International Tax Newsletter - Spring 2011 - United States - Key International Tax Developments

April 01, 2011

In recent months, EisnerAmper LLP has issued Alerts describing several significant U.S. international tax developments. In case you missed any of them, links are provided below:

  • Uncertain Tax Positions: The Internal Revenue Service (IRS) is moving forward with the requirement that corporations attach a schedule to their 2010 and later tax returns reporting uncertain tax positions, including those related to international operations and investments. For current reporting details, please see the Alert dated September 27, 2010.
  • Series Organizations: The IRS issued proposed regulations dealing with the tax treatment of series organizations. The proposed regulations also will apply to a foreign series organization if it conducts an insurance business. For further details, please see the Alert dated November 29, 2010.
  • Passive Foreign Investment Companies: One important question for resolution of past U.S. tax liabilities in connection with an investment in a PFIC is how to determine and tax the previously untaxed accumulated income associated with the holding. For recent IRS guidelines, please see the Alert linked here.
  • Tax Reform Act of 2010/International Provisions: For a description of provisions applying to Controlled Foreign Corporations, Regulated Investment Companies, the Foreign Investment in Real Property Tax Act, Puerto Rico and American Samoa, Nonresident Aliens and Foreign Trusts, please see the Alerts dated January 13 and January 28, 2011.
  • Foreign Bank Account Reports (FBARs): U.S. Treasury Department Form 90-22.1 generally is required to be filed by any U.S. person which has a financial interest in or signatory authority over any foreign financial account, if the aggregate value of that person's accounts exceeds $10,000 at any time during the year. Reports for calendar year 2010 must be received by the Treasury Department no later than June 30, 2011. (The form cannot currently be filed electronically and the sender cannot rely on a postmark date, rather than actual receipt.) The Treasury Department will impose a civil penalty of up to $10,000 on any person who does not comply with the filing requirements, even if the lack of filing is non-willful. For a willful violation, the penalty can be as high as the greater of $100,000 or 50% of the highest amount in the foreign account during the reportable calendar year. Final rules for FBARs have been issued by the Treasury Department's Financial Crimes Enforcement Network (FinCEN) and are described in the Alert dated March 16, 2011. 
  • Offshore Voluntary Compliance Initiative: Under a previous Offshore Voluntary Disclosure Program (OVDP), U.S. taxpayers not fully disclosing their offshore financial accounts on required FBARs for thesix years 2003-2008 were encouraged to do so and pay associated taxes by limiting penalties on such late disclosures — however, this OVDP closed on October 15, 2009. The U.S. Treasury Department has now adopted a new Offshore Voluntary Disclosure Initiative (OVDI) which covers the eight years 2003-2010 and closes on August 31, 2011 — by which date all documents must be submitted by the taxpayer — but which includes several changes from the previous OVDP. The new OVDI is described in the Alert dated February 11, 2011.

International Tax Newsletter - Spring 2011 

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