tag:blogger.com,1999:blog-88517898603633723982024-03-13T08:11:53.428-04:00Ruminations of a Toronto Tax LawyerBlogging frequently about taxes and infrequently about life - reflections from a Toronto-based Tax LawyerSunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.comBlogger100125tag:blogger.com,1999:blog-8851789860363372398.post-53013949298792539062018-11-08T14:34:00.000-05:002018-11-08T14:35:58.505-05:00US Shareholder of a Canco After 2017 Tax Reform*Public Law no. 115-97 (2017 tax act)—the Tax Cuts and Jobs Act, signed December 22, 2017—significantly
changed the Code and negatively affects a US person in Canada holding shares in a closely held corporation. The
changes were intended to target a large corporation, such as Apple, that has large non-US retained earnings, an
oversight no doubt attributable to hasty legislative drafting.<br />
<br />
A US CFC shareholder is deemed to be a US shareholder if 10 percent of the CFC's votes or value is held by a US
individual or US corporation. A CFC is a non-US corporation in which more than 50 percent of the votes or value is
owned by US shareholders. Before the 2017 tax act, a US shareholder was a US person who held at least
10 percent of the votes of the non-US corporation.<br />
<br />
The 2017 tax act eliminated Code section 958(b)(4), which prevented the attribution of shares owned by a non-US
person to a US person. Thus an individual US investor in the accompanying chart is deemed to be a US shareholder
of Foreign Subsidiary. The chart is from the AICPA's letter (dated March 13, 2018) to the IRS and the Department of
Treasury.<br />
<br />
IRS Notice 2018-13 (2018-6 IRB 341) stated an intent to amend IRS form 5471 to except category 5 filing for a US
person deemed to be a US shareholder via the new attribution rules.<br />
<br />
A US CFC shareholder is subject to the section 965 transition tax regime (also referred to as the "toll tax," or
"repatriation tax"). That tax is levied on all earnings and profits (similar to retained earnings) accumulated post-1986
to the higher of earnings and profits on November 2, 2017 or December 31, 2017, and it is payable on the pro rata
share of earnings held by a US shareholder. If the US shareholder is a corporation, the cash repatriated is subject to
tax at a flat rate of 15.5 percent; other assets are subject to an 8 percent flat rate. A US individual shareholder does
not benefit from the flat rates, but if his or her income level is taxed at the highest rate, he or she is subject in 2017 to
a toll tax rate of 17.5 percent (or about 27.3 percent in 2018) for cash and 9 percent (or about 14.1 percent in 2018)
for non-cash. (See Amanda Athanasiou, "Toll Charge Is Taking Individuals by Surprise," Tax Notes International,
February 19, 2018.) The 2018 rate applies to an individual whose tax liability is less than US$1 million and who
seeks to use the eight-year payment plan in section 965(h)(1).<br />
<br />
Income accumulated in a non-US corporation that was not subject to the toll tax (because it was earned after the tax
was introduced) may be subject to the tax under section 951A's global intangible low-tax income (GILTI). GILTI is
taxed in the US individual shareholder's hands at his or her highest tax rate: a US corporate shareholder is taxed at
10.5 percent (there is a 50 percent deduction under section 250).<br />
<br />
The favourable tax treatment for a US corporate shareholder has many practitioners considering the section 962
election, which allows to an individual US shareholder the corporate tax rates in section 11 on section 951(a)
inclusions. This annual election also entitles the individual to claim an otherwise unavailable deemed-paid foreign tax
credit under section 960. Sections 965 and 951A are both part of subpart F; arguably, a section 962 election is
available to a US individual shareholder faced with the transition tax and with GILTI thereafter. On September 18,
2018 the US Tax Court released Barry M. Smith and Rochelle Smith (151 TC no. 5), which considers the election in
a regular subpart F context, not in the context of section 965 or 951A. The court provided a sound overview of the
election and explained that it does "not create hypothetical corporations or change real-world facts. [It] simply
provide[s] a mechanism that enables an individual U.S. taxpayer to elect what he or she may deem more desirable
tax treatment."<br />
<br />
In Smith, the CFCs in question were based in Hong Kong and in Cyprus. There was no US-Hong Kong tax treaty
and the US-Cyprus tax treaty did not apply (the treaty's LOB clause was not met). The taxpayers elected to treat the
