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Disregarded Entities Internal Revenue Service

Holland & Knight LLP

New FinCEN FAQ Guidance: Taxpayer ID Numbers, Disregarded Entities and Best Practices

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The U.S. Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) on July 24, 2024, issued two new FAQs providing guidance on 1) how to obtain a taxpayer identification number (TIN) in a manner to ensure...more

Eversheds Sutherland (US) LLP

Revised IRS Form W-9 impacts disregarded entities and their owners as well as US partnerships with foreign owners

The IRS recently released a revised version of Form W-9, Request for Taxpayer Identification Number and Certification, bearing a March 2024 revision date. The revised Form W-9 modifies line 3a and includes a new line 3b....more

Ballard Spahr LLP

IRS Changes Rules for Who Can Sign a Power of Attorney for an Entity Treated as a Partnership

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Summary - In November 2022, the IRS updated its guidance regarding who can sign Form 2848, Power of Attorney and Declaration of Representative (POA), submitted on behalf of a limited liability company (LLC) treated as a...more

Foster Garvey PC

Disregarded Entities Under the Check-the-Box Regulations Are Not Disregarded for All Tax Purposes

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More than 25 years ago, effective January 1, 1997, Treasury issued what have been called the “Check-the-Box” regulations (the “Regulations”). The Regulations ended decades of battles between taxpayers and the IRS over entity...more

Cadwalader, Wickersham & Taft LLP

IRS Issues Taxpayer-Favorable Debt Workout Ruling

In PLR 202050014, the IRS ruled that a parent would not recognize taxable gain when its disregarded entity transferred a newly formed corporation’s stock to creditors in satisfaction of its debt pursuant to a “G”...more

Dorsey & Whitney LLP

Critical Reporting Obligation: Canadian-Owned U.S. Corporations and Disregarded Entities

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Canadian persons and entities owning a significant interest in a U.S. corporation or U.S. entity classified as a “disregarded entity” for U.S. federal income tax purposes should ensure they are compliant with IRS Form 5472...more

Ballard Spahr LLP

Partners Must Pay Self-Employment Tax on Partnership Income—Even From a 'Disregarded Entity'

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The IRS has published Final Regulations finalizing its prior guidance that partners in a partnership must pay self-employment tax on their partnership income, even if they work for an entity owned entirely by the partnership...more

Foodman CPAs & Advisors

Penalty of $25,000 for Foreigners with a 25% ownership stake or control of a U.S. legal entity that fail to file Form 5472

Form 5472 is an Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business.  The purpose of Form 5472 is to provide information when “reportable transactions” occur...more

Foodman CPAs & Advisors

Thoughts about the New Filing Requirements for Foreign-Owned U.S. entities?

Foreign Persons that own 25% of a US entity might want to reassess their strategy as it relates to that ownership. It “used to be” (until December, 2016) that a Foreign Person as a single owner of a Limited Liability Company...more

Akerman LLP

New Reporting Requirements For Foreign-Owned Disregarded Entities Have Taken Effect

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The final regulations enacted in late 2016 that impose new reporting requirements on foreign-owned disregarded entities have now taken effect, bringing changes that will add significant complexity for many taxpayers this tax...more

Stinson LLP

Minnesota Corporate Franchise Tax Change for Foreign Disregarded Entities

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The Minnesota Department of Revenue issued its position on foreign disregarded entities of corporate taxpayers on October 4, 2017. In response to the Minnesota Supreme Court decision filed August 2, 2017 in Ashland Inc. v....more

Ballard Spahr LLP

Treating Partners as Employees – Overview and Update

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Limited liability companies (LLCs) have become the fastest-growing entity choice for businesses in recent years. LLCs provide flexibility in operations and distributions. However, to the surprise of many businesspeople, if an...more

Troutman Pepper

Tax Update, Volume 2017, Issue 2

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THE NEW REGULATIONS EXPAND THE FILING REQUIREMENTS FOR FORM 5472 TO INCLUDE DISREGARDED ENTITIES WITH FOREIGN OWNERS WHEN THERE ARE CERTAIN REPORTABLE TRANSACTIONS. If a non-U.S. person (individual or corporation)...more

Troutman Pepper

Combatting Foreign Tax Evasion With New Filing Requirements for Foreign-Owned Disregarded Entities: Tax Update, Volume 2017, Issue...

