Controlled Foreign Corporations

News & Analysis as of

New Temporary Regulations Narrow the Application of the Subpart F Active Rents and Royalties Exception

On September 2, 2015, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued Temporary Regulation § 1.954-2T concluding that third party arrangements cannot be taken into account for...more

Treasury and IRS Issue New Temporary Treasury Regulations

On September 2, 2015, the U.S. Department of the Treasury (Treasury) and the Internal Revenue Service (IRS) issued new temporary Treasury regulations addressing the application of Internal Revenue Code Section 956 to certain...more

New IRS Guidance Expands Application of Section 956 to Controlled Foreign Corporations that Own Partnerships

Earlier this week the IRS published two sets of regulations addressing when a US owner of a Controlled Foreign Corporation (CFC) has a deemed repatriation through the use of a CFC-owned foreign partnership. The regulations...more

Treasury and IRS Release Notice 2015-54: Potential Impact on Domestic and Foreign Partnerships

The principal effect of the rules would be to turn virtually any contribution of appreciated property by a US person to a section 721(c) partnership into a taxable gain recognition event. On August 6, the US Treasury...more

UK Summer Budget 2015: Osborne's 'Big Summer Budget' – the key measures impacting business

The first fully Conservative Budget for 18 years, following the end of the Coalition as a result of the May general election, was anticipated to be a 'Big Budget' but in truth it was a mixed bag: the game changers are the...more

SEC Proposes Rules on Compensation Clawback Policies

On July 1, 2015, the Securities and Exchange Commission (SEC) proposed rules relating to compensation clawback policies. The rules, if adopted, would implement the requirements of Section 954 of the Dodd-Frank Wall Street...more

SEC Proposes Rules for Clawback of Incentive Compensation

On July 1, 2015, the Securities and Exchange Commission (SEC) issued the long-awaited proposed rules to implement section 10D of the Securities Exchange Act of 1934, as added by section 954 of the Dodd-Frank Wall Street...more

Ticking all the Right Boxes! Irish Collective Asset Management Vehicles Act 2015 Signed into Law

The eagerly anticipated Irish Collective Asset-management Vehicles Act 2015 (the “ICAV Act”) was signed into law in March 2015 and the first Irish Collective Asset-management Vehicles (“ICAVs”) have been authorised by the...more

BE-10 Report: The Overlooked International Reporting Form -The June 30 Deadline is Fast Approaching

The Bureau of Economic Analysis (“BEA”), an agency of the U.S. Department of Commerce, is currently conducting a benchmark BE-10 survey that requires the filing of a BE-10 report by any U.S. person that directly or indirectly...more

Delinquent FBAR Reporting and How to Come Forward? Fact and Choice of Method Really Matter!!!

FBARS for 2014 are Due and MUST BE FILED by June 30, 2015 - There are three approaches to coming forward and filing delinquent FBAR's (Report of Foreign Financial Account). They are...more

Mutual Funds with CFCs: Take Note of BE-10 Reporting Requirements

Mutual funds with Controlled Foreign Corporations may need to file a BE-10 with the Bureau of Economic Analysis or request an extension before the reporting deadline....more

Diverted Profits Tax: counterbalancing the UK's "open for business" agenda?

The UK’s introduction of the diverted profits tax (DPT) has dismayed tax practitioners and their multinational clients. Rushed through parliament (ahead of its dissolution before the general election) and in effect as of...more

Focus on Tax Controversy - Spring 2015

In This Issue: - Fifth Circuit Ruling in BMC Software, Inc. v. Comm’r. Is Good News for Taxpayers - When Is a Second Inspection Not a Second Inspection? - Captive Insurance Litigation: Key 2014 Cases ...more

Tax Policy Update

NUMBER OF THE WEEK: $1.4 Trillion. The estimated total of individual income taxes the Internal Revenue Service is expecting to collect on April 15. The U.S. House of Representatives has returned from recess and is planning to...more

New Russian CFC Rules Will Impact Inbound U.S. Tax Planning

According to recent estimates, the number of wealthy Russians investing in the United States ballooned in 2014 as a result of political turmoil and a disintegrating ruble causing Russians to seek a safe haven for their wealth...more

Is a Distribution of Previously Taxed Income “Exempt from Tax”?

A U.S. shareholder of a controlled foreign corporation (CFC) is required to include in its gross income its pro rata share of the CFC’s subpart F income and/or the amount determined under Section 956 with respect to such...more

FY 2016 Budget Tax Proposals Target Insurance Companies

On February 2, the Obama Administration released its fiscal year 2016 budget (FY 2016 Budget). The hallmarks of the FY 2016 Budget are proposals that would impose (i) a minimum tax on the current foreign earnings of U.S....more

New Russian De-Offshoring Rules. The Impact On Foreign Investors And Russian Businesses

The debate over the strength of the de-offshoring initiatives between Russian Government hard-liners and representatives of the business community seems to have been finally resolved as the Russian lawmakers have adopted...more

United States Property Investments under Section 956 of the Code

I. Background and Overall Scope of Section 956 - The overall purpose of section 956 is to tax investments made by CFCs in specified categories of “United States property” on a constructive dividend basis. The...more

New Treasury Regulations Target Corporate Inversions

Last week, the Internal Revenue Service and Treasury Department announced a number of new regulations intended to make it more difficult to qualify for tax advantages associated with inversion transactions and reduce certain...more

The New Landscape for Inversions: IRS and Treasury Change the Rules

The Internal Revenue Service (“IRS”) and Treasury Department issued Notice 2014-52 (the “Notice”) targeting corporate inversions on September 22, 2014 (the “Notice Date”) in the U.S. Tax considerations are important for...more

U.S. Treasury Department Takes Action to Slow (But Not Stop) Corporate Inversions: A Summary for Executives

What is an inversion? An inversion is a transaction that results in an existing U.S. company becoming a foreign company or becoming a subsidiary of a foreign parent. Historically, inversions involved U.S. companies...more

“Return of Basis” Repatriation Strategy Tested in Tax Court

U.S. multinationals literally have trillions of dollars of untaxed earnings purportedly “trapped” offshore because of the associated high U.S. corporate income taxes that would be incurred if these earnings were repatriated...more

IRS Taking Closer Look at Section 956 Inclusions

Each “U.S. Shareholder” of a controlled foreign corporation (“CFC”) is required to include in their gross income as a deemed distribution their pro rata share of the amount determined under section 956 for that year (i.e.,...more

SEC – USAO File Actions Based on Scheme To Conceal Ownership

Building on an undercover sting operation, the SEC filed an enforcement action against two individuals and their controlled entity. They are alleged to have conducted a business which helped shareholders conceal their...more

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