Hong Kong CFC and Cyprus CFC as corporations under section 962, and the issue was whether current
distributions from each CFC—a domestic corporation under the election—received qualified dividend treatment
under section 1(h)(11)(B)(i)(I) or ordinary dividend income treatment at a higher tax rate. This case confirms that a
distribution of a qualified foreign corporation that has made a section 962 election will be accorded qualified dividend
treatment under section 1(h)(11)(B)(i)(I). A US shareholder of a Canco would meet the section 1(h)(11)(B)(i)(I) test,
which accords qualified dividend treatment to dividends "from—domestic corporations, and qualified foreign
corporations." Section 1(h)(11)(C) defines a "qualified foreign corporation" as a corporation incorporated in the
United States or eligible for benefits under a comprehensive US income tax treaty. Notice 2006-101 provides that
Canada meets those requirements; the election is therefore worth considering for US persons in Canada who are
deemed US shareholders. Note that the election forfeits the benefits of section 959(a), which holds that a deemed
distribution taxed in a CFC is not taxed again in the shareholder's hands upon distribution. Section 962(d) states
that, upon actual distribution, the shareholder must include in income that portion of the distribution that exceeds the
transition tax paid on the election, which could result in a larger tax liability to the individual taxpayer if an election
was not made and if the dividend was issued by a corporation in a non-qualified country. Given the qualified status of
Canada, the current higher tax rates on dividends in Canada, and the low tax rates accorded to qualified dividends in
the United States, a US shareholder of a Canadian corporation is better off if it makes the section 961(d) election
today. However, if Canada lowers its general tax rates and dividend rates, a section 961 election may not be such a
good thing.<br />
<br />
It is the author's view that a section 961 election does not apply to the GILTI deduction under section 250.<br />
<br />
The unintended consequences described above are likely to be corrected by the IRS Treasury, but a question
remains about the timing of that correction and what it will entail.<br />
<br />
Sunita Doobay<br />
TaxChambers LLP, Toronto<br />
<br />
*First published in the October edition of the Canadian Tax Highlights
Volume 26, Number 10 ©2018, Canadian Tax Foundation.<br />
<br />
<br />
<br />
<br />Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-29998826905426907412018-09-11T10:36:00.001-04:002018-09-11T10:37:06.472-04:00Guidance on Withholding on US Partnership Interest's Sale*<span style="font-family: Times, Times New Roman, serif;"><span style="background-color: white; color: #003767; font-size: 12px;">The Treasury department and the IRS issued </span><a href="https://www.irs.gov/pub/irs-drop/n-18-29.pdf" style="background-color: white; box-sizing: border-box; color: #6380a8; font-size: 12px; font-weight: bold; margin: 0px;" target="_blank">Notice 2018-29</a><span style="background-color: white; color: #003767; font-size: 12px;"> on April 2, 2018 (following closely the publication of "US Partnership Interest Sale Triggers 10 Percent Withholding," </span><em style="background-color: white; box-sizing: border-box; color: #003767; font-size: 12px; margin: 0px;">Canadian Tax Highlights</em><span style="background-color: white; color: #003767; font-size: 12px;">, February 2018). The notice makes three exceptions to the withholding requirement. </span></span><br />
<span style="font-family: Times, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #003767; font-size: 12px; margin: 0px;" /></span>
<span style="background-color: white; color: #003767; font-family: Times, Times New Roman, serif; font-size: 12px;">The recent Tax Cuts and Jobs Act (US tax reform) added Code sections 864(c)(8) and 1446(f). The former deems the gain or loss from the exchange or disposition of a private US partnership interest to be effectively connected with a US trade or business if the sale of all partnership assets at FMV would be deemed effectively connected income (ECI); the latter imposes a 10 percent withholding on the amount realized on the gain of a private partnership interest if such gain is deemed ECI under section 864(c)(8). Withholding is not required if the transferor is not a non-US person under section 1446(f)(2). If a transferee fails to withhold as section 1446(f) requires, the partnership must deduct and withhold that amount as tax (plus interest) from distributions to the transferee. </span><br />
