netflix-and-amazon-prime-are-taxed-under-the-final-cloud-regulations/) - On January 14, 2025, the Internal Revenue Service (“IRS”) and the Department of the Treasury made significant changes to the digital content and cloud regulations. For this purpose, digital content means a computer program or any other content, such as books, movies, and music, in digital format that is protected by copyright law or no - [How Video-Sharing Platforms Such as YouTube are Taxed Under the Final Cloud Regulations](https://sftaxcounsel.com/blog/how-video-sharing-platforms-such-as-youtube-are-taxed-under-the-final-cloud-regulations/) - On January 14, 2025, the Internal Revenue Service (“IRS”) and the Department of Treasury made significant changes to the digital content and cloud regulations. For this purpose, digital content means a computer program or any other content, such as books, movies, and music, in digital format that is protected by copyright law or no longer - [How eBook Transactions are Taxed Under the Final Cloud Regulations](https://sftaxcounsel.com/blog/how-ebook-transactions-are-taxed-under-the-final-cloud-regulations/) - On January 14, 2025, the Internal Revenue Service (“IRS”) and the Department of Treasury made significant changes to the digital content and cloud regulations. For this purpose, digital content means a computer program or any other content, such as books, movies, and music, in digital format that is protected by copyright law or no longer - [The Taxation of Dual Resident Corporations and the Anti-Hybrid Rules](https://sftaxcounsel.com/blog/the-taxation-of-dual-resident-corporations-and-the-anti-hybrid-rules/) - We will begin with a discussion regarding the taxation of U.S. business entities. Foreign nationals may operate domestic entities through a “C” corporation or a “pass-through” entity such as a partnership. Generally, the earnings and profits or “E&P” of a “C” corporation is included in the gross taxable income of a shareholder when a dividend - [Demystifying an Outbound Cross-Border Tax-Free Forward Triangular Type B Merger and Acquisition](https://sftaxcounsel.com/blog/outbound-tax-free-forward-merger/) - Once a U.S. corporation is acquired by a foreign corporation, the ultimate disposition of the U.S. corporation’s appreciated property may occur outside the U.S. taxing jurisdiction. Section 367 was enacted to prevent tax-free transfers by U.S. taxpayers of appreciated property to foreign corporations that could then sell the property free of U.S. tax. Section 367 - [An Overview of the Taxation of Cross-Border Hedging and Notional Principal Contracts Involving CFCs](https://sftaxcounsel.com/blog/an-overview-of-the-taxation-of-cross-border-hedging-and-notional-principal-contracts-involving-cfcs/) - Notional principal contracts typically employ swaps and other reciprocal arrangements that provide for payments at specified intervals by a party to a counterparty calculated by reference to a specified index applied to a notional principal amount, for which the counterparty promises to pay similar amounts. Treasury Regulation Sections 1.446-3(c)(1)(i) and 1.863-7(a)(1) define a “notional principal - [How Portfolio Interest Can Avoid U.S. Withholding Taxes and Generate Deductions](https://sftaxcounsel.com/blog/how-portfolio-interest-can-avoid-u-s-withholding-taxes-and-generate-deductions/) - Most forms of U.S.-source income received by foreign persons that are not effectively connected with a U.S. trade or business will be subject to a flat tax of 30 percent on the gross amount received. Sections 871(a) (for nonresident aliens) and 881(a) (for foreign corporations) impose the 30-percent flat tax on interest income. This interest - [An Overview of the Anti-Inversion Rules for Expatriating U.S. Companies](https://sftaxcounsel.com/blog/an-overview-of-the-anti-inversion-rules-for-expatriating-u-s-companies/) - Prior to March of 2003, a U.S. corporation could reincorporate in a foreign jurisdiction and thereby replace the U.S. parent corporation of a multinational corporate group with a foreign parent corporation. These transactions were commonly referred to as inversion transactions. Inversion transactions could take many different forms, including stock inversions, asset inversions, and various combinations - [Digital Borders and the New Proposed Regulations for the Sourcing Cloud Computing Transactions](https://sftaxcounsel.com/blog/digital-borders-and-the-new-proposed-regulations-for-the-sourcing-cloud-computing-transactions/) - The United States taxes U.S. persons on all of their income, from whatever source derived. Therefore, the source of income generally has no effect on the computation of a U.S. person’s taxable income. Sourcing can have a significant effect, however, on the computation of a U.S. person’s foreign tax credit limitation, which equals the portion - [A Case for Bringing an APA Challenge to an IRS International Penalty Assessment](https://sftaxcounsel.com/blog/a-case-for-bringing-an-apa-challenge-to-an-irs-international-penalty-assessment/) - The Internal Revenue Code contains countless reporting requirements regarding foreign filing obligations. The failure to timely or correctly file foreign information returns with the Internal Revenue Service (“IRS”) can result in the assessment of penalties ranging from $10,000 to several million dollars annually. As a result of the IRS’s overzealous approach in assessing foreign information - [Demystifying an Outbound Cross-Border Tax-Free Type A Reverse Triangular Merger](https://sftaxcounsel.com/blog/outbound-tax-free-reverse-merger/) - This article discusses outbound tax-free cross-border Type A reverse triangular mergers. A reverse triangular reorganization is similar to a forward triangular reorganization, except that the surviving entity is the target and not the acquirer. Before examining the tax consequences of an outbound tax-free cross-border Type A reverse triangular merger, a Type A tax-free reorganization must - [Are there Silver Linings in the New Cloud Regulations? How Clicks are Taxed](https://sftaxcounsel.com/blog/are-there-silver-linings-in-the-new-cloud-regulations-how-clicks-are-taxed/) - The Department of Treasury and the Internal Revenue Service (“IRS”) recently issued proposed and final regulations for Treasury Regulation Section 1.861-18 and 19. These regulations will significantly change the way computer programs, movies, and music, in digital format, will be taxed in the United States. This article the recent changes the final regulations made to - [Will the Liquidation of a Foreign Subsidiary into a Foreign Parent Trigger U.S. Taxable Gains?](https://sftaxcounsel.com/blog/will-the-liquidation-of-a-foreign-subsidiary-into-a-foreign-parent-trigger-u-s-taxable-gains/) - The general rule established by the regulations promulgated by the Department of Treasury and the Internal Revenue Service (“IRS”) is that a foreign corporation does not recognize taxable gain in the U.S. with respect to property it distributes in a complete liquidation to a foreign parent corporation as long as the stock ownership tests of - [Does Congress Have the Authority to Retroactively Shorten The Statute of Limitations to Contest a Tax Assessment?](https://sftaxcounsel.com/blog/retroactive-tax-statute-limitations/) - Recently, Congress retroactively changed the statute of limitations contained in Section 7508A. This retractive change significantly reduced the amount of time taxpayers have to challenge a federal tax assessment. This article discusses the Constitutional issues this raises. Section 7508A provides the authority for the Treasury secretary or their delegates to provide relief to any taxpayer - [Why the Treasury Regulations Under Section 7508A Were Invalidated](https://sftaxcounsel.com/blog/why-the-treasury-regulations-under-section-7508a-were-invalidated/) - This article reviews the opinion promulgated by United States Tax Court in Mohamed K. Abdo and Fardowsa J. Farah v. Commissioner of Internal Revenue Service to determine why Treasury Regulations promulgated by the Department of Treasury were struck down by the Tax Court. Facts of the Case The Internal Revenue Service (“IRS”) issued to the - [For Whom is the Statute Tolled? An Overview of the Doctrine of Equitable Tolling in Tax Litigation](https://sftaxcounsel.com/blog/for-whom-is-the-statute-tolled-an-overview-of-the-doctrine-of-equitable-tolling-in-tax-litigation/) - The statute of limitations is a concept in law that sets a deadline for taking legal action. It specifies a time limit within which a lawsuit be initiated. The same concept applies in disputes with the Internal Revenue Service (“IRS”). The Internal Revenue Code sets a specific deadline in which a taxpayer must petition the - [OBBBA Changes to 962 Election for GILTI Inclusions](https://sftaxcounsel.com/blog/obbba-changes-to-962-election-for-gilti-inclusions/) - Internal Revenue Code Section 962 allows an individual U.S. shareholder of a CFC to elect to be subject to corporate income tax rates on Subpart F inclusions and GILTI. According to the legislative history of Section 962, “[t]he purpose of [Section 962] is to avoid what might otherwise be a hardship in taxing a U.S. - [OBBBA Changes to the Downward Attribution Rules- Is it Time for Portfolio Debt Planners to Rejoice?](https://sftaxcounsel.com/blog/obbba-changes-to-the-downward-attribution-rules-is-it-time-for-portfolio-debt-planners-to-rejoice/) - The Internal Revenue Code Sections 951 and 951A state that U.S. shareholders of a controlled foreign corporation (“CFC”) may be assessed to the CFC’s Subpart F or global intangible low-taxed income (“GILTI”). A U.S. shareholder is defined as a U.S. person who owns, or is considered as owning at least 10 percent of the total - [U.S.-U.K. Tax Treaty and U.K. Foreign Pension Planning Opportunities](https://sftaxcounsel.com/blog/u-s-u-k-tax-treaty-and-u-k-foreign-pension-planning-opportunities/) - This article assesses the tax impact of Article 17, “Pension, Social Security, Alimony, and Child Support” and Article 19 “Pension Schemes” of the United States- United Kingdom income tax treaty (“U.S.-U.K income tax treaty”) have on U.K pensions for U.S. tax purposes. The United Kingdom taxes its residents on their worldwide income and non-resident on - [Demystifying an Outbound Cross-Border Tax-Free Type B Reverse Triangular Merger](https://sftaxcounsel.com/blog/demystifying-an-outbound-cross-border-tax-free-type-b-reverse-triangular-merger/) - This article discusses outbound tax-free cross-border Type B reverse triangular mergers. A reverse triangular reorganization is similar to a forward triangular reorganization, except that the surviving entity is the target and not the acquirer. Before examining the tax consequences of an outbound tax-free cross-border Type B reverse triangular merger, a Type B tax-free reorganization must - [OBBBA Changes to FDII](https://sftaxcounsel.com/blog/obbba-changes-to-fdii/) - The foreign-derived intangible income (“FDII”) deduction was enacted as part of the 2017 Tax Cuts and Jobs Act to provide a tax incentive for domestic corporations to generate income from the export of products or services. This article discusses the relevant tax changes enacted by the One Big Beautiful Bill Act (“OBBBA”) to FDII. What - [OBBBA Changes to GILTI](https://sftaxcounsel.com/blog/obbba-changes-to-gilti/) - The global intangible low-taxed income (“GILTI”) regime was an attempt by Congress to use the Internal Revenue Code to encourage U.S. multinational corporations to increase investments in the United States. This article discusses the relevant tax changes enacted by the One Big Beautiful Bill Act (“OBBBA”) to GILTI. What Exactly is the GILTI Tax Regime? - [The Importance of the Terminable Interest Rule and QTIPs in Estate Planning](https://sftaxcounsel.com/blog/qtip-trusts-terminable-interest-rule-estate-planning/) - A qualified terminable interest property (“QTIP”) trust is an estate planning tool designed to provide for a surviving spouse while preserving assets for other beneficiaries. A QTIP provides a lifetime interest in the assets held in trust. QTIP trusts are typically irrevocable testamentary trusts. A testamentary trust is a trust that is established in a - [FIRPTA Planning and U.S. Real Property Holding Corporations](https://sftaxcounsel.com/blog/firpta-tax-planning-us-real-property-holding-corporations/) - Foreign investors actively invest in U.S. real estate by speculating on land and developing homes, condominiums, shopping centers, and commercial buildings. Many foreign investors own recreational property in popular U.S. beach and ski destinations. Any foreign investor in U.S. real estate should consider the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”). FIRPTA - [Can Establishing Puerto Rican Residency Avoid Subpart F and GILTI Inclusions?](https://sftaxcounsel.com/blog/puerto-rico-residency-subpart-f-gilti/) - As a U.S. territory, Puerto Rico can offer significant tax benefits to U.S. citizens. With proper planning, U.S. citizens establishing residency in Puerto Rico can avoid Subpart F income, and GILTI (Global Intangible Low-Taxed income) inclusions. A U.S. citizen can relocate to Puerto Rico without terminating his or her citizenship or triggering an exit tax. - [Are Foreign Insurance Companies Subject to the PFIC Tax Regime?](https://sftaxcounsel.com/blog/foreign-insurance-pfic-tax-regime/) - Sometimes U.S. investors set up insurance companies offshore for a variety of reasons. Often insurance companies established outside the United States are taxed under the controlled foreign corporation or (“CFC”) rules. However, unknown to the U.S. investor, a foreign insurance corporation or company can be taxed under the extremely punitive foreign investment company (or “PFIC”) - [An Overview of the Closer Connection Test and Treaty Tie-Breaker Provisions Available to Avoid U.S. Taxation on Foreign Source Income](https://sftaxcounsel.com/blog/closer-connection-test-treaty-tie-breaker-foreign-income/) - Of the world’s tax systems, most countries' bases for taxation are residency and source of income. As a result, most global taxing jurisdictions tax residents only on income received from domestic sources. Income received from foreign sources is frequently exempted from local income tax. The United States, on the other hand, is fairly unique from - [Tenancy-in-Common Planning and Section 761(a) Consideration for 1031 Tax-Deferred Exchanges](https://sftaxcounsel.com/blog/tenancy-in-common-1031-section-761a-planning/) - Real estate investors often hold real estate in a tenancy in common. A tenancy in common is a form of property ownership where two or more individuals, known as tenants in common, own real property together, but hold the property with separate, distinct ownership shares. Like any other real estate investors, restate estate investors that - [Demystifying a Cross-Border Tax-Free Forward Triangular Type A Merger and Acquisition](https://sftaxcounsel.com/blog/cross-border-tax-free-merger-a/) - Once a U.S. corporation is acquired by a foreign corporation, the ultimate disposition of the U.S. corporation’s appreciated property may occur outside the U.S. taxing jurisdiction. Section 367 was enacted to prevent tax-free transfers by U.S. taxpayers of appreciated property to foreign corporations that could then sell the property free of U.S. tax. Section 367 - [Demystifying a Cross-Border Tax-Free Forward Triangular Type C Merger and Acquisition](https://sftaxcounsel.com/blog/cross-border-tax-free-merger/) - Once a U.S. corporation is acquired by a foreign corporation, the ultimate disposition of the U.S. corporation’s appreciated property may occur outside the U.S. taxing jurisdiction. Section 367 was enacted to prevent tax-free transfers by U.S. taxpayers of appreciated property to foreign corporations that could then sell the property free of U.S. tax. Section 367 - [A Closer Look at QDOTs and the Blended International Couple](https://sftaxcounsel.com/blog/qdot-blended-international-couples/) - A qualified domestic trust (“QDOT”) is a specific type of trust used in estate planning to permit U.S. citizens to transfer assets to a non-U.S. citizen spouse in order to delay or avoid the U.S. estate and gift tax. In essence, a QDOT permits non-U.S. citizen spouses to receive benefits of assets placed in trust - [How Special Treaty Provisions Can be Utilized to Obtain Marital Deductions for Blended International Couples](https://sftaxcounsel.com/blog/international-marital-deductions-treaty/) - Married couples in the United States often utilize an unlimited marital deduction to avoid the U.S. estate and gift tax. However, the estate of non-citizens of the United States are generally not permitted to utilize a marital deduction for U.S. estate tax purposes other than for property passing to a qualified domestic trust (“QDOT”) or - [An Introduction to Basic Tax-Free Corporate Reorganization Principles](https://sftaxcounsel.com/blog/basic-tax-free-corporate-reorganization/) - There are a number of reasons as to why corporations enter into tax-free reorganizations. This article provides a very basic overview of tax-free corporate reorganizations. The term “reorganization” is used in the internal Revenue Code to describe a variety of transactions that result in a fundamental change in the ownership or structure of one or - [An Introduction to Type B Tax-Free Corporate Reorganizations](https://sftaxcounsel.com/blog/type-b-tax-free-corporate-reorganizations-introduction/) - In a Type B reorganization, a purchasing corporation or (“P”) acquires a controlling interest in target corporation (“T”) from the T shareholders solely in exchange for all or part of P’s voting stock. IRC Section 368(a)(1)(B). Two significant elements of the Type B reorganization should be understood. First, the purchasing corporation must have control over - [An Introduction to Type C Tax-Free Corporate Reorganizations](https://sftaxcounsel.com/blog/type-c-tax-free-corporate-reorganizations-introduction/) - A Type C reorganization generally is a purchasing corporation’s (“P’s”) acquisition of substantially all of a target corporation (“T’s”) assets solely in exchange for P voting stock (or voting stock of P’s parent). In a Type C reorganization, the target must “substantially all” of its properties. Internal Revenue Service (“IRS”) ruling policy requires a transfer - [An Introduction to Type D Tax-Free Corporate Reorganizations](https://sftaxcounsel.com/blog/type-d-tax-free-reorganization/) - A Divisive Type D reorganization under Section 355 allows certain distributions by one corporation (the “distributing corporation”) to its shareholders of stock or securities in another corporation (the “controlling corporation”) to be tax-free to the shareholders, and also to be tax-free to the distributing corporation. Type D reorganizations typically involve corporate divisions. Corporate divisions are - [How Tax Treaties Can Reduce U.S. Tax Consequences Associated With Foreign Pensions](https://sftaxcounsel.com/blog/tax-treaties-reduce-us-tax-on-foreign-pensions/) - Many U.S. taxpayers are beneficiaries of foreign pension plans. The rules governing the taxation of foreign pension plans are both confusing and complicated. In certain cases, U.S. participants of foreign pension plans may utilize favorable tax treaty positions with respect to the U.S. taxation of their foreign pension plans. This article discusses the applicability of - [The Complete Guide to U.S. Taxation of Foreign Pension Plans](https://sftaxcounsel.com/blog/us-taxation-foreign-pension-plans/) - Many U.S. taxpayers struggle with how to determine the U.S. tax consequences of their foreign pensions. This article will explore the U.S. income tax rules applied to foreign pensions that cross national borders. There are a number of factors that cause U.S. taxation of foreign pensions to be a difficult topic, not only from the - [How Japanese Investors Can Utilize the U.S.- Japan Estate and Gift Tax Treaty to Avoid the U.S. Estate Tax](https://sftaxcounsel.com/blog/japanese-investors-avoid-us-estate-tax/) - Foreign investors generally have the same goal of minimizing their tax liabilities from their U.S. real estate and other U.S. investments, as do their U.S. counterparts, although their objective is complicated by the very fact that they are not domiciled in the U.S. The U.S. has a special estate tax regime that is applicable to - [Special CFC Provisions to Puerto Rico Residents](https://sftaxcounsel.com/blog/special-cfc-provisions-to-puerto-rico-residents/) - Where a foreign corporation is characterized are a “Controlled Foreign Corporation” (“CFC”), its “United States Shareholders” are taxed annually on the “Subpart F income” and “Global Intangible Low-Taxed Income” (“GILTI”) of the CFC, whether or not such earnings are distributed at the time, and on the CFC’s increased investment in certain U.S. property. A CFC - [Does a Quirk in the Hypothetical Distribution Rule Permit Some CFC Shareholders to Avoid the Subpart F and GILTI Tax Regimes?](https://sftaxcounsel.com/blog/cfc-shareholders-avoid-subpart-f-gilti-tax/) - Where a foreign corporation is characterized are a “Controlled Foreign Corporation” (“CFC”), its “United States Shareholders” are taxed annually on the “Subpart F income” and “Global Intangible Low-Taxed Income” (“GILTI”) of the CFC, whether or not such earnings are distributed at the time, and on the CFC’s increased investment in certain U.S. property. A CFC - [How Australian Superannuation Funds are Taxed in the U.S.](https://sftaxcounsel.com/blog/us-taxation-australian-superannuation/) - There are currently more than 100,000 Australian-born people living in the United States. Many of these individuals have an Australian Superannuation account. A superannuation is an Australian pension program created by a company to benefit its employees. Funds deposited in a superannuation account will grow through appreciation and contributions until retirement or withdrawal. As with - [An Overview of the Covered Expatriate Gift Regulations and Potential Planning Opportunities](https://sftaxcounsel.com/blog/covered-expatriate-gift-tax-planning/) - Under Section 877A of the Internal Revenue Code, a “covered expatriate” is required to recognize gain on their worldwide assets as part of a deemed sale the day before the expatriation date. However, gain of up to $890,000 (for the 2025 calendar year) is not subject to the deemed sale provisions of Section 877A. A - [How Australian Investors Can Utilize the U.S.-Australia Estate Tax Treaty to Avoid the U.S. Estate Tax](https://sftaxcounsel.com/blog/us-australia-estate-tax-treaty-australian-investors/) - Foreign investors generally have the same goal of minimizing their tax liabilities from their U.S. real estate and other U.S. investments, as do their U.S. counterparts, although their objective is complicated by the very fact that they are not domiciled in the U.S. The U.S. has a special estate tax regime that is applicable to - [Does IRS Penalties For Failing to Timely File Form 3520 Violate the Eighth Amendment?](https://sftaxcounsel.com/blog/irs-form-3520-penalties-eighth-amendment/) - Section 1905 of the 1996 Tax Act created reporting requirements under Section 6039F of the Internal Revenue Code for U.S. persons (other than certain exempt organizations) that receive large gifts (including bequests) from foreign persons. The information reporting provisions require U.S. donees to provide information concerning the receipt of large amounts that the donees treat - [Can the Transition Tax and GILTI Regulations be Challenged Under the RFA?](https://sftaxcounsel.com/blog/transition-tax-gilti-regulations-challenged-rfa/) - Recently, in the case of Monte Silver, et Al v. Internal Revenue, et al, Monte Silver and his law firm, Monte Silver, Ltd, challenged the Internal Revenue Service’s (“IRS’s”) failure to conduct a small business impact analysis under the Regulatory Flexibility Act (“RFA”) when implementing regulations for the transition tax. Monte Silver, Ltd challenged the - [U.S. Tax and Reporting Issues Related to the Use of Foreign Usufructs](https://sftaxcounsel.com/blog/us-tax-reporting-foreign-usufructs/) - A typical European or Latin American estate plan involves a usufruct. A usufruct grants, by contractual arrangement, the right of use or enjoyment of property from one person to another for a specified period. The usufructuary is the person who has the right to use the person who has the right to use the property - [Cross-Border Tax and Estate Planning Considerations for U.S. Citizens that Plan Reside in France](https://sftaxcounsel.com/blog/us-citizens-tax-estate-planning-france/) - This article will discuss fundamental cross-border tax and estate planning considerations for U.S. citizens that become domiciled in France. In particular, this article will discuss consequences of a U.S. citizen redomiciling that established a U.S. revocable trust. Any U.S. citizen considering becoming a French domiciliary must understand that there are significant tax consequences associated with - [How Dual Citizens Can Escape the U.S. Exit Tax](https://sftaxcounsel.com/blog/dual-citizen-us-exit-tax-exemption/) - The taxation of worldwide income that confronts U.S. citizens may entice some to renounce their citizenship and become nonresident aliens. Section 877 of the Internal Revenue Code was designed to dissuade U.S. citizens from renouncing their U.S. citizenship for tax reasons. Section 877 effectively taxes a nonresident on all income from U.S. sources and on - [An Overview of the Tax Consideration of Moving IP Outbound](https://sftaxcounsel.com/blog/tax-considerations-moving-ip-outbound/) - Multinational corporations commonly develop some form of intangible property (“IP”). IP could be legally registered- like patents, copyrights or trademarks- or not registered such as manufacturing know-how, marketing intangibles, workforce-in-place, goodwill, and going concern value. The location of IP for a multinational corporation can significantly impact the IP’s tax cost. This article discusses the tax - [How Use a Section 6751(b)(1) Defense in an International Penalty Case](https://sftaxcounsel.com/blog/how-use-a-section-6751b1-defense-in-an-international-penalty-case/) - Chapter 61 of the Internal Revenue Code contains countless reporting requirements regarding foreign information filing obligations. Many of the sections under Chapter 61 impose significant penalties for the failure to comply with the reporting requirements. Common Reporting Requirements and Penalties The Internal Revenue Code requires certain persons to provide the IRS with information regarding foreign - [GILTI vs. FDII Who’s the Hero and Who’s the Villain?](https://sftaxcounsel.com/blog/gilti-vs-fdii-hero-villain/) - The foreign-derived intangible income (“FDII”) and global intangible low-taxed income (“GILTI”) regimes are an attempt by Congress to use the Internal Revenue Code to encourage U.S. multinational corporations to increase investments in the United States. However FDII and GILTI are incredibly complicated tax regimes and it is not always clear which of these provisions is - [What Foreign Owners of U.S. Disregarded Entities Need to Know About U.S. Tax Filing Requirements](https://sftaxcounsel.com/blog/foreign-owners-us-disregarded-entities-tax-filing/) - A number of years ago, the Internal Revenue Service (“IRS”) and the Treasury Department issued final regulations regarding the reporting requirements for domestic disregarded entities held by a nonresident. If a single-member LLC does not elect to be treated as a corporation with the IRS, the LLC is a “disregarded entity.” According to the regulations - [An Overview of the United States- Mexico Income Tax Treaty](https://sftaxcounsel.com/blog/an-overview-of-the-united-states-mexico-income-tax-treaty/) - The major purpose of an income tax treaty is to mitigate international double taxation through tax reduction or exemptions on certain types of income derived by residents of one treaty country from sources within the other treaty country. Because tax treaties often substantially modify U.S. and foreign tax consequences, the relevant treaty must be considered - [A Deep Dive into the United States-Canada Income Tax Treaty](https://sftaxcounsel.com/blog/a-deep-dive-into-the-united-states-canada-income-tax-treaty/) - The major purpose of an income tax treaty is to mitigate international double taxation through tax reduction or exemptions on certain types of income derived by residents of one treaty country from sources within the other treaty country. Because tax treaties often substantially modify U.S. and foreign tax consequences, the relevant treaty must be considered - [Did John Castro (or His Related Party AITAX.com) Advise you a Treaty can be used to Exclude Australian Superannuation Funds from U.S. Taxation? Here is How a Superannuation Fund is Taxed in the U.S.](https://sftaxcounsel.com/blog/australian-superannuation-tax-treaty-irs-treatment/) - On May 24, 2024, John Castro, the managing partner of Castro & Company was convicted of 33 counts of assisting in the preparation of fraudulent tax returns. According to a United States Attorney’s Office Press Release, John Castro marketed himself to clients around the world and claimed to be an “international tax expert” and “federal - [A Deep Dive Into the 2024 IRS Form 3520 Used to Report Transactions with Foreign Trusts and Receipt of Foreign Gifts](https://sftaxcounsel.com/blog/a-deep-dive-into-the-2024-irs-form-3520-used-to-report-transactions-with-foreign-trusts-and-receipt-of-foreign-gifts/) - United States persons with foreign assets are subject to an ever expanding universe of reporting requirements. A prime example of this can be found in Internal Revenue Code Section 667(a). This Internal Revenue Code Section provides that if a United States person beneficiary receives (directly or indirectly) a distribution from a foreign trust, that person - [A Deep Dive Into the 2024 IRS Form 3520-A Used to Provide Information About Foreign Trusts to the IRS](https://sftaxcounsel.com/blog/a-deep-dive-into-the-2024-irs-form-3520-a-used-to-provide-information-about-foreign-trusts-to-the-irs/) - United States persons with foreign assets are subject to an ever expanding universe of reporting requirements. A prime example of this can be found in Internal Revenue Code Section 6048(b). This Internal Revenue Code Section provides that a foreign trust owner must file Internal Revenue Service (“IRS”) Form 3520-A. Each U.S. person is treated as - [A Close Look at IRS Form 5471 Schedule F Used to Disclose a CFC’s Balance Sheet](https://sftaxcounsel.com/blog/a-close-look-at-irs-form-5471-schedule-f-used-to-disclose-a-cfcs-balance-sheet/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [An Overview of IRS Form 5471 Schedule H](https://sftaxcounsel.com/blog/an-overview-of-irs-form-5471-schedule-h/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [An Overview of IRS Form 5471 Schedule R](https://sftaxcounsel.com/blog/an-overview-of-irs-form-5471-schedule-r/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [An Overview of the IRS Form 5471 Schedule Q](https://sftaxcounsel.com/blog/an-overview-of-the-irs-form-5471-schedule-q/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [A Deep Dive into IRS Form 5471 Schedule I Used to Report a U.S. Shareholder’s Share of Subpart F Income](https://sftaxcounsel.com/blog/a-deep-dive-into-irs-form-5471-schedule-i-used-to-report-a-u-s-shareholders-share-of-subpart-f-income/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [A Deep Dive into IRS Form IRS Form 5471 Schedule I-1 Used to Determine GILTI Income Inclusions](https://sftaxcounsel.com/blog/a-deep-dive-into-irs-form-irs-form-5471-schedule-i-1-used-to-determine-gilti-income-inclusions/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [A Deep Dive into IRS Form IRS Form 5471 Schedule G-1 Used to Disclose Multinational Corporate Cost Sharing Arrangements](https://sftaxcounsel.com/blog/a-deep-dive-into-irs-form-irs-form-5471-schedule-g-1-used-to-disclose-multinational-corporate-cost-sharing-arrangements/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [Demystifying IRS Form 5471 Schedule J and the New Proposed PTEP Regulations](https://sftaxcounsel.com/blog/demystifying-irs-form-5471-schedule-j-and-the-new-proposed-ptep-regulations/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [Demystifying IRS Form 5471 Schedule O Used to Report the Organization and Reorganization of a CFC](https://sftaxcounsel.com/blog/demystifying-irs-form-5471-schedule-o-used-to-report-the-organization-and-reorganization-of-a-cfc/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [Demystifying IRS Form 5471 Schedule G](https://sftaxcounsel.com/blog/demystifying-irs-form-5471-schedule-g/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [Demystifying the New IRS Form 5471 Schedule M Used to Report CFC Transactions with Related Parties](https://sftaxcounsel.com/blog/demystifying-the-new-irs-form-5471-schedule-m-used-to-report-cfc-transactions-with-related-parties/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [Demystifying Form 5471 Schedule P](https://sftaxcounsel.com/blog/demystifying-form-5471-schedule-p/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [Demystifying Form 5471 Schedule E and E-1 Used to Report and Track Foreign Tax Credits of Controlled Foreign Corporations](https://sftaxcounsel.com/blog/demystifying-form-5471-schedule-e-and-e-1-used-to-report-and-track-foreign-tax-credits-of-controlled-foreign-corporations-2/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [Demystifying Form 5471 Schedule E and E-1 Used to Report and Track Foreign Tax Credits of Controlled Foreign Corporations](https://sftaxcounsel.com/blog/demystifying-form-5471-schedule-e-and-e-1-used-to-report-and-track-foreign-tax-credits-of-controlled-foreign-corporations/) - Form 5471 (Information Return of U.S. Persons With Respect to Certain Foreign Corporations) is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue - [How Does the Fifth Amendment Privilege Against Self-Incrimination Apply in a Criminal Tax Case?](https://sftaxcounsel.com/blog/how-does-the-fifth-amendment-privilege-against-self-incrimination-apply-in-a-criminal-tax-case/) - The Fifth Amendment of the U.S. Constitution provides that “no person … shall be compelled in any criminal case to be a witness against himself." Although literally applicable only to criminal cases, the Fifth Amendment has been held to grant individuals the option or privilege of refusing to answer potentially incriminating questions when compelled to - [How Fourth Amendment Can be Utilized to Challenge an IRS Summons](https://sftaxcounsel.com/blog/how-fourth-amendment-can-be-utilized-to-challenge-an-irs-summons/) - An individual who is the subject of a criminal tax case has the same rights as any other criminal defendant against unreasonable search and seizure in a criminal tax case. The Fourth Amendment constitutional right against unreasonable searches and seizure typically comes into play in criminal tax cases principally in warrantless searches of a taxpayer’s - [Is it Possible to Quash an IRS Summons Issued to Build a Civil or Criminal Tax Case in a Foreign Country?](https://sftaxcounsel.com/blog/is-it-possible-to-quash-an-irs-summons-issued-to-build-a-civil-or-criminal-tax-case-in-a-foreign-country/) - The rapid rise of globalism has made the world feel smaller. Americans are more connected to people on the other side of the world than ever before. Not only are Americans more connected to people on the other side of the world than ever, more and more of Americans are earning income in one or - [Will Loper-Bright Have Any Impact on Tax Litigation with the IRS?](https://sftaxcounsel.com/blog/will-loper-bright-have-any-impact-on-tax-litigation-with-the-irs/) - Recently, in Relentless Inc. v. U.S. Department of Commerce and Loper Bright Enterprise v. Raimondo, the Supreme Court overruled more than four decades of deference to federal agencies known as the Chevron doctrine. Under the Chevron doctrine, federal courts were often required to defer to “permissible” agency interpretation of the statutes those agencies administer-even when - [The IRS Finalizes Regulations for the Section 2801 Inheritance Tax](https://sftaxcounsel.com/blog/the-irs-finalizes-regulations-for-the-section-2801-inheritance-tax/) - Anyone considering abandoning their U.S. citizenship or ending a long-term U.S. residency must understand that they may be assessed an “expatriation tax.” An “expatriation tax” consists of two components: the “exit tax” and the “inheritance tax.” Both may be triggered upon abandonment of citizenship or abandonment of a green card. This article focuses on the - [Are Foreign Cash Gifts Taxable?](https://sftaxcounsel.com/blog/are-foreign-cash-gifts-taxable/) - The Tax Cut and Jobs Act of 2017 currently excludes $13.90 million of assets from estate and gift taxes of a U.S. citizen or resident from the federal estate and gift tax. The way the estate tax is computed on the gross estate of a decedent which includes “the value at the time of his - [How to Plan for the U.S. Exit Tax](https://sftaxcounsel.com/blog/how-to-plan-for-the-u-s-exit-tax/) - The number of U.S. citizens and U.S. residents expatriating from the United States has increased at an annual rate of 20 percent over the past few years. Expatriation is a major life decision with significant tax implications for anyone considering renouncing their citizenship or U.S. residency. This article discusses the exit tax associated with expatriation - [The Benefits of Utilizing Gain Recognition Agreements in Cross-Border Corporate Transfers](https://sftaxcounsel.com/blog/the-benefits-of-utilizing-gain-recognition-agreements-in-cross-border-corporate-transfers/) - Whenever a U.S. person decides to establish a foreign corporation (or foreign business entity), it will be necessary to capitalize the foreign corporation with a transfer of cash and other property in exchange for its stock. When appreciated property, such as equipment or certain property rights, is transferred to a foreign corporation, gain will often - [Does the Seventh Amendment Invalidate International