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If a non-U.S. person (individual or corporation) owns 100 percent of the stock of a U.S. corporate subsidiary, the subsidiary needs to obtain an employer identification number (EIN) and maintain adequate books and records to...more

Clark Hill PLC

IRS Clarification Causes Many Partnerships to Change Compensation Reporting for Partners

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A federal tax issue frequently arises when key employees of an operating business are given the opportunity to become equity holders. Despite the well-established rule that partners of a partnership are not permitted to be...more

Troutman Pepper

New Temporary and Proposed Regulations Regarding Debt Allocations for Partnerships - 'Oh My' - Tax Update Volume 2017, Issue 1

Troutman Pepper on

Although There Are Aspects of the Regulations that Practitioners and Taxpayers Still Disagree With, There Are Others that Are an Improvement on What Was Proposed Earlier. From 2013 through 2014, the IRS and the U.S....more

Eversheds Sutherland (US) LLP

Final Regulations Impose Reporting Obligations on Foreign-Owned Domestic Disregarded Entities 

Amid the Panama Papers leak and international concern that foreign persons were concealing assets through U.S. entities that are disregarded for U.S. federal income tax purposes, the Internal Revenue Service (IRS) and the...more

Seyfarth Shaw LLP

One Step Back, One Step Forward: New Debt-Equity Regulations Narrow Their Focus on Earnings Stripping

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Seyfarth Synopsis: On October 13, 2016 the IRS and Treasury Department published over 500 pages of final and temporary regulations under Code Section 385 (the “Final Regulations”). Drafted to curtail tax benefits accrued by...more

Proskauer - Tax Talks

IRS Issues Final and Temporary Debt-Equity Regulations Under Section 385

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On October 13, 2016, the Treasury Department and the Internal Revenue Service issued final and temporary regulations under section 385 of the Internal Revenue Code. The final and temporary regulations recharacterize certain...more

Proskauer Rose LLP

IRS Issues Final and Temporary Debt-Equity Regulations Under Section 385

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On October 13, 2016, the Treasury Department and the Internal Revenue Service issued final and temporary regulations under section 385. The final and temporary regulations recharacterize certain debt instruments as equity for...more

Cadwalader, Wickersham & Taft LLP

Application of New Debt-Equity Regulations to Securitizations

On October 13, 2016, Treasury and the IRS issued new final and temporary “anti-inversion” regulations under section 385 of the Internal Revenue Code that could treat certain purchasers of notes issued by securitizations as...more

Morrison & Foerster LLP

IRS Issues Final Debt-Equity Regulations

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On October 13th, the Internal Revenue Service (“IRS”) followed through on its promise to issue final regulations and temporary regulations under Section1 385 (the “Final Regulations” and “Temporary Regulations,” respectively)...more

Robinson & Cole LLP

IRS Clarifies Benefit Coverage Requirements for Employees of Tax-Exempt Disregarded Entities

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The Internal Revenue Service (IRS) recently issued General Counsel Memorandum 201634021 (Memorandum), clarifying benefit coverage requirements for employees of a disregarded LLC wholly owned by a single member tax-exempt...more

Seyfarth Shaw LLP

IRS Says Employees of Disregarded Single-Member LLC May Participate in Parent’s 403(b) and 457(b) Plans

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Seyfarth Synopsis: A recently published IRS memorandum provides that employees of a single-member LLC treated as a disregarded entity must be allowed to participate in a section 403(b) plan sponsored by its parent 501(c)(3)...more

Morrison & Foerster LLP

MoFo Tax Talk - Volume 9, No. 2

Editor's Note - Welcome to Tax Talk 9.02. By this fall, we may look back on Q2 2016 with some nostalgia. Of course, there is the U.S. presidential election on November 8th, but U.S. tax advisors right now are more...more

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