<span style="font-family: Times, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #003767; font-size: 12px; margin: 0px;" /></span>
<span style="background-color: white; color: #003767; font-family: Times, Times New Roman, serif; font-size: 12px;">Before the publication of notice 2018-29, it was not entirely clear whether sections 864(c)(8) and 1446(f) were intended to override existing US tax treaties if ECI income was not taxable in the United States because it was not derived from a US PE. Section 6.05 appears to indicate that those provisions were not intended to override treaties: section 6.05 refers to regulation section 1.1445-2(d)(2) and says that a transferor and a transferee may rely thereon to exempt them from withholding. That regulation provides that a transferee is not required to withhold if there is no gain or loss pursuant to a US treaty. In reading regulation 1.1445-2(d)(2), section 6.05 instructs the reader to substitute section 1445(a) for section 1446(f) and also to substitute "partnership interest" for "US real property interest." Section 6.05 further provides that the treaty statement received from the transferor is not to be mailed into the IRS offices. </span><br />
<span style="font-family: Times, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #003767; font-size: 12px; margin: 0px;" /></span>
<span style="background-color: white; color: #003767; font-family: Times, Times New Roman, serif; font-size: 12px;">The notice includes two other exceptions to withholding, which are relevant in the event the transferee chooses to not rely on a treaty exception. These two exceptions are set out clearly, unlike the language that sets out the treaty exception. The first of these exceptions clarifies that section 1446(f) applies only if there is a gain on disposition: section 6 says that under planned regulations a transferee may generally rely on a certification received by it and issued by the transferor—signed under penalties of perjury and including a US ITIN—that says that the transfer of its partnership interest does not result in realized gain. However, the transferee is not relieved from withholding if it has knowledge that the certification is false. </span><br />
<span style="font-family: Times, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #003767; font-size: 12px; margin: 0px;" /></span>
<span style="background-color: white; color: #003767; font-family: Times, Times New Roman, serif; font-size: 12px;">Section 6.03 provides further withholding relief if in three prior taxable years the transferor had less than 25 percent ECI attributable to the partnership interest being transferred. Treasury and the IRS confirm their intention to issue regulations providing that section 1446(f)(1) does not require withholding on a partnership interest's transfer if the transferee receives a certification issued by the transferor—signed under penalties of perjury and including a US ITIN—no earlier than 30 days before the transfer, to the effect that the transferor was a partner in the partnership throughout each of its immediately prior taxable year and its two preceding taxable years, and that its allocable share of effectively connected taxable income for each such taxable year was less than 25 percent of the transferor's total distributive share of partnership income for that year. According to the notice, the transferor's immediately prior taxable year is its most recent taxable year that includes or ends with the partnership's taxable year-end and for which forms 8805 ("Foreign Partner's Information Statement of Section 1446 Withholding Tax") and 1065 ("U.S. Return of Partnership Income," schedule K-1) were due (including extensions) or filed by the time of the transfer. The notice cautions that a transferee may not rely on a certification that was provided before the transferor receives those forms, nor can it rely on a certification—and is not relieved from withholding—if it has actual knowledge that the certification is false. </span><br />
<span style="font-family: Times, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #003767; font-size: 12px; margin: 0px;" /></span>