Penalties?](https://sftaxcounsel.com/blog/does-the-seventh-amendment-invalidate-international-penalties/) - Adjudicatory powers have been a power essential to federal agencies like the Internal Revenue Service (“IRS”), agencies supplement this power by assessing civil fines. Chapter 61 of the Internal Revenue Code contains countless reporting requirements regarding foreign information filing obligations. Many of the sections under Chapter 61 impose significant penalties for the failure to comply - [The Application of the Anti-Conduit and Anti-Hybrid Regulations to Hybrid Entities and Hybrid Instruments ](https://sftaxcounsel.com/blog/the-application-of-the-anti-conduit-and-anti-hybrid-regulations-to-hybrid-entities-and-hybrid-instruments/) - The Internal Revenue Service (“IRS”) has issued final regulations (T.D. 8611) relating to conduit financing arrangements under authority granted by Section 7701(l). - [Will Your Form 5471 Be Dinged By the IRS’ $10,000 Penalty For Being ‘Substantially Incomplete’?](https://sftaxcounsel.com/blog/will-your-form-5471-be-dinged-by-the-irs-10000-penalty-for-being-substantially-incomplete/) - Whether future litigation on the substantial compliance issue will provide relief to U.S. taxpayers required to file the Form 5471, remains to be seen. - [About to Disclose a Previously Undisclosed Foreign Financial Asset to the IRS through the OVDP or Streamlined Filing Compliance Procedures? Better Learn About Option 4](https://sftaxcounsel.com/blog/about-to-disclose-a-previously-undisclosed-foreign-financial-asset-to-the-irs-through-the-ovdp-or-streamlined-filing-compliance-procedures-better-learn-about-option-4/) - Anyone considering disclosing a previously undisclosed foreign financial asset to the IRS has heard about the Offshore Voluntary Disclosure Program - [Taxation of the Digital Economy- A Brief Overview of the OECD Two-Pillar Proposal](https://sftaxcounsel.com/blog/oecd-two-pillar-proposal/) - The pillar one and pillar two OECD proposals represent a significant change to global international tax relating to the taxation of digital and digitized businesses - [A Closer Look at the Title 31 Anti-Money Laundering Rules Governing Cryptocurrency Exchangers](https://sftaxcounsel.com/blog/anti-money-laundering-rules/) - This article will discuss cryptocurrency trader’s obligation under the Anti-Money Laundering Act of 2020. Contact us to discuss. - [Hiring the Right San Francisco Tax Law Attorneys: Why Choose Diosdi Ching & Liu, LLP?](https://sftaxcounsel.com/blog/hiring-the-right-san-francisco-tax-law-attorneys-why-choose-diosdi-ching-liu-llp/) - Contact Diosdi Ching & Liu, LLP today and let our experienced San Francisco tax law attorneys guide you through the maze of tax law with confidence and ease. - [A Case Study of an Outbound Forward Triangular Reorganization Part II- The Limited Interest Exception](https://sftaxcounsel.com/blog/a-case-study-of-an-outbound-forward-triangular-reorganization-part-ii-the-limited-interest-exception/) - This article provides an overview of the rules governing outbound forward triangular mergers. This article uses a hypothetical Singapore corporation which acquires a U.S. corporation to discuss the issues commonly faced by tax professionals in outbound forward triangular merger. A forward triangular reorganization occurs when an acquiror uses the shares of its parent as merger - [Demystifying the IRS Form 5471 Part 2. Schedule C](https://sftaxcounsel.com/blog/demystifying-the-irs-form-5471-part-2-schedule-c/) - By Anthony Diosdi In order to provide the Internal Revenue Service (“IRS”) with the information necessary to ensure compliance with the subpart F rules and global intangible low-taxed income (“GILTI”) provisions, each year certain U.S. persons with interests in foreign corporations must file an IRS Form 5471 otherwise known as “Information Return of U.S. Persons - [How is the Branch Profits Tax Calculated?](https://sftaxcounsel.com/blog/how-is-the-branch-profits-tax-calculated/) - By introducing the U.S. branch profits tax, Congress substantially reduced the desirability of a foreign corp as the vehicle for operating a U.S. business. - [An Overview of the Civil and Criminal Statute of Limitations For Undisclosed Foreign Financial Assets and Unreported Foreign Income](https://sftaxcounsel.com/blog/an-overview-of-the-civil-and-criminal-statute-of-limitations-for-undisclosed-foreign-financial-assets-and-unreported-foreign-income/) - Since the 2009 calendar year, the Department of Justice and the Internal Revenue Service (“IRS”) have been aggressively waging war on taxpayers who hold undisclosed offshore assets. Through a variety of methods, the Department of Justice and the IRS have obtained volumes of information about the holders of offshore financial accounts and their assets abroad. - [What is an Aircraft Trust and How They Work for Nonresidents](https://sftaxcounsel.com/blog/what-is-an-aircraft-trust-and-how-they-work-for-nonresidents/) - Civil aviation is a very popular pastime in the United States. In order to operate an aircraft in the United States, an aircraft must be registered with the Federal Aviation Administration (“FAA”) Aircraft Registry. The FAA is the primary agency in the U.S. that governs aircraft registration. The United States has the largest registry of - [How U.S. Retirement Plans are Treated for Exit Tax Purposes](https://sftaxcounsel.com/blog/how-u-s-retirement-plans-are-treated-for-exit-tax-purposes/) - This article discusses how U.S. retirement accounts (i.e., IRA and 401(k) plans) are treated for expatriation tax purposes. Before discussing how a U.S. retirement account is treated for expatriation tax purposes, this article will provide an overview regarding the expatriation tax. Section 877A and the “Exit” Tax Under Section 877A of the Internal Revenue Code, - [IRS Form 8621 and PFIC Reporting Rules](https://sftaxcounsel.com/blog/irs-form-8621-and-pfic-reporting-rules/) - This article provides guidance on how to report Passive Foreign Investment Company (“PFIC”) shares on a Form 8621. This article will discuss line-by-line the Form 8621. A U.S. person must file annually, with its federal income tax return for the year, a separate Form 8621, Return by a Shareholder of a Passive Foreign Investment Company - [How the U.S.-Canada Tax Treaty Treats Retirement Plans](https://sftaxcounsel.com/blog/how-the-u-s-canada-tax-treaty-treats-retirement-plans/) - In an increasingly global economy, workers are experiencing unprecedented mobility. As such, foreigners living in America, even for a limited time, often participate in a pension or retirement plan in the United States; participation might even be mandatory. In most cases, pretax money is contributed into retirement accounts where it accumulates tax-free until retirement. U.S. - [The U.S. Taxation of Canadian RRSP Retirement Accounts](https://sftaxcounsel.com/blog/the-u-s-taxation-of-canadian-rrsp-retirement-accounts/) - There are approximately 3.1 million Canadians living in the United States. Many of these individuals have Canadian registered retirement accounts or (“RRSPs”). An RRSP is a retirement savings and investing vehicle for employees and self-employed individuals in Canada. Under Canadian tax law, money that is placed into an RRSP grows tax-free until it is withdrawn - [The U.S. Taxation of India’s Provident Fund](https://sftaxcounsel.com/blog/the-u-s-taxation-of-indias-provident-fund/) - India has a national pension plan that is similar to a social security system. The normal pension age for earnings-related pension benefits from the Employees’ Pension Scheme is 58 years of age with a minimum of ten years of contribution. The pension age for the earnings-related Employees Provident Fund scheme is 55 years of age. - [Tax Consideration Involved in the Domesticating of a CFC](https://sftaxcounsel.com/blog/tax-consideration-involved-in-the-domesticating-of-a-cfc/) - The Internal Revenue Code provides that a United States shareholder of a Controlled Foreign Corporation or (“CFC”) is subject to tax on the CFC’s Subpart F or “global intangible low-taxed income” or (“GILTI”). Section 957(a) defines a CFC as a foreign corporation of which more than 50 percent of value or total combined voting power - [The IRS Ends Automatic Section 6039F Penalties for Late-Filed Form 3520s. Six Reasons Why the Announcement Was Inadequate](https://sftaxcounsel.com/blog/the-irs-ends-automatic-section-6039f-penalties-for-late-filed-form-3520s-six-reasons-why-the-announcement-was-inadequate/) - The Internal Revenue Service (“IRS”) will no longer automatically impose penalties on taxpayers who file late Forms 3520 (annual Return To Report Transactions With Foreign Trust and Receipt of Certain Foreign Gifts) reporting gifts or bequests from foreign persons, a change announced by IRS Commissioner Danny Werfel on October 24, 2024. Going forward, before assessing - [Are There Any Silver Linings in the Proposed Cloud Computing Regs?](https://sftaxcounsel.com/blog/are-there-any-silver-linings-in-the-proposed-cloud-computing-regs/) - Recently, the Internal Revenue Service (“IRS”) released proposed regulations addressing cloud-computing transactions and other transactions involving digital content. In general, the proposed cloud computing regulations validated taxpayer’s belief that the existing framework of the software regulations in Treasury Regulation Section 1.861-18 was not well suited for cloud-based software applications and other digital offerings, and they - [The Evolution of the Taxation and Reporting of Non-Fungible Tokes](https://sftaxcounsel.com/blog/the-evolution-of-the-taxation-and-reporting-of-non-fungible-tokes/) - Digital currency is money. There are a number of different digital currencies. They include bitcoin, ethereum, and dogecoin. Digital currencies are also called cryptocurrency. This is because cryptocurrency can be held in an online account, a USB drive, or in a digital wallet app. The value of these currencies varies depending on online exchanges such - [Can Canadian Florida Real Estate Investors Utilize a Lady Bird Deed to Avoid the U.S. Gift Tax?](https://sftaxcounsel.com/blog/can-canadian-florida-real-estate-investors-utilize-a-lady-bird-deed-to-avoid-the-u-s-gift-tax/) - Canadians actively invest in real estate located in Florida. Many Canadians like to spend their winters in Florida and acquire homes near to beach destinations in the Sunshine State. Canadians that acquire real property in Florida should consider the U.S. estate and gift tax consequences associated with such a transaction. The U.S. estate and gift - [U.S. Taxation of Stock-Based Compensation Received by Nonresident Aliens](https://sftaxcounsel.com/blog/u-s-taxation-of-stock-based-compensation-received-by-nonresident-aliens/) - The following is a general summary of the cross-border tax consequences associated with stock-based compensation. Stock-based compensation is a form of stock based compensation used to reward employees. Stock-based compensation vests at some point in the future. It is common for U.S. multinational corporations to assign U.S. employees to overseas affiliates for short or long - [How Foreign Corporations Conducting Business in the United States are Taxed](https://sftaxcounsel.com/blog/how-foreign-corporations-conducting-business-in-the-united-states-are-taxed/) - Introduction Foreign corporations are taxed in the United States on income from U.S. sources and on income that derives from the conduct of a U.S. trade or business or from passive investments. As a general rule, a foreign corporation that conducts a U.S. trade or business will be subject to the usual U.S. federal tax - [An Overview of the Source-of-Income Rules and the Taxation of Foreign Computer Programs](https://sftaxcounsel.com/blog/an-overview-of-the-source-of-income-rules-and-the-taxation-of-foreign-computer-programs/) - The source rules play an important role in the taxation of foreign persons and foreign corporations, since they effectively define the boundaries of U.S. taxation. The United States taxes the gross amount of a foreign person’s or foreign corporation’s U.S.-source nonbusiness income at a flat rate of 30 percent. On the other hand, the United - [How Foreign Corporations Can be Used to Avoid FIRPTA](https://sftaxcounsel.com/blog/how-foreign-corporations-can-be-used-to-avoid-firpta/) - U.S. real estate has become a popular investment with foreigners. However, few foreign investors fail to consider the U.S. tax implications of holding U.S. real property. There are significant income, gift and estate tax consequences that may result when U.S. real property is sold or transferred. This article discusses the withholding requirements of the Foreign - [How Canadian Real Estate Investors Can Avoid the U.S. Gift Tax Through Marital Deduction Provisions](https://sftaxcounsel.com/blog/how-canadian-real-estate-investors-can-avoid-the-u-s-gift-tax-through-marital-deduction-provisions/) - Understand the complexities of marital deduction planning and U.S. tax issues for foreign investors in real estate. Consult a qualified U.S. tax attorney for tailored advice. - [A Deep Dive into How the PFIC Regime Taxes Foreign Investments](https://sftaxcounsel.com/blog/a-deep-dive-into-how-the-pfic-regime-taxes-foreign-investments/) - Discover the effects of PFIC guidelines on U.S. investors in foreign stocks and mutual funds. Gain insights into tax obligations related to passive income. - [Cross-Border Audits: When Foreign Tax Authorities Sic the IRS on You](https://sftaxcounsel.com/blog/cross-border-audits-when-foreign-tax-authorities-sic-the-irs-on-you/) - If you are facing a cross-border tax investigation and an IRS summons, consult qualified attorneys immediately. Timely action is crucial for your defense - [A Closer Look at the United States- Republic of Chile Income Tax Treaty
](https://sftaxcounsel.com/blog/a-closer-look-at-the-united-states-republic-of-chile-income-tax-treaty/) - The major purpose of an income tax treaty is to mitigate international double taxation through tax reduction or exemptions on certain types of income derived by residents of one treaty country from sources within the other treaty country. Because tax treaties often substantially modify U.S. and foreign tax consequences, the relevant treaty must be considered - [The Impact of French Tax Law on Dual U.S. French Residents that Utilize U.S. Trusts for Estate Planning](https://sftaxcounsel.com/blog/the-impact-of-french-tax-law-on-dual-u-s-french-residents-that-utilize-u-s-trusts-for-estate-planning/) - U.S. estate planning often involves the use of trusts to minimize the U.S. federal estate and gift tax. Trusts are also utilized in the U.S. to avoid going through probate. Trusts do not exist as a concept in French law. At one time, it was unclear how France would treat beneficiaries of trusts. In 2011, - [An Overview of the Corporate Transparency Act](https://sftaxcounsel.com/blog/an-overview-of-the-corporate-transparency-act/) - The Corporate Transparency Act (“CTA”) was enacted on January 1, 2021, as part of the National Defense Authorization Act (“NDAA”). It effectively creates a national beneficial ownership registry. The CTA requires certain business entities to report beneficial owners and “applicants” to Treasury’s Financial Crimes Enforcement Network (“FinCEN”). CTA is intended to strengthen anti-money laundering laws - [A Brief Overview of Columbian Taxation](https://sftaxcounsel.com/blog/a-brief-overview-of-columbian-taxation/) - This article provides a brief summary as to how individual and corporate taxes are determined in Colombia. How Individuals are Taxed in Columbia Colombia taxes its nationals and aliens as follows. Residents are taxed on Colombian-source income. Nonresidents or aliens are only taxed on Colombian-source income. For Columbian tax purposes, individuals become a tax resident - [A Brief Overview of Japanese Taxation](https://sftaxcounsel.com/blog/a-brief-overview-of-japanese-taxation/) - This article provides a brief summary as to how individual and corporate taxes are determined in Japan. Individual Taxation Nonresident individual taxpayers are taxed only on their Japan-source income. A permanent resident taxpayer is taxed on his or her worldwide income. A resident taxpayer is an individual who is either a resident of Japan or - [What Importers Need Know About US Trade and Customs Practices](https://sftaxcounsel.com/blog/what-importers-need-know-about-us-trade-and-customs-practices/) - Planning for cross-border transactions often involves mitigation or elimination of US withholding taxes. Although planning for US withholding taxes is extremely important, in cases where tangible goods are being imported into the US, US tariffs and duties must also be considered. This article provides a broad overview of the US customs, duties, and tariff procedures - [How the “Title Passage Rule” Can be Effectively Utilized to Avoid U.S. Income and Withholding Taxes in Cross-Border Transactions](https://sftaxcounsel.com/blog/how-the-title-passage-rule-can-be-effectively-utilized-to-avoid-u-s-income-and-withholding-taxes-in-cross-border-transactions/) - Many foreign corporations and businesses ship goods such as vehicles, machines, parts, and electronics into the United States. These types of transactions can trigger U.S. income or withholding tax obligations. This article discusses how the “title passage rule” can be utilized by foreign entities to eliminate their exposure to U.S. income and withholding taxes. How - [How Qualified Domestic Trusts are Used in Cross-Border Estate Planning](https://sftaxcounsel.com/blog/how-qualified-domestic-trusts-are-used-in-cross-border-estate-planning/) - U.S. federal law imposes a transfer tax upon the privilege of transferring property by gift, bequest, or inheritance. This transfer tax takes the form of an estate or gift tax. The tax is measured against a tax base that includes not only the assets of decedent’s probate estate, but also certain gifts by the decedent - [How is Restitution and the Cost of Prosecution Determined in a Criminal Tax Case](https://sftaxcounsel.com/blog/how-is-restitution-and-the-cost-of-prosecution-determined-in-a-criminal-tax-case/) - If you are found guilty or plead guilty in a federal criminal tax case, the court will likely order you to pay restitution. The court may also order you to pay the cost of prosecution. The article discusses how restitution and the cost of prosecution are typically determined. Calculation of the Amount of Restitution in - [How a Dynasty Trusts Can be Used to Avoid the Generation Skipping-Tax](https://sftaxcounsel.com/blog/how-a-dynasty-trusts-can-be-used-to-avoid-the-generation-skipping-tax/) - Introduction On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act of 2017. The 2017 Tax Cuts and Jobs Act increased the exemptions for federal estate tax, gift tax, and generation-skipping tax (“GST”) to $11,180,000 per person for 2018. The exemptions are indexed for inflation. In 2024, the exemption was increased to - [The Estate, Gift, and Income Tax Consequences of Utilizing Life Insurance in an Estate Plan](https://sftaxcounsel.com/blog/the-estate-gift-and-income-tax-consequences-of-utilizing-life-insurance-in-an-estate-plan/) - The United States imposes estate and gift taxes on certain transfers of U.S. situs property by “nonresident citizens of the United States.” In other words, individual foreign investors may be subject to the U.S. estate and gift tax on their investments in the United States. The U.S. estate and gift tax is assessed at a - [401K and IRA Considerations that May Influence the Estate Planning Process](https://sftaxcounsel.com/blog/401k-and-ira-considerations-that-may-influence-the-estate-planning-process/) - Many people accumulate significant benefits in qualified employer benefit plans such as 401Ks and individual retirement accounts (“IRAs”). These benefits are subject to a maze of tax rules. Both the participants and their beneficiaries need advice on the plethora of choices they face. This article focuses primarily on those features of qualified plans and IRAs - [The Retirement and Estate Planning Benefits of Charitable Remainder Trusts](https://sftaxcounsel.com/blog/the-retirement-and-estate-planning-benefits-of-charitable-remainder-trusts/) - The United States imposes estate and gift taxes on certain transfers of U.S. situs property by “nonresident citizens of the United States.” In other words, individual foreign investors may be subject to the U.S. estate and gift tax on their investments in the United States. The U.S. estate and gift tax is assessed at a - [Estate Freezing Techniques Available Through Grantor Retained Annuity Trusts](https://sftaxcounsel.com/blog/estate-freezing-techniques-available-through-grantor-retained-annuity-trusts/) - The United States imposes estate and gift taxes on certain transfers of U.S. situs property by “nonresident citizens of the United States.” In other words, individual foreign investors may be subject to the U.S. estate and gift tax on their investments in the United States. The U.S. estate and gift tax is assessed at a - [The Tax Benefits of Utilizing Commercial Annuities](https://sftaxcounsel.com/blog/the-tax-benefits-of-utilizing-commercial-annuities/) - There are many types of annuities, each with its own set of rules. This article discusses commercial annuities. This article discusses how an annuity works and then explains the tax treatment. How Commercial Annuities Work The “purchaser” buys the annuity from the “seller,” say, an insurance company. The “owner” or “holder” owns the annuity policy. - [Taxation of Annuities](https://sftaxcounsel.com/blog/taxation-of-annuities/) - The United States imposes estate and gift taxes on certain transfers of U.S. situs property by “nonresident citizens of the United States.” In other words, individual foreign investors may be subject to the U.S. estate and gift tax on their investments in the United States. The U.S. estate and gift tax is assessed at a - [How the French Reporting Requirements and Tax May Affect U.S. Trusts](https://sftaxcounsel.com/blog/how-the-french-reporting-requirements-and-tax-may-affect-u-s-trusts/) - U.S. beneficiaries of domestic trusts are typically subject to U.S. taxation. If a U.S. trust has a settlor or beneficiary that is domiciliary of France, the settlor and/or beneficiary could be liable for France’s gratuitous transfer tax. France does not have a law that recognizes the establishment of trusts in that country. However, France does - [CFC Shareholder Planning Considerations for GILTI](https://sftaxcounsel.com/blog/cfc-shareholder-planning-considerations-for-gilti/) - Whenever a U.S. person decides to establish a business abroad that will be conducted by a foreign corporation, the U.S. shareholders of controlled foreign corporations (“CFCs”) must plan for the Global Intangible Low-Taxed Income (“GILTI’) tax regime. GILTI is a provision that can be found in Internal Revenue Code Section 951A. The Tax Cuts and - [How the Throwback Tax is Calculated on a Foreign Trust Distribution on the Form 3520](https://sftaxcounsel.com/blog/how-the-throwback-tax-is-calculated-on-a-foreign-trust-distribution-on-the-form-3520/) - U.S. beneficiaries of non-grantor foreign trusts are subject to a special tax regime known as the “throwback tax.” Not only is the throwback tax incredibly punitive, computing the throwback tax is extremely complicated. The throwback tax is the difference between distributable net income and undistributed net income of a foreign nongrantor trust to a U.S. - [An Overview of U.S. Taxation Foreign Pensions](https://sftaxcounsel.com/blog/an-overview-of-u-s-taxation-foreign-pensions/) - In the last 20 years, there has been a significant upward trend of highly skilled foreign workers moving to the United States for temporary assignments. For foreigners planning to move to the United States for a temporary work assignment, pre-immigration tax planning is crucial. Whether the goal is to minimize the tax effects of the - [What Clients and Tax Advisors Can Learn From the Prosecution of John Castro of Castro & Company](https://sftaxcounsel.com/blog/what-clients-and-tax-advisors-can-learn-from-the-prosecution-of-john-castro-of-castro-company/) - On May 24, 2024, John Castro, the managing partner of Castro & Company was convicted of 33 counts of assisting in the preparation of fraudulent tax returns. According to a United States Attorney’s Office Press Release, John Castro marketed himself to clients around the world and claimed to be an “international tax expert” and “federal - [IRS Reopens Voluntary Disclosure Program for Businesses with Problematic Employee Retention Credits](https://sftaxcounsel.com/blog/irs-reopens-voluntary-disclosure-program-for-businesses-with-problematic-employee-retention-credits/) - The Internal Revenue Service (“IRS”) has recently announced a limited reopening of the Voluntary Disclosure Program to help businesses fix incorrect Employee Retention Credit (“ERC”) claims. The ERC Voluntary Disclosure Program (“VDP”) will run through November 22 and permit businesses an opportunity to correct improper payments at a 15% discount and avoid future audits, penalties, - [How the Deemed Royalty Regime for Intellectual Property Operates in Cross-Border Transactions](https://sftaxcounsel.com/blog/how-the-deemed-royalty-regime-for-intellectual-property-operates-in-cross-border-transactions/) - Whenever a U.S. person decides to establish a business abroad that will be conducted by a foreign corporation, it will be necessary to capitalize the foreign corporation with a transfer of cash and other property in exchange for its stock. When appreciated property, such as equipment or intangible property rights (e.g., foreign patents, knowhow and - [An Overview of a Franchise Tax Board Audit and How they are Different than IRS Audits](https://sftaxcounsel.com/blog/an-overview-of-a-franchise-tax-board-audit-and-how-they-are-different-than-irs-audits/) - Like the Internal Revenue Service (“IRS”), the Franchise Tax Board (“FTB”) is authorized to audit tax returns and assess additional tax liabilities, interest, and penalties. Although a FTB audit seems similar to an IRS audit, an FTB audit is very different in nature, and the outcome of an FTB audit may be dramatically different than - [Is the Sentencing Guidelines' Zero-Point Offender Provision a Get Out of Jail Free Card for First-Time Criminal Tax Offenders?](https://sftaxcounsel.com/blog/is-the-sentencing-guidelines-zero-point-offender-provision-a-get-out-of-jail-free-card-for-first-time-criminal-tax-offenders/) - Under Amendment 821 to the Federal Sentencing Guidelines, the United States Sentencing Commissioner added two new Guidelines provisions to the Federal Sentencing Guidelines. The first new provision created by the Commission resulted in an “Adjustment for Certain Zero-Point Offenders” under Guideline Section 4C1.1. Under Guideline Section 4C1.1, if a defendant satisfies a number of conditions, - [U.S. Tax Planning for Foreigners Intending to own U.S Real Estate](https://sftaxcounsel.com/blog/u-s-tax-planning-for-foreigners-intending-to-own-u-s-real-estate/) - U.S. Tax Planning for Foreigners Intending to own U.S Real Estate. If you are foreign investor looking to acquire a U.S. business or start a U.S. business, contact the international tax attorneys at Diosdi Ching & Liu, LLP. - [Bringing a Case Before the United States Tax Court A to Z. Part 1. What is the Significance of Receiving a Notice of Deficiency From the IRS?](https://sftaxcounsel.com/blog/bringing-a-case-before-the-united-states-tax-court-a-to-z-part-1-what-is-the-significance-of-receiving-a-notice-of-deficiency-from-the-irs/) - A notice of deficiency states the tax liability they believe a taxpayer owes as the result of an audit. Call SF Tax Counsel to discuss. - [Are Prosecutors Making a Mistake by Prosecuting Lori Loughlin For Honest Services Wire Fraud?](https://sftaxcounsel.com/blog/are-prosecutors-making-a-mistake-by-prosecuting-lori-loughlin-for-honest-services-wire-fraud/) - Federal prosecutors ultimately filed a superseding indictment against Loughlin alleging that she conspired to commit mail and wire fraud. - [A Quick Look at The Investment in a Qualified Opportunity Fund Rules](https://sftaxcounsel.com/blog/a-quick-look-at-the-investment-in-a-qualified-opportunity-fund-rules/) - Any deferred taxable gain invested in a QOV remains subject to federal income tax. Please contact our firm to discuss your opportunity. - [Bringing a Case Before the United States Tax Court A to Z Part II. Petitioning the Court, the Appeals Process, and Discovery](https://sftaxcounsel.com/blog/bringing-a-case-before-the-united-states-tax-court-a-to-z-part-ii-petitioning-the-court-the-appeals-process-and-discovery/) - By Anthony Diosdi If you have received a notice of deficiency and wish to contest the liability indicated on the notice without paying in full, you must timely petition the Tax Court. Anyone who contests a notice of deficiency by petitioning the Tax Court must understand that they are suing the IRS and must act - [Are Taxpayers Who Fail to File a FBAR Today at Greater Risk of Being Assessed the Willful ($100,000) FBAR Penalty?](https://sftaxcounsel.com/blog/are-taxpayers-who-fail-to-file-a-fbar-today-at-greater-risk-of-being-assessed-the-willful-100000-fbar-penalty/) - Do you have an interest in a foreign financial account which you have not disclosed on a ‘Report of Foreign Bank and Financial Accounts’ (FBAR)? - [A District Court Determines that a Sole Beneficiary of a Foreign Trust is Subject to Only a 5 Percent Penalty for the Untimely Filing of IRS Form 3520 and Not the Usual 35 Percent Penalty](https://sftaxcounsel.com/blog/a-district-court-determines-that-a-sole-beneficiary-of-a-foreign-trust-is-subject-to-only-a-5-percent-penalty-for-the-untimely-filing-of-irs-form-3520-and-not-the-usual-35-percent-penalty/) - In this case, although Wilson was both the owner of the foreign trust and also a beneficiary, the court concluded that under a plain reading of Section 6677 - [How is the GILTI High-Tax Exemption Treated for Purposes of Section 959?](https://sftaxcounsel.com/blog/how-is-the-gilti-high-tax-exemption-treated-for-purposes-of-section-959/) - This option allows CFC shareholders to defer the recognition of undistributed GILTI income (and subpart F income) as earnings and profits (“E&P”). The high tax exception can be a very effective tax planning tool. - [One Potential Strategy Foreigner Investors Can Utilize to Transfer U.S. Real out of their Estate to Avoid the Estate and Gift Tax](https://sftaxcounsel.com/blog/san-francisco-estate-and-gift-tax-attorney/) - For U.S. federal estate tax purposes a person can only (and must have) one place of domicile. Contact SF Tax Counsel to discuss. - [Did You Get an Audit Notice?](https://sftaxcounsel.com/blog/san-francisco-tax-attorney/) - When the IRS decides you are up for an audit, the process can move quickly. You should consult with our tax legal team at Diosdi, Ching & Liu, LLP, as soon as possible. - [A Deep Dive Into the IRS Form 5471 Schedule E Reporting and Tracking Foreign Tax Credits](https://sftaxcounsel.com/blog/a-deep-dive-into-the-irs-form-5471-schedule-e-reporting-and-tracking-foreign-tax-credits/) - Schedule E of Form 5471 is used to report taxes paid or accrued by a foreign corporation for which a foreign tax credit is allowed and taxes for which a credit may not be taken. - [The U.S. Tax Effects of Entities Used by Foreign Investors](https://sftaxcounsel.com/blog/the-u-s-tax-effects-of-entities-used-by-foreign-investors-2/) - Foreign investors must understand the difference between effectively connected income compared to not effectively connected income. - [What are the Tax Deadlines for 2022?](https://sftaxcounsel.com/blog/san-francisco-california-tax-lawyer/) - Call the experienced attorneys at SF Tax Counsel at 415.398.3990 or contact us online with all of your income tax questions. - [RSUs and the Expatriation Tax](https://sftaxcounsel.com/blog/rsus-and-the-expatriation-tax/) - When a recipient subsequently sells the shares acquired upon vesting of an RSU or RSUs, the recipient will be subject to capital gains tax. - [San Francisco Tax Lawyers: Expertise That Counts](https://sftaxcounsel.com/blog/san-francisco-tax-lawyers-expertise-that-counts/) - At Diosdi & Liu, LLP, we're more than just your lawyers; we're your partners in navigating the complex world of taxation. - [San Francisco Tax Lawyers: Your Allies in Complex Tax Matters](https://sftaxcounsel.com/blog/san-francisco-tax-lawyers-your-allies-in-complex-tax-matters/) - At Diosdi Ching & Liu, LLP, our commitment to excellence and our depth of expertise in tax law make us a premier choice for anyone seeking a San Francisco tax lawyer. - [Tax Law Attorneys in San Francisco, California: Why Choose Diosdi Ching & Liu, LLP?](https://sftaxcounsel.com/blog/tax-law-attorneys-in-san-francisco-california-why-choose-diosdi-ching-liu-llp/) - If you're seeking a reliable San Francisco, California tax law attorney, reach out to us at Diosdi Ching & Liu, LLP. - [Secure Your Financial Future with Diosdi Ching & Liu, LLP: Your Reliable San Francisco Tax Law Attorneys](https://sftaxcounsel.com/blog/secure-your-financial-future-with-diosdi-ching-liu-llp-your-reliable-san-francisco-tax-law-attorneys/) - Reach out to Diosdi Ching & Liu, LLP, your trusted San Francisco tax law attorneys, for comprehensive and personalized tax solutions. - [Diosdi Ching & Liu, LLP: Experienced San Francisco Tax Law Attorneys](https://sftaxcounsel.com/blog/san-francisco-tax-law-attorneys/) - With experienced San Francisco tax law attorneys like Diosdi Ching & Liu, LLP by your side, you can confidently tackle any tax challenge that comes your way. - [Tax Planning for U.S. Inbound Licenses of Intellectual Property in a Post U.S.