Chris Byrne International Tax Attorney @christopherbyrnepllc-blog - Tumblr Blog

Dormant Foreign Corporations

A Controlled Foreign Corporation (“CFC”) is, in general, a foreign corporation controlled by a U.S. person(s) through ownership of stock. A U.S. person owning at least 10% of a CFC has a reporting requirement for an annual information return of Form 5471 Information Return of U.S. Persons with Respect to Certain Foreign Corporations. Depending on how the U.S. person is affiliated with the foreign corporation determines which category filer they are as well as which schedules are required to be submitted with Form 5471.

If the foreign corporation is dormant, the filer may use summary filing procedures provided by IRS Revenue Procedure 92-70 (1992-2 C.B. 435). For this procedure, the IRS determined that a foreign corporation is deemed to be a dormant foreign corporation if at all times during the foreign corporation’s annual accounting period (within the meaning of section 6038(e)(2)):

the foreign corporation conducted no business and owned no stock in any other corporation other than another dormant foreign corporation;

no shares of the foreign corporation (other than directors’ qualifying shares) were sold, exchanged redeemed, or otherwise transferred, nor was the foreign corporation a party to a reorganization;

no assets of the foreign corporation were sold, exchanged, or otherwise transferred, except for de minimis transfers described in (4) and (5) below;

the foreign corporation received or accrued no more than $5,000 of gross income or gross receipts;

the foreign corporation paid or accrued no more than $5,000 of expenses;

the value of the foreign corporation’s assets as determined pursuant to U.S. generally accepted accounting principles (but not reduced by any mortgages or other liabilities) did not exceed $100,000;

no distributions were made by the foreign corporation; and

the foreign corporation either had no current or accumulated earnings and profits or had only de minimis changes in its beginning and ending accumulated earnings and profits balances by reason of income or expenses specified in (4) or (5) above.

Original content posted on https://www.christopherbyrne.com/dormant-foreign-corporations/

#CFC #foreign tax preparation #forms and listings #internal revenue code #internal revenue service #tax compliance

New York Utilizing Electronic Data Records for Tax Audits

Taxpayers claiming residency outside of New York while maintaining ties to New York, such as an apartment, room, or other ties in New York, may be exposing themselves to a New York tax audit. In general, the taxpayer has the burden of demonstrating by clear and convincing evidence that the taxpayer was not present in New York for more than 183 days.

With today’s available technology electronic records are readily accessible to provide evidence which reflects the days the taxpayer is in New York. Examples of the records the New York State Department of Taxation and Finance (“DTF”) requests includes credit card/bank statements, EZ pass toll invoices, travel itineraries, personal calendars, etc. Even simply logging onto an employee computer terminal leaves evidence of your whereabouts.

The DTF regularly requests records directly from electronic data sources in an effort to refute days where the taxpayer has contended that s/he was not present in New York on a given day. For example, the DTF may request cell phone records directly from the service provider; each outbound and inbound call requires a connection to a cell phone tower, which may be used to triangulate the taxpayer’s position on any given day.

The use of electronic data records to prove residency requires taxpayers to exercise due diligence to insure that they are aware of their days present in New York.

Original content posted on https://www.christopherbyrne.com/york-utilizing-electronic-data-records-tax-audits/

#compliance issues #New York #nonresidents #tax compliance

Many IRS Return Due Dates Changed for 2015 Reporting Season (including FBAR) and Change to IRS Audit Period

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 was signed into law on July 31, 2015. This legislation changes the IRS return due dates going forward and the IRS audit period.

IRS Return Due Date Changes

Starting after December 31, 2015:

Partnership tax returns are due March 15, NOT April. If your partnership isn’t on a calendar year, the return is due on the 15th day of the third month following the close of your tax year.

C corporation tax returns are due April 15, NOT March 15. For non-calendar years, it is due on the 15th day of the fourth month following the close of the tax year. For C corporations with tax years ending on June 30 will continue to have a due date of September 15 until 2025. For years beginning after 2025, the due date for these returns will be October 15.

S corporation tax returns remain unchanged—they are still due March 15, or the third month following the close of the taxable year

FBARs filing deadline changes from June 30th to April 15th. 6 month extensions are now available.

Changes to IRS Audit Period

Prior to the IRS statute of limitations for audit was generally 3 years or 6 years for substantial understatement of income (if you omitted more than 25% of your gross income). The Supreme Court in U.S. v. Home Concrete & Supply, LLC (2012) held that overstating your tax basis was not the same as omitting income. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 over rules the Supreme Court’s 2012 decision. Now, following this new legislation, the tax code says: “An understatement of gross income by reason of an overstatement of unrecovered cost or other basis is an omission from gross income.” The change applies to tax returns filed after July 31, 2015. It also applies to previously filed returns that are still open. This means that overstating your tax basis is the same as omitting income for purposes of the IRS statute of limitations for audit.

For further information on this topic please contact Christopher J. Byrne at (212) 239-1931 or visit http://christopherbyrne.com/.

This content was originally posted at http://christopherbyrne.com/irs-return-due-dates-changed-2015-reporting-season-including-fbar-change-irs-audit-period/

#IRS #IRS Audit #FBAR #international tax attorney

Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.

Ronald Reagan.

Learn more about international taxes.

#taxes #funny #international tax #ronald reagan

professorwilliambyrnes

By Professor William Byrnes, - co-author of LexisNexis® Guide to FATCA Compliance; co-author of Foreign Tax & Trade Briefs

FATCA Registration Portal

FATCA requires that FFIs, through a responsible officer (a.k.a. “FATCA compliance officer”), make regular certifications to the...

frankkapitzacpa

After the economy shifted toward a downward spiral when the housing market hit an all-time low in 2007 many people lost their homes, many lost their jobs and America found itself stuck with a massive economic crisis. After years of recovery attempts, many people are hesitant about the market and…

aliciaacciardi

It is a buyers Market right now, but soon it will even out.

Find homes in your area!

internalrevenueservice-deactiva

The US would impose a one-time 20 per cent tax on an estimated $2tn of cash held overseas by American multinationals under a proposal from Democrats on the Senate finance committee that would reshape international tax policy. The proposal by Max

What are your thoughts on this?

For more information on international tax laws visit http://christopherbyrne.com/

#Tax law #tax evasion #international tax

Structuring Foreign Investments

Foreign nationals (non U.S. residents) can generally achieve favorable income tax results on the income and gains earned on their investments. A summary of the rules applicable to foreign national investors residing outside the U.S. are outlined below. These rules assume the investor is an individual and not a business entity except where so indicated. To read more about the rules visit this page dedicated to structuring foreign investments.

#foreign investment #foreign investors

breesahn

objectivistnerd

Raising minimum wage actually hurts the poor the most? How about that?

dee43i42nt42us42a42

What does minimum wage do? Keeps/makes low-skilled workers unemployed.

nycedc

It’s basically an audio time machine. Tech historian Emily Thompson, out of Princeton, has put together an interactive map of New York circa 1933, embedded with the old sounds of the city.

Do you hear that? Go back in time with this cool interactive map that navigates through the sounds of 1933.

What kinds of sounds would you capture in your own audio map of life?

frankkapitzacpa

When you have children one of the primary concerns that any parent has, remains the mystery of the future and what it will mean for the well-being of their child and ultimately for their family as a whole. It is a parents dream to see their child become a success, get an education and graduate...