<span style="background-color: white; color: #003767; font-family: Times, Times New Roman, serif; font-size: 12px;">Withholding is also not required (notice section 6.04) if the transferee receives—no earlier than 30 days before the transfer—from the partnership a certification to the effect that if the partnership had sold all its assets at FMV, the gain effectively connected with the conduct of a trade or business within the United States would be less than 25 percent of the total gain on the deemed sale of all its assets. For a Canadian transferee, this option is more viable than that of section 6.03, because a US partnership with a December year-end usually seeks extensions to file returns until September: it is difficult for the Canadian transferee to access before mid-June forms 8805 and 1065 for the partnership's most recent taxable year. </span><br />
<span style="font-family: Times, Times New Roman, serif;"><br style="background-color: white; box-sizing: border-box; color: #003767; font-size: 12px; margin: 0px;" /></span>
<em style="background-color: white; box-sizing: border-box; color: #003767; font-size: 12px; margin: 0px;"><span style="font-family: Times, Times New Roman, serif;">Sunita Doobay</span></em><br />
<span style="background-color: white; color: #003767; font-family: Times, Times New Roman, serif; font-size: 12px;">TaxChambers LLP, Toronto</span><br />
<span style="font-family: Times, Times New Roman, serif;"><span style="background-color: white; color: #003767; font-size: 12px;"><br /></span>
<span style="background-color: white; color: #222222; font-size: 13.2px;">*First published in the May edition of the Canadian Tax Highlights, a Canadian Tax Foundation newsletter.</span></span>Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-23923444542310499462018-07-12T17:17:00.003-04:002018-07-12T17:17:37.359-04:00No US Deduction for Related-Party Interest or Royalty Paid Abroad*<br />
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">Section
267A, added December 2017, denies a deduction to a US-situated payer of
interest or a royalty to a related non-US hybrid party or as part of a hybrid
transaction. This hybrid mismatch provision was likely influenced by <span class="MsoHyperlink"><a href="https://read.oecd-ilibrary.org/taxation/neutralising-the-effects-of-hybrid-mismatch-arrangements-action-2-2015-final-report_9789264241138-en#page1">Action
2 – OECD Base Erosion and Profit Shifting Report</a>,</span> which was
finalized in 2015.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">Section
267A originated in the <span class="MsoHyperlink"><a href="https://www.finance.senate.gov/imo/media/doc/Chairman's%20Staff%20International%20Discussion%20Draft%20Common.pdf">US
Senate Committee on Finance International Tax Reform Staff Discussion Draft</a>,</span>
released November 19, 2013. Proposed section 267A prevented related-party
payments in a base erosion arrangement, defined as a transaction, series
thereof, or other arrangement that (1) reduces foreign income tax paid or
accrued and (2) involves a hybrid transaction or instrument, a hybrid entity,
an exemption arrangement, or a conduit financing arrangement. The proposal was
clearly influenced by the said OECD report, but Congress did not entirely follow
the report: final section 267A addresses only a hybrid transaction and a hybrid
entity. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">A
US payer of interest or a royalty is denied a related-party deduction if the amount
is not included in or is deductible from the related party’s income. That
latter concern was raised in the <span class="MsoHyperlink"><a href="https://www.treasury.gov/resource-center/tax-policy/Documents/General-Explanations-FY2016.pdf">2016
Treasury Green Book</a>, r</span>eleased February 2015 (the year the OECD
Action 2- BEPS report was released). Treasury expressed concern that “there has
been a proliferation of tax avoidance techniques involving a variety of
cross-border hybrid arrangements, such as hybrid entities, hybrid instruments,
and hybrid transfers” such as sale-repurchase transaction: <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%; margin-left: 36.0pt;">
<span style="font-family: "Cambria",serif;">"In one such hybrid arrangement, a U.S.
person holds an interest in a reverse hybrid, which is an entity that is a
corporation for U.S. purposes but is a fiscally transparent entity (such as a
partnership) or a branch under the laws of a foreign jurisdiction. Because the
United States treats the reverse hybrid as a corporation, income earned by the
reverse hybrid generally will not be subject to current U.S. tax. Moreover,
even if the reverse hybrid is treated as a CFC, interest and royalty income
earned by the reverse hybrid from certain foreign related persons (which
otherwise would qualify as subpart F income) may nonetheless not be subject to
U.S. taxation as a result of either section 954(c)(3) or section 954(c)(6).