-Hungary Tax Treaty World](https://sftaxcounsel.com/blog/tax-planning-for-u-s-inbound-licenses-of-intellectual-property-in-a-post-u-s-hungary-tax-treaty-world/) - Under U.S. domestic laws, a foreign person generally is subject to to 30 percent U.S. federal tax on the gross amount of U.S. source income received from a licensing agreement. - [Navigating Tax Challenges with a San Francisco Tax Litigation Attorney](https://sftaxcounsel.com/blog/san-francisco-tax-litigation-attorney/) - Secure your peace of mind today with a proficient San Francisco tax litigation attorney from Diosdi Ching & Liu, LLP. - [A Basic Guide to Subpart F Income](https://sftaxcounsel.com/blog/a-basic-guide-to-subpart-f-income/) - Prior to the 2017 Tax Cuts and Jobs Act, a subpart F inclusion for a U.S. Shareholder was required only if the foreign corporation was a CFC for an uninterrupted period of 30 days or more during the relevant tax year. - [A Dive Into Subpart F Income and Schedule I of the Form 5471](https://sftaxcounsel.com/blog/a-dive-into-subpart-f-income-and-schedule-i-of-the-form-5471/) - This article is designed to supplement the IRS’ instructions to Schedule I of IRS Form 5471. This article will go line by line through Schedule I of Form 5471. - [Did You Receive Notice of an IRS Audit?](https://sftaxcounsel.com/blog/san-francisco-irs-audit-sf-tax-counsel/) - Contact us to discuss what you might expect and how we can help you throughout this often stressful process. We are here to help. - [Filing a Tax Extension](https://sftaxcounsel.com/blog/san-francisco-tax-lawyer/) - SF Tax Counsel handles all tax-related legal matters, including helping to prepare complex business and international tax documents and returns. - [How Cryptocurrency “Hard Forks” and “Airdrops” Are Taxed](https://sftaxcounsel.com/blog/san-francisco-cryptocurrency-tax-attorney/) - In 2019, the IRS issued Revenue Ruling 2019-24. This Revenue Ruling provided guidance on the taxation of “hard forks” and “air drops.” - [Unraveling the United States- Philippines Income Tax Treaty and a Closer Look at the Treaty’s Provision Regarding the Taxation of U.S. Based Retirement Accounts Such as 401K Plans and IRAs](https://sftaxcounsel.com/blog/united-states-philippines-income-tax-treaty-2/) - The United States currently has income tax treaties with approximately 58 countries. This article discusses the United States- Philippines Income Tax Treaty. - [California Tax Attorneys: Navigate the Complex Tax Landscape with Diosdi Ching & Liu](https://sftaxcounsel.com/blog/california-tax-attorneys/) - Diosdi Ching & Liu is a reputable California tax attorney team assisting clients in tax controversies, tax litigation, and tax planning. Discover their services today! - [How Digital Evidence Can be Obtained from Computers, Smartphones, and Social Media Platforms](https://sftaxcounsel.com/blog/digital-evidence/) - This article will also discuss the proper forensic practices to preserve digital evidence. - [Criminal Tax Law in San Francisco, California: What You Need to Know](https://sftaxcounsel.com/blog/san-francisco-criminal-tax-attorney/) - At Diosdi Ching & Liu, LLP, we are dedicated to protecting the rights and interests of our clients. Contact us today to discuss. - [The 962 Election vs. The High-Tax Exception: The Epic Showdown](https://sftaxcounsel.com/blog/the-962-election-vs-the-high-tax-exception-the-epic-showdown-2/) - A Section 250 deduction allows U.S. shareholders to deduct (currently 50 percent of a GILTI inclusion (including any corresponding Section 78 gross-up). - [The Reshoring or Domesticate of a Controlled Foreign Corporation](https://sftaxcounsel.com/blog/the-reshoring-or-domesticate-of-a-controlled-foreign-corporation-2/) - The Subpart F and GILTI are anti-deferral tax regimes. Subpart F and GILTI results in most income earned by foreign corporations being subject to current U.S. taxation. - [No, No, No, No….Prohibited Transactions and Disqualified Persons in Self-Directed IRAs](https://sftaxcounsel.com/blog/no-no-no-no-prohibited-transactions-and-disqualified-persons-in-self-directed-iras-2/) - Anthony has written numerous articles on international tax planning and frequently provides continuing educational programs to other tax professionals. - [The Difficulties of Portfolio Interest Exemption Planning After the Repeal of Section 958(b)(4)](https://sftaxcounsel.com/blog/the-difficulties-of-portfolio-interest-exemption-planning-after-the-repeal-of-section-958b4/) - In determining whether a U.S. person meets the Section 951(b) of a U.S. shareholder and whether a foreign corporation, Section 958 applies direct, indirect, and constructive ownership rules to determine stock ownership in the foreign corporation. Stock ownership under all three types of rules counts for purposes of determining whether a shareholder is a “U.S. - [How to Calculate Foreign Tax Credit on Qualified Dividends](https://sftaxcounsel.com/blog/how-to-calculate-foreign-tax-credit-on-qualified-dividends/) - U.S. taxpayers are generally subject to U.S. tax on their worldwide income, but may be provided a tax credit for foreign income paid or accrued. The main purpose of the foreign tax credit is to mitigate the double taxation of foreign source income that might occur if such income is taxed by both the United - [Type F Reorganization Considerations for S Corporate Targets](https://sftaxcounsel.com/blog/type-f-reorganization-considerations-for-s-corporate-targets/) - The acquisition of American corporations continues to increase. S corporations. S corporations is a popular entity structure choice for closely held and operating businesses and, more importantly, are often the targets in acquisition transactions.Eligibility to make a S election is limited to a “small business corporation,” defined in Section 1361(b) of the Internal Revenue Code - [Potential Sentence Reduction for Federal Criminal Tax Defendants](https://sftaxcounsel.com/blog/potential-sentence-reduction-for-federal-criminal-tax-defendants/) - This article provides a brief overview as to how a court determines a sentence after a defendant is convicted of a federal tax crime (such as tax evasion or filing a false tax return) by either pleading guilty to a charge, or by being found guilty after a trial. In 2005, the United States Supreme - [A Deep Dive Into the U.S. Tax Consequences of Foreign Investors Holding Domestic Real Estate](https://sftaxcounsel.com/blog/a-deep-dive-into-the-u-s-tax-consequences-of-foreign-investors-holding-domestic-real-estate/) - Foreign investors actively invest in U.S. real estate by speculating on land and developing homes, condominiums, and commercial buildings. Many foreign investors own recreational property in popular U.S. beach and ski destinations. This article summarizes the U.S. tax consequences associated with a foreign investor’s acquisition of different U.S. property interests. This article also provides a - [Can a “Multi-Tiered Blocker Structure” be Used to Avoid FIRPTA](https://sftaxcounsel.com/blog/can-a-multi-tiered-blocker-structure-be-used-to-avoid-firpta/) - Foreign investors actively invest in U.S. real estate by speculating on land and developing homes, condominiums, shopping centers, and commercial buildings. Many foreign investors own recreational property in popular U.S. beach and ski destinations. Any foreign investor in U.S. real estate should consider the Foreign Investment in Real Property Tax Act of 1980 (“FIRPTA”). FIRPTA - [4 Different Branches of Business Law](https://sftaxcounsel.com/blog/4-different-branches-of-business-law/) - While you probably work to ensure your business runs smoothly, you may run into unexpected problems that require litigation. - [A Closer Look at the W-8BEN-E Used by Foreign Entities to Document their Status for U.S. Tax Withholding Purposes](https://sftaxcounsel.com/blog/a-closer-look-at-the-w-8ben-e-used-by-foreign-entities-to-document-their-status-for-u-s-tax-withholding-purposes-2/) - Form W-BBEN-E is used by foreign entities to document their status for purposes of Chapter 3 and Chapter 4, as well as for certain other Internal Revenue Code provisions. Generally, withholding agents are required to withhold U.S. tax at the source on certain payments made to nonresident aliens and foreign corporations. A withholding agent for - [Why Domesticate or Decant a Foreign Non-Grantor Trust](https://sftaxcounsel.com/blog/why-domesticate-or-decant-a-foreign-non-grantor-trust/) - Under U.S. law, a foreign trust is an entity which does not meet either the “Court Test” or the “Control Test” described below. Court Test The Court Test is satisfied if any federal, state, or local court within the United States is able to exercise primary authority over substantially all of the administration of the - [The Impact of a Section 338 Election to CFC Shareholders](https://sftaxcounsel.com/blog/the-impact-of-a-section-338-election-to-cfc-shareholders/) - Congress enacted Section 338 of the Internal Revenue Code to allow taxpayers to treat certain stock purchases as asset acquisitions for federal income tax purposes. A Section 338 election can be made under Section 338(h)(1)) and 338(g). A Section 338 election typically benefits the buyer of a corporation. For tax purposes, a buyer is not - [An Overview of the Presentence Investigation Report Process for a Criminal Tax Case Prosecuted in the U.S. District Court of the Central District of California](https://sftaxcounsel.com/blog/an-overview-of-the-presentence-investigation-report-process-for-a-criminal-tax-case-prosecuted-in-the-u-s-district-court-of-the-central-district-of-california/) - A Presentence Investigation Report (“PSR”) is a document that judges use to help assess a defendant’s penalty for a crime. If a criminal defendant is found guilty or pleads guilty to a federal crime, the court will order the defendant to go through the PSR process. Although this article focuses on federal tax crimes such - [An Overview of the Presentence Investigation Report Process for a Criminal Tax Case Prosecuted in the U.S. District Court of Northern California](https://sftaxcounsel.com/blog/an-overview-of-the-presentence-investigation-report-process-for-a-criminal-tax-case-prosecuted-in-the-u-s-district-court-of-northern-california/) - A Presentence Investigation Report (“PSR”) is a document that judges use to help assess a defendant’s penalty for a crime. If a criminal defendant is found guilty or pleads guilty to a federal crime, the court will order the defendant to go through the PSR process. Although this article focuses on federal tax crimes such - [Thinking About Renouncing Your Citizenship if Your Presidential Candidate Does Not Win the Election? Here is What You Need to Know About the Expatriation Tax](https://sftaxcounsel.com/blog/thinking-about-renouncing-your-citizenship-if-your-presidential-candidate-does-not-win-the-election-here-is-what-you-need-to-know-about-the-expatriation-tax/) - Introduction Seems like whenever there is an election a number of people threaten to leave the United States and move to another country if their candidate doesn’t win. I’m not sure how many of these individuals make good on their threats. This article is designed to provide an overview of the U.S. exit tax consequences - [Are Families Who Took Advantage of the Temporary Increase in the Unified Credit for Estate and Gift Taxation Purposes in for a Very Unpleasant Surprise after 2025?](https://sftaxcounsel.com/blog/are-families-who-took-advantage-of-the-temporary-increase-in-the-unified-credit-for-estate-and-gift-taxation-purposes-in-for-a-very-unpleasant-surprise-after-2025/) - Gift tax is a companion to the estate tax. Contrary to common misconception, the transfer of an asset as a gift does not subject the donor or recipient to income tax liability. - [Transfer Pricing for Tangible Property](https://sftaxcounsel.com/blog/transfer-pricing-for-tangible-property/) - Transfer pricing must be taken into consideration by any business involved in cross-border transactions. Contact us today. - [Can You Utilize an LLC to Hold Stock Options in a Self-Directed IRA?](https://sftaxcounsel.com/blog/can-you-utilize-an-llc-to-hold-stock-options-in-a-self-directed-ira/) - The growth of 401(k) plans and other defined contribution plans (as opposed to traditional defined pension plans) has generated additional opportunities for employees and retirees to use IRAs. - [What International, Corporate, Estate, and Individual Taxes May Look Like Over the Next Four Years](https://sftaxcounsel.com/blog/what-international-corporate-estate-and-individual-taxes-may-look-like-over-the-next-four-years/) - The Tax Cuts and Jobs Act also enacted the global low-taxed income (“GILTI”) and the foreign-derived intangible income (“FDII”) tax regimes. - [Self Directed IRAs The Long Reach of IRC 4975 Prohibited Transactions](https://sftaxcounsel.com/blog/self-directed-iras-the-long-reach-of-irc-4975-prohibited-transactions/) - Pursuant to IRC 4975, the Court determined that the Self Directed IRA engaged in prohibited transactions with disqualified persons that caused it to lose its tax exempt status. - [A Closer Look as to How FDII Can Reduce the Effective Corporate Tax Rate to 13.125%](https://sftaxcounsel.com/blog/a-closer-look-as-to-how-fdii-can-reduce-the-effective-corporate-tax-rate-to-13-125/) - Because the current U.S. federal corporate income tax rate is 21 percent, a FDII deduction can result in an effective tax rate of only 13.125 percent (21% - 37.5% = 13.125%). - [Tax Free Mergers and Acquisitions under IRC 368 What Worked and What Didn’t](https://sftaxcounsel.com/blog/tax-free-mergers-and-acquisitions-under-irc-368-what-worked-and-what-didnt/) - The federal tax code provides for tax free mergers and acquisitions in certain situations. Please contact SF Tax to discuss. - [Tax-Free Demergers in the International Context](https://sftaxcounsel.com/blog/tax-free-demergers-in-the-international-context/) - For reasons to be elaborated below, the shareholders wish to divide the business into two separate corporations on a tax-free basis. - [An Introduction to Type A Corporate Tax- Free Reorganizations](https://sftaxcounsel.com/blog/typa-a-corporate-tax-free-reorganizations/) - A Type A reorganization is a reorganization that fits within the Section 368(a)(1)(A) definition. Contact SF Tax Counsel to discuss. - [An Introduction to Type A Forward and Reverse Triangular Tax-Free Mergers](https://sftaxcounsel.com/blog/tax-free-merger/) - The final requirement for a Type A forward triangular merger is that the transaction would have qualified as a Type A reorganization if it had been a merger of T directly into P. - [An Overview of Type B Tax-Free Reorganizations and Type B Tax-Free Triangular Reorganizations](https://sftaxcounsel.com/blog/type-b-tax-free-reorganizations/) - The rigid requirements for a Type B reorganization have placed considerable pressure on the definition of “voting stock. - [An Overview of Type C Tax-Free Reorganizations and Type C Tax-Free Triangular Reorganizations](https://sftaxcounsel.com/blog/tax-free-reorganization/) - Another difference between Type B and Type C reorganizations is the so-called boot relation rule. Contact SF Tax Counsel to discuss. - [An Overview of Type F Tax-Free Reorganizations](https://sftaxcounsel.com/blog/type-f-tax-free-reorganizations/) - Unless a transaction fits into one of the seven categories stated in subparagraphs (A) through (G), it is not a corporate reorganization. - [Transfer Pricing for Intangible Property](https://sftaxcounsel.com/blog/transfer-pricing-for-intangible-property/) - Transfer pricing must be taken into consideration by any business involved in cross-border transactions. Contact us today to discuss. - [A Landmark Decision Recently Decided by the Supreme Court Regarding Sales Tax may Affect eCommerce Sellers](https://sftaxcounsel.com/blog/a-landmark-decision-recently-decided-by-the-supreme-court-regarding-sales-tax-may-affect-ecommerce-sellers/) - Introduction For years, retailers conducting business through eCommerce were advised that states could not require them to collect and remit sales tax on online sales unless they were ‘doing business’ in a taxing state based on the tax laws of that state. This concept was referred to as a “nexus” based on a seller’s physical - [An Overview of Type E Tax-Free Reorganizations](https://sftaxcounsel.com/blog/type-e-tax-free-reorganizations/) - A tax-free reorganization sometimes involves only a single corporation which is undergoing a readjustment to its capital structure. - [A Closer Look at Taxable Corporate Mergers and Acquisitions](https://sftaxcounsel.com/blog/taxable-corporate-mergers/) - The tax lawyer generally would not refer to these day-to-day corporate purchases of stock or assets as corporate acquisitions. - [A Closer Look at Tax-Free Corporate Divisions or Type D Reorganizations](https://sftaxcounsel.com/blog/tax-free-corporate-divisions/) - In a spin-off, the distributing corporation distributes stock of a controlled corporation (a subsidiary) to its shareholders. - [The Corporate Transparency Act- A New FinCEN Filing Requirement With Significant Delinquency Penalties](https://sftaxcounsel.com/blog/corporate-transparency-act/) - The Corporate Transparency Act (“CTA”) was enacted on January 1, 2021, as part of the National Defense Authorization Act (“NDAA”). - [An Overview of the California Water’s Edge Election for State International Tax Purposes](https://sftaxcounsel.com/blog/california-waters-edge-election/) - There are two approaches to dealing with unitary group members that are incorporated in a foreign country or conduct most of their business abroad. - [Can U.S. Remote Workers Trigger Foreign Income Tax or Foreign Employment Tax Liability for U.S. Companies? An OECD Perspective](https://sftaxcounsel.com/blog/foreign-income-tax-attorney/) - This temporary dislocation of people or workers can have global tax consequences for those individuals and U.S. businesses for which they work. - [Final Regulations Issued Regarding Partnerships and S Corporations that Hold Controlled Foreign Corporations](https://sftaxcounsel.com/blog/final-regulations-issued-regarding-partnerships-and-s-corporations/) - The final regulations merit careful study by any U.S. partnership or S corporation that owns a 10 percent or more interest in a foreign corporation. - [The Basics of Claiming a Section 199A Deduction and a Potential Alternative](https://sftaxcounsel.com/blog/the-basic-of-claiming-a-section-199a-deduction-and-a-potential-alternative/) - A Section 199A deduction is only available on “qualified business income” QBI includes income, gain deduction, and loss with respect to a qualified trade or business. - [A Brief Discussion of the New Business Interest Expense Limitation Rules](https://sftaxcounsel.com/blog/a-brief-discussion-of-the-new-business-interest-expense-limitation-rules/) - The rule used to applied when a debtor’s debt-to-equity ratio exceeded 1.5 to 1 and its total “net interest expense” exceeded 50 percent of its “adjusted taxable income.” - [When Can a Foreign Tax Credit be Claimed? Part II. The Changes GILTI Made in the Way Foreign Tax Credits are Calculated](https://sftaxcounsel.com/blog/when-can-a-foreign-tax-credit-be-claimed-part-ii-the-changes-gilti-made-in-the-way-foreign-tax-credits-are-calculated/) - Recently, the Global Intangible Low-Taxed Income (“GILTI”) made some made changes to the way foreign tax credits are computed. - [New Rules Governing Disregarded Entities Owned by Nonresidents Impose Significant New Reporting and Compliance Requirements](https://sftaxcounsel.com/blog/new-rules-governing-disregarded-entities-owned-by-nonresidents-impose-significant-new-reporting-and-compliance-requirements/) - Any nonresident that holds an interest in a disregarded entity must understand they now have additional filing and record keeping requirements. - [Should Your LLC be Taxed as a Disregarded Entity or a Corporation?](https://sftaxcounsel.com/blog/should-your-llc-be-taxed-as-a-disregarded-entity-or-a-corporation/) - The owner or owners of an LLC may elect out of being taxed as a disregarded entity or partnership and may elect to be taxed as a corporation. - [Can Non-U.S. Citizens Elect to be Taxed as an “S” Corporation?](https://sftaxcounsel.com/blog/can-non-u-s-citizens-elect-to-be-taxed-as-an-s-corporation/) - As part of the complex U.S. tax law, certain domestic corporations can make an election to be taxed as an “S” corporation. - [A New Anti-Deferral for International Taxation has Been Announced, Don’t be Guilty of Owing the GILTI Tax](https://sftaxcounsel.com/blog/a-new-anti-deferral-for-international-taxation-has-been-announced-dont-be-guilty-of-owing-the-gilti-tax/) - Introduction to GILTI For years, tax planning for international outbound taxation remained the same, mitigation of Subpart F income, maximization of foreign tax credits, and transfer pricing. The 2017 Tax Cuts and Jobs Act has broken the monotony associated with international tax planning for outbound transactions and added a new category for tax planning. In - [Five Tax Traps That All Non Residents Coming to The United States Must Know](https://sftaxcounsel.com/blog/five-tax-traps-that-all-non-residents-coming-to-the-united-states-must-know/) - Introduction As the world becomes increasingly “global,” so too does the practice of tax law. In California, Florida, and other states, clients of tax advisors are often families from outside the United States that seek to take advantage of investment opportunities and a higher living standard in the United States. While the United States may - [Beware of the Pitfalls of Rental Property Tax Laws](https://sftaxcounsel.com/blog/beware-of-the-pitfalls-of-rental-property-tax-laws/) - Because of the recent boom in real estate, many individuals have jumped back into the real estate market and have become landlords. Renting real estate can generate significant tax losses. Anyone considering utilizing losses realized in the real estate market to offset other sources of income such as wages, must be aware of the tax - [The Collection of State Sales Tax in Today’s eCommerce World](https://sftaxcounsel.com/blog/the-collection-of-state-sales-tax-in-todays-ecommerce-world/) - The Supreme Court’s decision in Wayfair, in overruling Quill, will not only change the way online merchants conduct business to avoid collecting sales tax, it may also affect anyone who purchases goods online. - [As Per the “People First Initiative,” the IRS will Suspend Most Audits and the Collection of Most Back Tax Liabilities](https://sftaxcounsel.com/blog/as-per-the-people-first-initiative-the-irs-will-suspend-most-audits-and-the-collection-of-most-back-tax-liabilities/) - By Anthony Diosdi On March 18th, the Internal Revenue Service (“IRS”) promulgated Notice 2020-17 entitled “Relief for Taxpayers Affected by Ongoing Coronavirus Disease 2019 Pandemic.” The notice provided for an extension of time to pay federal income taxes originally due April 15, 2020 until July 15, 2020. This relief applied only to individual tax amounts - [The Nuts and Bolts of the CARES Act Economic Disaster and Payroll Protection Loan Programs](https://sftaxcounsel.com/blog/the-nuts-and-bolts-of-the-cares-act-economic-disaster-and-payroll-protection-loan-programs/) - The Cares Act provides for special loan programs for businesses impacted by the coronavirus (COVID-19) pandemic. Call us to discuss. - [Tax Refunds and Chapter 7 Bankruptcy](https://sftaxcounsel.com/blog/tax-refunds-and-chapter-7-bankruptcy/) - Our legal team handles tax-related legal matters, as well as Chapter 7 bankruptcy, and we can advise you of the implications of a possible bankruptcy case. - [How to Utilize Section 6751 to Successfully Challenge IRS 5472 Penalties](https://sftaxcounsel.com/blog/irs-5472-penalties/) - This article discusses defenses under Section 6751 available to individuals assessed a 5472 penalty by the IRS. Contact us to discuss. - [Planning Options to Increase the Section 1202 Gain Exclusion Far Beyond the $10 Million Cap](https://sftaxcounsel.com/blog/section-1202-gain-exclusion/) - Investors should know that four requirements must be met in order to exclude gains from the sale of stock under Section 1202. - [A Brief Look at the Hurdles Involved in a Type F Cross-Border Reorganization](https://sftaxcounsel.com/blog/type-f-cross-border-reorganizations/) - Unless a transaction fits into one of the seven categories stated in subparagraphs (A) through (G), it is not a corporate reorganization. - [The IRS’s Ability to Access Electronic Communications Under the Stored Communication Act](https://sftaxcounsel.com/blog/irs-access-electronic-communication/) - As the Hunter Biden matter demonstrates, emails are often a treasure trove for the IRS in any criminal investigation. Contact to discuss. - [A Walk through the Cost Sharing Arrangement and Platform Contribution Rules](https://sftaxcounsel.com/blog/platform-contribution-rules/) - To arrive at an arm’s-length result, a multinational corporation must select and apply the method that provides the most reliable estimate of an arm’s-length price. - [Cross-Border Corporation Divisions or Demergers under Section 355](https://sftaxcounsel.com/blog/cross-border-corporate-divisions/) - The three types of corporate divisions are commonly known as spinoffs, split-offs, and split-ups. Such corporate divisions are also referred to as demergers or Type D reorganizations. - [The Corporate Anti-Inversion or Expatriation Rules Explained in a Nut-Shell](https://sftaxcounsel.com/blog/corporate-anti-inversion/) - This article will discuss the “nuts and bolts” of the corporate anti-inversion rules. Contact SF Tax Counsel to discuss your situation. - [Can Sections 7432 and 7433 be Used to Recover Damages from the IRS for the Collection of Section 3520, 5471, and 5472 Penalties?](https://sftaxcounsel.com/blog/sections-7432-and-7433/) - The IRS’s authority to proceed with enforced collect actions has its limitations. The more well known reporting requirements and penalties are found in Chapter 61 and are as follow - [Filing Tax Forms for Employees and Contractors](https://sftaxcounsel.com/blog/tax-forms/) - San Francisco Tax Counsel works with individuals and small businesses on tax issues throughout the year. Contact us today. - [An Overview of the Rules Governing Tax-Free Corporate Reorganizations of Section 355](https://sftaxcounsel.com/blog/tax-free-corporate-reorganizations-of-section-355/) - We have substantial experience advising clients ranging from small entrepreneurs to major multinational corporations in cross-border tax planning and compliance. - [Introduction to the Taxation of Corporate Divisions](https://sftaxcounsel.com/blog/taxation-of-corporate-divisions/) - In a spin-off, the distributing corporation distributes stock of a controlled corporation (a subsidiary) to its shareholders. - [To Withhold, or Not to Withhold, That is the Question For Foreign Workers](https://sftaxcounsel.com/blog/to-withhold-or-not-to-withhold-that-is-the-question-for-foreign-workers/) - A potential withholding agent will generally be responsible for determining the existence of a withholding obligation. - [An Introduction to the Corporate Transparency Act](https://sftaxcounsel.com/blog/an-introduction-to-the-corporate-transparency-act/) - Some of the states that have marketed themselves as privacy havens include Nevada, Wyoming, South Dakota, and Delaware. - [An Introduction to the Tax-Free Corporate Reorganization Rules](https://sftaxcounsel.com/blog/an-introduction-to-the-tax-free-corporate-reorganization-rules/) - The foregoing discussion is intended to provide the reader with a basic understanding of the basic considerations of the tax-free corporate reorganization rules. - [A Brief Overview of Taxable Corporate Mergers and Acquisitions](https://sftaxcounsel.com/blog/a-brief-overview-of-taxable-corporate-mergers-and-acquisitions/) - The parties to a corporate acquisition must first decide whether the transaction is to proceed as a taxable acquisition or a tax-free reorganization. - [An Overview of the Federal Taxation of S Corporations](https://sftaxcounsel.com/blog/an-overview-of-the-federal-taxation-of-s-corporations/) - This article will discuss the basic rules governing the federal taxation of S corporations. - [The Taxation of Affiliated Corporations and Computing Consolidated Taxable Income](https://sftaxcounsel.com/blog/the-taxation-of-affiliated-corporations-and-computing-consolidated-taxable-income/) - For tax purposes, it is permissible to treat the corporation as a single entity in which intercompany transactions are disregarded. This article discusses the taxation of affiliated corporations. - [The Tax Consequences of Liquidating C Corporations](https://sftaxcounsel.com/blog/the-tax-consequences-of-liquidating-c-corporations/) - It is useful to think of liquidations as a process through which the corporation winds up its affairs and distributes remaining assets to its shareholders rather than a single event. - [A Case Study of an Outbound Forward Triangular Reorganization](https://sftaxcounsel.com/blog/a-case-study-of-an-outbound-forward-triangular-reorganization/) - This article provides an overview of the rules governing outbound forward triangular mergers. This article uses a hypothetical Singapore corporation which acquires a U.S. corporation to discuss the issues commonly faced by tax professionals in outbound forward triangular merger. A forward triangular reorganization occurs when an acquiror uses the shares of its parent as merger - [Corporate Spinoffs, Split-Offs, and Split-Ups in the International Context](https://sftaxcounsel.com/blog/corporate-spinoffs-split-offs-and-split-ups-in-the-international-context/) - Corporate divisions involve the breaking of one corporation into multiple corporations. Such a transaction can be either taxable or tax-free. Corporate divisions tend to come in three basic flavors: spin-off, split-off, and split-up. Each variation involves a slightly different type of distribution of stock or securities. In general, if the transaction successfully runs the gauntlet - [The IRS Has Deferred 2020 Income Tax Payments by 90 Days. What Happens in 90 Days?](https://sftaxcounsel.com/blog/the-irs-has-deferred-2020-income-tax-payments-by-90-days-what-happens-in-90-days/) - Treasury Secretary Steven Mnuchin recently announced that the IRS is deferring income tax payments for the 2019 tax year by 90 days. - [Planning Considerations of Tax-Free Forward Triangular Mergers for Cross-Border Acquisitions of S Corporations Tax-Free](https://sftaxcounsel.com/blog/planning-considerations-of-tax-free-forward-triangular-mergers-for-cross-border-acquisitions-of-s-corporations-tax-free/) - U.S. corporations are routinely acquired by foreign corporations. Once a U.S. corporation is acquired by a foreign corporation, the ultimate disposition of the U.S. corporation’s appreciated property may occur outside the U.S. taxing jurisdiction. Section 367 was enacted to prevent tax-free transfers by U.S. taxpayers of appreciated property to foreign corporations that could then sell - [U.S. Taxpayers Now Can Claim Foreign Tax Credits for Foreign Taxes Assessed on French Contribution Sociale Generalisee and Remboursement de la Dette Sociate](https://sftaxcounsel.com/blog/u-s-taxpayers-now-can-claim-foreign-tax-credits-for-foreign-taxes-assessed-on-french-contribution-sociale-generalisee-and-remboursement-de-la-dette-sociate/) - Recently, the United States and France memorialized through diplomatic communications an understanding that the French Contribution Sociale Generalisee (“CSG”) and Contribution a Remboursement de la Dette Sociate (“CRDS”) taxes are not social security taxes covered by the totalization agreement between the United States and France. Accordingly, the Internal Revenue Service (“IRS”) will not challenge foreign - [If You Were a Client of Castro & Company You Should Consult With A Qualified Tax Attorney](https://sftaxcounsel.com/blog/if-you-were-a-client-of-castro-company-you-should-consult-with-a-qualified-tax-attorney/) - On May 24, 2024, John Castro, the managing partner of Castro & Company was convicted of 33 counts of assisting in the preparation of fraudulent tax returns. According to a United States Attorney’s Office Press Release, John Castro marketed himself to clients around the world and claimed to be an “international tax expert” and “federal - [Does the U.S.-Australian Income Tax Treaty Exclude Superannuation Funds from U.S. Taxation?](https://sftaxcounsel.com/blog/does-the-u-s-australian-income-tax-treaty-exclude-superannuation-funds-from-u-s-taxation/) - There are currently more than 100,000 Australian-born people living in the United States. Many of these individuals have an Australian Superannuation account. A superannuation is an Australian pension program created by a company to benefit its employees. Funds deposited in a superannuation account will grow through appreciation and contributions until retirement or withdrawal. As with - [Specific Criminal Sanctions](https://sftaxcounsel.com/blog/specific-criminal-sanctions/) - An individual or business involved in a criminal tax investigation may ultimately be prosecuted for specific revenue offenses - [The Internal Revenue Service Criminal Investigation Process](https://sftaxcounsel.com/blog/the-internal-revenue-service-criminal-investigation-process/) - Threats of criminal investigation and prosecution should not be taken lightly.Over the years, of those prosecuted for tax crimes, the conviction rate is about 90% - [Check the Box Regulation Planning](https://sftaxcounsel.com/blog/check-the-box-regulation-planning/) - Check the box regulations could profoundly impact the outbound tax planning of U.S. business conducting business offshore. Call for a consultation! - [Minimizing U.S. Tax Consequences of U.S. Citizens and Residents Working Overseas](https://sftaxcounsel.com/blog/minimizing-u-s-tax-consequences-of-u-s-citizens-and-residents-working-overseas/) - Minimizing U.S. Tax Consequences of U.S. Citizens and Residents Working Overseas. Let the Tax Attorneys at SF Tax Counsel Provide You With a Plan. - [FinCen Form 114 / Treasury Form TD F 90-22.1](https://sftaxcounsel.com/blog/fincen-form-114-treasury-form-td-f-90-22-1/) - Federal law provides that if any U.S. person during a calendar year has a “financial interest” or “signature authority” or “other authority” in offshore “financial accounts” in the aggregate that exceeds $10,000 must disclose the foreign accounts on a FinCen Form 114 (“FBAR”). - [Voluntary Disclosures of Foreign Financial Accounts](https://sftaxcounsel.com/blog/voluntary-disclosures-of-foreign-financial-accounts/) - U.S. taxpayers with undisclosed foreign financial accounts must understand that they have exposure to serious criminal and civil penalties. - [IRS Form 5472: Do You Need to File it?](https://sftaxcounsel.com/blog/irs-form-5472-do-you-need-to-file-it/) - This article will discuss whether an entity has an obligation to file a Form 5472. - [Dynamo Holdings L.P. v. Commissioner- A Blueprint of How Related-Party Inbound Foreign Investment in U.S. Real Estate Should and Should Not be Handled for FIRPTA and FDAP Purposes](https://sftaxcounsel.com/blog/dynamo-holdings-l-p-v-commissioner-a-blueprint-of-how-related-party-inbound-foreign-investment-in-u-s-real-estate-should-and-should-not-be-handled-for-firpta-and-fdap-purposes/) - Beekman Vista sold multiple properties to Dynamo Holdings through a number of bargain sales transactions that exceeded $200 million. - [A Closer Look at the W-8BEN Used by Foreign Individuals to Document their Status for U.S. Tax Withholding Purposes](https://sftaxcounsel.com/blog/a-closer-look-at-the-w-8ben-used-by-foreign-individuals-to-document-their-status-for-u-s-tax-withholding-purposes/) - Withholding taxes is effected primarily through the imposition of an obligation on the person or entity making the payment to the foreign person to withhold the tax and pay it over to the Internal Revenue Service or (“IRS”) - [A Closer Look at the W-8BEN-E Used by Foreign Entities to Document their Status for U.S. Tax Withholding Purposes](https://sftaxcounsel.com/blog/a-closer-look-at-the-w-8ben-e-used-by-foreign-entities-to-document-their-status-for-u-s-tax-withholding-purposes/) - Form W-BBEN-E is used by foreign entities to document their status for purposes of Chapter 3 and Chapter 4, as well as for certain other Internal Revenue Code provisions. - [Demystifying the Use of a Intentionally Defective Grantor Trust](https://sftaxcounsel.com/blog/demystifying-the-use-of-a-intentionally-defective-grantor-trust/) - This article discusses the importance of using an “intentionally defective grantor trust” (or “IDGT”) for estate, gift, and income tax purposes. An IDGT involves setting up a trust that accumulates income (while the settlor or the grantor pays the income taxes owed on such income) and yet will not be included in his or her - [Pushing Back on IRS’s Attempts to Immunize Its Employees from Subpoenas](https://sftaxcounsel.com/blog/pushing-back-on-irss-attempts-to-immunize-its-employees-from-subpoenas/) - Civil litigation often follows Internal Revenue Service (“IRS”) assessments of income tax liabilities, interest, and penalties assessments. In these situations, as well as in cases involving criminal indictments, obtaining testimony from IRS employees, such as investigators, managers, or revenue agents, could be highly relevant. The question facing many litigants is how to obtain such testimony. - [A Closer Look at the United States- France Income Tax Treaty](https://sftaxcounsel.com/blog/a-closer-look-at-the-united-states-france-income-tax-treaty/) - The major purpose of an income tax treaty is to mitigate international double taxation through tax reduction or exemptions on certain types of income derived by residents of one treaty country from sources within the other treaty country. Because tax treaties often substantially modify U.S. and foreign tax consequences, the relevant treaty must be considered - [A Closer Look at the United States- Italy Income Tax Treaty](https://sftaxcounsel.com/blog/a-closer-look-at-the-united-states-italy-income-tax-treaty/) - The major purpose of an income tax treaty is to mitigate international double taxation through tax reduction or exemptions on certain types of income derived by residents of one treaty country from sources within the other treaty country. Because tax treaties often substantially modify U.S. and foreign tax consequences, the relevant treaty must be considered - [Making Sense of Tax Treaty LOB Provisions](https://sftaxcounsel.com/blog/making-sense-of-tax-treaty-lob-provisions/) - Because tax treaties provide lower withholding tax rates on dividend, interest, and royalty income, some multinational corporations can reduce U.S. withholding taxes by establishing a subsidiary in a jurisdiction that has a favorable tax treaty with the United States. This type of planning is often referred to as “treaty shopping.” Because of a concern of - [An Overview of IRS Form 5471 Schedule R Used to Report Distributions from Foreign Corporations](https://sftaxcounsel.com/blog/an-overview-of-irs-form-5471-schedule-r-used-to-report-distributions-from-foreign-corporations/) - Schedule R is used to report basic information pertaining to distributions from foreign corporations. According to the instructions for Schedule R, the information reported on the schedule is required by Sections 245A, 959, and 986(c) of the Internal Revenue Code. Form 5471 filers that are classified as Category 3 and Category 4 filers must complete - [Examining the Form 5471 Category of Filers](https://sftaxcounsel.com/blog/examining-the-form-5471-category-of-filers/) - Form 5471 is used by certain U.S. persons who are officers, directors, or shareholders in respect of certain foreign entities that are classified as corporations for U.S. tax purposes. The Form 5471 and schedules are used to satisfy the reporting requirements of Internal Revenue Code Section 6038 and 6046 along with the applicable regulations.Substantively, it - [The Application of the Indirect and Constructive Ownership Rules Under Section 958 From Foreign Corporations to U.S. Persons](https://sftaxcounsel.com/blog/the-application-of-the-indirect-and-constructive-ownership-rules-under-section-958-from-foreign-corporations-to-u-s-persons/) - In determining whether a U.S. person meets the Section 951(a) definition of a U.S. shareholder and whether a foreign corporation meets the Section 957(a) definition of a controlled foreign corporation (“CFC”), Section 958 applies direct, indirect, and constructive ownership rules to determine stock ownership in the foreign corporation. Stock ownership under all three types of - [How the IRS Establishes a Tax Evasion Case](https://sftaxcounsel.com/blog/how-the-irs-establishes-a-tax-evasion-case/) - The building of a criminal tax evasion against a criminal defendant often takes months or even years. The process of building a tax evasion case often involves a careful examination of a criminal defendant's finances. This article examines the methods that the IRS uses to build a criminal tax evasion case. The most common forms - [A Beginner’s Guide to Tax Evasion, Money Laundering and Other Criminal Tax Related Crimes](https://sftaxcounsel.com/blog/a-beginners-guide-to-tax-evasion-money-laundering-and-other-criminal-tax-related-crimes/) - An individual involved in a criminal tax investigation may find himself or herself ultimately charged with specific offenses (contained in the Internal Revenue Code) and with general federal criminal offenses. The tendency in criminal tax prosecutions is to pile up charges, indicting the targeted individual for multiple years with a combination of offenses contained in - [The Most Common Federal Tax Crimes that Aggressive Tax Professionals Should Know](https://sftaxcounsel.com/blog/the-most-common-federal-tax-crimes-that-aggressive-tax-professionals-should-know/) - Some tax professionals such as lawyers, accountants, and enrolled agents are well known for taking aggressive positions on tax returns that seem to reduce federal income tax liability for their clients. Tax professionals who take aggressive positions may find themselves criminally investigated by the Internal Revenue Service (“IRS”). A criminal investigation may ultimately result in - [The Court of Claims Expands Foreign Tax Credits to NIIT Under the U.S.-France Income Tax Treaty](https://sftaxcounsel.com/blog/the-court-of-claims-expands-foreign-tax-credits-to-niit-under-the-u-s-france-income-tax-treaty/) - The United States Court of Federal Claims has issued an opinion in Christensen v. United States, No. 20-935T (2024) holding that U.S. citizens living outside the United States can claim a foreign tax credit against their Net Investment Income Tax (“NIIT”) under the U.S.