Payments to the reverse hybrid, however, generally are also not subject to tax
in the foreign jurisdiction in which it is established or organized, because
the foreign jurisdiction views reverse hybrid as a fiscally transparent entity
and therefore treats that entity’s income as derived by its owners, including
its U.S. owners. As a result of this hybrid treatment, income earned by the
reverse hybrid generally would not be subject to tax currently in the United
States or the foreign jurisdiction". <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">The
2017 Green Book expresses the ongoing Treasury concern with hybrid entities and
transactions.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">Section
267A refers to section 954(d)(3) for guidance on the meaning of “related party”:
a related person that <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%; margin-left: 36.0pt;">
<span style="font-family: "Cambria",serif;">Is an individual, corporation, partnership,
trust, or estate which controls, or is controlled by the person making the payment
from the United States or<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%; margin-left: 36.0pt;">
<span style="font-family: "Cambria",serif;">Is a corporation, partnership, trust or
estate which is controlled by the same person or persons which control the
payor. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">Section
954(d)(3) defines “control” as the ownership, directly or indirectly, of (1) corporate
stock that has more than 50 percent of the total voting power of all classes of
stock entitled to vote, or (2) more than 50 percent (by value) of the
beneficial interests in a partnership, trust, or estate. Rules similar to those
in section 958 also apply.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">A
US payer of interest or a royalty must determine whether it is related to a
non-resident payee; a US fund must ensure that no single non-resident investor may
hold 50 percent of the fund’s value. The US payer must also determine whether
the payee is a hybrid and whether the payment is taxed where the hybrid entity
resides for tax purposes (section 267A)(d)). A “hybrid transaction” means any
transaction, series thereof, agreement, or instrument under which one or more
payments are treated as interest or royalties and “are not treated for purposes
of the tax law of the foreign country of which the recipient of such payment is
resident for tax purposes or is subject to tax.”<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">Needless
to say, a Canadian financing structure that uses a hybrid through a jurisdiction
such as the Cayman Islands (which hybrid has checked the box and is thus a
flowthrough for US purposes) must review its current structure. Also, a US
entity with non-resident investors must take a closer look at the recipient of an
interest and royalty payment and determine whether at time of payment a
non-resident payee might be deemed related and a hybrid. <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">Given
the sparse definition of “a hybrid” or “a hybrid transaction” under section 267A,
practitioners await further guidance from section 267A regulations yet to be
released.<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">Sunita
Doobay <o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">TaxChambers
LLP, Toronto<o:p></o:p></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria",serif;">*First published in the June edition of the Canadian Tax Highlights, a Canadian Tax Foundation newsletter </span></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<br />Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-32820032107794427832018-02-27T10:50:00.004-05:002018-02-27T10:58:22.986-05:00US Partnership Interest Sale Triggers 10 Percent Withholding<span style="font-family: "times" , "times new roman" , serif;">R</span><span style="font-family: "times" , "times new roman" , serif;">ecently published in <i>Canadian Tax Highlights</i> - a Canadian Tax Foundation newsletter and republished here with permission:</span><br />
<span style="font-family: "times" , "times new roman" , serif;"><span style="background-color: white; text-align: justify;"><br /></span>
<span style="background-color: white; text-align: justify;">The 600-plus-page GOP tax bill was signed by President Trump on December 22, 2017, becoming Public Law no. 115-97, commonly known as the Tax Cuts and Jobs Act or US tax reform. This tax reform essentially codifies, inter alia, IRS Rev. rul. 91-32 (1991-1 CB 107), which was briefly overturned by the 2017 decision of </span><em style="background-color: white; box-sizing: border-box; margin: 0px; text-align: justify;">Grecian Magnesite Mining, Industrial & Shipping Co., SA</em><span style="background-color: white; text-align: justify;"> (</span><a href="https://www.ustaxcourt.gov/UstcInOp/OpinionViewer.aspx?ID=11322" style="background-color: white; box-sizing: border-box; font-weight: bold; margin: 0px; text-align: justify;" target="_blank">149 TC no. 3</a><span style="background-color: white; text-align: justify;">). The new rule sources to the United States the gain on an asset sale of a US partnership interest, and a 10 percent withholding is imposed on that gain. In other words, it is on the gross </span></span><br />
<span style="font-family: "times" , "times new roman" , serif;">amount realized, similar to FIRPTA withholding.</span><br />
<span style="font-family: "times" , "times new roman" , serif;"><br /></span>
<span style="font-family: "times" , "times new roman" , serif;">Rev. rul. 91-32 says that the rules in section 865(e)(2) apply to a foreign partner that has a fixed place of business in the United States:</span><br />
<span style="font-family: "times" , "times new roman" , serif;"><span style="background-color: white;">
</span>
</span><br />
<blockquote style="background-color: white; box-sizing: border-box; margin: 1em 40px; padding: 0px; text-align: justify;">
<span style="font-family: "times" , "times new roman" , serif;">Section 865(e)(2) provides, <em style="box-sizing: border-box; margin: 0px;">inter alia</em>, that income from the sale of personal property by a nonresident will be sourced in the United States if the nonresident has a fixed place of business in the United States and if the income is attributable to such fixed place of business. A foreign partner of a partnership that is engaged in a trade or business through a fixed place of business in the United States itself has a fixed place of business in the United States, since the foreign partner is considered to be engaged in such trade or business pursuant to section 875(l). Income from the disposition of a partnership interest by the foreign partner will be attributable to the foreign partner's fixed place of business in the United States.</span></blockquote>
<span style="font-family: "times" , "times new roman" , serif;"><span style="background-color: white; text-align: justify;">The IRS cited section 865(e)(3) and </span><em style="background-color: white; box-sizing: border-box; margin: 0px; text-align: justify;">Unger</em><span style="background-color: white; text-align: justify;"> (</span><a href="https://www.leagle.com/decision/1990121558hotcm11571993" style="background-color: white; box-sizing: border-box; font-weight: bold; margin: 0px; text-align: justify;" target="_blank">TC Memo 1990-15, 58 TCM 1157</a><span style="background-color: white; text-align: justify;">, at 1159) to support its position that the proceeds or loss received on a disposition of an interest in a US partnership by a non-resident is sourced to the United States. The IRS thus applied an aggregate approach to a partnership, as the Code does for the sale of a FIRPTA interest. Section 897(g) says that on the sale of a partnership interest, the proceeds received that are attributable to a US real property interest are considered to be amounts received in the United States. In </span><em style="background-color: white; box-sizing: border-box; margin: 0px; text-align: justify;">Grecian</em><span style="background-color: white; text-align: justify;">, the US Tax Court distinguished the aggregate and entity approaches: "The aggregate approach arises from the observation that a partnership is an aggregation of individuals, while the entity approach applies where the Code focuses on the distinct legal rights that a partner has in its interest in the partnership entity, distinct from the assets the partnership itself owns. </span><em style="background-color: white; box-sizing: border-box; margin: 0px; text-align: justify;">See</em><span style="background-color: white; text-align: justify;"> William S. McKee, et al., Federal Taxation of Partnerships and Partners. . . . Subchapter K adopts the entity or the aggregate approach depending on the context, and '[t]he entity approach . . . predominates in the treatment of transfers of partnership interests as transfers of interests in a separate entity rather than in the assets of the partnership." </span></span><br />
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;"><br /></span>
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;">The court also recognized that "the enactment of section 897(g) actually reinforces our conclusion that the entity theory is the general rule for the sale or exchange of an interest in a partnership. Without such a general rule, there would be no need to carve out an exception to prevent U.S. real property interests from being swept into the indivisible capital asset treatment that section 741 otherwise prescribes." </span><br />