- France income tax treaty. The Court of Claims opinion contradicts a - [An Overview of the Section 911 Income and Housing Exclusion Rules](https://sftaxcounsel.com/blog/an-overview-of-the-section-911-income-and-housing-exclusion-rules/) - Internal Revenue Code Section 911 was enacted to mitigate U.S. federal income tax and other economic burdens imposed on U.S. persons working outside the U.S. by providing for an exclusion from U.S. taxation of up to a specified amount of foreign earned income and housing costs. Internal Revenue Code Section 911(a)(1) permits a U.S. citizen - [U.S. Acquisitions by Foreign Corporations and Section 367 Considerations](https://sftaxcounsel.com/blog/u-s-acquisitions-by-foreign-corporations-and-section-367-considerations/) - U.S. corporations are routinely acquired by foreign corporations. Once a U.S. corporation is acquired by a foreign corporation, the ultimate disposition of the U.S. corporation’s appreciated property may occur outside the U.S. taxing jurisdiction. Section 367 was enacted to prevent tax-free transfers by U.S. taxpayers of appreciated property to foreign corporations that could then sell - [No, No, No, No….Prohibited Transactions and Disqualified Persons in Self-Directed IRAs](https://sftaxcounsel.com/blog/no-no-no-no-prohibited-transactions-and-disqualified-persons-in-self-directed-iras/) - Self-directed IRAs are authorized by federal law and are held by a trustee or custodian that permits investments in a broader range of assets than is permitted by traditional IRAs. - [Can a CFC Shareholder Pledge CFC Shares as Security for a Loan? ](https://sftaxcounsel.com/blog/can-a-cfc-shareholder-pledge-cfc-shares-as-security-for-a-loan/) - This section of the Internal Revenue Code is an anti-abuse rule, designed to prevent the enjoyment of the benefit of repatriation to the U.S. of untaxed foreign earnings through reinvestment here. - [How is a Sentence Determined in a Criminal Tax Case?](https://sftaxcounsel.com/blog/how-is-a-sentence-determined-in-a-criminal-tax-case/) - This article is based on the Criminal Tax manual published by the Depart of Justice. - [A Basic Guide to GILTI ](https://sftaxcounsel.com/blog/a-basic-guide-to-gilti/) - For years, tax planning for international outbound taxation remained the same, mitigation of Subpart F income, maximization of foreign tax credits, and transfer pricing. - [Tracking Form 5471 Section 959 PTEPs of the Modern Day CFC](https://sftaxcounsel.com/blog/tracking-form-5471-section-959-pteps-of-the-modern-day-cfc/) - This article provides an overview as to how to categorize income for purposes of Section 959 of the Internal Revenue Code. - [The IRS Form 5471 Category Filer Rules](https://sftaxcounsel.com/blog/the-irs-form-5471-category-filer-rules/) - The Form 5471 and schedules are used to satisfy the reporting requirements of Internal Revenue Code Section 6038 and 6046 along with the applicable regulations. - [A Basic Guide to GILTI and Schedule I-1 for Form 5471](https://sftaxcounsel.com/blog/a-basic-guide-to-gilti-and-schedule-i-1-for-form-5471/) - The information from Schedule I-1 is used by U.S. shareholder(s) of a CFC to file IRS Form 8892, U.S. Shareholder Calculation of GILTI, and may assist in the completion of Form 1118 and 1116. - [The Reshoring or Domesticate of a Controlled Foreign Corporation](https://sftaxcounsel.com/blog/the-reshoring-or-domesticate-of-a-controlled-foreign-corporation/) - The benefit of domesticating a CFC is that the shareholders of the corporation will no longer be subject to the Subpart F and GILTI tax regimes. - [The Reshoring or Domestication of a Controlled Foreign Corporation](https://sftaxcounsel.com/blog/the-reshoring-or-domestication-of-a-controlled-foreign-corporation/) - To demonstrate how the domestication of a CFC can potentially take place, let’s assume that F was incorporated in Country Y. (Country Y is a hypothetical foreign country). - [The U.S. Taxation of Foreign Trusts](https://sftaxcounsel.com/blog/the-u-s-taxation-of-foreign-trusts/) - This article provides an overview of the U.S. federal tax rules governing U.S. beneficiaries of foreign trusts. - [Understanding the Vital Role of San Francisco Tax Lawyers at Diosdi & Liu, LLP](https://sftaxcounsel.com/blog/understanding-the-vital-role-of-san-francisco-tax-lawyers-at-diosdi-liu-llp/) - If you're seeking expert tax legal advice or representation in San Francisco, look no further than Diosdi & Liu, LLP. - [FIRPTA and the IRS’ Ability to Assess Interest When No Tax is Due ](https://sftaxcounsel.com/blog/firpta-and-the-irs-ability-to-assess-interest-when-no-tax-is-due/) - FIRPTA is designed to ensure that a foreign investor is taxed on the disposition of a U.S. property interest. - [An Introduction to the Taxation of U.S. Real Estate Held by Foreign Investors](https://sftaxcounsel.com/blog/an-introduction-to-the-taxation-of-u-s-real-estate-held-by-foreign-investors/) - This article summarizes the U.S. tax consequences associated with a foreign investor’s acquisition of different U.S. property interests. - [Why the IRS Does Not Have the Authority to Assess and Collect a Section 6039F Penalty in Connection With a Late Filed Form 3520](https://sftaxcounsel.com/blog/why-the-irs-does-not-have-the-authority-to-assess-and-collect-a-section-6039f-penalty-in-connection-with-a-late-filed-form-3520/) - This article discusses the IRS’s statutory ability to assess and collect Section 6039F Penalties associated with failing to timely disclose a foreign gift on a Form 3520. - [How to Report Cross-Border Payments to the IRS on Form 1042](https://sftaxcounsel.com/blog/how-to-report-cross-border-payments-to-the-irs-on-form-1042/) - With the expansion of cross-border transactions, more U.S. businesses will need to become familiar with U.S. tax, withholding, and compliance rules. - [How to Report Cross-Border Payments to the IRS on Form 1042-S](https://sftaxcounsel.com/blog/how-to-report-cross-border-payments-to-the-irs-on-form-1042-s/) - With the expansion of cross-border transactions, more U.S. businesses will need to become familiar with U.S. tax, withholding, and compliance rules. - [Mastering Tax Issues in San Francisco: Why Diosdi & Liu, LLP Stands Out](https://sftaxcounsel.com/blog/mastering-tax-issues-in-san-francisco-why-diosdi-liu-llp-stands-out/) - Contact us today to experience the difference for yourself and take the first step toward achieving your financial goals with confidence. - [Factors to Consider When Developing a Strategy to Contest a 3520 Penalty](https://sftaxcounsel.com/blog/factors-to-consider-when-developing-a-strategy-to-contest-a-3520-penalty/) - Taxpayers developing a strategy to contest a 3520 penalty should consider the arguments made in Farhy v. Commissioner of Internal Revenue, 160 T.C. 6 (2023) in developing an overall strategy to contest a 3520 penalty. - [When Are You Required to File a Form 3520 with the IRS?](https://sftaxcounsel.com/blog/when-are-you-required-to-file-a-form-3520-with-the-irs/) - This article discusses the circumstances that trigger a requirement to file a Form 3520 with the Internal Revenue Service (“IRS”). - [Why You Need an Experienced Tax Law Attorney in San Francisco, California](https://sftaxcounsel.com/blog/why-you-need-an-experienced-tax-law-attorney-in-san-francisco-california/) - Choosing a law firm with a focus on tax issues is critical, and Diosdi Ching & Liu, LLP provides that specialized service. - [Foreign Cloud Computing Transactions: U.S. Taxation of Service, Intangible, Copyright, and Royalty Income](https://sftaxcounsel.com/blog/foreign-cloud-computing-transactions-u-s-taxation-of-service-intangible-copyright-and-royal/) - This article is intended to acquaint foreign tech companies with some of the principal tax planning issues associated with U.S. taxation of intellectual property. - [Questions Regards U.S. Federal Tax Consequences of India’s Provident Fund Schemes Under the U.S.-India Income Tax Treaty](https://sftaxcounsel.com/blog/questions-regards-u-s-federal-tax-consequences-of-indias-provident-fund-schemes-under-the-u-s-india-income-tax-treaty/) - As a general rule, U.S. citizens and residents are taxed on their worldwide income. As a general rule, U.S. citizens and residents are taxed on their worldwide income. - [A Closer Look at the U.S.-France Estate and Gift Tax Treaty](https://sftaxcounsel.com/blog/a-closer-look-at-the-u-s-france-estate-and-gift-tax-treaty/) - This article discusses the special provisions of the U.S.-France estate and gift tax treaty foreign investors should consider when planning to avoid or mitigate U.S. estate and gift taxes. - [Navigating San Francisco's Tax Landscape: Choosing the Right Tax Attorney](https://sftaxcounsel.com/blog/navigating-san-franciscos-tax-landscape-choosing-the-right-tax-attorney/) - With our knowledge and experience, we are equipped to provide you with exceptional legal guidance and support. - [A Closer Look at the U.S.- Germany Estate and Gift Tax Treaty](https://sftaxcounsel.com/blog/a-closer-look-at-the-u-s-germany-estate-and-gift-tax-treaty/) - The treaty also applies to any German inheritance or gift tax that is imposed on the transfer of property that is transferred at death or by gift. - [A Closer Look at the U.S.- U.K. Estate and Gift Tax Treaty](https://sftaxcounsel.com/blog/a-closer-look-at-the-u-s-u-k-estate-and-gift-tax-treaty/) - This article discusses the special provisions of the U.S.- United Kingdom or (“U.K.”) estate and gift tax treaty foreign investors should consider when planning to avoid or mitigate U.S. estate and gift taxes. - [How to Determine the Withholding Tax on a Foreign Partner’s Partnership Interest](https://sftaxcounsel.com/blog/how-to-determine-the-withholding-tax-on-a-foreign-partners-partnership-interest/) - Foreign investors generally have the same goals of minimizing their income tax liabilities from their business investments, as do their U.S. counterparts, although their objective is complicated by the very fact that they are not U.S. persons. - [A Closer Look at the U.S.- Canada Tax Treaty Article Governing the U.S. Estate Tax](https://sftaxcounsel.com/blog/a-closer-look-at-the-u-s-canada-tax-treaty-article-governing-the-u-s-estate-tax/) - U.S. citizens and resident individuals are permitted a unified credit of $12,920,000 or $25,840,000 for a married couple (for the 2023 calendar year). - [Determining Taxable Gains from the Sale of CFC Stocks](https://sftaxcounsel.com/blog/determining-taxable-gains-from-the-sale-of-cfc-stocks/) - Virtually all controlled foreign corporations (“CFCs”) generate earnings and profits that become previously taxed earnings and profits (“PTEP”). - [FIRPTA and the Benefits of a Section 897(i) Election](https://sftaxcounsel.com/blog/firpta-and-the-benefits-of-a-section-897i-election/) - Section 897 provides that gain or loss realized by nonresident aliens or foreign corporations on the disposition of U.S. real property. - [What is an Initial Appearance/Arraignment in a Federal Criminal Tax Case?](https://sftaxcounsel.com/blog/what-is-an-initial-appearance-arraignment-in-a-federal-criminal-tax-case/) - This article discusses what a defendant can expect during an appearance and arraignment. - [What is Superannuation and How it Could be Taxed Under the United States- Australia Income Tax Treaty](https://sftaxcounsel.com/blog/what-is-superannuation-and-how-it-could-be-taxed-under-the-united-states-australia-income-tax-treaty/) - This article will focus on Self-Managed Superannuation Funds. This is because Self-Managed Superannuation Funds are the most common type of superannuation. - [Here Comes the Employee Retention Credit Enforcement, There Goes the Criminal Indictments](https://sftaxcounsel.com/blog/here-comes-the-employee-retention-credit-enforcement-there-goes-the-criminal-indictments/) - The general public continues to be subject to a barrage of broadcast advertisements and online promotions involving the employee retention credit or (“ERC”). - [A Look at Schedule G of Form 5471 Used to Report Cost Sharing Arrangements of Controlled Foreign Corporations](https://sftaxcounsel.com/blog/a-look-at-schedule-g-of-form-5471-used-to-report-cost-sharing-arrangements-of-controlled-foreign-corporations/) - The Form 5471 and schedules are used to satisfy the reporting requirements of Internal Revenue Code Section 6038 and 6046 along with the applicable regulations. - [Demystifying the 2023 Form 5471 Schedule E Used to Report and Track Foreign Tax Credits of Controlled Foreign Corporations](https://sftaxcounsel.com/blog/demystifying-the-2023-form-5471-schedule-e-used-to-report-and-track-foreign-tax-credits-of-controlled-foreign-corporations/) - The Form 5471 and schedules are used to satisfy the reporting requirements of Internal Revenue Code Section 6038 and 6046 along with the applicable regulations. - [Income, Gift, Estate, Generation-Skipping, and State Tax Considerations Associated with Establishing and Administering Trusts](https://sftaxcounsel.com/blog/income-gift-estate-generation-skipping-and-state-tax-considerations-associated-with-establishing-and-administering-trusts/) - When a settlor (the person or entity that establishes a trust), he or she must evaluate the income, gift, estate, generation-skipping transfer tax (“GST”), and state tax aspects associated with establishing a trust. - [What is an RRSP and How is it Taxed Under the United States- Canada Income Tax Treaty](https://sftaxcounsel.com/blog/what-is-an-rrsp-and-how-is-it-taxed-under-the-united-states-canada-income-tax-treaty/) - Under Canadian tax law, money that is placed into an RRSP grows tax-free until it is withdrawn from the account. - [What Hungarian High Tech Companies Need to Know Now that the U.S.-Hungarian Tax Treaty Will be Terminated](https://sftaxcounsel.com/blog/what-hungarian-high-tech-companies-need-to-know-now-that-the-u-s-hungarian-tax-treaty-will-be-terminated/) - According to the same July 8, 2022 article in the Wall Street Journal, the Biden administration does not support the 2010 treaty because Hungary recently reduced its corporate tax rate. - [A Deep Dive Into the New 2022 IRS Form 3520](https://sftaxcounsel.com/blog/a-deep-dive-into-the-new-2022-irs-form-3520/) - A foreign gift, bequest, or inheritance that exceeds $100,000 from a nonresident must also be disclosed on a Form 3520. - [A Deep Dive Into the New 2022 IRS Form 3520-A](https://sftaxcounsel.com/blog/a-deep-dive-into-the-new-2022-irs-form-3520-a/) - The penalty for failure to file IRS Form 3520-A will be imposed directly on the U.S. owner of the foreign trust. - [Dynasty Trusts- the Most Powerful Planning Available to Combat the Estate, Gift, and the Generation Skipping Tax](https://sftaxcounsel.com/blog/dynasty-trusts-the-most-powerful-planning-available-to-combat-the-estate-gift-and-the-generation-skipping-tax/) - A dynasty trust is a trust that perpetuates from one generation to the next without the requirement of terminating on a set date. - [A Closer Look at FTB Notice 2023-02 Offering Settlement for Micro-Captive Insurance and Syndicated Conservation Easement Tax Motivated Transactions](https://sftaxcounsel.com/blog/a-closer-look-at-ftb-notice-2023-02-offering-settlement-for-micro-captive-insurance-and-syndicated-conservation-easement-tax-motivated-transactions/) - Like the Internal Revenue Service (“IRS”), the FTB has taken a tough stand against taxpayers claiming tax deductions on certain transactions classified as sham transactions. - [Basic U.S. and Canadian Tax Considerations of Canadian Investment in U.S. Real Estate    ](https://sftaxcounsel.com/blog/basic-u-s-and-canadian-tax-considerations-of-canadian-investment-in-u-s-real-estate/) - This article attempts to summarize the cross-border consequences surrounding a Canadian’s acquisition of different U.S. real property interests. - [Top Eight Considerations for Anyone Considering Expatriating from the United States ](https://sftaxcounsel.com/blog/top-eight-considerations-for-anyone-considering-expatriating-from-the-united-states/) - If you are considering expatriating from the United States, here are eight things to consider: - [Demystifying the New 2022 IRS Form 5472](https://sftaxcounsel.com/blog/demystifying-the-new-2022-irs-form-5472/) - Anyone completing a Form 5472 must understand the importance of this form and the fact that the IRS often uses the Form 5472 as a starting point for conducting a transfer pricing examination. - [Is the Exit Tax Constitutional?](https://sftaxcounsel.com/blog/is-the-exit-tax-constitutional/) - For U.S. tax purposes, the concept of expatriation can be very complicated. If you are considering expatriating from the United States, here are eight things to consider: - [Is the Section 965 Transition Tax, Subpart F, and GILTI Constitutional?](https://sftaxcounsel.com/blog/is-the-section-965-transition-tax-subpart-f-and-gilti-constitutional/) - Internal Revenue Code Section 965 imposes a one-time transition tax on a U.S. shareholder’s share of deferred foreign income of certain foreign corporations accumulated deferred foreign income (“ADFI”). - [The United States- Japan Income Tax Treaty and a Closer Look at Issues Involving “Hybrid Entities” in the Taxation of International Transactions](https://sftaxcounsel.com/blog/the-united-states-japan-income-tax-treaty-and-a-closer-look-at-issues-involving-hybrid-entities-in-the-taxation-of-international-transactions/) - The U.S. currently has income tax treaties with approximately 58 countries. This article discusses the implications of the United States- Japan income tax treaty. - [A Closer Look at the U.S.-Japan Estate and Gift Tax Treaty](https://sftaxcounsel.com/blog/a-closer-look-at-the-u-s-japan-estate-and-gift-tax-treaty/) - This article summarizes the basic concepts of the U.S.-Japan Tax and Estate Tax Treaty also known as the U.S.-Japan Estate and Gift Tax Treaty. - [Tax Planning for Inbound Licenses of Intellectual Property in a Post 2017 Tax Cuts and Jobs Act World](https://sftaxcounsel.com/blog/tax-planning-for-inbound-licenses/) - The second test, referred to as the ownership-base erosion test, consists of two parts, both of which must be satisfied. Contact us today. - [U.S. Taxation of International Cloud Computing and Digital Transactions](https://sftaxcounsel.com/blog/u-s-taxation-of-international-cloud-computing/) - New technology and new transactions often raise difficult issues of tax policy and administration in part because existing rules were developed to deal with other situations. - [Once the U.S.-Hungary Income Tax Treaty Terminates- Can Hungarian Owned Entities be Treated as “Equivalent Beneficiaries” For Tax Treaty Purposes?](https://sftaxcounsel.com/blog/u-s-hungary-income-tax-treaty/) - The U.S. taxes the gross amount of a foreign person’s U.S.-source nonbusiness (or investment-type) income at a flat rate of 30 percent. - [TAXATION OF THE MODERN DAY CROSS-BORDER MERGER AND ACQUISITION](https://sftaxcounsel.com/blog/taxation-of-the-modern-day-cross-border-merger-and-acquisition/) - In larger multinational corporations, frequently there are multiple foreign parent corporations. Contact SF Tax Counsel to discuss. - [The 2023 Tax Guide for Cryptocurrency and NFTs](https://sftaxcounsel.com/blog/tax-guide-for-cryptocurrency-and-nfts/) - The U.S. is not alone in treating virtual currencies as property and not currency for tax purposes. Contact SF Tax Counsel to discuss. - [How is Crypto Staking Taxed Post Jarrett?](https://sftaxcounsel.com/blog/how-is-crypto-staking-taxed-post-jarrett/) - This article discusses the current state of the taxation of crypto staking and how investors can calculate their basis in the block rewards from staking. - [Demystifying the 2023 IRS Form 5471 Schedule J](https://sftaxcounsel.com/blog/demystifying-the-2023-irs-form-5471-schedule-j/) - The Form 5471 and schedules are used to satisfy the reporting requirements of Internal Revenue Code Section 6038 and 6046 along with the applicable regulations. - [Can a Tax Treaty Tie-Breaker Provision Save Departing Residents from the Expatriation Tax?](https://sftaxcounsel.com/blog/tax-treaty-tie-breaker-provision/) - Much of this expatriation is from citizens of other countries who were issued green cards. Contact SF Tax Counsel to discuss. - [How to Determine the Tax on a U.S. Partnership Interest of a Foreign Person](https://sftaxcounsel.com/blog/u-s-partnership-interest-of-a-foreign-person/) - This article discusses the U.S. tax and withholding requirements associated with the sale of a foreign partner’s U.S. partnership interest. - [Challenges Associated with the Sourcing of Computer Programs for Purposes of the U.S. Cross-Border Tax Sourcing Rules](https://sftaxcounsel.com/blog/u-s-cross-border-tax-sourcing-rules/) - The U.S. also taxes foreign persons at graduated rates on the net amounts of income effectively connected with the conduct of a U.S. trade or business. - [Foreign Persons Doing Business in the United States- Tax and Treaty Considerations](https://sftaxcounsel.com/blog/tax-and-treaty-considerations/) - The rules for allocating and apportioning deductions are used to determine which of the foreign person’s potential deductions are attributable to the U.S. trade or business. - [Do the Anti-Conduit Regulations Delegate Authority to the IRS to Override Tax Treaties?](https://sftaxcounsel.com/blog/anti-conduit-regulations/) - The anti-conduit regulations identify factors that will determine whether there is a tax-avoidance purpose: Contact SF Tax Counsel to discuss. - [A Deep Dive into the FIRPTA Rules](https://sftaxcounsel.com/blog/firpta-rules/) - We have substantial experience advising clients ranging from small entrepreneurs to major multinational corporations in foreign tax planning and compliance. - [A Closer Look at the Benefits of Cross-Border Finance Transactions that are Characterized as Portfolio Debt](https://sftaxcounsel.com/blog/cross-border-finance-transactions/) - if the non-U.S. person receives passive U.S. source income, the income is taxed at a flat 30 percent rate, unless a tax treaty reduces this rate. - [Can a Foreign Tech Company be Subject to U.S. Tax on Internet-Related Income by Utilizing U.S. Servers?](https://sftaxcounsel.com/blog/foreign-tech-company/) - The U.S. source rules in general derive from an attempt to identify the geographic locus of the economic activity or financial arrangements that generate income. - [The U.S. Taxation of Foreign Computer Programs and Cloud Computing Transactions](https://sftaxcounsel.com/blog/u-s-taxation-of-foreign-computer-programs/) - The application of source rules to electronic commerce transactions is just one area of international taxation concern to tax attorneys. - [Does the Farhy Decision Apply to 3520 Penalty Assessments?](https://sftaxcounsel.com/blog/does-the-farhy-decision-apply-to-3520-penalty-assessments/) - For reasons discussed in this article, the IRS also lacks the authority to assess Section 6039F penalties associated with the failure to timely file a Form 3520. - [How to Sue the IRS for Damages Associated with the Failure to Release a Lien](https://sftaxcounsel.com/blog/failure-to-release-a-lien/) - This article discusses the procedure to obtain damages for the improper conduct by the IRS associated with the failure to release a lien. - [How Quarterly Tax Payments Work](https://sftaxcounsel.com/blog/quarterly-tax-payments-attorney/) - The attorneys at San Francisco Tax Counsel can work with you on tax strategies and the details of your tax returns. Contact us today. - [Received a Gift from an Individual that Expatriated the U.S.? You May Owe the IRS Gift Tax](https://sftaxcounsel.com/blog/irs-gift-tax/) - Expatriates were also subject to U.S. estate and gift tax during the subsequent ten year period. Contact SF Tax Counsel to disucss. - [Can Article 4 of the US-UK Estate, Gift, and Generation Skipping-Tax Treaty be Utilized to Avoid the U.K. Inheritance Tax?](https://sftaxcounsel.com/blog/u-k-inheritance-tax/) - A transfer of money or property from a U.K. spouse to a spouse domiciled in another country can also trigger the tax. Contact SF Tax Counsel today. - [An Introduction to the Taxation of the Modern Day Cross-Border Merger and Acquisition](https://sftaxcounsel.com/blog/cross-border-merger/) - Typically, a U.S. parent corporation owns a group of subsidiary corporations formed within and outside the United States. - [Beware of Section 956 Constructive Dividends Resulting from Short-Term Cross-Border Intercompany Loans](https://sftaxcounsel.com/blog/section-956-constructive-dividends/) - We have substantial experience advising clients ranging from small entrepreneurs to major multinational corporations in foreign tax planning and compliance. - [Do IRS International Penalties Qualify for First Time Relief?](https://sftaxcounsel.com/blog/irs-international-penalties/) - This article discusses if it is possible to abate or request a refund of an international penalty through the first-time penalty abatement program. - [It is About to Get Much More Difficult to Claim a Foreign Tax Credit A Look at the 2022 Final Foreign Tax Credit Regulations](https://sftaxcounsel.com/blog/foreign-tax-credit/) - A foreign tax credit (under either Internal Revenue Code Sections 901 or 903) is allowed only to the extent that the creditable foreign tax is “paid or accrued.” - [Tax Planning Tips for Couples Involved in a Cross-Border Divorce](https://sftaxcounsel.com/blog/tax-planning-tips/) - This article discusses some key tax tips to keep in mind if you are divorcing or recently divorced and you held assets located in the U.S. and abroad with your spouse. - [Totalization Agreements vs. Tax Treaties](https://sftaxcounsel.com/blog/totalization-agreements-vs-tax-treaties/) - Totalization agreements eliminate dual contributions cross-border workers might otherwise be paying to the Social Security systems of both the U.S. and another country. - [Is the Statute of Limitation for IRS Assessed Foreign Information Reporting Penalties for Collections Five or Ten Years?](https://sftaxcounsel.com/blog/irs-assessed-foreign-information-reporting-penalties/) - Chapter 61 of the Internal Revenue Code contains countless reporting requirements regarding foreign information filing obligations. - [Are IRS Assessed Foreign Information Reporting Penalties Associated with Forms 3520, 5471, and 5472 Ripe for a Prepayment APA Suit?](https://sftaxcounsel.com/blog/irs-assessed-foreign-information-reporting-penalties-2/) - The Internal Revenue Code requires certain persons to provide the Internal Revenue Service or IRS with information regarding foreign corporations. - [The Foreign Trust “Throwback Tax” and a Guide to Reporting the “Throwback Tax” on a Form 3520](https://sftaxcounsel.com/blog/throwback-tax/) - We will conclude this article with a discussion on how to potentially mitigate the impacts of the throwback tax. Contact us to discuss. - [How to Make a Competent Authority Request to Resolve a Tax Treaty Dispute](https://sftaxcounsel.com/blog/tax-treaty-dispute-attorney/) - The related procedures for requesting competent authority relief is described in IRS Rev. Proc. 2015-40, 2015-35 I.R.B. 236. - [Form 5472- The Hidden Reporting Requirement for Foreign-Held Disregarded Entities](https://sftaxcounsel.com/blog/irs-form-5472/) - The lack of transparency has allowed nonresidents of the United States to form a domestic shell to avoid paying foreign income taxes, hide money or commit other acts of wrongdoing. - [How to Calculate the Tax on Sale of a Partnership Interest of a Foreign Investor](https://sftaxcounsel.com/blog/tax-on-sale-of-a-partnership-interest/) - This article discusses the U.S. tax and withholding requirements associated with the sale of a foreign partner’s U.S. partnership interest. - [From Investment Vehicles to Treaties- What Foreign Investors Need to Know About Cross-Border Estate Planning](https://sftaxcounsel.com/blog/cross-border-estate-planning/) - This article also discusses international tax planning opportunities that may be available to individuals that are not-U.S. citizens. - [Can Your Self-Directed IRA Hold Stock Options?](https://sftaxcounsel.com/blog/self-directed-ira/) - Although a self-directed IRA allows individuals to invest in numerous illiquid assets, investments in some assets are prohibited. - [The Separate Basket Limitations for Foreign Tax Credits](https://sftaxcounsel.com/blog/foreign-tax-credits/) - A U.S. corporation that owns at least 10 percent of stock in a foreign corporation (by vote or value) may receive an “indirect” or “deemed” foreign tax credit for foreign taxes paid by that subsidiary. - [Is a 962 Election the Cure for the Hardships Caused by GILTI or Subpart F Inclusions?](https://sftaxcounsel.com/blog/962-election/) - The second is taxable Section 962 E&P (the amount of Section 962 E&P that exceeds excludable Section 962 E&P). - [What Foreign Nationals Relocating to the U.S. Needs to Know About the Check-the-Box Rules](https://sftaxcounsel.com/blog/check-the-box-rules/) - Sometimes an understanding of the U.S. check-the-box rules can result in significant reduction in U.S. tax on foreign holdings and tax compliance savings. - [Has the IRS Been Illegally Assessing 3520 Penalties all this Time? What to do If the IRS Unlawfully Assessed a 3520 Penalty Against You](https://sftaxcounsel.com/blog/irs-unlawfully-assessed-a-3520-penalty/) - Originally, 3520 and 3520-A penalties (hereinafter “international penalties”) were assessed manually on individuals and entities whose missing filings were discovered during an audit. - [Planning Ideals for the Modern Day International Corporate Merger or Reorganization](https://sftaxcounsel.com/blog/international-corporate-merger/) - This article discusses planning ideals to mitigate the impact of Section 367 in the context of a cross-border merger or reorganization. - [Has the IRS Been Illegally Assessing 5472 and 5471 Penalties all this Time? What to do If the IRS Unlawfully Assessed Such a Penalty Against You](https://sftaxcounsel.com/blog/5472-and-5471-penalties/) - The penalty for failing to timely file a Form 5472 is $25,000 for each 30-day period. There is no upper limit on this penalty. - [The Cross-Border Taxation of Cloud Transactions and Digital Downloads](https://sftaxcounsel.com/blog/cross-border-taxation-of-cloud-transactions/) - The dramatic expansion in electronic commerce facilitated by the use of the Internet and other technology is subjecting existing tax principles to new pressures. - [Foreign Contractors- To Withhold or Not to Withhold in a Digital Age](https://sftaxcounsel.com/blog/foreign-contractors-tax/) - This article discusses a U.S. businesses potential obligation to withhold U.S. taxes to a foreign contractor. Call SF Tax Counsel today. - [Cross-Border Financing and the Importance of the Registration Rules](https://sftaxcounsel.com/blog/cross-border-financing/) - It should be noted that a book entry system is essentially an electronic system of tracking ownership of debt (bonds), securities, etc. - [An Overview of the FIRPTA Withholding Rules and Planning Ideas to Avoid FIRPTA Withholding](https://sftaxcounsel.com/blog/firpta-withholding-rules/) - This article discusses the withholding requirements of the Foreign Investment in Real Property Tax Act of 1980 (or “FIRPTA”) and how the FIRPTA withholdings may be reduced or eliminated. - [Tax Goals for 2023](https://sftaxcounsel.com/blog/tax-goals/) - The attorneys at San Francisco Tax Counsel work with individuals and businesses to help you devise the most effective tax strategies. - [A Brief Overview of the Form W-9 and W-8 for Purposes of Withholding](https://sftaxcounsel.com/blog/form-w-9/) - A U.S. payor of income may typically rely on a Form W-9 or Form W-8 to determine the country of residence. Call to discuss. - [Can a Gift of Cash from Abroad Trigger a Gift Tax Obligation to the U.S. Recipient?](https://sftaxcounsel.com/blog/gift-tax/) - The estate tax is payable by the executor of the estate. Estate and gift (gift taxes will be discussed in more detail below) taxes the two parts of a “unified” transfer tax system. - [An Overview of the Rules Governing Hybrid Arrangements](https://sftaxcounsel.com/blog/an-overview-of-the-rules-governing-hybrid-arrangements/) - The Tax Cuts and Jobs Act introduced two new Internal Revenue Code provisions targeting “hybrid arrangements.” - [Cross Border Conduit Financing and the Intricate Rules Governing These Transactions](https://sftaxcounsel.com/blog/cross-border-conduit-financing/) - A transfer of money or other property in satisfaction of a repayment obligation is not an advance of money or other property. - [What Every Nonresident that Jointly Owns U.S. Property Should Know About the Federal Estate Tax](https://sftaxcounsel.com/blog/federal-estate-tax/) - With respect to jointly held property between spouses, a different rule applies to nonresidents. Contact SF Tax Counsel to discuss. - [Litigating a Case in Tax Court: A Litigation Tutorial](https://sftaxcounsel.com/blog/tax-court/) - This article will discuss step-by-step how to contest an IRS audit before the United States Tax Court. Contact SF Tax Counsel to discuss. - [Facing an IRS Section 965 Transition Tax Audit? Maybe a 962 Election Can Save the Day](https://sftaxcounsel.com/blog/irs-section-965-transition-tax-audit/) - This article discusses the 965 transition tax and the use of a 962 election which could significantly reduce a transition tax assessment. - [Planning for Foreign Investors Investing in U.S. Real Estate to Eliminate the U.S. Estate and Gift Tax](https://sftaxcounsel.com/blog/foreign-investors-investing-in-u-s-real-estate/) - The United States imposes estate and gift taxes on certain transfers of U.S. situs property by “nonresident citizens of the United States.” - [RSUs and the Expatriation Tax](https://sftaxcounsel.com/blog/expatriation-tax/) - When a recipient subsequently sells the shares acquired upon vesting of an RSU or RSUs, the recipient will be subject to capital gains tax. - [An In Depth Look into U.S. Estate, Gift, and Generation-Skipping Tax Treaties](https://sftaxcounsel.com/blog/estate-gift-and-generation-skipping-tax-treaties/) - The estate and gift tax regulations offer a general indication of the definition of domicile, stating that: Contact SF Tax Counsel to discuss. - [Are You Ready for the Tax Extension Deadline?](https://sftaxcounsel.com/blog/tax-extension-deadline/) - The attorneys at SF Tax Counsel Work with you on every stage of the tax process, answering your questions and helping you prevent issues. - [A Deep Dive Into the IRS Form 5471 Attribution Rules, Form 5471 Category of Filers, and the Safe Harbor Rules](https://sftaxcounsel.com/blog/irs-form-5471-3/) - This article will attempt to explain the attribution rules for stock ownership for individuals and entities regarding the filing requirements of the Form 5471. - [Common Issues that Lead to Tax Audits](https://sftaxcounsel.com/blog/tax-audits/) - The attorneys at Diosdi Ching & Liu, LLP can defend you when the IRS shows up asking questions. You should never face the IRS alone. - [Why the Anti-Inversion Rules Make the Holding of U.S. Real Property through Multi-Tiered Blocker Structures Worthless to Foreign Investors](https://sftaxcounsel.com/blog/anti-inversion-rules/) - At one time, multi-tiered corporate blocker structures could protect foreign investors from U.S. federal estate and gift tax. - [An Introduction to the Secure Act for Qualified Retirement Plans and IRA Minimum Distribution Rules](https://sftaxcounsel.com/blog/ira-minimum-distribution-rules/) - Originally, the required beginning date was April 1 of the year following the participant’s 70 1/2 birthday. The tax law now extends this age to 72. - [Cross-Border Corporate Reorganizations and the Use of Gain-Recognition Agreements to Avoid Significant Adverse Tax Consequences](https://sftaxcounsel.com/blog/cross-border-corporate-reorganizations/) - When appreciated property, such as equipment or certain property rights, is transferred to a foreign corporation, gain will often be realized by a U.S. person. - [Thinking About Starting a Private Foundation? Proceed With Extreme Caution](https://sftaxcounsel.com/blog/private-foundation/) - Promoters of private foundations make private foundations sound like the perfect tax planning option. Contact SF Tax Counsel to discuss. - [Dual American British Residents- Will Uncle Sam or King Charles Tax Your Estate?](https://sftaxcounsel.com/blog/dual-american-british-residents/) - This article takes a look at these potential tax consequences and examines the big picture impact of the U.S.-U.K.