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;"><br /></span>
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;">Section 741 provides that income realized on the sale of a partnership interest shall be considered a gain or loss from the sale or exchange of a capital asset. The court noted that Congress used the singular of "asset" rather than the plural. The court also cited section 731(a) in support of the entity theory that when an interest in a partnership is sold, "[a]ny gain or loss recognized under this subsection shall be considered as gain or loss from the sale or exchange of the partnership interest of the distributee partner." </span><br />
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;"><br /></span>
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;">The court emphasized that the sourcing rules in sections 861-863 do not specify the source of a foreign partner's income from the sale or liquidation of its partnership interest. </span><br />
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;"><br /></span>
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;">The Tax Cuts and Jobs Act added to the sourcing rules in section 864(c), effective November 27, 2017. Section 864(c)(8)(A) deems a gain or loss from the sale or exchange, by a non-resident alien or foreign corporation, of an interest in a partnership engaged in a trade or business in the United States to be effectively connected with the conduct of a trade or business in the United States. The Act has also amended the Code's withholding rules: section 1446(f) is effective for sales, exchanges, and dispositions after 2017. Section 1446(f)(1) provides that if any portion of any gain on a disposition of a partnership interest was treated under section 864(c)(8) as effectively connected with the conduct of a trade or business within the United States, the transferee must deduct and withhold a 10 percent tax on the amount realized on the disposition. Two exceptions to the withholding are provided. Under the first, the seller must provide a non-foreign affidavit (section 1446(f)(2)(B)) that (1) includes the transferor's US taxpayer identification number and (2) attests that the transferor is not a foreign person. Under the second exception, similar to FIRPTA, either the seller or the buyer of the partnership interest can apply to the IRS for authority to withhold a reduced amount. Otherwise, if the buyer does not withhold, section 1446(f)(4) provides that the partnership must withhold from distributions to the transferee. </span><br />
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;"><br /></span>
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;">The codification of Rev. rul. 91-32 has brought complexity to the world of funds. Private equity is often structured as a limited partnership in the United States: foreign investors, including Canadian pension funds, often participate in a US fund as limited partners. Canadians must now revisit their exit strategy, which typically involved a sale of their US partnership interests. IRS guidance has not yet been provided to determine the portion of a gain from the sale of a US partnership attributable to a US trade or business. Furthermore, it is not clear how to value a partnership interest: must the entire partnership undertake an asset valuation to accommodate the sale by the 0.1 percent partner? Also, the withholding obligations of the partnership when the buyer partner fails to withhold place pressure on the partnership. </span><br />
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;"><br /></span>
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;">The new rules are burdensome and will ultimately require a US partnership to track all of its interests held by foreign partners if it is to be cognizant of a foreign partner's sale of an interest to another partner. The new provisions of the Code apply FIRPTA treatment to a partnership interest in the United States that is not tied to real estate. This tracking is onerous for the partnership and impedes a non-US partner from selling a US partnership interest that is not tied to US real estate to another non-US partner. One would expect that this new measure will diminish the commercial appeal of investing in a US partnership. </span><br />
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;"><br /></span>