- Estate, Gift, and Generation-Skipping Tax Treaty. - [Think You Can Delete Incriminating Evidence From Your Computer and an IRS Criminal Tax Investigator Won’t Notice? Think Again](https://sftaxcounsel.com/blog/irs-criminal-tax-investigation-2/) - A search warrant consists of a set of documents, each with a specified legal purpose. Contact SF Tax Counsel to discuss your rights. - [The High-Tax or Section 954 Election for Multinational Corporations](https://sftaxcounsel.com/blog/section-954-election-for-multinational-corporations/) - As part of the Tax Cuts and Jobs Act, Congress added Section 951A to the Internal Revenue Code which resulted in the GILTI tax regime. - [When Should I Call a Tax Attorney?](https://sftaxcounsel.com/blog/tax-attorney/) - The attorneys at San Francisco Tax Counsel can help you when you are dealing with the IRS. Contact SF Tax Counsel to discuss. - [The Impact of Revenue Procedure 2019-40 on GILTI and Subpart F Inclusions](https://sftaxcounsel.com/blog/revenue-procedure-2019-40-on-gilti/) - Prior to the enactment of the 2017 Tax Cuts and Jobs Act, Section 958(b) provided a taxpayer friendly rule, in Section 958(b)(4), which disallowed so-called downward attribution. - [A Closer Look at the Form 5471 Filer Rules and the Upward and Downward Attribution Rules](https://sftaxcounsel.com/blog/form-5471-category-filers-rules/) - The Form 5471 and schedules are used to satisfy the reporting requirements of Internal Revenue Code Section 6038 and 6046 along with the applicable regulations. - [Todd and Julie Chrisley Were Found Guilty of Tax Evasion- So What is Tax Evasion?](https://sftaxcounsel.com/blog/tax-evasion/) - Internal Revenue Code Section 7201 defines what is commonly known as “tax evasion” or “tax fraud.” Section 7201 reads as follows: - [Will ‘Chrisley Knows Best’ Reality TV Stars Face Prison Sentences? A Brief Discussion Regarding the Sentencing of Defendants Convicted of Tax Fraud](https://sftaxcounsel.com/blog/sentencing-of-defendants-convicted-of-tax-fraud/) - According to the United States Sentencing Commission, 68.7 percent of individuals convicted of tax fraud were sentenced to prison. - [An In Depth Look at the IRS Form 8858 Used With Respect to Foreign Disregarded Entities and Foreign Branches](https://sftaxcounsel.com/blog/irs-form-8858/) - If the branch is an integral extension of a U.S. operation not capable of producing income independently (such as a financing vehicle), it will not be a QBU. - [An In Depth Look at the IRS Form 8865 and the Foreign Partnership Reporting Provisions of the Internal Revenue Code](https://sftaxcounsel.com/blog/irs-form-8865/) - Under Internal Revenue Code Section 6038(a), a U.S. partner that controls a foreign partnership must annually file a Form 8865 with the IRS. - [Reporting Cross-Border Transfers and Reorganizations on IRS Form 926](https://sftaxcounsel.com/blog/irs-form-926/) - This article discusses Form 926 and is designed to supplement the instructions promulgated by the IRS. Contact us to discuss. - [A Closer Look at Gain Recognition Agreements in the Context of Cross-Border Transfers and Reorganizations](https://sftaxcounsel.com/blog/gain-recognition-agreements/) - The character and source of gain produced by Section 367 is determined as if the transferor had sold the property to the transferred in a taxable transaction. - [IRS Form 3520 in a Nutshell](https://sftaxcounsel.com/blog/irs-form-3520/) - This article is designed to provide the reader with an understanding of the Internal Revenue Service (“IRS”) Form 3520. Contact us to discuss. - [An Overview of FIRPTA Withholding and a Discussion How to Avoid FIRPTA Withholding on a 1031 Exchange](https://sftaxcounsel.com/blog/firpta-withholding/) - There are significant income, gift and estate tax consequences that may result when U.S. real property is sold or transferred. - [An Overview of the Expatriation Tax and the New Federal Inheritance Tax](https://sftaxcounsel.com/blog/new-federal-inheritance-tax/) - Expatriates were also subject to U.S. estate and gift tax during the subsequent ten year period. Contact Sf Tax Counsel to discuss. - [Cross-Border Intercompany Transfers of Intangible Property and Cost Sharing Arrangement Considerations for Multinationals](https://sftaxcounsel.com/blog/cross-border-intercompany-transfers-of-intangible-property/) - A multinational must select and apply the method which provides the most reliable estimate of an arm’s length price. Contact us to discuss. - [The Rules Governing Cross-Border Intercompany Transfer Pricing of Intangible Property for Multinational Corporations](https://sftaxcounsel.com/blog/rules-governing-cross-border-intercompany-transfer-pricing-of-intangible-property/) - To arrive at an arm’s-length result, a multinational corporation must select and apply the method that provides the most reliable estimate of an arm’s-length price. - [Exploitation of Intangible Property Rights Abroad: The Tax Incentives to Licensing under FDII](https://sftaxcounsel.com/blog/intangible-property-rights-abroad/) - Since the current U.S. federal corporate income tax rate is 21 percent FDII income is taxed at an effective rate of 13.125 percent (21% - 37.5% = 13.125%). - [The United States- Hungary Income Tax Treaty- Last Call!](https://sftaxcounsel.com/blog/united-states-hungary-income-tax-treaty/) - This article will discuss the unusual provisions of the United States- Hungary Income Tax Treaty. Contact SF Tax Counsel today. - [How to Treat IRA and 401(k) Plans in an Expatriation](https://sftaxcounsel.com/blog/ira-and-401k-plans-in-an-expatriation/) - This article discusses how U.S. retirement accounts (i.e., IRA and 401(k) plans) are treated for expatriation tax purposes. - [A Foreign Investor’s Guide to U.S. Real Estate Investment Trusts](https://sftaxcounsel.com/blog/real-estate-investment-trusts/) - In the United States, a Real Estate Investment Trust or “REIT” is a common vehicle for earning income from rental property. - [Exploitation of Intangible Property Abroad: The Use of Cost Sharing Arrangements to Avoid the Transfer Pricing Rules](https://sftaxcounsel.com/blog/transfer-pricing/) - The term “transfer pricing” is often used to refer to the setting of prices on all types of transactions between related parties. - [The Tax Consequences Associated With Making Loans or Advances to a Foreign Corporation](https://sftaxcounsel.com/blog/tax-consequences/) - The investor who acquires stock holds an equity interest in the corporation while the lender holds a debt or creditor interest in the foreign corporation. - [The Taxation of RSUs in an International Context](https://sftaxcounsel.com/blog/taxation-of-rsus/) - This article provides a brief overview of the taxation of RSUs in the international context. Contact us to discuss your situation. - [IRS Aims to Clear Backlog by 2023](https://sftaxcounsel.com/blog/irs-tax-attorney/) - We assist with all legal tax-related matters, including criminal allegations, payment arrangements, tax advice, and audits. - [The IRS Multinational Audit: How Multinational Corporations Can Survive Five Common Targets of an IRS International Tax Audit](https://sftaxcounsel.com/blog/irs-multinational-audit/) - This article explores five areas that in our experience tend to come up in international tax audits of multinational corporations and potential strategies to deal with these unique situations. - [Be Careful with Loans to Controlled Foreign Corporations - a Loan to a Foreign Corporation Can Trigger a Form 5471 Filing Requirement](https://sftaxcounsel.com/blog/loans-to-controlled-foreign-corporations/) - The GILTI and subpart F tax regimes would be eliminated. In addition, the Form 5471 filing requirements for many U.S. investors in foreign corporations would be eliminated. - [How to Utilize Section 6751 to Successfully Challenge IRS 3520 Penalties](https://sftaxcounsel.com/blog/irs-3520-penalties/) - This article discusses defenses under Section 6751 available to individuals assessed a 3520 penalty by the IRS. Contact us today. - [Unraveling the Mystery of Reporting Foreign Retirement Plans to the IRS](https://sftaxcounsel.com/blog/reporting-foreign-retirement-plans/) - This article will discuss the special U.S. reporting and tax consequences of foreign retirement plans. Contact SF Tax Counsel to discuss. - [Navigating the Maze of the Complex Money Transmitter Laws of Cryptocurrency](https://sftaxcounsel.com/blog/money-transmitter-laws-of-cryptocurrency/) - This article will discuss cryptocurrency trader’s obligation under the Anti-Money Laundering Act of 2020. Contact SF Tax Counsel to discuss. - [A Brief Overview of the Estate and Gift Tax Considerations Associated with the Transfer of Cryptocurrency](https://sftaxcounsel.com/blog/transfer-of-cryptocurrency/) - Federal law imposes a transfer tax upon the privilege of transferring property by gift, bequest or inheritance. Call SF Tax Counsel to discuss. - [How to Survive a Cryptocurrency IRS Tax Audit](https://sftaxcounsel.com/blog/how-to-survive-a-cryptocurrency-irs-tax-audit/) - This article focuses on how cryptocurrency holders can survive an IRS audit. Introduction Cryptocurrency Technology and the Taxation of Cryptocurrency - [Got Cryptocurrency? Here is What You Need to Know About Estate Planning, Crypto Memorandums, and RUFADDA](https://sftaxcounsel.com/blog/estate-planning-crypto-memorandums-and-rufadda/) - This article will discuss both the challenges and importance of estate planning in the context of crypto assets. Contact SF Tax Counsel to discuss. - [Cryptocurrency Tax Accounting Decoded- Using HIFO Tax Accounting to Shield Crypto Gains from the IRS](https://sftaxcounsel.com/blog/cryptocurrency-tax-accounting/) - The obvious issue with adequate identification is whether this concept can be applied to cryptocurrency. Contact SF Tax Counsel to discuss. - [The Guide to Claiming Cryptocurrency Tax Losses](https://sftaxcounsel.com/blog/cryptocurrency-tax-losses/) - Since cryptocurrencies are not securities, a crypto investor cannot utilize Section 165(g) worthless security loss rules. - [How the Sale of an NFT May Trigger a Painful Tax Surprise for Some Investors](https://sftaxcounsel.com/blog/sale-of-an-nft/) - There are a number of different ways NFTs can be taxed. We will discuss the ways an NFT can be taxed in more detail below. - [The Tax Treatment of Charitable Contributions of Cryptocurrency to Public Charities and Private Foundations](https://sftaxcounsel.com/blog/charitable-contributions-of-cryptocurrency/) - A cryptocurrency donor must be prepared to substantiate his or her contribution to a qualified charitable organization. Contact us to discuss. - [A Closer Look at the Road to Indictment in an IRS Criminal Tax Fraud Case](https://sftaxcounsel.com/blog/irs-criminal-tax-fraud-case/) - The understanding of this process may ultimately significantly reduce an accused’s prosecutorial exposure to a criminal tax crime. - [The Crimes an Individual Targeted by an IRS Criminal Tax Fraud Investigation May Ultimately Find Himself Charged With](https://sftaxcounsel.com/blog/irs-criminal-tax-fraud-investigation/) - This article will begin with a review of revenue offenses that are typically charged in criminal tax fraud cases. Contact us today. - [An Introduction to the Form 5471 Filing Categories of the Modern Day Foreign Corporation and a Brief Look at the Taxation of CFC Income](https://sftaxcounsel.com/blog/form-5471-filing-catergories/) - The Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue Code Sections 6038 and 6046. - [A Tax Professional's Guide to Form 5471 Schedule J and Schedule H](https://sftaxcounsel.com/blog/form-5471-schedule-e-and-schedule-h/) - The Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue Code Sections 6038 and 6046. - [A Tax Professional's Guide to Form 5471 Schedule E and Schedule H](https://sftaxcounsel.com/blog/form-5471-schedule-e-and-schedule-h-2/) - The Form 5471 and its schedules are used to satisfy the reporting requirements of Internal Revenue Code Sections 6038 and 6046. - [The Rising Significance of Self-Cancelling Installment Notes as a Estate-Planning Tool for U.S. Citizens and Nonresidents](https://sftaxcounsel.com/blog/self-cancelling-installment-notes-as-a-estate-planning-tool/) - This article discusses how a SCIN may be a feasible estate planning tool. Contact SF Tax Counsel to discuss your situation. - [Given the Way the U.S.- Cyprus Income Tax Treaty’s LOB is Drafted, Does it Really Matter if the U.S.- Russia Income Tax Treaty is Canceled?](https://sftaxcounsel.com/blog/u-s-cyprus-income-tax-treaty/) - We have substantial experience advising clients regarding the U.S.- Russia Income Tax Treaty and U.S.- Cyprus Income Tax Treaty. - [Demystifying the QDOT in the Context of Cross-Border Estate Planning](https://sftaxcounsel.com/blog/demystifying-the-qdot-in-the-context-of-cross-border-estate-planning/) - By Anthony Diosdi U.S. federal law imposes a transfer tax upon the privilege of transferring property by gift, bequest, or inheritance. This transfer tax takes the form of an estate or gift tax. The tax is measured against a tax base that includes not only the assets of decedent’s probate estate, but also certain gifts - [A Closer Look at Cross-Border Estate Planning for Foreign Investors Utilizing Estate Tax Treaties and Corporate Structures](https://sftaxcounsel.com/blog/cross-border-estate-planning-for-foreign-investors/) - U.S. federal law imposes a transfer tax upon the privilege of transferring property by gift, bequest, or inheritance. This transfer tax takes the form of an estate tax. - [The Pros and Cons of Using a “Multi-Tiered Blocker Structure” to Avoid FIRPTA](https://sftaxcounsel.com/blog/multi-tiered-blocker-structure/) - The article then explores the potential estate tax consequences of such planning options. Contact SF Tax Counsel to discuss. - [A Closer Look as to How a Foreign Investor May Utilize a Section 897(i) Election to Avoid FIRPTA Withholding](https://sftaxcounsel.com/blog/section-897i-election/) - A foreign investor who personally owns U.S. real property may wish to avoid U.S. estate and gift tax by transferring the property to a foreign corporation - [Demystifying the 2021 Tax Year IRS Form 5471 Schedule P Tracking “Previously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations”](https://sftaxcounsel.com/blog/2021-tax-year-irs-form-5471-schedule-p/) - Schedule P of Form 5471 is used to report PTEP of the U.S. shareholder of a controlled foreign currency (“CFC”) in the CFC’s functional currency. - [Demystifying the 2021 Schedule M “Transactions Between Foreign Corporations” of IRS Form 5471](https://sftaxcounsel.com/blog/transactions-between-foreign-corporations/) - This article is designed to provide a basic overview of the Internal Revenue Service (“IRS”) Form 5471, Schedule M. Contact us to discuss. - [Demystifying Schedule O Used to Report Foreign Corporate Reorganizations and Acquisitions on IRS Form 5471](https://sftaxcounsel.com/blog/irs-form-5471-schedule-o/) - This article will take a deep dive into each column and line of 2021 Schedule J of the Form 5471. Contact SF Tax Counsel to discuss. - [A Closer Look at the Schedule R Used to Disclose Distributions from Foreign Corporations to CFC Shareholders on IRS Form 5471](https://sftaxcounsel.com/blog/irs-form-5471-schedule-r/) - Schedule R will be used to report basic information pertaining to distributions from foreign corporations. Contact SF Tax Counsel to discuss. - [A Review of the 2021 Form 8992-U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (“GILTI”)](https://sftaxcounsel.com/blog/2021-irs-form-8992/) - A or separate Schedule B, depending upon whether the shareholder of the CFC is a member of a U.S. consolidated group. Contact us to discuss. - [A Closer Look at the 2021 Schedule I-1for IRS Form 5471](https://sftaxcounsel.com/blog/2021-schedule-i-1-for-irs-form-5471/) - The information from Schedule I-1 is used by U.S. shareholder(s) of a CFC to file IRS Form 8892, U.S. Shareholder Calculation of GILTI, and may assist in the completion of Form 1118 and 1116. - [Fighting IRS Form 3520 Penalties- Your Best Defense Maybe Your Offense](https://sftaxcounsel.com/blog/irs-form-3520-penalties/) - This article will discuss the reasonable cause and other procedural defenses available to contest penalties associated with the failure to timely file a Form 3520 (hereinafter “3520 penalty” or “3520 penalties”). - [An Overview of Reporting Deemed Paid Foreign Tax Credits Related to GILTI Inclusions of an S Corporation on Part III, Section 3 for the New IRS Schedule K-3](https://sftaxcounsel.com/blog/foreign-tax-credits-related-to-gilti-inclusions-of-an-s-corporation-on-part-iii/) - This article will provide an overview Part III, Section 3 of Schedule K-2 and K-3 used to calculate creditable foreign tax credits associated with GILTI inclusions. - [There May Be 50 Ways To Leave Your Lover- But You May Only Utilize A CDP Challenge to Contest a Form 3520 Penalty Without Prepayment](https://sftaxcounsel.com/blog/there-may-be-50-ways-to-leave-your-lover-but-you-may-only-utilize-a-cdp-challenge-to-contest-a-form-3520-penalty-without-prepayment-2/) - 本文將討論如何通過被稱為國稅局徵收正當程式聽證會（“CDP”）的程式來質疑 3520 表格的處罰。 - [Utilizing the U.S.- China Tax Treaty to Avoid U.S. Withholding Tax and Early Withdrawal Penalties From a 403(b) Plan](https://sftaxcounsel.com/blog/u-s-china-tax-treaty/) - This article will discuss how the United States- China Income Tax Treaty can potentially be utilized to minimize the income tax consequences associated with a 403(b) plan. - [A Closer Look as to How Nonresidents Can Utilize the U.S.- Korean Income Tax Treaty to Avoid U.S. Taxation Associated With a Domestic Retirement Plan Distributions](https://sftaxcounsel.com/blog/domestic-retirement-plan-distributions/) - This article will examine the U.S.- Korea Tax Treaty and how the treaty can be utilized to eliminate U.S. taxes associated with the distribution of retirement accounts. - [The IRS Form 5472 Reporting Requirements for Foreign Owners of a U.S. Disregarded Entity](https://sftaxcounsel.com/blog/irs-form-5472-reporting-requirements/) - Nonresidents and foreign entities that hold interests in disregarded entities must file a Form 5472 with the IRS. Contact us to discuss. - [The United States-Canada Income Tax and Estate Tax Treaty Revisited](https://sftaxcounsel.com/blog/united-states-canada-income-tax-and-estate-tax-treaty/) - This article discusses the implications of the United States.-Canada Income Tax Treaty. Contact SF Tax Counsel to discuss. - [The U.S. and Canadian Tax Consequences of a Canadian Investor’s Acquisition of U.S. Real Estate](https://sftaxcounsel.com/blog/u-s-and-canadian-tax-consequences/) - The 30 percent withholding tax is based on gross income rental income received and there are no offsets for local real estate taxes paid by a tenant. - [Unraveling the United States- Philippines Income Tax Treaty and a Closer Look at the Treaty’s Provision Regarding the Taxation of U.S. Based Retirement Accounts Such as 401K Plans and IRAs](https://sftaxcounsel.com/blog/united-states-philippines-income-tax-treaty/) - We will review the key provisions of the United States- Philippines Income Tax Treaty and the implications to individuals attempting to make use of the treaty. - [Limited Escape Hatch: Do You Need to File Form 8938 ‘Statement of Specified Foreign Financial Assets’?](https://sftaxcounsel.com/blog/foreign-financial-assets/) - Much has been written about the plethora of Foreign Financial Disclosure Forms and the insanely huge penalties that accompany a failure to file these forms. - [Unraveling the United States- Switzerland Income Tax Treaty and the Treaty’s Impact on the Global Taxation on Cross-Border Pension Plans](https://sftaxcounsel.com/blog/income-tax-treaty-4/) - The United States currently has income tax treaties with approximately 58 countries. This article discusses the United States- Switzerland Income Tax Treaty. - [Unraveling the United States- Spain Income Tax Treaty and the Treaty’s Impact on the Global Taxation on Cross-Border Pension Plans](https://sftaxcounsel.com/blog/united-states-spain-income-tax-treaty/) - The United States currently has income tax treaties with approximately 58 countries. This article discusses the United States- Spain Income Tax Treaty. - [Unraveling the United States- Germany Income Tax Treaty and the Treaty’s Impact on the Global Taxation of Cross-Border Pension Plans](https://sftaxcounsel.com/blog/united-states-germany-income-tax-treaty/) - The United States currently has income tax treaties with approximately 58 countries. This article discusses the United States- Germany Income Tax Treaty. - [Unraveling the United States- Netherlands Income Tax Treaty and the Treaty’s Impact on the Global Taxation of Cross-Border Pension Plans](https://sftaxcounsel.com/blog/united-states-netherlands-income-tax-treaty/) - The United States currently has income tax treaties with approximately 58 countries. This article discusses the United States- Netherlands Income Tax Treaty. - [The U.S. Tax Consequences of Terminating U.S. Residency With PFIC Shares and Potential Planning Options](https://sftaxcounsel.com/blog/u-s-tax-consequences-of-terminating-u-s-residency/) - Under Internal Revenue Code Section 7701(a)(3)(A), an individual is a U.S. person if he or she is either a citizen or a resident of the United States. - [A Guide to the Taxation of Crypto Staking and How Investors Can Calculate Their Basis In Staking Rewards](https://sftaxcounsel.com/blog/taxation-of-crypto-staking/) - This article discusses the current state of the taxation of staking and how investors can calculate their basis in staking rewards. - [What Constitutes a Foreign Branch?](https://sftaxcounsel.com/blog/what-constitutes-a-foreign-branch/) - The foreign branch generally is subject to the income tax laws in the foreign country in which it operates. Contact us to discuss. - [A Win for Taxpayer in Non-Willful FBAR Penalty Case In The Ninth Circuit Court of Appeals](https://sftaxcounsel.com/blog/non-willful-fbar-penalty-case/) - FBAR is filed, no matter the number of foreign accounts (as opposed to $10,000 per FBAR account as argued by the government). - [Crossborder Taxation of Retirement and Pension Plans Under the U.S.- U.K Tax Treaty](https://sftaxcounsel.com/blog/crossborder-taxation-of-retirement-and-pension-plans/) - The United States- United Kingdom Income Tax Treaty can potentially be utilized to minimize the income tax consequences on U.S. and U.K based retirement plans. - [Crossborder Taxation of Cloud Transactions and Digital Downloads](https://sftaxcounsel.com/blog/u-s-taxation-of-the-digital-economy/) - Probably the most important rules governing the taxation of digital transactions are the so-called “software rules.” Contact us to discuss. - [Crossborder Taxation of Retirement and Pension Plans Under the U.S.- India Tax Treaty](https://sftaxcounsel.com/blog/u-s-india-tax-treaty/) - How the United States- India Income Tax Treaty can potentially be utilized to minimize the income tax consequences on U.S. and India based retirement plans. - [Crossborder Taxation of Retirement and Pension Plans Under the U.S.- Canada Income Tax Treaty](https://sftaxcounsel.com/blog/u-s-canada-income-tax-treaty/) - This article will discuss how the United States- Canada Tax Treaty can potentially be utilized to minimize the income tax consequences on U.S. and Canada based retirement plans. - [The Risks U.S. Companies Should Consider before Hiring a Foreign Independent Contractor](https://sftaxcounsel.com/blog/foreign-independent-contractor/) - There are significant risks to hiring foreign independent contractors that should be carefully considered by any U.S. company. - [Don’t Expatriate from the U.S. to Avoid the PFIC or GILTI and Subpart F Regimes- Keep Your U.S. Citizenship and Become a Resident of Puerto Rico Instead](https://sftaxcounsel.com/blog/subpart-f-regimes/) - Additional benefits are available to bona fide residents of Puerto Rico who own shares of corporations organized in Puerto Rico. - [Planning Options to Defer the Recognition of Subpart F or GILTI Income- Section 962 Election vs. High-Tax Exception: The Epic Showdown](https://sftaxcounsel.com/blog/high-tax-exception/) - Prior to the enactment of the 2017 Tax Cuts and Jobs Act, Controlled Foreign Corporations (“CFCs”) were able to defer the U.S. taxation of foreign source income through tax planning. - [The 2022 Guide to Income and Estate Taxation of Cryptocurrency and NFTs or Non-Fungible Tokens](https://sftaxcounsel.com/blog/estate-taxation/) - Cryptocurrency is also unlikely to be a “security,” with the possible exception of security tokens and stablecoin (discussed below). - [The Current State of the IRS OVDP and an Overview of the Pre-Clearance IRS CI Form 14457](https://sftaxcounsel.com/blog/irs-ovdp/) - This article discusses the current state of the IRS offshore voluntary disclosure program. Contact SF Tax to discuss your case. - [Has the IRS Assessed You a Penalty for a Late Filed Form 3520-A? You May Be Eligible For an Abatement of Penalties Assessed or a Refund of Penalties Paid](https://sftaxcounsel.com/blog/abatement-of-penalties/) - The trust must be generally exempt from income tax or is otherwise tax-favored under the laws of the trust’s jurisdiction. - [Can Holding or Blocker Company be Used to Reduce GILTI Tax Liability?](https://sftaxcounsel.com/blog/gilti-tax/) - The GILTI or “global intangible low-taxed income regime under Internal Revenue Code Section 951(a) captures a significant amount earned by a controlled foreign corporation (“CFC”). - [State of California Residency Considerations for Non-resident Corporate Executives that are Physically Present in California Part-Time](https://sftaxcounsel.com/blog/state-of-california-residency-considerations/) - This article will discuss the factors the California taxing authorities consider in determining whether “part-time” resident can be classified as a resident for state income tax purposes. - [The Participation Exemption Rules Available for Domestic Corporations to Avoid GILTI Inclusions and a Discussion Regarding the Anti-Hybrid Limitations to the Participation Exemption Rules](https://sftaxcounsel.com/blog/anti-hybrid-limitations/) - The proposed regulations provide two separate and distinct formulas to reduce the DRD- one for Subpart Income inclusions and the other for GILTI inclusions. - [Been Assessed Penalties by the IRS for Failing to Report a Foreign Pension Plan or Retirement Plan on Forms 3520 or 3520-A? Consider Requesting Relief Under Rev. Proc 2020-17](https://sftaxcounsel.com/blog/been-assessed-penalties-by-the-irs-for-failing-to-report-a-foreign-pension-plan-or-retirement-plan-on-forms-3520-or-3520-a-consider-requesting-relief-under-rev-proc-2020-17/) - By Anthony Diosdi In an increasing global economy, workers are experiencing unprecedented mobility. As a result Americans and foreign nationals that become green card holders often participate in a pension or retirement plan in the foreign country. In most cases, the model resembles the one in the United States: Pretax money is contributed into retirement - [Planning Opportunities Available for Foreign Persons to Eliminate or Significantly Reduce Taxable Real Estate Gains through Shared Appreciation Loans and Income Tax Treaties](https://sftaxcounsel.com/blog/income-tax-treaties/) - This article discusses how nonresidents investing U.S. real estate may utilize shared appreciation loans. Contact us today to discuss. - [Why Should You Have a Lawyer Do Your Tax Prep?](https://sftaxcounsel.com/blog/san-francisco-ca-tax-attorneys/) - Contact us to schedule an appointment to discuss how we can assist with all of your personal or business tax preparation needs. - [Demystifying the New 2021 IRS Form 5471 Schedule E and Schedule E-1 Used for Reporting and Tracking Foreign Tax Credits](https://sftaxcounsel.com/blog/irs-form-5471/) - We will also attempt to provide guidance as to how to prepare this incredibly complicated return. Contact SF Tax Counsel to discuss. - [Demystifying the 2021 IRS Form 5471 Schedule J](https://sftaxcounsel.com/blog/demystifying-the-2021-irs-form-5471-schedule-j/) - This article will take a deep dive into each column and line of 2021 Schedule J of the Form 5471. Contact SF Tax Counsel to discuss. - [How An IC-DISC Can be Used to Defer Tax On Commissions Related to $10 Million of Export Sales Per Year](https://sftaxcounsel.com/blog/how-an-ic-disc-can-be-used-to-defer-tax-on-commissions-related-to-10-million-of-export-sales-per-year/) - An IC-DISC creates the opportunity to tax a portion of export related profits at lower tax rates, and to potentially export related income to future years. - [The Taxation of Cross-Border Currency and Hedging Transactions](https://sftaxcounsel.com/blog/cross-border-currency/) - To implement the premises of the foreign currency rules, it is always necessary to determine an appropriate exchange rate. - [Demystifying the 2021 IRS Form 5471 Schedule Q](https://sftaxcounsel.com/blog/irs-form-5471-2/) - The article is based on the instructions promulgated by the Internal Revenue Service (“IRS”). Call Sf Tax Counsel to discuss. - [A Discussion as to How Foreign Investors Can Use Shared Appreciation Mortgages to Avoid FIRPTA Withholding Associated with the Sale of U.S. Real Estate](https://sftaxcounsel.com/blog/avoid-firpta-withholding/) - A U.S. real property includes interests in any of the following types of property located within the United States or the U.S. Virgin Islands: - [International CorporateTax-Free Mergers and Acquisitions- is there Anywhere to Hide from Section 367?](https://sftaxcounsel.com/blog/tax-free-mergers/) - the taxplanner should seek to ensure that the transaction is structured in a way to minimize or eliminate the initial U.S. tax burden. - [When Foreigners Own U.S. Real Property: Planning for the Estate and Gift Tax Associated with U.S. Property Ownership with an Emphasis on Partnerships](https://sftaxcounsel.com/blog/estate-and-gift-tax/) - The article will discuss estate and gift tax planning opportunities available to foreigners who own real property in the United States. - [One Potential Strategy Foreigner Investors Can Utilize to Transfer U.S. Real Property out of their Estate to Avoid the Estate and Gift Tax](https://sftaxcounsel.com/blog/wealth-tax-planning/) - Potential strategy that may be considered by foreign investors to transfer U.S. property to a corporate or partnership structure for wealth tax planning purposes. - [The Importance of Digital Evidence and Digital Forensics in a Criminal Tax Case](https://sftaxcounsel.com/blog/criminal-tax-case-2/) - The Internal Revenue Service (“IRS”) typically seizes evidence through a search warrant with no forewarning to the persons in possession of the evidence. - [Indirect Methods that the IRS Uses to Establish Criminal Tax Evasion and Potential Defenses](https://sftaxcounsel.com/blog/criminal-tax-evasion/) - The indirect methods of proof used by the IRS in a criminal tax evasion case are not accounting methods. Contact us today to discuss. - [Specific Methods that the IRS may use to Establish Criminal Tax Liability and Potential Defenses to these Methods](https://sftaxcounsel.com/blog/criminal-tax-liability/) - The specific item method of proving an underpayment of tax is a direct method of proving one or more tax laws were violated. - [Some Common Defenses in Criminal Tax Cases](https://sftaxcounsel.com/blog/irs-tax-defense/) - The IRS has the burden of proof on this question. The IRS must tie the understatement of taxes to the defendant, demonstrating both his knowledge and intent. - [Why Disclose Your Foreign Assets to the IRS in 2022?](https://sftaxcounsel.com/blog/why-disclose-your-foreign-assets-to-the-irs-in-2022/) - By Lynn K. Ching Perhaps you had a foreign bank account or securities account from prior years of your youth, or maybe you inherited income-producing rental property located in a foreign country, or was the beneficiary of a gift from a foreign person - to name a few. If so, you may have an obligation to disclose - [Cross-Border Debt Planning with the Portfolio Debt Rules With an Emphasis on Complying with the Bond Registration Rules](https://sftaxcounsel.com/blog/debt-planning/) - By way of background, in 1984, Congress effectively eliminated the 30-percent tax on interest from “portfolio debt investments.” - [Civil Asset Forfeiture What To Do If Your Assets Have Been Seized by the U.S. Government](https://sftaxcounsel.com/blog/civil-asset-forfeiture-what-to-do-if-your-assets-have-been-seized-by-the-u-s-government/) - By Lynn K. Ching If your assets have been seized by the U.S. Government you must file a timely claim to contest the asset seizure in the United States District Court. A timely filed claim stops the administrative forfeiture proceeding, and the seizing agency forwards the timely claim to the U.S. Attorney’s Office for further proceedings Failure - [Can Chinese Investors in U.S. Real Estate Skirt the $50,000 Transfer Limit by Using Cryptocurrency Trading Agreements?](https://sftaxcounsel.com/blog/cryptocurrency-trading-agreements/) - A number of U.S. businesses offer cryptocurrency trading agreements as a way to get around China's $50,000 transfer limit. - [Stock Acquisitions Treated as Asset Acquisitions under Section 338](https://sftaxcounsel.com/blog/section-338/) - Internal Revenue Code Section 338 applies to stock purchases of control sufficient to meet an 80 percent ownership test required for consolidated reporting purposes. - [A Deep Dive Into the United States-United Kingdom Income, Gift, and Estate Tax Treaties](https://sftaxcounsel.com/blog/a-deep-dive-into-the-united-states-united-kingdom-income-gift-and-estate-tax-treaties/) - The U.S. currently has income tax treaties with approximately 58 countries. This article discusses the implications of the United States -United Kingdom Income Tax Treaty. - [Unraveling the Controversial United States- Hungary Income Tax Treaty](https://sftaxcounsel.com/blog/unraveling-the-controversial-united-states-hungary-income-tax-treaty/) - The United States currently has income tax treaties with approximately 58 countries. This article discusses the highly controversial United States- Hungary Income Tax Treaty. - [Unraveling the United States- India Income Tax Treaty](https://sftaxcounsel.com/blog/unraveling-the-united-states-india-income-tax-treaty/) - The U.S. currently has income tax treaties with approximately 58 countries. This article discusses the implications of the United States- India Income Tax Treaty. - [Business Impact of the United States- France Income Tax Treaty](https://sftaxcounsel.com/blog/income-tax-treaty/) - The U.S. currently has income tax treaties with approximately 58 countries. This article discusses the implications of the United States- France Income Tax Treaty. - [Unraveling the United States- Mexico Income Tax Treaty](https://sftaxcounsel.com/blog/unraveling-the-united-states-mexico-income-tax-treaty/) - The U.S. currently has income tax treaties with approximately 58 countries. This article discusses the implications of the United States- Mexico Income Tax Treaty. - [Unraveling the United States- Ireland Income Tax Treaty](https://sftaxcounsel.com/blog/unraveling-the-united-states-ireland-income-tax-treaty/) - By Anthony Diosdi The major purpose of an income tax treaty is to mitigate international double taxation through tax reduction or exemptions on certain types of income derived by residents of one treaty country from sources within the other treaty country. Because tax treaties often substantially modify U.S. and foreign tax consequences, the relevant treaty - [Unraveling the United States- Italy Income Tax Treaty and a Closer Look as to How the Treaty Views Fiscally Transparent Entities Such as “Hybrid” and “Reverse Hybrid” Entities](https://sftaxcounsel.com/blog/income-tax-treaty-3/) - This article discusses the implications of the United States- Italy Income Tax Treaty. Contact SF Tax Counsel to discuss. - [Unraveling the United States- Israel Income Tax Treaty](https://sftaxcounsel.com/blog/israel-income-tax-treaty/) - This article discusses the implications of the United States- Israel Income Tax Treaty. Contact SF Tax Counsel to discuss. - [Unraveling the United States- Australia Income Tax Treaty and How Australian Nationals with Superannuation Funds, 401(k) Plans, IRAs, and 403(a) Plans can Benefit From the Treaty](https://sftaxcounsel.com/blog/australia-income-tax-treaty/) - This article discusses the implications of the United States- Australia Income Tax Treaty. Contact SF Tax Counsel to discuss. - [A Deep Dive into the 2021 IRS Form 5471 Schedule J](https://sftaxcounsel.com/blog/a-deep-dive-into-the-2021-irs-form-5471-schedule-j/) - Schedule J of Form 5471 tracks the earnings and profits (“E&P”) of a controlled foreign corporation (“CFC”) in its functional currency - [The Immigration Consequences Counsel Should Understand When Representing a Noncitizen Who is Criminally Prosecuted for Failing to Disclose Foreign Income or Foreign Bank Accounts](https://sftaxcounsel.com/blog/foreign-income/) - This article goes on to discuss the immigration traps counsel should understand in order to competently represent his or her client. - [Defense Considerations in an IRS Criminal Tax Investigation- Cooperation Versus Non Cooperation](https://sftaxcounsel.com/blog/irs-criminal-tax-investigation/) - This article will discuss the advantages and disadvantages of cooperating with the IRS in a criminal tax investigation. - [The Fourth Amendment Protection Against Unreasonable Search and Seizure in an IRS Criminal Tax Evasion or CriminalTax Fraud Case](https://sftaxcounsel.com/blog/unreasonable-search-and-seizure/) - If the books and records of a corporation are subject to unlawful search and seizure, the corporation and the shareholders may have the evidence suppressed. - [The Fifth Amendment Right to Remain Silent in an IRS Criminal Tax Evasion or Criminal Tax Fraud Case](https://sftaxcounsel.com/blog/fifth-amendment-right/) - The right is a complete one, subject only to a grant of immunity, and the fact that the right was evoked cannot be used as evidence against the taxpayer. - [Tracking Form 5471 Section 959 PTEPs on Schedule J for the Modern Day CFC](https://sftaxcounsel.com/blog/tracking-form-5471-section-959-pteps-on-schedule-j-for-the-modern-day-cfc/) - The IRS’s Proposed Regulations Governing Section 959 Basketing and Ordering Rules for PTEP Distributions. Contact SF Tax Counsel to discuss. - [Are Holiday Gifts from Employers Taxable?](https://sftaxcounsel.com/blog/san-francisco-california-tax-attorney/) - Discuss any tax concerns with the San Francisco tax lawyers of SF Tax Counsel. We advise clients on a wide range of complex tax issues. - [International Treaty Law that Permits Non-Residents to Withdraw Funds from their IRAs or 401(k) Funds and Avoid Any and All U.S. Tax Consequences](https://sftaxcounsel.com/blog/international-treaty-law/) - Under the U.S.-Constitution, the U.S. Executive Branch has the exclusive province to negotiate all treaties as part of its authority to conduct U.S. foreign relations - [Cross-Border Reorganizations, Mergers and Acquisitions and the Application of Internal Revenue Code Section 367](https://sftaxcounsel.com/blog/cross-border-reorganizations-mergers-and-acquisitions-and-the-application-of-internal-revenue-code-section-367/) - This taxable gain will be realized by the transferor unless one of the tax-free exchange provisions of the Internal Revenue Code applies. - [Will a Voluntary Disclosure of Unreported Income to the IRS Really Protect You From Criminal Prosecution?](https://sftaxcounsel.com/blog/voluntary-disclosure/) - Unfortunately, as will be discussed below in detail, a voluntary disclosure is far from a “sure thing.” Contact SF Tax Counsel to discuss. - [The Tax-Free Withdrawal of U.S. Based Retirement Funds by Non-U.S. Citizens through Income Tax Treaties](https://sftaxcounsel.com/blog/tax-free-withdrawal-of-us-based-retirement-funds/) - We will discuss how tax treaties can potentially be utilized by non-U.S. citizens to avoid the US.tax on the distribution from a US based retirement account - [Thinking About a Cross Border Tax-Free Reorganization or Merger? Better Consider Section 367](https://sftaxcounsel.com/blog/thinking-about-a-cross-border-tax-free-reorganization-or-merger-better-consider-section-367/) - This taxable gain will be realized by the transferor unless one of the tax-free exchange provisions of the Internal Revenue Code applies. - [Demystifying International Forward and Reverse Tax-Free Mergers](https://sftaxcounsel.com/blog/demystifying-international-forward-and-reverse-tax-free-mergers/) - Before examining the tax consequences of a reverse triangular merger, the transaction itself must be explained. Contact us to discuss. - [The Corporate Anti-Inversion Rules- Don’t Leave Home Without Understanding Them](https://sftaxcounsel.com/blog/the-corporate-anti-inversion-rules-dont-leave-home-without-understanding-them/) - This article will discuss the different types of inversions that can be used by corporations and other business entities along with the tax consequences. - [A Dive into the IRS Form 5471 Schedule F](https://sftaxcounsel.com/blog/a-dive-into-the-irs-form-5471-schedule-f/) - There are five categories of U.S.persons that are required to complete a Form 5471 for each tax year. Contact us today to discuss. - [Foreigners Holding U.S. Real Estate Multi-Tiered Corporations- An Accidental Inversion Just Waiting to Happen](https://sftaxcounsel.com/blog/foreigners-holding-u-s-real-estate-multi-tiered-corporations-an-accidental-inversion-just-waiting-to-happen/) - The purpose of these multi-tiered structures was to avoid the U.S. estate and gift tax. Contact SF Tax Counsel to discuss. - [The New CFC Attribution Rules and How These Rules Can Cause Domestic Investors to be Classified as “SFC” Shareholders](https://sftaxcounsel.com/blog/the-new-cfc-attribution-rules-and-how-these-rules-can-cause-domestic-investors-to-be-classified-as-sfc-shareholders/) - This article was designed to provide the reader with an introduction to new attribution rules. These rules can become extremely complicated. - [What Foreign Investors Should Know About the Branch Profits Tax and Withholdings Before Investing in the United States](https://sftaxcounsel.com/blog/what-foreign-investors-should-know-about-the-branch-profits-tax-and-withholdings-before-investing-in-the-united-states/) - By Anthony Diosdi The United States taxes foreign corporations and nonresident individuals on the net amount of income effectively connected with the conduct of a trade or business within the United States. Therefore, under the Internal Revenue Code, the existence of a trade or business is the touchstone of U.S. taxation of a foreign business - [A Dive into the New Form 5471 Categories of Filers and the Schedule R](https://sftaxcounsel.com/blog/a-dive-into-the-new-form-5471-categories-of-filers-and-the-schedule-r/) - Form 5471 and appropriate accompanying schedules must be completed and filed by certain categories of persons. Contact us to discuss. - [A Closer Look at the Process of Reducing a FIRPTA Withholding](https://sftaxcounsel.com/blog/a-closer-look-at-the-process-of-reducing-a-firpta-withholding/) - This article discusses the withholding requirements of the Foreign Investment in Real Property Tax Act of 1980 and how the FIRPTA withholdings may be reduced or eliminated. - [The Taxation of Dispositions of Partnership Interests by Foreign Persons](https://sftaxcounsel.com/blog/the-taxation-of-dispositions-of-partnership-interests-by-foreign-persons/) - This article discusses the U.S. tax and withholding requirements associated with the sale of a foreign partner’s U.S. partnership interest. - [When Foreigners Own U.S. Real Property: Planning for the Estate and Gift Tax Associated with U.S. Property Ownership](https://sftaxcounsel.com/blog/when-foreigners-own-u-s-real-property-planning-for-the-estate-and-gift-tax-associated-with-u-s-property-ownership/) - The article will discuss estate and gift tax planning opportunities available to foreigners who own real property in the United States. - [Criminal and Civil Forfeitures Involving Cryptocurrency: An Introduction to Federal Forfeiture Processes](https://sftaxcounsel.com/blog/criminal-and-civil-forfeitures-involving-cryptocurrency-an-introduction-to-federal-forfeiture-processes/) - Consequently, this article uses the terms “cryptocurrency” and “property” interchangeably. - [Calculating the Foreign Tax Credit- Don’t Put All Your Eggs in One Basket](https://sftaxcounsel.com/blog/calculating-the-foreign-tax-credit-dont-put-all-your-eggs-in-one-basket/) - This article discusses calculating foreign tax credits in a post 2017 Tax Cuts and Jobs world. Contact SF Tax Cousel to discuss. - [Bringing the 3520 Penalty Fight to the IRS- Contesting a 3520 Penalty in Tax Court](https://sftaxcounsel.com/blog/bringing-the-3520-penalty-fight-to-the-irs-contesting-a-3520-penalty-in-tax-court/) - A foreign gift, bequest, or inheritance that exceeds $100,000 must also be disclosed on a Form 3520. Contact us today to discuss. - [Four Lines of Defense to a Form 5471 Penalty](https://sftaxcounsel.com/blog/four-lines-of-defense-to-a-form-5471-penalty/) - Now since we have discussed the most common defenses to the 5471 penalty, we will now discuss litigating a Form 5471 penalty. - [Four Lines of Defense to a Form 5472 Penalty](https://sftaxcounsel.com/blog/four-lines-of-defense-to-a-form-5472-penalty/) - If such failure continues for more than 90 days after notification by the IRS, there is an additional penalty of $25,000 for each 30-day period or fraction, with no maximum penalty. - [Unraveling the United States- People’s Republic of China Income Tax Treaty](https://sftaxcounsel.com/blog/unraveling-the-united-states-peoples-republic-of-china-income-tax-treaty/) - This article discusses the implications of the United States.-People’s Republic of China Income Tax Treaty. Call us to discuss. - [Unraveling the United States- Republic of Korea Income Tax Treaty](https://sftaxcounsel.com/blog/unraveling-the-united-states-republic-of-korea-income-tax-treaty/) - By Anthony Diosdi The major purpose of an income tax treaty is to mitigate international double taxation through tax reduction or exemptions on certain types of income derived by residents of one treaty country from sources within the other treaty country. Because tax treaties often substantially modify U.S. and foreign tax consequences, the relevant treaty - [Unraveling the United States-Canada Income Tax Treaty](https://sftaxcounsel.com/blog/unraveling-the-united-states-canada-income-tax-treaty/) - The U.S. currently has income tax treaties with approximately 58 countries. This article discusses the implications of the United States.-Canada Income Tax Treaty. - [The Cross-Border Tax Implications of Canadians Holding U.S. Real Property](https://sftaxcounsel.com/blog/the-cross-border-tax-implications-of-canadians-holding-u-s-real-property/) - The article attempts to summarize the Canadian and U.S. tax consequences surrounding a Canadian’s acquisition of different U.S. real property interests. - [Facing a 965 Transition Tax Audit? Maybe a 962 Election Can Save the Day](https://sftaxcounsel.com/blog/facing-a-965-transition-tax-audit-maybe-a-962-election-can-save-the-day/) - It has also been our experience that a significant number of CFC shareholders facing a transition tax audit could greatly benefit by making a late 962 election. - [Many Fortune 500 Companies Use Foreign Subsidiaries to Avoid Paying U.S. Tax- Here is One Way Your Foreign Corporation Can Avoid Paying U.S. Income Tax](https://sftaxcounsel.com/blog/many-fortune-500-companies-use-foreign-subsidiaries-to-avoid-paying-u-s-tax-here-is-one-way-your-foreign-corporation-can-avoid-paying-u-s-income-tax/) - By Anthony Diosdi The Internal Revenue Code provides that a U.S. shareholder of a controlled foreign corporation (“CFC”) is subject to tax on the CFC’s subpart F or global intangible low-taxed income, called “GILTI.” For many years, U.S. multinational corporations and other CFCs were able to utilize a high-tax election to defer the recognition of - [Cross-Border Debt Planning with the Portfolio Interest Exemption Rules](https://sftaxcounsel.com/blog/cross-border-debt-planning-with-the-portfolio-interest-exemption-rules/) - Fforeign investors may consider utilizing a “portfolio debt instrument” and portfolio debt to reduce or eliminate the 30 percent withholding tax. - [Navigating the Rules for Gain Recognized on a Shareholder’s Disposition of CFC Stock with Untaxed Accumulated E&P](https://sftaxcounsel.com/blog/navigating-the-rules-for-gain-recognized-on-a-shareholders-disposition-of-cfc-stock-with-untaxed-accumulated-ep/) - As a result of the Section 965 “transition tax,” few controlled foreign corporations (“CFCs”) have untaxed offshore earnings and profits (“E&P”). - [A Deep Dive Into Form 5471 Schedule H “Calculating the E&P of a Controlled Foreign Corporation”](https://sftaxcounsel.com/blog/a-deep-dive-into-form-5471-schedule-h-calculating-the-ep-of-a-controlled-foreign-corporation/) - This article is designed to supplement the IRS instructions to the Form 5471. Contact SF Tax Counsel to discuss from 5471. - [A Deep Dive into the IRS Form 5471 Schedule J](https://sftaxcounsel.com/blog/a-deep-dive-into-the-irs-form-5471-schedule-j/) - By Anthony Diosdi Schedule J of Form 5471 tracks the earnings and profits (“E&P”) of a controlled foreign corporation (“CFC”). In most cases, special ordering rules under Section 959 of the Internal Revenue Code apply in determining how E&P is reported on Schedule J. Shortly after the Tax Cuts and Jobs Act was enacted in - [A Deep Dive Into IRS Form 5471 Schedule P](https://sftaxcounsel.com/blog/a-deep-dive-into-irs-form-5471-schedule-p/) - This article will dive into each column and line of the new 2020 Form 5471 Schedule P. Contact SF Tax Counsel today to discuss. - [When Can the Administrative Record in an IRS WhistleBlower Case Be Supplemented?](https://sftaxcounsel.com/blog/when-can-the-administrative-record-in-an-irs-whistleblower-case-be-supplemented/) - The IRS Whistleblower Awards Program pays money to people who blow the whistle on persons who fail to pay taxes they owe. - [There May Be 50 Ways To Leave Your Lover But You May Only Utilize A CDP Challenge to Contest a Form 3520 Penalty Without Prepayment](https://sftaxcounsel.com/blog/there-may-be-50-ways-to-leave-your-lover-but-you-may-only-utilize-a-cdp-challenge-to-contest-a-form-3520-penalty-without-prepayment/) - The IRS may assess an annual penalty equal to 35 percent of the gross value of the trust or 35 percent of the gross value of the property transferred from the trust if a Form 3520 is not timely filed. - [A Deep Dive Into the IRS Form 3520-A](https://sftaxcounsel.com/blog/a-deep-dive-into-the-irs-form-3520-a/) - The penalty for failure to file IRS Form 3520-A will be imposed directly on the U.S. owner of the foreign trust. Contact us to discuss. - [A Deep Dive Into the IRS Form 3520](https://sftaxcounsel.com/blog/a-deep-dive-into-the-irs-form-3520/) - Lately, the IRS has been handing out penalties for not timely and incorrectly filing Form 3520s like its candy. Contact our office to discuss. - [Can a Intentionally Defective Grantor Trust Coupled with a Self-Canceling Installment Note ‘Magically’ Remove High Value Assets From an Estate?](https://sftaxcounsel.com/blog/can-a-intentionally-defective-grantor-trust-coupled-with-a-self-canceling-installment-note-magically-remove-high-value-assets-from-an-estate/) - By Anthony Diosdi An intentionally defective grantor trust (“IDGT”) is a trust that is treated as owned by the grantor for income tax purposes, but not for gift or estate tax purposes. The benefit of an IDGT is that the value of the trust, and any growth thereon, are excluded from the grantor’s estate. At - [An Unusual LOB Provision Contained in the U.S.-Cyprus Tax Treaty May Allow a Resident of a Non-Treaty Country to Obtain the Benefits of the U.S.- Cyprus Tax Treaty](https://sftaxcounsel.com/blog/an-unusual-lob-provision-contained-in-the-u-s-cyprus-tax-treaty-may-allow-a-resident-of-a-non-treaty-country-to-obtain-the-benefits-of-the-u-s-cyprus-tax-treaty/) - As typically the case in international tax planning, there are always exceptions to the general rule. One such exception to this general rule is the U.S.-Cyprus tax treaty. - [TAXPAYER PREVAILS IN FBAR CASE NON-WILLFUL FBAR PENALTY COMPUTED PER YEAR - NOT PER ACCOUNT](https://sftaxcounsel.com/blog/taxpayer-prevails-in-fbar-case-non-willful-fbar-penalty-computed-per-year-not-per-account/) - By: Lynn K. Ching A taxpayer-friendly opinion recently issued from the Ninth Circuit Court of Appeals regarding a non-willful failure to file an FBAR. FBAR Violations Recap: Under Section 5314(a), “the Secretary of the Treasury shall require [U.S. citizens and others] … to keep records, file reports, or keep records and file reports, when the - [Can a Foreign Investor Utilize a “Triangular” Tax Treaty Position to Reduce or Eliminate FDAP and FIRPTA Withholdings?](https://sftaxcounsel.com/blog/can-a-foreign-investor-utilize-a-triangular-tax-treaty-position-to-reduce-or-eliminate-fdap-and-firpta-withholdings/) - Foreign investors are subject to a different set of rules for income that is not effectively connected with a trade or business in the U.S. - [Two Potential Strategies to Avoid the Section 367 “Toll Charge” on the Outbound Transfer of Intellectual Property](https://sftaxcounsel.com/blog/two-potential-strategies-to-avoid-the-section-367-toll-charge-on-the-outbound-transfer-of-intellectual-property/) - In response to changing business conditions, U.S. corporations routinely organize new subsidiaries and divide, merge, and liquidate existing subsidiaries. - [International Tax-Free Exchanges and the Deemed Royalty Regime for Intellectual Property](https://sftaxcounsel.com/blog/international-tax-free-exchanges-and-the-deemed-royalty-regime-for-intellectual-property/) - A major exception to the active foreign business use exception is the branch loss recapture rule. Contact us to discuss your case. - [Taking the 3520 Penalty Fight to the IRS by Attacking the Penalty on Technical Grounds](https://sftaxcounsel.com/blog/taking-the-3520-penalty-fight-to-the-irs-by-attacking-the-penalty-on-technical-grounds/) - A foreign gift, bequest, or inheritance that exceeds $100,000 must also be disclosed on a Form 3520. Contact us to discuss. - [Demystifying International Tax-Free Reorganization, Divisions, and Mergers and Acquisitions](https://sftaxcounsel.com/blog/demystifying-international-tax-free-reorganization-divisions-and-mergers-and-acquisitions/) - Equally important in the context of international reorganizations and merger transactions is Internal Revenue Code Section 367. - [The New Tax Laws Governing Foreign Persons or Entities Sale of U.S. Partnership Interests](https://sftaxcounsel.com/blog/the-new-tax-laws-governing-foreign-persons-or-entities-sale-of-u-s-partnership-interests/) - mong one of many changes the Tax Cuts and Jobs Act made to tax law relates to the handling of the sale of partnership interests by foreign persons. - [Does Section 4975 Permit an IRA Account Holder to Establish an IRA Grantor Trust Investment Vehicle and Act as the Trustee of the IRA Grantor Trust?](https://sftaxcounsel.com/blog/does-section-4975-permit-an-ira-account-holder-to-establish-an-ira-grantor-trust-investment-vehicle-and-act-as-the-trustee-of-the-ira-grantor-trust/) - Many Individual Retirement Account (“IRA”) beneficiaries would like more control over the investments of their IRAs. - [Attention All Home Buyers](https://sftaxcounsel.com/blog/attention-all-home-buyers/) - The code governing FIRPTA exemptions is complicated and it is generally advised that FIRPTA-affected deals should involve competent tax professionals who are experienced in FIRPTA. - [Tax Deadline Approaching for 2021](https://sftaxcounsel.com/blog/tax-deadline-approaching-for-2021/) - At SF Tax Counsel, we provide assistance with complex tax matters for all types of clients, including individuals and corporations. - [FORM 3520 / 3520A NOT REQUIRED FOR CERTAIN TAX FAVORED FOREIGN TRUSTS](https://sftaxcounsel.com/blog/form-3520-3520a-not-required-for-certain-tax-favored-foreign-trusts/) - Must be established under the laws of a foreign jurisdiction to operate exclusively or almost exclusively to provide, or to earn income for the provision of, pension or retirement benefits. - [How to Determine a U.S. Shareholder’s Pro Rata Share of GILTI if a Foreign Corporation is a CFC for Part of Its Tax Year](https://sftaxcounsel.com/blog/how-to-determine-a-u-s-shareholders-pro-rata-share-of-gilti-if-a-foreign-corporation-is-a-cfc-for-part-of-its-tax-year/) - This means, that for classification purposes, a U.S. person is constructively treated as owning stock in a foreign corporation that is owned by certain entities or individuals that are related to the U.S. person. - [An Overview of the New Anti-Hybrid Rules and Anti-Conduit Rules Governing Transactions Subject to International Taxation and Some Planning Ideas](https://sftaxcounsel.com/blog/an-overview-of-the-new-anti-hybrid-rules-and-anti-conduit-rules-governing-transactions-subject-to-international-taxation-and-some-planning-ideas/) - By Anthony Diosdi The Tax Cuts and Jobs Act introduced two new Internal Revenue Code provisions targeting “hybrid arrangements.” The new Internal Revenue Code provisions include Section 245A(e), which denies a dividend received deduction under Section 245A with respect to hybrid dividends, and Section 267A, which denies certain interest or royalty deductions from hybrid transactions - [A Closer Look at International Tax Arbitrage and the Dual Consolidated Loss Rules](https://sftaxcounsel.com/blog/a-closer-look-at-international-tax-arbitrage-and-the-dual-consolidated-loss-rules/) - a number of international tax arbitrage issues remain that the DCL proposed regulations did not address. Contact our office to discuss. - [Can a “Leveraged Lease” Avoid the New Anti-Conduit Provisions of the Code?](https://sftaxcounsel.com/blog/can-a-leveraged-lease-avoid-the-new-anti-conduit-provisions-of-the-code/) - The discussion below first presents a brief overview of the 30 percent withholding tax as well as the “anti-conduit” rules, then describes if a properly structured “leveraged lease” is entitled to an exemption U.S. withholding tax. - [Reducing U.S. Taxes While Living Abroad](https://sftaxcounsel.com/blog/reducing-u-s-taxes-while-living-abroad/) - If you are temporarily away from your US tax home, you do not qualify for the Foreign Income Exclusion and/or the Foreign Housing Exclusion. - [The Roller-Coaster Ride is Over: IRS Loses Battle to Render PPP Business Deductions Non-Deductible](https://sftaxcounsel.com/blog/the-roller-coaster-ride-is-over-irs-loses-battle-to-render-ppp-business-deductions-non-deductible/) - By: Lynn K. Ching Many small businesses received a loan in 2020 under the (CARES Act) SBA Paycheck Protection Program (“PPP”). Under the CARES Act, the PPP loan proceeds are eligible for forgiveness, if used to pay (1) payroll costs, (2) certain employee benefits relating to healthcare, (3) interest on mortgage obligations, (4) rent, (5) - [The Conduit Regulations and Multinational Financing Transactions Between Cross-Border Subsidiaries](https://sftaxcounsel.com/blog/the-conduit-regulations-and-multinational-financing-transactions-between-cross-border-subsidiaries/) - This article is designed to provide an introduction to the conduit finance rules which govern the transfer of funds among subsidiaries in different countries. - [Major Estate and Gift Tax Increase Proposed in the Senate](https://sftaxcounsel.com/blog/major-estate-and-gift-tax-increase-proposed-in-the-senate/) - If the bill is enacted, it dramatically changes the current estate and gift tax system. Below, are the most significant provisions of the 99.5% Act: - [Can a “Leveraged Lease or License” Avoid the New Anti-Conduit Regulations Revisited with a Touch of Hungarian Spice](https://sftaxcounsel.com/blog/can-a-leveraged-lease-or-license-avoid-the-new-anti-conduit-regulations-revisited-with-a-touch-of-hungarian-spice/) - Internal Revenue Code Sections 871(a) (for nonresident aliens) and Section 881(a) (for foreign corporations) impose the 30-percent tax on FDAP. - [What is a Fungible Token (NFT) and How is a NFT Taxed?](https://sftaxcounsel.com/blog/what-is-a-fungible-token-nft-and-how-is-a-nft-taxed/) - The popularity of Non Fungible Tokens (“NFTs) has spiked in the past couple of months. Call SF Tax Counsel to discuss your case. - [A Line-by-Line Review of the IRS Form 5471 Schedule M](https://sftaxcounsel.com/blog/a-line-by-line-review-of-the-irs-form-5471-schedule-m/) - This article is designed to provide a basic overview of the Internal Revenue Service (“IRS”) Form 5471, Schedule M. Contact to discuss. - [Attention All Home Buyers Part II: FIRPTA and the Statute of Limitations](https://sftaxcounsel.com/blog/attention-all-home-buyers-part-ii-firpta-and-the-statute-of-limitations/) - In our previous article, we introduced Foreign Investment in Real Property Tax Act of 1980 (hereinafter “FIRPTA”); Contact us today. - [Fighting IRS Form 3520 Penalties- Your Best Defense is Your Offense](https://sftaxcounsel.com/blog/fighting-irs-form-3520-penalties-your-best-defense-is-your-offense/) - The IRS may also assess a penalty under Internal Revenue Code Section 6039F equal to 25 percent of a foreign gift if it is not timely disclosed on a Form 3520. - [The U.S. Tax Effects of Entities Used by Foreign Investors](https://sftaxcounsel.com/blog/the-u-s-tax-effects-of-entities-used-by-foreign-investors/) - By Anthony Diosdi Introduction Foreign investors typically have the same objectives of minimizing their income tax liabilities from their real estate and businesses located in the U.S. as do their domestic counterparts. However, foreign investors are subject to an even more complicated set of tax laws than their domestic counterparts. Foreign investors must understand the - [How a Non-Resident Can Use a Tax Treaty to Eliminate the U.S. Tax Consequence of Withdrawing Money from an IRA or 401(k) Plan](https://sftaxcounsel.com/blog/how-a-non-resident-can-use-a-tax-treaty-to-eliminate-the-u-s-tax-consequence-of-withdrawing-money-from-an-ira-or-401k-plan/) - U.S. courts are legally bound to mandatorily refer to OECD commentary, which is published every four years, to interpret terms in that income tax treaty. - [Claiming a Tax Treaty Benefit in a Foreign Country or Want to avoid Paying VAT? Make Sure You Obtain a Form 6166](https://sftaxcounsel.com/blog/claiming-a-tax-treaty-benefit-in-a-foreign-country-or-want-to-avoid-paying-vat-make-sure-you-obtain-a-form-6166/) - Diosdi Ching & Liu, LLP assists individuals and businesses with tax treaty planning. Anthony Diosdi may be reached at (415) 318-3990. - [Adding Shares of a DISC to a Roth IRA in Excess of the Statutory Limits- Clever or Unseemly?](https://sftaxcounsel.com/blog/adding-shares-of-a-disc-to-a-roth-ira-in-excess-of-the-statutory-limits-clever-or-unseemly/) - Congress designed domestic international sales corporations (“DISC”) to incentivize companies to export their goods by deferring and lowering their taxes on export income. - [A Quick Look at the PTEP Basis Adjustment Rules For CFC Stocks](https://sftaxcounsel.com/blog/a-quick-look-at-the-ptep-basis-adjustment-rules-for-cfc-stocks/) - Virtually all controlled foreign corporations (“CFCs”) generate earnings and profits that become previously taxed earnings and profits (“PTEP”). - [What Happens When You Marry a Nonresident Alien for U.S. Tax Purposes?](https://sftaxcounsel.com/blog/what-happens-when-you-marry-a-nonresident-alien-for-u-s-tax-purposes/) - If an American marries a spouse that has not been awarded a green card or if the spouse is a nonresident alien for U.S. tax purposes, the American taxpayer has two options. - [Can “Knowhow” Constitute Property in Exchange for Stock of a Foreign Corporation Under a Section 351 Tax-Free Exchange?](https://sftaxcounsel.com/blog/can-knowhow-constitute-property-in-exchange-for-stock-of-a-foreign-corporation-under-a-section-351-tax-free-exchange/) - On such a transfer, any gain realized will be recognized and taxed unless Internal Revenue Code Section 351 operates to prevent its recognition. - [Cross-Border Taxation of the Digital Economy](https://sftaxcounsel.com/blog/cross-border-taxation-of-the-digital-economy/) - The Department of Treasury and the IRS promulgated regulations to provide guidance with respect to computer program transactions. - [Things to Know About the 2021 Tax Season](https://sftaxcounsel.com/blog/things-to-know-about-the-2021-tax-season/) - If you need legal assistance, consult with a San Francisco tax attorney at SF Tax Counsel. Contact us online or call 415.318.3990 today. - [A Deep Dive Into U.S. Estate and Gift Tax Treaties](https://sftaxcounsel.com/blog/a-deep-dive-into-u-s-estate-and-gift-tax-treaties/) - The United States imposes estate and gift taxes on certain transfers of U.S. situs property by “nonresident citizens of the United States.” - [The GILTI High-Tax Election for Multinational Corporations- Be Careful What You Wish For](https://sftaxcounsel.com/blog/the-gilti-high-tax-election-for-multinational-corporations-be-careful-what-you-wish-for/) - The GILTI high-tax election will permit US multinationals to defer current GILTI inclusions. Call SF Tax Counsel today to discuss. - [Common Mistakes CFC Shareholders or Their Advisors Make When Computing Tested Income and Tested Loss for the GILTI Taxing Regime](https://sftaxcounsel.com/blog/common-mistakes-cfc-shareholders-or-their-advisors-make-when-computing-tested-income-and-tested-loss-for-the-gilti-taxing-regime/) - This is determined by computing a shareholder’s “net CFC tested income” for the taxable year over that shareholder’s pro rata share of the “tested loss” for each CFC. See IRC Section 951A(c). - [A Brief Introduction to the Brand New Schedule Q and Schedule R for IRS Form 5471](https://sftaxcounsel.com/blog/a-brief-introduction-to-the-brand-new-schedule-q-and-schedule-r-for-irs-form-5471/) - The new Schedule Q and Schedule R will make an already difficult Form 5471 more complicated and time consuming. Contact us to discuss. - [Demystifying IRS Form 1116- Calculating Foreign Tax Credits](https://sftaxcounsel.com/blog/demystifying-irs-form-1116-calculating-foreign-tax-credits/) - The taxpayer must check the applicable box on the Form 1116 for the foreign source income being disclosed. Contact us today. - [With Mega Million, Power Jackpots Swelling to $1.6B Combined, the Valuation of Large Lottery Payouts Remains an Open Question for Purposes of the Estate Tax](https://sftaxcounsel.com/blog/with-mega-million-power-jackpots-swelling-to-1-6b-combined-the-valuation-of-large-lottery-payouts-remains-an-open-question-for-purposes-of-the-estate-tax/) - Not only will the estate have to pay the federal estate tax based upon the fair market value of the right to receive the stream of lottery payments - [A Deep Dive Into the GILTI Taxing Regime and CFC GILTI Tax Planning](https://sftaxcounsel.com/blog/a-deep-dive-into-the-gilti-taxing-regime-and-cfc-gilti-tax-planning/) - By Anthony Diosdi The 2017 Tax Cuts and Jobs Act (“TCJA”) enacted a new category of foreign source taxable income known as global intangible low-taxed income (“GILTI”). Similar to subpart F income, GILTI is an anti-deferral regime applicable to U.S. shareholders of controlled foreign corporations (“CFCs”). GILTI is the excess of a U.S. shareholder’s net - [An Overview of the Rules Governing the Calculation of Foreign Tax Credits](https://sftaxcounsel.com/blog/an-overview-of-the-rules-governing-the-calculation-of-foreign-tax-credits/) - In order to mitigate the consequence of worldwide taxation, the foreign tax credit rules were developed to prevent U.S. taxpayers from being double taxed. - [Mistakes on Your Taxes Can be Costly](https://sftaxcounsel.com/blog/mistakes-on-your-taxes-can-be-costly/) - Contact us online or call 415.318.3990 to discuss your situation and learn about the services of our San Francisco tax attorneys. - [A First Impression of the Expatriation “Inheritance Tax”](https://sftaxcounsel.com/blog/a-first-impression-of-the-expatriation-inheritance-tax/) - The inheritance tax is also imposed on “covered bequests.” A “covered bequest” is the conveying of assets through the provisions of a will or an estate plan from a “covered expatriate.” - [How a Treaty-Tie Breaker Provision May Save Departing Long-Term Green Card Holders from the Expatriation Tax](https://sftaxcounsel.com/blog/how-a-treaty-tie-breaker-provision-may-save-departing-long-term-green-card-holders-from-the-expatriation-tax/) - To the surprise of many, the relinquishment of a green card can trigger a very expensive expatriation tax. Contact us to discuss. - [The Unintended Collateral Consequences of Entering into the OVDP for Immigrants](https://sftaxcounsel.com/blog/the-unintended-collateral-consequences-of-entering-into-the-ovdp-for-immigrants/) - The OVDP for Immigrants initiatives were likely not designated to become roadblocks to U.S. citizenship. Call us to discuss. - [What is a CFC for Purposes of Filing a Form 5471?](https://sftaxcounsel.com/blog/what-is-a-cfc-for-purposes-of-filing-a-form-5471/) - Completing a Form 5471 is no easy task and there are serious penalties associated with not accurately filing this form. Call to discuss. - [Introduction to International Income Tax Treaties](https://sftaxcounsel.com/blog/introduction-to-international-income-tax-treaties/) - A broad overview as to how an income tax treaty can be used by U.S. residents and nonresidents to reduce their exposure to global income taxation. - [The Foreign Compliance Intricacies Associated with Using the United States Indonesia Tax Treaty](https://sftaxcounsel.com/blog/the-foreign-compliance-intricacies-associated-with-using-the-united-states-indonesia-tax-treaty/) - When a domestic taxpayer is utilizing the United States Indonesia tax treaty to reduce a foreign tax obligation, at a minimum, the taxpayer must comply with Regulation No. PER-10/PJ/2017 (“PER-10”) and complete Form DGT. - [Demystifying the 962 Election](https://sftaxcounsel.com/blog/demystifying-the-962-election/) - If a CFC is more interested in deferring his or her tax liability than obtaining tax savings, a 962 election may provide a deferral of tax. - [Cross-Border Lending of Related Parties Requires Attention be Given to Transfer Pricing and Earnings Stripping Rules](https://sftaxcounsel.com/blog/cross-border-lending-of-related-parties-requires-attention-be-given-to-transfer-pricing-and-earnings-stripping-rules/) - Anytime related parties engage in cross-border financing, the parties both the transfer pricing and earnings stripping provisions of Section 163(j) must be followed. - [Demystifying the All New 2020 Tax Year IRS Form 5471 Schedule J](https://sftaxcounsel.com/blog/demystifying-the-all-new-2020-tax-year-irs-form-5471-schedule-j/) - Schedule J of Form 5471 tracks the earnings and profits (“E&P”) of a controlled foreign corporation (“CFC”). Call our office to discuss. - [Will Taxes Increase in 2021?](https://sftaxcounsel.com/blog/will-taxes-increase-in-2021/) - Even with votes still being recounted, it seems likely that the Biden administration will take over the White House in January. Many Americans wonder what this will mean for their taxes in 2021. First, the good news is that tax liability you might face this coming spring is based on your 2020 financial picture and - [Demystifying the All New 2020 Tax Year IRS Form 5471 Schedule E Reporting and Tracking Foreign Tax Credits](https://sftaxcounsel.com/blog/demystifying-the-all-new-2020-tax-year-irs-form-5471-schedule-e-reporting-and-tracking-foreign-tax-credits/) - By Anthony Diosdi IntroductionSchedule E of Form 5471 is used to report taxes paid or accrued by a foreign corporation for which a foreign tax credit is allowed and taxes for which a credit may not be taken. Like Schedule J, Schedule E (mostly because of Schedule E-1) has given tax practitioners fits the - [Can a 962 Election be Used to Defer and Reduce a Delinquent Transition Tax?](https://sftaxcounsel.com/blog/can-a-962-election-be-used-to-defer-and-reduce-a-delinquent-transition-tax/) - By Anthony Diosdi Introduction to the Transition TaxInternal Revenue Code Section 965 imposes a one-time transition tax on a U.S. shareholder’s share of deferred foreign income of certain foreign corporation’s accumulated deferred foreign income. For this purpose, a U.S. shareholder is a U.S. person who directly, indirectly, or constructively owns at least 10 percent of - [Demystifying the All New 2020 Tax Year IRS Form 5471 Schedule P Tracking “Previously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations”](https://sftaxcounsel.com/blog/demystifying-the-all-new-2020-tax-year-irs-form-5471-schedule-p-tracking-previously-taxed-earnings-and-profits-of-u-s-shareholder-of-certain-foreign-corporations/) - Schedule P of Form 5471 is incredibly complicated. Make sure you retain an international tax attorney with many years of experience in international tax compliance to advise you regarding this incredibly complicated return. - [So Your Candidate Did Not Win the Election and You Want to Expatriate- Here is What You Need to Know About Expatriation, the Exit Tax, and the New Federal Inheritance Tax](https://sftaxcounsel.com/blog/so-your-candidate-did-not-win-the-election-and-you-want-to-expatriate-here-is-what-you-need-to-know-about-expatriation-the-exit-tax-and-the-new-federal-inheritance-tax/) - U.S. tax consequences associated with renouncing one’s U.S. citizenship and discuss potential strategies to mitigate the taxes associated with expatriating. - [The General Rules Governing Currency Conversations for Computing Foreign Tax Credits and the Section 986 Election](https://sftaxcounsel.com/blog/the-general-rules-governing-currency-conversations-for-computing-foreign-tax-credits-and-the-section-986-election/) - This article is designed to provide guidance regarding translating foreign taxes into U.S. dollars. Call us to discuss today. - [Understanding the High-Tax Kickout and its Impact on Foreign Tax Credits](https://sftaxcounsel.com/blog/understanding-the-high-tax-kickout-and-its-impact-on-foreign-tax-credits/) - This article attempts to clarify the meaning of “high-tax kickout” and its impact on claiming foreign tax credits. Call us today. - [Calculating the Foreign Tax Credit and the CFC Netting Rule](https://sftaxcounsel.com/blog/calculating-the-foreign-tax-credit-and-the-cfc-netting-rule/) - The foreign tax credit was enacted in 1918 to prevent U.S. taxpayers from being taxed on their foreign-source income by both the foreign country and by the U.S. - [Top Audit Triggers of a CFC that Catch the Attention of the IRS. Part One- Calculating a Net Section 965 Tax Liability Incorrectly](https://sftaxcounsel.com/blog/top-audit-triggers-of-a-cfc-that-catch-the-attention-of-the-irs-part-one-calculating-a-net-section-965-tax-liability-incorrectly/) - By Anthony Diosdi IntroductionFor those who are or will be involved in international business and investment transactions, it is important to have some basic understanding of the relevant tax laws. These series of articles are intended to warn individual shareholders of controlled foreign corporations (“CFCs”) (whether individual or corporate) of the mistakes that will likely - [Top Audit Triggers of a CFC that Will Catch the Attention of the IRS. Part Three- Improperly Claiming a Foreign Tax Credit](https://sftaxcounsel.com/blog/top-audit-triggers-of-a-cfc-that-will-catch-the-attention-of-the-irs-part-three-improperly-claiming-a-foreign-tax-credit/) - This article will discuss mistakes CFC shareholders make when claiming credits for foreign income on their U.S. tax returns - [Top Audit Triggers of a CFC that Will Catch the Attention of the IRS. Part Two- Form 8993](https://sftaxcounsel.com/blog/top-audit-triggers-of-a-cfc-that-will-catch-the-attention-of-the-irs-part-two-form-8993/) - The mistakes that will likely catch the attention of the Internal Revenue Service (“IRS”) and trigger a potential costly audit. - [Top Audit Triggers of a CFC that Will Catch the Attention of the IRS. Part Four- Claiming a Loss Associated with Subpart F Income Against GILTI Income](https://sftaxcounsel.com/blog/top-audit-triggers-of-a-cfc-that-will-catch-the-attention-of-the-irs-part-four-claiming-a-loss-associated-with-subpart-f-income-against-gilti-income/) - These series of articles are intended to warn individual shareholders of controlled foreign corporations (“CFCs”) of some top audit triggers of the IRS. - [A Walk-Through Form 8992-U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (“GILTI”)](https://sftaxcounsel.com/blog/a-walk-through-form-8992-u-s-shareholder-calculation-of-global-intangible-low-taxed-income-gilti/) - A CFC shareholder must calculate its GILTI inclusion on IRS Form 8992. This article will go line by line through the Form 8992 to determine how a GILTI inclusion is determined. - [Demystifying IRS Form 5472](https://sftaxcounsel.com/blog/demystifying-irs-form-5472/) - A separate IRS Form 5472 must be filed for each foreign or domestic related party with which the reporting corporation engaged in reportable transactions during the year. - [The IRS Clarifies the Regulations for the High-Tax Exception to GILTI](https://sftaxcounsel.com/blog/the-irs-clarifies-the-regulations-for-the-high-tax-exception-to-gilti/) - Recent proposed regulations (which have been finalized by the IRS and Department of Treasury) allows a CFC shareholder to make a high tax exception to GILTI inclusions. - [The Most Costly Mistakes of CFC Shareholders that Catch the Attention of the IRS. Part Five- Failure to Charge Arm’s-Length Rate of Interest on Intercompany Loans or Advances](https://sftaxcounsel.com/blog/the-most-costly-mistakes-of-cfc-shareholders-that-catch-the-attention-of-the-irs-part-five-failure-to-charge-arms-length-rate-of-interest-on-intercompany-loans-or-advances/) - For those who are or will be involved in international business and investment transactions, it is important to have some basic understanding of the relevant tax laws. - [Income Tax Consideration of Property Inherited from a Foreign Individual](https://sftaxcounsel.com/blog/income-tax-consideration-of-property-inherited-from-a-foreign-individual/) - By Anthony Diosdi Many U.S. income tax questions arise in connection with the receipt of inherited property. These questions generally include whether the recipient must include the value of such property in gross income for U.S. tax purposes and what will be the U.S. income tax consequences of the recipient’s subsequent disposition of the inherited - [The Most Costly Mistakes of CFC Shareholders that Catch the Attention of the IRS. Part Six- Failing to Disclose GILTI Income on Schedule H of Form 5471](https://sftaxcounsel.com/blog/the-most-costly-mistakes-of-cfc-shareholders-that-catch-the-attention-of-the-irs-part-six-failing-to-disclose-gilti-income-on-schedule-h-of-form-5471/) - Excluding GILTI income from Schedule H of a Form 5471 can be expensive. It can result in a reduction of foreign tax credits by ten percent. - [The IRS Makes Significant Changes to Schedule H of Form 5471](https://sftaxcounsel.com/blog/the-irs-makes-significant-changes-to-schedule-h-of-form-5471/) - If you have a Form 5471 reporting obligation, you should seek advice from a professional well versed in international tax. - [The Most Costly Mistakes of CFC Shareholders that Catch the Attention of the IRS. Part Seven- Making a 962 Election and Failing to File Forms 1116 and 1118](https://sftaxcounsel.com/blog/the-most-costly-mistakes-of-cfc-shareholders-that-catch-the-attention-of-the-irs-part-seven-making-a-962-election-and-failing-to-file-forms-1116-and-1118/) - Many CFC shareholders make a so-called Section 962 election to reduce the tax liability associated with GILTI (and in some cases subpart F income). - [Tax Relief for Farmers Impacted by Drought](https://sftaxcounsel.com/blog/tax-relief-for-farmers-impacted-by-drought/) - There is no doubt that severe and increasing drought has harmed farmers and ranchers across the United States, including in California. Now, such operations that had to sell livestock because of drought might qualify for certain tax relief as announced by the Internal Revenue Service (IRS). Generally speaking, when farmers or ranchers sell livestock for - [U.S. Real Property Interest Non-Recognition Transfers- Can the IRS Assess Interest When No Tax is Due?](https://sftaxcounsel.com/blog/u-s-real-property-interest-non-recognition-transfers-can-the-irs-assess-interest-when-no-tax-is-due/) - We provide international compliance assistance and international tax planning services to domestic corporations. Call today. - [A Closer Look at the “Related Transaction” Rules for the Federal Crime Know as Structuring](https://sftaxcounsel.com/blog/a-closer-look-at-the-related-transaction-rules-for-the-federal-crime-know-as-structuring/) - We have significant experience representing individuals and businesses that have been criminally charged with the crime of structuring. - [Top Five Considerations for Anyone Considering Expatriating from the United States](https://sftaxcounsel.com/blog/top-five-considerations-for-anyone-considering-expatriating-from-the-united-states/) - We have significant experience advising our clients how to minimize the tax consequences associated with expatriating. - [Demystifying IRS Form 3520-A](https://sftaxcounsel.com/blog/demystifying-irs-form-3520-a/) - The penalty for failure to file IRS Form 3520-A will be imposed directly on the U.S. owner of the foreign trust. Call our firm to discuss. - [What to Do if You are Facing a Tax Audit](https://sftaxcounsel.com/blog/what-to-do-if-you-are-facing-a-tax-audit/) - If you have received an audit notice, your first call should be to a San Francisco tax attorney at the law firm of Diosdi Ching & Liu, LLP. - [Can an Item of Foreign Source Income be Double Taxed Under Both the Subpart F and GILTI Rules?](https://sftaxcounsel.com/blog/can-an-item-of-foreign-source-income-be-double-taxed-under-both-the-subpart-f-and-gilti-rules/) - International tax reform introduced the global intangible low-taxed income (“GILTI”) regime under Internal Revenue Code Section 951A. - [An Overview of Classifying Earnings and Profits Reported on Form 5471 Schedule J Before and After 2017 International Tax Reform](https://sftaxcounsel.com/blog/an-overview-of-classifying-earnings-and-profits-reported-on-form-5471-schedule-j-before-and-after-2017-international-tax-reform/) - The U.S. shareholder is taxed even if the CFC does not make an actual distribution to the shareholder. Contact our firm to discuss Form 5471. - [Making a Section 962 Election to Reduce Income Taxes Associated with a GILTI Inclusion? Don't Forget About the Second Layer of Tax and the Ordering Rules](https://sftaxcounsel.com/blog/making-a-section-962-election-to-reduce-income-taxes-associated-with-a-gilti-inclusion-dont-forget-about-the-second-layer-of-tax-and-the-ordering-rules/) - To offset GILTI inclusions, IRS Section 250 allows US C corporate CFC shareholders to deduct a portion (currently 50 percent, but decreases to 37.5 percent for taxable years beginning after December 31, 2025). - [Schedule J of Form 5471- Preparing the Schedule Before and After International Tax Reform](https://sftaxcounsel.com/blog/schedule-j-of-form-5471-preparing-the-schedule-before-and-after-international-tax-reform/) - This article will compare the pre-2017 Tax Cuts and Jobs Act Schedule J with the post-2017 Tax Cuts and Jobs Act Schedule J. - [Demystifying the Form 5471 Part 11. Schedule E-1 Calculating a CFC’s E&P for Purposes of Reporting Foreign Tax Credits](https://sftaxcounsel.com/blog/demystifying-the-form-5471-part-11-schedule-e-1-calculating-a-cfcs-ep-for-purposes-of-reporting-foreign-tax-credits/) - This article will review both Schedule E and Schedule E-1 of the Form 5471. Call SF Tax Counsel to discuss your individual tax needs. - [Demystifying the Form 5471 Part 12. Schedule H Calculating the E&P of a Controlled Foreign Corporation](https://sftaxcounsel.com/blog/demystifying-the-form-5471-part-12-schedule-h-calculating-the-ep-of-a-controlled-foreign-corporation/) - This is the 12th of a series of articles designed to provide a basic overview of Form 5471. Call SF Tax Counsel to discuss. - [The Top Five Tax Planning Opportunities and Pitfalls that Should be Considered Before Contributing Stock of a CFC to a Holding Corporation to Reduce the U.S. Tax Liability on GILTI](https://sftaxcounsel.com/blog/the-top-five-tax-planning-opportunities-and-pitfalls-that-should-be-considered-before-contributing-stock-of-a-cfc-to-a-holding-corporation-to-reduce-the-u-s-tax-liability-on-gilti/) - The harsh tax consequences associated with owning CFC stocks directly has resulted in a number of tax planning strategies to reduce GILTI inclusions. - [Demystifying the Form 1118 Foreign Tax Credit- Corporations Part 1. Schedule A “Income or (Loss) Before Adjustment”](https://sftaxcounsel.com/blog/demystifying-the-form-1118-foreign-tax-credit-corporations-part-1-schedule-a-income-or-loss-before-adjustment/) - By Anthony Diosdi In order to provide the Internal Revenue Service (“IRS”) with the information necessary to claim a foreign tax credit, a U.S. corporation claiming a foreign tax credit must attach Form 1118 otherwise known as “Foreign Tax Credit - Corporations,” to its tax return. This is the first of a series of articles - [Reporting Capital Gains](https://sftaxcounsel.com/blog/reporting-capital-gains/) - You do not want to risk errors on your returns when it comes to reporting capital gains and losses. Contact SF Tax Counsel to discuss. - [Demystifying the Form 1118 Foreign Tax Credit- Corporations Part 2. Schedule B “Foreign Tax Credit”](https://sftaxcounsel.com/blog/demystifying-the-form-1118-foreign-tax-credit-corporations-part-2-schedule-b-foreign-tax-credit/) - Completing IRS Form 1118 for purposes of claiming foreign tax credits is extraordinarily complex. Contact SF Tax Counsel to discuss. - [Demystifying the Form 1118 Foreign Tax Credit- Corporations Part 3. Schedule C “Tax Deemed Paid With Respect to Section 951(a)(1) Inclusion by Domestic Corporation Filing Return (Section 960(a))”](https://sftaxcounsel.com/blog/demystifying-the-form-1118-foreign-tax-credit-corporations-part-3-schedule-c-tax-deemed-paid-with-respect-to-section-951a1-inclusion-by-domestic-corporation-filing-return-section-960a/) - This is the third article designed to provide a basic overview of the Form 1118. This article is designed to supplement the instructions for the Form 1118 promulgated by the IRS. - [Demystifying the Form 1118 Foreign Tax Credit- Corporations Part 5. Schedule E Reporting PTEPs of Tiered CFCs](https://sftaxcounsel.com/blog/demystifying-the-form-1118-foreign-tax-credit-corporations-part-5-schedule-e-reporting-pteps-of-tiered-cfcs/) - Completing Form 1118 for purposes of claiming foreign tax credits is extraordinarily complex. Pease contact SF Tax Counsel to discuss. - [Demystifying the Form 1118 Part 4. Schedule D Foreign Tax Credits Associated with GILTI Inclusions](https://sftaxcounsel.com/blog/demystifying-the-form-1118-part-4-schedule-d-foreign-tax-credits-associated-with-gilti-inclusions/) - This article is designed to supplement the instructions for the Form 1118 promulgated by the IRS. Contact SF Tax Counsel to discuss. - [Demystifying the Form 1118 Part 6. Schedule F-1 Determining the Tax Consequences of Dividends from First-Tier Foreign Corporation and Inclusions of the Earnings of a First or Lower Tier Foreign Corporation Prior to Tax Reform](https://sftaxcounsel.com/blog/demystifying-the-form-1118-part-6-schedule-f-1-determining-the-tax-consequences-of-dividends-from-first-tier-foreign-corporation-and-inclusions-of-the-earnings-of-a-first-or-lower-tier-foreign-corpor/) - Completing Form 1118 for purposes of claiming foreign tax credits is extraordinarily complex. Contact SF Tax Counsel to discuss. - [Demystifying the Form 1118 Part 7. Schedule F-2 Determining the Tax Consequences of Tax Deemed Paid by a First-Foreign Corporation with Respect to Dividends from a Second-Tier Foreign Corporation Prior to Tax Reform](https://sftaxcounsel.com/blog/demystifying-the-form-1118-part-7-schedule-f-2-determining-the-tax-consequences-of-tax-deemed-paid-by-a-first-foreign-corporation-with-respect-to-dividends-from-a-second-tier-foreign-corporation-pri/) - By Anthony Diosdi In order to provide the Internal Revenue Service (“IRS”) with the information necessary to claim a foreign tax credit, a U.S. corporation claiming a foreign tax credit must attach Form 1118 otherwise known as “Foreign Tax Credit - Corporations,” to its tax return. This is the seventh of a series of articles - [Demystifying the Form 1118 Part 8. Schedule F-3 Determining the Tax Consequences of Tax Deemed Paid by Third, Fourth, and Fifth-Tier Foreign Corporations Under Section 902(b) Prior to Tax Reform](https://sftaxcounsel.com/blog/demystifying-the-form-1118-part-8-schedule-f-3-determining-the-tax-consequences-of-tax-deemed-paid-by-third-fourth-and-fifth-tier-foreign-corporations-under-section-902b-prior-to-tax-reform/) - By Anthony Diosdi In order to provide the Internal Revenue Service (“IRS”) with the information necessary to claim a foreign tax credit, a U.S. corporation claiming a foreign tax credit must attach Form 1118 otherwise known as “Foreign Tax Credit - Corporations,” to its tax return. This is the eighth of a series of - [Form 8993 and Claiming the Section 250 Deduction](https://sftaxcounsel.com/blog/form-8993-and-claiming-the-section-250-deduction/) - Form 8993 is utilized to determine the amount eligible for a deduction against FDII and GILTI under Section 250. Call us to discuss. - [Demystifying the Form 1118 Part 9. Schedule G Reduction of Taxes Paid, Accrued, or Deemed Paid by a CFC](https://sftaxcounsel.com/blog/demystifying-the-form-1118-part-9-schedule-g-reduction-of-taxes-paid-accrued-or-deemed-paid-by-a-cfc/) - Schedule G of Form 1118 is designed to report any reductions of the deductibility of foreign credits claimed by a domestic corporation. - [The IRS Has Yet to Issue Final Regulations for Section 987 Foreign Currency Branch Transactions](https://sftaxcounsel.com/blog/the-irs-has-yet-to-issue-final-regulations-for-section-987-foreign-currency-branch-transactions/) - As of this date, the Treasury and IRS have yet to issue final regulations to Section 987. Contact our office to discuss today. - [Demystifying the Form 5471 Part 7. Schedule P](https://sftaxcounsel.com/blog/demystifying-the-form-5471-part-7-schedule-p/) - This is the seventh of a series of articles designed to provide a basic overview of the Internal Revenue Service (“IRS”) Form 5471. - [Relief from Filing Forms 3520 and Form 3520-A for Some](https://sftaxcounsel.com/blog/relief-from-filing-forms-3520-and-form-3520-a-for-some/) - By Anthony Diosdi The Internal Revenue Code provides that if any United States Person (i.e. U.S. citizen or U.S. resident) beneficiary receives (directly or indirectly) a distribution from a foreign trust during any taxable year, such person is required to make a return with respect to such a trust for such year using Internal Revenue - [Beware of the New CFC Rules Triggering a Surprise 965 Inclusion](https://sftaxcounsel.com/blog/beware-of-the-new-cfc-rules-triggering-a-surprise-965-inclusion/) - By Anthony Diosdi The Controlled Foreign Corporation (“CFC”) rules are embedded in the Internal Revenue Code. The CFC rules are designed to limit artificial deferral of foreign income using foreign entities. The CFC provides that certain classes of taxpayers must include in their U.S. taxable income amounts earned by foreign entities they or related entities/persons - [The IRS Delays the Filing Deadline from April 15th to July 15th](https://sftaxcounsel.com/blog/the-irs-delays-the-filing-deadline-from-april-15th-to-july-15th/) - By Anthony Diosdi Treasury Secretary Steve Mnuchin made the following announcement on Twitter “At @realDonaldTrump’s direction, we are moving Tax Day from April 15 to July 15. All taxpayers and businesses will have this additional time to file and make payments without interest or penalties.” This means that in addition to providing taxpayers with additional - [Do Shareholders of Dormant Foreign Corporations Still Need to File a Form 5471?](https://sftaxcounsel.com/blog/do-shareholders-of-dormant-foreign-corporations-still-need-to-file-a-form-5471/) - U.S. persons with certain interests in controlled foreign corporations (“CFCs”) must disclose their interests on Form 5471. - [Demystifying the Form 5471 Part 8. Schedule M](https://sftaxcounsel.com/blog/demystifying-the-form-5471-part-8-schedule-m/) - By Anthony Diosdi Schedule M is designed to measure intercompany payments. Schedule M requires the majority U.S. owner to provide information on transactions between the CFC and its shareholders or other related persons. This is the eighth of a series of articles designed to provide a basic overview of the Internal Revenue Service (“IRS”) Form - [Tax Deadlines for 2020](https://sftaxcounsel.com/blog/tax-deadlines-for-2020/) - With the COVID-19 pandemic sweeping through the U.S. and the world in the early months of the year, the IRS has made adjustments to filing deadlines. - [Demystifying the Form 5471 Part 9. Schedule G](https://sftaxcounsel.com/blog/demystifying-the-form-5471-part-9-schedule-g/) - This is the ninth of a series of articles designed to provide a basic overview of the Internal Revenue Service (“IRS”) Form 5471. - [Understanding the Beneficial Rules of the CARES Act for Retirement Fund Withdrawals](https://sftaxcounsel.com/blog/understanding-the-beneficial-rules-of-the-cares-act-for-retirement-fund-withdrawals/) - As part of the new law, Congress is permitting savers to skip so-called required minimum withdrawals or RMDs from their retirement accounts in 2020. - [Demystifying the Form 5471 Part 10. Schedule I](https://sftaxcounsel.com/blog/demystifying-the-form-5471-part-10-schedule-i/) - The professionals at Diosdi Ching & Liu, LLP have substantial experience preparing all schedules associated with Form 5471. - [Introduction to Corporate Cross-Border Transfers, Reorganizations, and Inversions Part 1. The “Toll Charge”](https://sftaxcounsel.com/blog/introduction-to-corporate-cross-border-transfers-reorganizations-and-inversions-part-1-the-toll-charge/) - The area of cross-border transfers and reorganizations is an incredibly complicated area. Call SF Tax Counsel today to discuss. - [Can a 965 Repatriation or Transition Tax Assessment be Compromised Through an Offer in Compromise?](https://sftaxcounsel.com/blog/can-a-965-repatriation-or-transition-tax-assessment-be-compromised-through-an-offer-in-compromise/) - Internal Revenue Code Section 965 imposes a one-time transition tax on a U.S. shareholder’s share of deferred foreign income of certain foreign corporations - [The Government Begins to Hunt Down Individuals Who Received Commissions and Referral Fees from RaPower-3](https://sftaxcounsel.com/blog/the-government-begins-to-hunt-down-individuals-who-received-commissions-and-referral-fees-from-rapower-3/) - We have represented customers that purchased RaPower-3’s solar lenses and individuals that have received commissions and referral fees - [Does Section 958 Attribution Rules Impute the Value of Stocks Owned by a Nonresident Spouse to a U.S. Citizen/Resident for Expatriation Tax Purposes?](https://sftaxcounsel.com/blog/does-section-958-attribution-rules-impute-the-value-of-stocks-owned-by-a-nonresident-spouse-to-a-u-s-citizen-resident-for-expatriation-tax-purposes/) - If you are considering expatriating, it is important that you consult with a qualified attorney that has experience advising individuals. - [Introduction to Corporate Cross-Border Transfers, Reorganizations, and Inversions Part 2. “Taxation of Mergers and Acquisitions in Which a Foreign Corporation Acquires a U.S. Corporation”](https://sftaxcounsel.com/blog/introduction-to-corporate-cross-border-transfers-reorganizations-and-inversions-part-2-taxation-of-mergers-and-acquisitions-in-which-a-foreign-corporation-acquires-a-u-s-corporation/) - the Internal Revenue Code provides for nonrecognition of taxable gains realized in connection with a number of corporate organizational changes. - [Demystifying IRS Form 3520](https://sftaxcounsel.com/blog/demystifying-irs-form-3520/) - By Anthony Diosdi Introduction United States persons with foreign assets are subject to an ever expanding universe of reporting requirements. A prime example of this can be found in Internal Revenue Code Section 667(a). This Internal Revenue Code Section provides that if a United States person beneficiary receives (directly or indirectly) a distribution from a - [Taxation of Foreign Trust Beneficiaries and a Dive into the “Throwback Tax”](https://sftaxcounsel.com/blog/taxation-of-foreign-trust-beneficiaries-and-a-dive-into-the-throwback-tax/) - The rules pertaining to the taxation of foreign trusts and its beneficiaries are complex. Please contact SF Tax Counsel to discuss. - [Introduction to Corporate Cross-Border Transfers, Reorganizations, and Inversions Part 4. “U.S. Taxation of Foreign-to-Foreign Acquisitive Reorganizations”](https://sftaxcounsel.com/blog/introduction-to-corporate-cross-border-transfers-reorganizations-and-inversions-part-4-u-s-taxation-of-foreign-to-foreign-acquisitive-reorganizations/) - One would think that the acquisition of one foreign corporation by another foreign corporation would not trigger a U.S. tax consequence. - [Introduction to Corporate Cross-Border Transfers, Reorganizations, and Inversions Part 3. “The Anti-Inversion Rules- It’s Not Just for Large Multinational Corporations Anymore”](https://sftaxcounsel.com/blog/introduction-to-corporate-cross-border-transfers-reorganizations-and-inversions-part-3-the-anti-inversion-rules-its-not-just-for-large-multinational-corporations-anymore/) - The first type of inversion is a transaction is a transaction in which, pursuant to a plan or series of related transactions - [Is 2020 the New 2018 for Estate, Gift, and Generation-Skipping Tax Purposes?](https://sftaxcounsel.com/blog/is-2020-the-new-2018-for-estate-gift-and-generation-skipping-tax-purposes/) - The Economic Growth and Tax Relief Reconciliation Act excluded $5,120,000 from estate and gift taxes, and the generation-skipping transfer taxes (“GST”). - [The IRS Whistleblower Program and the Potential for Additional Recovery Under the False Claims Act](https://sftaxcounsel.com/blog/the-irs-whistleblower-program-and-the-potential-for-additional-recovery-under-the-false-claims-act/) - Defendants are potentially liable for triple damages, attorney fees and under the FCA whistleblowers can receive 15 to 30 percent of what they recoup from the wrongdoer. - [Intentionally Defective Grantor Trusts: Estate Planning with Schrödinger's Cat](https://sftaxcounsel.com/blog/intentionally-defective-grantor-trusts-estate-planning-with-schrodingers-cat/) - A popular estate planning vehicle for transferring wealth to descendants during one's lifetime is the "intentionally defective grantor trust" (IDGT) - [An Overview of the Taxation of Cloud Transactions and Digital Downloads](https://sftaxcounsel.com/blog/an-overview-of-the-taxation-of-cloud-transactions-and-digital-downloads/) - “Cloud transactions” are the “streaming music and video, transactions involving mobile device applications, and access to data through remotely hosted software. - [A Possible Solution to Gift Tax Concerns Associated with Cash, Check, or Wire Transfer Gifts from Overseas](https://sftaxcounsel.com/blog/a-possible-solution-to-gift-tax-concerns-associated-with-cash-check-or-wire-transfer-gifts-from-overseas/) - As discussed above, cash has a U.S. situs for purposes of determining the gift tax. Cash has been defined to encompass checks and wire transfers. - [Say it Ain't So- FATCA Goes Criminal](https://sftaxcounsel.com/blog/say-it-aint-so-fatca-goes-criminal/) - DOJ has secured under the Foreign Account Tax Compliance Act (“FATCA”) through the guilty plea of Adrian Baron, a former executive of Loyal Bank Ltd. - [Calculating Foreign Tax Credits Before and After the 2017 Tax Cut and Jobs Act](https://sftaxcounsel.com/blog/calculating-foreign-tax-credits-before-and-after-the-2017-tax-cut-and-jobs-act/) - The 2017 Tax Cut and Jobs Act significantly changed the way we plan cross-border transactions. Contact SF Tax Counsel today to discuss. - [Your Chance of an IRS Audit is Way Down. But That’s Not Good News if You Have to File an IRS Form 3520 and/or IRS Form 3520-A](https://sftaxcounsel.com/blog/your-chance-of-an-irs-audit-is-way-down-but-thats-not-good-news-if-you-have-to-file-an-irs-form-3520-and-or-irs-form-3520-a/) - The International Penalties Associated with Not Timely Filing an IRS Form 3520 and IRS Form 3520-A Contact our firm to discuss. - [Cross-Border Tax Planning with the Proposed Regulations Regarding Cloud Computing Transactions and Digital Downloads](https://sftaxcounsel.com/blog/cross-border-tax-planning-with-the-proposed-regulations-regarding-cloud-computing-transactions-and-digital-downloads/) - In certain cases, foreign persons with a nexus to the United States can utilize a tax treaty to mitigate its U.S. income tax consequences. - [Former Miami Dolphins Linebacker Zach Thomas Will Go Up Against His Toughest Opponent to Date- The IRS in Refund Litigation](https://sftaxcounsel.com/blog/former-miami-dolphins-linebacker-zach-thomas-will-go-up-against-his-toughest-opponent-to-date-the-irs-in-refund-litigation/) - By Anthony Diosdi In the future, a jury of selectors will vote on whether former Miami Dolphins linebacker Zach Thomas should be in the Hall of Fame. Down the road, in a Fort Lauderdale federal court room, a jury might vote whether Thomas should get over $18,000 plus interest back from the Internal Revenue Service - [Crossing The Line - Felony Tax Crimes](https://sftaxcounsel.com/blog/crossing-the-line-felony-tax-crimes/) - So when does failing to file a tax return or not accurately reporting income and expenses on a return, cross the line? Contact us to discuss. - [Dynasty Trusts- the Most Powerful Tool Available to Combat the Estate, Gift, and Generation Skipping Taxes](https://sftaxcounsel.com/blog/dynasty-trusts-the-most-powerful-tool-available-to-combat-the-estate-gift-and-generation-skipping-taxes/) - Dynasty trusts has become a popular tool to transfer taxable assets out of an individual's estate. Contact SF Tax Counsel to discuss. - [With the Coronavirus on Everyone’s Mind- Now is a Good Time to Consider Medical Expense Tax Deduction Planning](https://sftaxcounsel.com/blog/with-the-coronavirus-on-everyones-mind-now-is-a-good-time-to-consider-medical-expense-tax-deduction-planning/) - In order to maximize medical expense deductions, you may utilize a strategy of medical expense shifting. Call our firm to discuss the medical expense tax. - [The IRS “Swings for the Fences” and Asserts a $120 Million FBAR Penalty](https://sftaxcounsel.com/blog/the-irs-swings-for-the-fences-and-asserts-a-120-million-fbar-penalty/) - The United States Department of Justice is attempting to collect unprecedented civil FBAR penalties in the amount of approximately $120 million. - [What Happens When the IRS Makes an Error?](https://sftaxcounsel.com/blog/what-happens-when-the-irs-makes-an-error/) - Many unexpected issues can arise regarding your taxes, and you should not hesitate to call a San Francisco tax attorney today. - [Advanced Strategies Available to Mitigate the Tax Consequences of GILTI Inclusions](https://sftaxcounsel.com/blog/advanced-strategies-available-to-mitigate-the-tax-consequences-of-gilti-inclusions/) - By Anthony Diosdi Introduction to the Global Intangible Low-Tax RegimeThe 2017 Tax Cuts and Jobs Act dramatically changed the way outbound international transactions are taxed. The Tax Cuts and Jobs Act retained the existing Subpart F tax regime, but it also created a new class of taxable income known as global intangible low-taxed income (”GILTI”). - [The Trump Administration will Likely Delay the April 15th Tax Filing Deadline in Response to the Coronavirus Outbreak](https://sftaxcounsel.com/blog/the-trump-administration-will-likely-delay-the-april-15th-tax-filing-deadline-in-response-to-the-coronavirus-outbreak/) - The WSJ recently reported that in response to the coronavirus outbreak the Trump administration will most likely delay the deadline for filing individual income tax returns. - [Does the United States Tax Court have Jurisdiction to Review Penalties Assessed by the IRS for Not Timely filing Form 3520 or 3520-A?](https://sftaxcounsel.com/blog/does-the-united-states-tax-court-have-jurisdiction-to-review-penalties-assessed-by-the-irs-for-not-timely-filing-form-3520-or-3520-a/) - The IRS has recently begun to automatically assess penalties associated with not timely filing Form 3520s and Form 3520-As. - [Owe the IRS? What Can be Done to Prevent IRS Levies or Garnishments](https://sftaxcounsel.com/blog/owe-the-irs-what-can-be-done-to-prevent-irs-levies-or-garnishments/) - If the IRS has assessed a tax liability against you and it is not paid, the IRS can proceed with enforced collection actions you. - [FIRPTA and Partnership Interest Withholding Rules Under the Tax Cuts and Jobs Act](https://sftaxcounsel.com/blog/firpta-and-partnership-interest-withholding-rules-under-the-tax-cuts-and-jobs-act/) - The passing of the 2017 Tax Cuts and Jobs Act brought many changes to the Internal Revenue Code. Call our San Francisco frim today for help. - [Hovering Deficits- Uncertain Times in Cross Border Mergers with the Enactment of the 2017 Tax Cuts and Jobs Act](https://sftaxcounsel.com/blog/hovering-deficits-uncertain-times-in-cross-border-mergers-with-the-enactment-of-the-2017-tax-cuts-and-jobs-act/) - By Anthony Diosdi OverviewIn general, Section 367 governs corporate restructurings under Sections 332, 351, 354, 355, 356, and 361 (Subchapter C nonrecognition transactions) in which the status of a foreign corporation as a “corporation” is necessary for the application of the relevant subchapter C nonrecognition provisions. Other provisions in subchapter C (subchapter C carryover provisions) - [All I Want for Christmas is a Refund of the 965 Tax I Overpaid](https://sftaxcounsel.com/blog/all-i-want-for-christmas-is-a-refund-of-the-965-tax-i-overpaid/) - Any taxpayer that overpaid a Section 965 inclusion must satisfy the entire one-time transition tax. Contact San Francisco Tax Attorney SF Tax Counsel. - [Attention California Homeowners Age 55+: How Proposition 60/90 Could Benefit You](https://sftaxcounsel.com/blog/attention-california-homeowners-age-55-how-proposition-60-90-could-benefit-you/) - If you are a California homeowner age 55 or older, you need to know about Proposition 60/90. Contact SF Tax today to learn more. - [Top Four Ways to be Audited by the IRS in 2020](https://sftaxcounsel.com/blog/top-four-ways-to-be-audited-by-the-irs-in-2020/) - Even though IRS has been auditing much fewer tax returns, there are certain things that individual taxpayers can do that will likely certainly result in a costly IRS audit. - [The IRS Continues to Aggressively Audit RaPower3 Investors](https://sftaxcounsel.com/blog/the-irs-continues-to-aggressively-audit-rapower3-investors/) - Over the past few years, a company known as RaPower3 has marketed ownership in solar lenses to investors throughout the United States. - [New York Estate of Mind](https://sftaxcounsel.com/blog/new-york-estate-of-mind/) - Ranked among the highest taxing jurisdictions in the country, New York is one of the few states that also has a state-level estate tax. - [The District Court Allows a Suit to Proceed Challenging the Regulations to Section 965 of the Internal Revenue Code](https://sftaxcounsel.com/blog/the-district-court-allows-a-suit-to-proceed-challenging-the-regulations-to-section-965-of-the-internal-revenue-code/) - As part of the “TCJA”, Congress enacted certain “transition tax” provisions applicable to “controlled foreign corporations” owned by United States persons. - [Demystifying the Form 5471 Part 6. Schedule O](https://sftaxcounsel.com/blog/demystifying-the-form-5471-part-6-schedule-o/) - This is the sixth of a series of articles designed to provide a basic overview of the Internal Revenue Service (“IRS”) Form 5471. - [Tax Return Changes for 2020](https://sftaxcounsel.com/blog/tax-return-changes-for-2020/) - Tax returns can change in many ways from year to year. Before you file, contact a San Francisco tax attorney at Diosdi, Ching & Liu. - [Don’t Feel GILTI About Paying Only 10.5 Percent Tax On Foreign Source Income](https://sftaxcounsel.com/blog/dont-feel-gilti-about-paying-only-10-5-percent-tax-on-foreign-source-income/) - Any individual that owns stock in a foreign corporation may be subject to Global Intangible Low-Taxed Income (“GILTI”). Call our firm for help. - [Yes- You Can be Taxed at the Lower Federal C Corporation Rates on Foreign Source Income Without Incorporating or Being Subject to Two Layers of Tax](https://sftaxcounsel.com/blog/yes-you-can-be-taxed-at-the-lower-federal-c-corporation-rates-on-foreign-source-income-without-incorporating-or-being-subject-to-two-layers-of-tax/) - IRS Section 962 allows a U.S. individual taxpayer that holds shares of a controlled foreign corporations to elect to be taxed as a subchapter C corporation. - [The IRS Offers Settlements for Owners of Micro-Captives Insurance Companies](https://sftaxcounsel.com/blog/the-irs-offers-settlements-for-owners-of-micro-captives-insurance-companies/) - Internal Revenue Code Section 831(b) permitted micro-captive insurance companies to claim up to $1.2 million tax-free per year. - [What Happens if You Are a Criminal Tax Defendant and Receive a Summons to Appear Before a District Court](https://sftaxcounsel.com/blog/what-happens-if-you-are-a-criminal-tax-defendant-and-receive-a-summons-to-appear-before-a-district-court/) - Once a criminal tax defendant has been indicted for a tax crime, he or she must make an initial appearance before a United States district court. - [Disagree with an IRS Audit- Here Are Your Options](https://sftaxcounsel.com/blog/disagree-with-an-irs-audit-here-are-your-options/) - The IRS audits thousands of tax returns every year and often proposes to assess significant additional tax liabilities against hardworking taxpayers. - [Bringing a Case Before the United States Tax Court A to Z Part III. How to Proceed with a Tax Court Trial](https://sftaxcounsel.com/blog/bringing-a-case-before-the-united-states-tax-court-a-to-z-part-iii-how-to-proceed-with-a-tax-court-trial/) - The tax attorneys at Diosdi Ching & Liu, LLP assisted hundreds of clients resolve tax controversies nationwide before the United States Tax Court. - [Demystifying the IRS Form 5471 Part 1. Selecting the Proper Category of Filer and Preparing Schedule B](https://sftaxcounsel.com/blog/demystifying-the-irs-form-5471-part-1-selecting-the-proper-category-of-filer-and-preparing-schedule-b/) - This is the first of a series of articles designed to provide an overview of the IRS Form 5471 and the tax law anyone completing a Form should understand. - [Possible Waiver for 2018 Failure to Meet Estimated Tax Obligations](https://sftaxcounsel.com/blog/possible-waiver-for-2018-failure-to-meet-estimated-tax-obligations/) - If you have any tax-related legal questions, feel free to speak with a San Francisco tax attorney at Diosdi Ching & Liu, LLP. - [Demystifying the IRS Form 5471 Part 3. Schedule E](https://sftaxcounsel.com/blog/demystifying-the-irs-form-5471-part-3-schedule-e/) - U.S. persons with interests in foreign corporations must file an IRS Form 5471 “Information Return of U.S. Persons With Respect to Certain Foreign Corporations.” - [Demystifying the IRS Form 5471 Part 4. Schedule J](https://sftaxcounsel.com/blog/demystifying-the-irs-form-5471-part-4-schedule-j/) - By Anthony Diosdi In order to provide the Internal Revenue Service (“IRS”) with the information necessary to ensure compliance with the subpart F rules and global intangible low-taxed income (“GILTI”) provisions, each year certain U.S. persons with interests in foreign corporations must file an IRS Form 5471 otherwise known as “Information Return of U.S. Persons - [The Importance of Determining Accurate Earnings and Profits of Foreign Corporations for U.S. Tax Compliance Purposes](https://sftaxcounsel.com/blog/the-importance-of-determining-accurate-earnings-and-profits-of-foreign-corporations-for-u-s-tax-compliance-purposes/) - By Anthony Diosdi When we think about international tax or cross border transactions, we think about the controlled foreign corporation or CFC rules. We also consider subpart F income or global intangible low-taxed income (“GILTI”) planning. Unfortunately, many international tax professionals do not give much consideration to the “earnings and profits” (“E&P”) of a controlled - [The Taxation of Offshore Accumulated Earnings under Section 959- Before and After the 2017 Tax Cuts and Jobs Act](https://sftaxcounsel.com/blog/the-taxation-of-offshore-accumulated-earnings-under-section-959-before-and-after-the-2017-tax-cuts-and-jobs-act/) - To avoid double taxation, IRS Section 959 provides that previously taxed earnings and profits of a CFc are not taxed again when distributed to the U.S. shareholder. - [Despite the Enactment of the 2017 Tax Cuts and Jobs Act, the High-Taxed Exception to Subpart F Income Continues to Allow CFC’s to Defer Foreign Income From U.S. Taxation](https://sftaxcounsel.com/blog/despite-the-enactment-of-the-2017-tax-cuts-and-jobs-act-the-high-taxed-exception-to-subpart-f-income-continues-to-allow-cfcs-to-defer-foreign-income-from-u-s-taxation/) - The definition of “subpart F income” has five components. The most important component is “foreign base company income.” Contact us to discuss. - [Demystifying the IRS Form 5471 Part 5. Schedule I-1](https://sftaxcounsel.com/blog/demystifying-the-irs-form-5471-part-5-schedule-i-1/) - By Anthony Diosdi Each year certain U.S. persons with interests in foreign corporations must file an IRS Form 5471 otherwise known as “Information Return of U.S. Persons With Respect to Certain Foreign Corporations.” This is the fifth of a series of articles designed to provide a basic overview of the Form 5471. This article will - [Tax Tips for the End of the Year](https://sftaxcounsel.com/blog/tax-tips-for-the-end-of-the-year/) - With a month left in the year, there are still some moves you can make to decrease your tax liability come spring. Contact us today. - [Tax-Free Spinoffs in the International Tax Context and the Danger of Subpart F Income Inclusion](https://sftaxcounsel.com/blog/tax-free-spinoffs-in-the-international-tax-context-and-the-danger-of-subpart-f-income-inclusion/) - If the foreign subsidiary is indirectly owned by a U.S. corporate shareholder, “subpart F” could apply resulting in an immediate tax to the indirect U.S. shareholder. - [Inbound Structuring for U.S. Real Estate in a Post-2017 Tax Cut and Jobs World](https://sftaxcounsel.com/blog/inbound-structuring-for-u-s-real-estate-in-a-post-2017-tax-cut-and-jobs-world/) - For most real estate businesses, the vast majority of depreciation deductions recognized by a real estate business will be for real property. - [Facing an FBAR Penalty? Better Make Sure Your Attorney Understands Administrative Law](https://sftaxcounsel.com/blog/facing-an-fbar-penalty-better-make-sure-your-attorney-understands-administrative-law/) - What is Administrative Law and How is it Relevant to an FBAR Case? We have represented clients accused of both criminal and civil BSA violations. - [The IRS’ Own Regulation is Successfully Used Against them in Two Willful FBAR Penalty Cases](https://sftaxcounsel.com/blog/the-irs-own-regulation-is-successfully-used-against-them-in-two-willful-fbar-penalty-cases/) - Although there is some disagreement among the courts, some courts will follow Colliot and Wahdam in capping the willful FBAR penalty. - [Cryptocurrency and Taxes](https://sftaxcounsel.com/blog/cryptocurrency-and-taxes/) - With investments in Bitcoin, Ripple, Ethereum, and other types of cryptocurrency increasing significantly in 2017 and 2018, many new investors should be aware of the tax implications of their investments. Cryptocurrency taxes may seem complicated, so many investors file to address them on their returns. This can result in future liability, however, so you want - [Making a Voluntary Disclosure to the IRS- Everything You Wanted to Know But Were Afraid to Ask](https://sftaxcounsel.com/blog/making-a-voluntary-disclosure-to-the-irs-everything-you-wanted-to-know-but-were-afraid-to-ask/) - (“IRS”) issued a Memorandum discussing the rules for all voluntary disclosures after the expiration of the final Offshore Voluntary Disclosure Program - [What is the Streamlined Filing Compliance Procedures](https://sftaxcounsel.com/blog/what-is-the-streamlined-filing-compliance-procedures/) - Several years ago the (“IRS”) introduced the Streamlined Compliance Procedures for taxpayers with undisclosed foreign financial accounts. - [Does an Individual Holding Cryptocurrencies on a Foreign Exchange Have a Legal Obligation to Disclose that Interest on an FBAR or Form 8938](https://sftaxcounsel.com/blog/does-an-individual-holding-cryptocurrencies-on-a-foreign-exchange-have-a-legal-obligation-to-disclose-that-interest-on-an-fbar-or-form-8938/) - By Anthony Diosdi “U.S. persons” have a legal duty to file an FBAR (FinCEN Form 114, previously known as Form TD F 90-22.1) to disclose an interest in a foreign financial account if the “aggregate value” of the account(s) exceeds $10,000 “at any time during the calendar year.” A “U.S.” person means a U.S. citizen, - [How a Nonresident Can Utilize the Closer Connection Test or a Treaty Tie-Breaker Provision to Avoid Being Taxed as a U.S. Resident](https://sftaxcounsel.com/blog/how-a-nonresident-can-utilize-the-closer-connection-test-or-a-treaty-tie-breaker-provision-to-avoid-being-taxed-as-a-u-s-resident/) - The Tax Court did not address the “closer connection test” and the “treaty tie-breaker” position contained in the U.S.-German income tax treaty. - [PFICs and the Statute of Limitations- Finally Some Good News](https://sftaxcounsel.com/blog/pfics-and-the-statute-of-limitations-finally-some-good-news/) - the U.S. investor is allowed to defer taxation of the PFICs undistributed income until the PFIC makes an excess distribution. - [What is an Offer in Compromise?](https://sftaxcounsel.com/blog/what-is-an-offer-in-compromise/) - An offer in compromise is a proposed plan that you can make to the Internal Revenue Service (IRS) when you cannot pay your full tax bill. - [There May By 50 Ways To Leave Your Lover But Only 1 Way To Make a Transfer To a “Ding,” NING,” “WING,” Or “SDING”](https://sftaxcounsel.com/blog/there-may-by-50-ways-to-leave-your-lover-but-only-1-way-to-make-a-transfer-to-a-ding-ning-wing-or-sding/) - An incomplete gift non-grantor trust formed that is, a NING, DING, WING, or SDING, may offer a planning opportunity to reduce state income tax liabilities. - [Failed to Disclose a Virtual Currency on Your Tax Return? You May be Receiving Either an “IRS Letter 6173,” “IRS Letter 6174,” or “IRS Letter 6174-A” in the Very Near Future](https://sftaxcounsel.com/blog/failed-to-disclose-a-virtual-currency-on-your-tax-return-you-may-be-receiving-either-an-irs-letter-6173-irs-letter-6174-or-irs-letter-6174-a-in/) - The IRS issued a press release. announcing that the IRS will be sending letters to persons that participated in virtual currency transactions. - [Conducting Business Abroad? The Check-the-Box Regulations and Cross Border Tax Arbitrage May Offer Significant Tax Savings Opportunities](https://sftaxcounsel.com/blog/conducting-business-abroad-the-check-the-box-regulations-and-cross-border-tax-arbitrage-may-offer-significant-tax-savings-opportunities/) - The tax attorneys at Diosdi Ching & Liu, LLP represent clients in a wide variety of domestic and international tax planning and tax controversy cases. - [Part Time Lovers- International Tax Attorneys and the Estate and Gift Tax](https://sftaxcounsel.com/blog/part-time-lovers-international-tax-attorneys-and-the-estate-and-gift-tax/) - For many foreign direct investors, the most important tax consideration is the U.S. federal estate tax and gift taxation. - [Can Todd and Julie Chrisley of “Chrisley Knows Best” Blame their Legal Troubles on a Whistleblower Statute?](https://sftaxcounsel.com/blog/can-todd-and-julie-chrisley-of-chrisley-knows-best-blame-their-legal-troubles-on-a-whistleblower-statute/) - A federal grand jury has indicted reality television stars Todd and Julie Chrisley on multiple counts of federal crimes including tax evasion. - [Can You Live Happily Ever After in California Holding Real Property in a “Tenancy by the Entirety” Form of Ownership?](https://sftaxcounsel.com/blog/can-you-live-happily-ever-after-in-california-holding-real-property-in-a-tenancy-by-the-entirety-form-of-ownership/) - If real property is held in a “tenancy by the entirety” form, and only one spouse who owns the property is a debtor, that spouse’s creditors cannot seize or even encumber the property so long as the spouses remain married. - [When Can a Foreign Tax Credit be Claimed?](https://sftaxcounsel.com/blog/when-can-a-foreign-tax-credit-be-claimed/) - The main purpose of the foreign tax credit is to mitigate the double taxation of foreign source income that might occur. Call us today. - [Be Careful When Receiving a Gift From a Foreign Corporation or Partnership](https://sftaxcounsel.com/blog/be-careful-when-receiving-a-gift-from-a-foreign-corporation-or-partnership/) - Federal law requires gifts or bequests valued at more than $100,000 from a nonresident alien or foreign estate to be disclosed on an IRs Form 3520. - [Discrepancy of the U.S. Income Tax Consequences for Foreign Investors Selling Limited Liability Company Units Compared to Corporate Shares](https://sftaxcounsel.com/blog/discrepancy-of-the-u-s-income-tax-consequences-for-foreign-investors-selling-limited-liability-company-units-compared-to-corporate-shares/) - The foreign person should make his or her U.S. income tax advisor aware of his or her ultimate goal in starting the U.S. business - [The Impact of an Installment Sale and the Potential Branch Profits Tax Liability for any Foreign Corporation Doing Business in the U.S.](https://sftaxcounsel.com/blog/the-impact-of-an-installment-sale-and-the-potential-branch-profits-tax-liability-for-any-foreign-corporation-doing-business-in-the-u-s/) - The Impact of an Installment Sale and the Potential Branch Profits Tax Liability for any Foreign Corporation Doing Business in the U.S. - [Can a Non-U.S. Citizen/Non-Domiciliary be Subject to a U.S. Gift Tax for Gifting Money to a U.S. Family Member?](https://sftaxcounsel.com/blog/can-a-non-u-s-citizen-non-domiciliary-be-subject-to-a-u-s-gift-tax-for-gifting-money-to-a-u-s-family-member/) - A person who is a non-U.S. citizen/non-U.S. domiciliary is also subject to U.S. gift tax with regard to inter vivos transfers of real estate and tangible personal property (including cash) which is situated within the United States. - [The Perils of a Foreign Individual Transferring U.S. Real Property for No Value](https://sftaxcounsel.com/blog/the-perils-of-a-foreign-individual-transferring-u-s-real-property-for-no-value/) - The Foreign Individual should also make his or her U.S. legal advisor aware of his or her ultimate goal when transferring such U.S. real property. - [The Potential Adverse Consequences Associated with the Transfer of Property to Foreign Entities by U.S. Persons](https://sftaxcounsel.com/blog/the-potential-adverse-consequences-associated-with-the-transfer-of-property-to-foreign-entities-by-u-s-persons/) - U.S. tax consequences that could result from such transfers and the forms that must be filed with the Internal Revenue Service (“IRS”) as a result of such transfers. - [Does Lori Loughlin Have an “Ignorance of the Law” a Defense to a Charge of Money Laundering? By Anthony Diosdi](https://sftaxcounsel.com/blog/does-lori-loughlin-have-an-ignorance-of-the-law-a-defense-to-a-charge-of-money-laundering-by-anthony-diosdi/) - Anthony Diosdi represents clients in federal tax controversy matters, including money laundering, throughout the United States. Call now 415.318.3990 - [Want to Contest Penalties Associated with Forms 5471 or 3520 before the Tax Court? Think Twice About Requesting an IRS Appeals Conference.](https://sftaxcounsel.com/blog/want-to-contest-penalties-associated-with-forms-5471-or-3520-before-the-tax-court-think-twice-about-requesting-an-irs-appeals-conference/) - Absent compelling reasons, the IRS Appeals Division tends to uphold these penalty assessments. Contact SF Tax Counsel to speak to a tax attorney. - [The Deductibility Fines and Penalties Has Gotten Easier Thanks to the First Circuit Court of Appeals](https://sftaxcounsel.com/blog/the-deductibility-fines-and-penalties-has-gotten-easier-thanks-to-the-first-circuit-court-of-appeals/) - The Income Tax Regulations unequivocally states that compensatory damages paid to a federal or state government does not constitute a fine or penalty. - [Working Outside the United States? You Can Potentially Exclude $105,900 from Federal Income Taxation](https://sftaxcounsel.com/blog/working-outside-the-united-states-you-can-potentially-exclude-105900-from-federal-income-taxation/) - The amount that can be excluded is up to a stipulated amount of foreign source “earned income,” that is wages, salary or other amounts paid for personal services performed outside the U.S. - [The Tax Deferral Afforded by an Interest-Charge DISC should be Considered by any Export Company](https://sftaxcounsel.com/blog/the-tax-deferral-afforded-by-an-interest-charge-disc-should-be-considered-by-any-export-company/) - By Anthony Diosdi Would you like to defer the payment of income tax on a substantial portion of your export profits? An Interest-Charge Domestic International Sales Corporation (“IC DISC”) may be the answer.An IC DISC is a domestic corporation which affords the shareholder the ability to defer income taxes on a significant portion of the - [Is it Possible to Obtain a Refund of the OVDP Offshore Penalty](https://sftaxcounsel.com/blog/is-it-possible-to-obtain-a-refund-of-the-ovdp-offshore-penalty/) - By Anthony Diosdi Since the Internal Revenue Service (“IRS”) has launched the initial Offshore Voluntary Disclosure Program (“OVDP”) in 2009, more than 56,000 people have disclosed their foreign financial accounts to the IRS. At last count, the IRS has collected over $10 billion dollars in tax, interest, and penalties from various targeted offshore voluntary disclosure - [The Taxation of Passive Foreign Investment Company (“PFIC”): The Use of a Sledgehammer to Kill a Cockroach](https://sftaxcounsel.com/blog/the-taxation-of-passive-foreign-investment-company-pfic-the-use-of-a-sledgehammer-to-kill-a-cockroach/) - The object of the PFIC provisions is to deprive a U.S. taxpayer of the economic benefit of deferral of U.S. tax on the taxpayer’s share of the undistributed income of a foreign investment. - [Foreign Tax Credit Planning- The Use of the “Technical Taxpayer” Rule to Split Foreign Tax Credits](https://sftaxcounsel.com/blog/foreign-tax-credit-planning-the-use-of-the-technical-taxpayer-rule-to-split-foreign-tax-credits/) - Under the “technical taxpayer rule” in Treasury Regulation 1.901-2(f)(1), the taxpayer “on whom foreign tax is treated as paying the foreign tax for foreign tax credit purposes, - [Renouncing a U.S. Citizenship for Tax Purposes- Breaking Up is Hard to Do](https://sftaxcounsel.com/blog/renouncing-a-u-s-citizenship-for-tax-purposes-breaking-up-is-hard-to-do/) - By Anthony Diosdi Renunciations of U.S. citizenship is growing. One of the main reasons people renounce their U.S. citizenship is to reduce their exposure to U.S. taxes. Anyone considering renouncing their U.S. citizenship must understand that the renunciation involves a two step process. Renunciation of U.S. citizenship has both immigration and tax implications. Section 349(a)(5) - [Just How Can I Obtain an Identification Number or ITIN](https://sftaxcounsel.com/blog/just-how-can-i-obtain-an-identification-number-or-itin/) - A nonresident alien applies for an ITIN on Form W-7. The form must be completed and signed under penalties of perjury. Call us for help. - [Can a Representative of an Estate be Forced to Defend Against an FBAR Penalty in Court?](https://sftaxcounsel.com/blog/can-a-representative-of-an-estate-be-forced-to-defend-against-an-fbar-penalty-in-court/) - In September of 2016, DOJ initiated an action before the district court to liquidate FBAR penalties to a judgment of just under $700,000. - [Is Constructive Knowledge Enough to Assess a Willful FBAR Penalty?](https://sftaxcounsel.com/blog/is-constructive-knowledge-enough-to-assess-a-willful-fbar-penalty/) - The court referenced and acknowledged the most prominent cases on willfulness for FBAR penalty purposes, U.S. v. Williams and U.S. v. McBride, - [Is the APA Still Relevant in FBAR Penalty Litigation?](https://sftaxcounsel.com/blog/is-the-apa-still-relevant-in-fbar-penalty-litigation/) - APA provides that the IRS must give ‘prompt notice...of the denial in whole or in part of a written application, petition, or other request...made in connection with the assessment of an FBAR penalty. - [The “Nuts and Bolts” of Contesting an FBAR Penalty Through Either the Tucker Act or Little Tucker Act](https://sftaxcounsel.com/blog/the-nuts-and-bolts-of-contesting-an-fbar-penalty-through-either-the-tucker-act-or-little-tucker-act/) - Anyone assessed an FBAR penalty can pay some or all of the penalties and then file a refund suit suit under the Tucker Act, 28 U.S.C. Section 1491, - [Time’s Up: Tolling Events That Extend the IRS’ Ability to Collect on You](https://sftaxcounsel.com/blog/times-up-tolling-events-that-extend-the-irs-ability-to-collect-on-you/) - A lesser known tolling event also occurs if the taxpayer is physically outside the United States for a continuous period of at least six months. - [Just in Time for Tax Season: Change to IRS Form 5471](https://sftaxcounsel.com/blog/just-in-time-for-tax-season-change-to-irs-form-5471/) - By Anthony Diosdi Introduction Subpart F of the Internal Revenue Code requires every person who is a U.S. shareholder of a controlled foreign corporation (or “CFC”), and who owns stock in such corporation to include in gross income a deemed dividend equal to the shareholder’s pro rata share of the CFC’s earnings. In order to - [“BEAT” Again- The New BEAT Tax Regime Considerations and Compliance Requirements Imposed on U.S. Inbound Transactions Involving Foreign Corporate Parents](https://sftaxcounsel.com/blog/beat-again-the-new-beat-tax-regime-considerations-and-compliance-requirements-imposed-on-u-s-inbound-transactions-involving-foreign-corporate-parents/) - By Anthony Diosdi Introduction to the BEAT Tax Regime The 2017 Act introduced the Base Erosion Anti-Abuse tax (“BEAT”) as codified under Internal Revenue Code Section 59A, which is designed to prevent base erosion in the crossborder context by imposing a type of alternative minimum tax, which is applied by adding back to taxable income - [The General Treaty Provisions That All Individual Foreign Investors Should Consider Before Investing in the United States](https://sftaxcounsel.com/blog/the-general-treaty-provisions-that-all-individual-foreign-investors-should-consider-before-investing-in-the-united-states/) - By Anthony Diosdi Introduction In the individual foreign investor setting, inbound tax planning often requires a balancing of U.S. income tax considerations and U.S. federal gift and estate tax considerations. While U.S. federal income tax rates on the taxable income of an individual foreign investor are the same as those applicable to a U.S. citizen - [Should You Hire an Attorney for Your Business Tax Preparation in 2019?](https://sftaxcounsel.com/blog/should-you-hire-an-attorney-for-your-business-tax-preparation-in-2019/) - At SF Tax Counsel, however, we offer the services of Certified Public Accountants (CPAs) and Enrolled Agents for your business tax preparation. - [A Closer Look at the Non-Willful FBAR Penalty Associated with Not Timely Filing a FinCen Report 114](https://sftaxcounsel.com/blog/a-closer-look-at-the-non-willful-fbar-penalty-associated-with-not-timely-filing-a-fincen-report-114/) - By Anthony Diosdi I. DEFINING THE IMPORTANT TERMS EVERY U.S. INDIVIDUAL WITH AN INTEREST IN FOREIGNFINANCIAL ACCOUNT(S) NEEDS TO UNDERSTANDA. Introduction This article is designed to provide a background and overview of the laws governing the disclosure of foreign accounts on a Foreign Bank Account Report, FinCen Report 114 (“FBAR”). This article also discusses the - [Reporting Requirements for U.S. Persons Who Receive Large Gifts From Foreign Persons](https://sftaxcounsel.com/blog/reporting-requirements-for-u-s-persons-who-receive-large-gifts-from-foreign-persons/) - By Anthony Diosdi IntroductionThe Small Business Job Protection Act of 1996 (the “Act”) contained certain foreign gift reporting provisions. In order to facilitate compliance with the Act, the Internal Revenue Service (“Service” or “IRS”) developed Form 3520 entitled “Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts.” The Form 3520 - [Did You Receive a Notice CP 508C From the IRS Stating That Your Passport is Being Revoked? Maybe the APA Can Prevent the IRS from Taking Your Passport](https://sftaxcounsel.com/blog/did-you-receive-a-notice-cp-508c-from-the-irs-stating-that-your-passport-is-being-revoked-maybe-the-apa-can-prevent-the-irs-from-taking-your-passport/) - By Anthony Diosdi IntroductionI have been assisting clients with tax problems for nearly twenty years. One question that I was always asked is,’Can the Internal Revenue Service (“IRS” or “Service”) stop me from traveling abroad?’. Up until fairly recently, I advised clients that the IRS could not prevent them from traveling abroad. That all changed - [Income Tax Considerations of Property Inherited from A Foreign Person](https://sftaxcounsel.com/blog/income-tax-considerations-of-property-inherited-from-a-foreign-person/) - By Anthony Diosdi Many U.S. income tax questions arise in connection with receipt of inherited property. These questions generally include whether the recipient must include the value of such property in gross income for U.S. income tax purposes and what will be the U.S. income tax consequences of the recipient’s subsequent disposition of the inherited - [The Branch Profits Tax and the Foreign Corporation](https://sftaxcounsel.com/blog/the-branch-profits-tax-and-the-foreign-corporation/) - By Anthony Diosdi In general, when a domestic corporation pays a dividend to a foreign shareholder, a thirty percent (30%) tax is imposed. Recognizing that it is far more difficult for the Internal Revenue Service (“IRS”) to monitor when a foreign corporation pays a dividend, the tax law provides a mechanism to determine when funds - [Establishing a Residency Termination Date For Tax Planning Purposes](https://sftaxcounsel.com/blog/establishing-a-residency-termination-date-for-tax-planning-purposes/) - By Anthony Diosdi An alien individual who is a United States resident alien for income tax purposes, but who is a nonresident alien for United States income tax purposes during the following year, will cease to be a resident alien on the individual’s “residency termination date.” Generally, the residency will be the last day of - [The U.S. Withholding Tax on a Foreign Partner’s Share of Effectively Connected Taxable Income](https://sftaxcounsel.com/blog/the-u-s-withholding-tax-on-a-foreign-partners-share-of-effectively-connected-taxable-income/) - By Anthony Diosdi In recent years, there has been a significant increase in business activities between U.S. persons and persons from third countries. When U.S. persons and foreign persons enters into arrangements to conduct business activities in the United States, it is not uncommon for the arrangement to be general or limited partnership, a limited - [Tax Planning for Foreign Individuals That Own U.S. Real Property](https://sftaxcounsel.com/blog/tax-planning-for-foreign-individuals-that-own-u-s-real-property/) - Tax Planning for Foreign Individuals That Own U.S. Real Property. The most common example of a U.S. situs asset is U.S. real estate. - [U.S. Real Property Interest Non-Recognition Transfers- Can the Internal Revenue Service Assess Interest When No Tax is Due?](https://sftaxcounsel.com/blog/u-s-real-property-interest-non-recognition-transfers-can-the-internal-revenue-service-assess-interest-when-no-tax-is-due/) - U.S. Real Property Interest Non-Recognition Transfers- Can the Internal Revenue Service Assess Interest When No Tax is Due? - [Transfer of Property Between Spouses During Divorce When the Transferee Spouse is a Nonresident Alien](https://sftaxcounsel.com/blog/transfer-of-property-between-spouses-during-divorce-when-the-transferee-spouse-is-a-nonresident-alien/) - A transfer of property is incident to the divorce if such transfer occurs within one year after the date on which the marriage ceases, or is related to the cessation of the marriage. - [Violation of a Temporary Visa and the Possible Effect on “Domicile”](https://sftaxcounsel.com/blog/violation-of-a-temporary-visa-and-the-possible-effect-on-domicile/) - One acquires “domicile” in a particular place by living there (for even a brief period of time) with no definite present intention of later removing oneself - [Criminal Aspects of Failing to Disclose Foreign Financial Accounts](https://sftaxcounsel.com/blog/criminal-aspects-of-failing-to-disclose-foreign-financial-accounts/) - If you have or had signature authority over one or more foreign financial accounts that exceed $10,000 in value, and the foreign financial accounts were “willfully” (willfulness in the criminal context has been defined as the “voluntary, intentional violation of a known legal duty") not disclosed on your U.S. tax return, Form TD F 90-22.1 - [GILTI as Charged? Maybe 962 Can Bail You Out](https://sftaxcounsel.com/blog/gilti-as-charged-maybe-962-can-bail-you-out/) - It has come to my attention that some advertisers have made vague references to helping individual taxpayers claim the same “tax breaks” as “the big boys.” What exactly is meant by “tax breaks” or “big boys” is neither here nor there, (although I assume for purposes of this article that what is referred to as - [GILTI vs. FDII: Outbound International Taxation Showdown](https://sftaxcounsel.com/blog/gilti-vs-fdii-outbound-international-taxation-showdown/) - We all have guilty pleasures (no pun intended). One of my guilty pleasures used to be watching WWE wrestling. WWE battles were always epic and you never knew who was going to be the hero or villain in any given match. Just like WWE characters, tax regulations can be a hero in one case and - [It’s Not Your Father’s Retirement Account Anymore- The Basics of Using a Self-Directed IRA and 401Ks to Invest in Real Estate](https://sftaxcounsel.com/blog/its-not-your-fathers-retirement-account-anymore-the-basics-of-using-a-self-directed-ira-and-401ks-to-invest-in-real-estate/) - A self-directed retirement plan is a type of structure that allows the holder to transfer tax free funds from a retirement account to acquire real estate. There are a number of rules however that must be followed in order to make such a transaction work. Let’s first start with a basic retirement account. Retirement accounts - [Beware of Investing in Conservation Easements Offered by Promoters of Easement Syndicates](https://sftaxcounsel.com/blog/beware-of-investing-in-conservation-easements-offered-by-promoters-of-easement-syndicates/) - Introduction to Conservation EasementsOver the years, charitable contributions of conservation easements have allowed taxpayers to obtain a federal tax deduction for the purpose of conserving land for public use, public enjoyment, or to preserve historic building structures. For tax purposes, a conservation easement creates a discounted value for the property encumbered by the easement which - [The IRS Announces the 2018 Offshore Voluntary Disclosure Program](https://sftaxcounsel.com/blog/the-irs-announces-the-2018-offshore-voluntary-disclosure-program/) - On November 29, 2018, the Internal Revenue Service (“IRS”) announced a new set of rules governing the 2018 Offshore Voluntary Disclosure Program (“OVDP”). The OVDP allows taxpayers with undisclosed foreign accounts to potentially avoid criminal prosecution and/or severe civil penalties. Previously, taxpayers that entered into the OVDP were required to amend tax returns for up - [Buyer Beware: The Basic Rules Governing FIRPTA Withholding on Real Estate](https://sftaxcounsel.com/blog/buyer-beware-the-basic-rules-governing-firpta-withholding-on-real-estate/) - Introduction Foreign investors actively invest in United States real estate by speculating on land and developing homes, condominiums, shopping centers, and commercial buildings. Many foreign investors also own recreational property in popular U.S. vacation destinations. This article attempts to summarize the Foreign Investment in Real Property Tax Act of 1980 (hereinafter “FIRPTA”) consequences surrounding a - [Can You “DING” Your State Tax Liability With a “NING,” “WING,” or “SDING”?](https://sftaxcounsel.com/blog/can-you-ding-your-state-tax-liability-with-a-ning-wing-or-sding/) - Introduction The passing of the Tax Cuts and Jobs Act resulted in a significant tax increase for many in high income tax states. It also elevated the need of many residents of high tax states to utilize planning opportunities to reduce their overall tax liabilities. An incomplete gift non-grantor trust (hereinafter “ING”) formed in a - [What You Need to Know About OVDP After September 28, 2018](https://sftaxcounsel.com/blog/what-you-need-to-know-about-ovdp-after-september-28-2018/) - Introduction to the Offshore Voluntary Disclosure Program (OVDP) For many years, a large number of U.S. taxpayers have placed and continue to place large sums of money in foreign financial accounts. Many of these individuals, knowingly or unknowingly, violate federal law by not disclosing these foreign accounts to the Internal Revenue Service (“IRS”). In an - [Demystifying the Taxation of Deferred Foreign Earnings](https://sftaxcounsel.com/blog/demystifying-the-taxation-of-deferred-foreign-earnings/) - U.S. shareholders of foreign corporations with retained earnings were required to repatriate as much as 31 years of accumulated foreign earnings in a single year. ## Pages - [Home](https://sftaxcounsel.com/) - Expert tax litigation and preparation with unparalleled experience and passion. Few firms match our dedication to your financial success. - [Publications](https://sftaxcounsel.com/publications/) - Check out our publications from tax news outlets and magazines from around the world. We specialize in foreign and financial tax accounts. - [Speaking Engagements](https://sftaxcounsel.com/speaking-engagements/) - Globalization impacts the work of businesses, individuals and the tax professionals who advise them. We talk about it, read our speeches and conference details. - [Videos](https://sftaxcounsel.com/videos/) - Explore our collection of videos on international tax law. Gain insights on tax planning strategies, compliance, and cross-border tax issues. - [Success Stories](https://sftaxcounsel.com/success-stories/) - Below is a small sample of some of the successes achieved on behalf of clients at other law firms by the attorneys of Diosdi & Liu, LLP. The results portrayed in the success stories were dependent on the facts of that case, and the results will differ if based on different facts. Select Success Regarding - [About Us](https://sftaxcounsel.com/about-us/) - Don't subject yourself to unnecessary penalties by not having the right legal assistance. Contact our experienced attorneys at SF Tax Counsel. - [Contact Us](https://sftaxcounsel.com/contact-us/) - Our Headquarters View Our Offices - [Sitemap](https://sftaxcounsel.com/sitemap/) - View the full sitemap of blogs, practice areas, locations, and more on this page. Scroll through to find what you are looking for in regards to tax law. - [Terms and Conditions](https://sftaxcounsel.com/terms-and-conditions/) - Last updated: January 17, 2023 Please read these terms and conditions carefully before using Our Service. Interpretation and Definitions Interpretation The words of which the initial letter is capitalized have meanings defined under the following conditions. The following definitions shall have the same meaning regardless of whether they appear in singular or in plural. Definitions - [Privacy Policy](https://sftaxcounsel.com/privacy-policy/) - Last updated: January 17, 2023 This Privacy Policy describes Our policies and procedures on the collection, use and disclosure of Your information when You use the Service and tells You about Your privacy rights and how the law protects You. We use Your Personal data to provide and improve the Service. By using the Service, ## Attorneys - [Anthony Diosdi](https://sftaxcounsel.com/attorneys/anthony-diosdi/) - Anthony Diosdi focuses his practice on international inbound and outbound tax and estate planning for high net worth individuals, multinational companies. - [Kerrin Liu](https://sftaxcounsel.com/attorneys/kerrin-liu/) - Kerrin is a San Francisco tax lawyer who focuses on civil tax litigation, representation before Internal Revenue Service Criminal Investigations & more. ## Offices - [Fort Lauderdale](https://sftaxcounsel.com/office/fort-lauderdale/) - We provide comprehensive legal tax advise in Fort Lauderdale, FL. From personal accounts to large corporations trust the attorneys at Diosdi & Liu. - [Pleasanton](https://sftaxcounsel.com/office/pleasanton/) - Need a tax attorney? Visit our Pleasanton office, and speak with one today! 4900 Hopyard Rd. Suite #100 Pleasanton, CA 94588. - [San Francisco](https://sftaxcounsel.com/office/san-francisco/) - San Francisco is one of the largest business hubs in the world, and we harness the top lawyers in the city for both national and foreign tax. ## Practice Areas - [IRS Offshore Voluntary Disclosure Representation](https://sftaxcounsel.com/practice-areas/irs-offshore-voluntary-disclosure-representation/) - Since the 2009 calendar year, the Department of Justice and the IRS have been aggressively waging war on taxpayers who hold undisclosed offshore assets. Through a variety of methods, the Department of Justice and the IRS have obtained volumes of information about the holders of offshore financial accounts and their assets abroad. Some of this - [Commercial Litigation](https://sftaxcounsel.com/practice-areas/commercial-litigation/) - The attorneys at Diosdi & Liu, LLP have represented clients in the following areas of commercial litigation. Tax Professional Malpractice Business owners and individuals often rely on tax professionals to plan transactions or prepare their tax returns. Sometimes things go wrong, and tax professionals provide incorrect tax advice or incorrectly prepare tax returns. This can - [Preparation of Form 8621 and PFIC Reporting](https://sftaxcounsel.com/practice-areas/preparation-of-form-8621-and-pfic-reporting/) - A U.S. person must file annually, with its federal income tax return for the year, a separate Form 8621, Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, for each PFIC for which the taxpayer was a shareholder during the taxable year. The objective of the PFIC provisions of the - [FBAR Preparation and Penalty Defense](https://sftaxcounsel.com/practice-areas/fbar-preparation-and-penalty-defense/) - At the tax law firm of Diosdi & Liu, LLP, we prepare FinCen Report 114 (“FBAR”) for our clients. We not only prepare FBARs for clients, but we also defend clients in FBAR audits and against FBAR-related penalties. For decades, many U.S. taxpayers have held interests in financial accounts located in foreign countries. However, few - [Taxation of Foreign Pensions](https://sftaxcounsel.com/practice-areas/taxation-of-foreign-pensions/) - In the last 20 years, there has been a significant upward trend of highly skilled foreign workers moving to the United States for temporary assignments. For foreigners planning to move to the United States for a temporary work assignment, pre-immigration tax planning is crucial. Whether the goal is to minimize the tax effects of the - [Criminal Tax Representation](https://sftaxcounsel.com/practice-areas/criminal-tax-attorneys/) - If you learn you may be under investigation for a tax crime, you need to contact a qualified criminal tax attorney immediately. - [Preparation of Form 5471](https://sftaxcounsel.com/practice-areas/tax-preparation-of-form-5471/) - You should never risk making costly errors on your tax returns that could result in significant penalties. Even small mistakes on your individual or corporate tax returns can lead to large penalty assessments, lengthy audits, and other complications. We offer a full range of tax preparation services. Although we provide tax preparation services in a - [Estate Tax Planning](https://sftaxcounsel.com/practice-areas/estate-tax-planning/) - We advise high-net-worth individuals on both domestic and international trusts and estate planning matters, dynasty trusts, wealth preservation, & more. - [Tax Planning and Opinions](https://sftaxcounsel.com/practice-areas/tax-planning-attorneys/) - The IRS is extraordinarily complex and you should always have a tax planning attorney evaluate your situation and identify any new laws. - [Preparation of Form 5472](https://sftaxcounsel.com/practice-areas/preparation-of-form-5472/) - The Form 5472 is a mandatory return that must be filed with the IRS for reportable transactions between a reporting corporation and its foreign related party. This article will discuss whether an entity has an obligation to file a Form 5472. Form 5472: Basic Terminology A Form 5472 is required to be filed by a - [Preparation of Form 3520](https://sftaxcounsel.com/practice-areas/preparation-of-form-3520/) - Form 3520, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, is one of the most complex tax return reporting forms in the IRS international tax reporting regime. Individuals or entities who own an interest in a foreign-based trust or receive gifts, inheritances, or distributions from a foreign source are - [State Tax Planning and Litigation](https://sftaxcounsel.com/practice-areas/state-tax-planning-and-litigation/) - Like the IRS, the California Franchise Tax Board (“FTB”) is authorized to audit tax returns and assess additional tax liabilities, interest, and penalties. Although a FTB audit seems similar to an IRS audit, an FTB audit is very different in nature, and the outcome of an FTB audit may be dramatically different than an IRS - [Cryptocurrency Tax Matters](https://sftaxcounsel.com/practice-areas/cryptocurrency-representation/) - Discuss tax law compliance with an experienced cryptocurrency attorney. Call now for your FREE consultation with SF Tax Counsel 415.318.3990 - [Tax Preparation](https://sftaxcounsel.com/practice-areas/tax-preparation-attorneys/) - Protect yourself and your finances from the very beginning by hiring an experienced tax preparation lawyer at SF Tax Counsel. - [FIRPTA](https://sftaxcounsel.com/practice-areas/firpta/) - U.S. real estate has become a popular investment with foreigners. We inform foreign investors on the Foreign Investment in Real Property Tax Act (“FIRPTA”). - [Tax Planning of Cross-Border Cloud Computing Transactions](https://sftaxcounsel.com/practice-areas/tax-planning-of-cross-border-cloud-computing-transactions/) - We provide planning advice to foreign high-tech companies to avoid U.S. taxes and withholding tax. Stay on par with new technology, new transactions & the law. - [Expatriation](https://sftaxcounsel.com/practice-areas/expatriation/) - We have assisted many U.S. citizens and green card holders expatriate from the United States. We provide expatriation tax planning advice and help you prepare. - [Estate and Gift Tax for Foreign Investors](https://sftaxcounsel.com/practice-areas/estate-and-gift-tax-for-foreign-investors/) - This article summarizes the basic estate and gift tax issues that affect foreign investors investing in the U.S. This article also discusses international tax - [Independent Contractor Disputes](https://sftaxcounsel.com/practice-areas/independent-contractor-disputes/) - From the very first meeting, we carefully review the facts and circumstances of each client with employment tax issues. We are San Francisco Tax Lawyers. - [Tax-Exempt and Nonprofit Organizations](https://sftaxcounsel.com/practice-areas/tax-exempt-and-nonprofit-organizations/) - We provide advice to tax-exempt and nonprofit organizations in San Francisco and beyond. We work with you to establish a tax-exempt organization or nonprofit. - [Cross-Border Mergers and Acquisitions](https://sftaxcounsel.com/practice-areas/cross-border-mergers-and-acquisitions/) - We provide U.S. international tax planning advice for tax-efficient corporate mergers, acquisitions, and reorganizations. - [International Tax Planning and Advice](https://sftaxcounsel.com/practice-areas/international-tax-planning-and-advice/) - We provide global tax planning advice and representation. We are international tax attorneys and we dedicate to defending your rights. - [International Penalties](https://sftaxcounsel.com/practice-areas/international-tax-attorneys/) - San Francisco International Tax Attorneys Providing Cutting Edge Advice for International Tax Planning and Preparation. Call Now For a FREE Consultation! - [IRS Representation and Compliance](https://sftaxcounsel.com/practice-areas/collection-representation/) - Whether you owe back taxes, have years of unfiled tax returns, or have received notices from the IRS, our attorneys are here to help. - [Tax Audits, Controversies, and Litigation](https://sftaxcounsel.com/practice-areas/tax-law-attorneys/) - The Internal Revenue Code is a lengthy and complex set of laws that sets out rules and restrictions applying to many different types of situations.