<span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;">The Trump government succeeded in codifying Rev. rul. 91-32; the Obama government sought to do so in the government's </span><a href="https://www.treasury.gov/resource-center/tax-policy/Documents/General-Explanations-FY2013.pdf" style="background-color: white; box-sizing: border-box; font-family: times, "times new roman", serif; font-weight: bold; margin: 0px; text-align: justify;" target="_blank">2012 Green Book</a><span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;">. At the time of writing, the IRS had not provided relief from withholding on the sale of a private partnership interest as it had for certain public partnerships in IRS </span><a href="https://www.irs.gov/pub/irs-drop/n-18-08.pdf" style="background-color: white; box-sizing: border-box; font-family: times, "times new roman", serif; font-weight: bold; margin: 0px; text-align: justify;" target="_blank">Notice 2018-08</a><span style="background-color: white; font-family: times, "times new roman", serif; text-align: justify;">. </span><br />
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<span style="background-color: white;"><span style="font-family: "times" , "times new roman" , serif;"><em style="box-sizing: border-box; margin: 0px; text-align: left;">Sunita Doobay</em><br style="box-sizing: border-box; margin: 0px; text-align: left;" /><span style="text-align: left;">TaxChambers LLP, Toronto </span></span></span></div>
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</span>Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-40892505008952925342017-11-16T16:43:00.000-05:002017-11-16T16:43:03.558-05:00Dual Resident Estate<!--[if gte mso 9]><xml>
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<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-hansi-theme-font: major-latin;">Recently published in <i>Canadian Tax Highlights</i> - a Canadian Tax Foundation newsletter and republished here with permission:</span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-hansi-theme-font: major-latin;"> </span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-hansi-theme-font: major-latin;">For Canadian purposes, an estate is now deemed to be a trust
under a 2013 amendment to the subsection 248(1) definition of a trust. My
article on <i style="mso-bidi-font-style: normal;">Hess</i> (see “Trust or
Estate?”, <i style="mso-bidi-font-style: normal;">Canadian Tax Highlights</i>, April
2012) is no longer relevant. A distribution from a foreign estate must thus be
reported on </span><a href="https://www.canada.ca/content/dam/cra-arc/migration/cra-arc/E/pbg/tf/t1142/t1142-15e.pdf"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-hansi-theme-font: major-latin;">CRA form
1142</span></a><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-hansi-theme-font: major-latin;">
– “Information Return in Respect of Distributions from and indebtedness to a
Non-Resident Trust” where a testamentary trust arises out of an estate. This
deeming provision may create complications in the case of a trust that is
deemed to be a Canadian resident under subsection 94(3). An argument can be
made pursuant to subsection 233.6(1) that an estate is not subject to T1142
filing as the language of subsection 233.6(1) excludes an estate that arose as
a consequence of the death of an individual .</span></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-hansi-theme-font: major-latin;">At the 2017 STEP Canada Round Table, the CRA was asked about
the filing position for a US estate with a Canadian trustee. Under Canadian law,
a US estate that is managed and controlled by a Canadian trustee is deemed to
be a Canadian resident according to the factual test set out in <i style="mso-bidi-font-style: normal;">Fundy Settlement </i>(2012 SCC 14). The CRA
referred to Income Tax Folio </span><a href="https://www.canada.ca/en/revenue-agency/services/tax/technical-information/income-tax/income-tax-folios-index/series-6-trusts/series-6/income-tax-folio-s6-f1-c1-residence-a-trust-estate.html"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-hansi-theme-font: major-latin;">S6-F1-C1</span></a><span class="MsoHyperlink"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-hansi-theme-font: major-latin;">,
</span></span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-hansi-theme-font: major-latin;">paragraph
1.6, in which the CRA says as follows.</span></div>
<div class="MsoNormal" style="margin-left: 36.0pt; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<b><span style="font-family: "Cambria","serif"; font-size: 9.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">1.6</span></b><span style="font-family: "Cambria","serif"; font-size: 9.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;"> For
example, when making a determination as to the jurisdiction in which the
central management and control of a trust is exercised, the CRA will consider
any relevant factor, which may include:</span></div>
<div class="MsoNormal" style="margin-left: 72.0pt; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 72.0pt; text-indent: -18.0pt;">
<span style="font-family: Symbol; font-size: 10.0pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 9.0pt; mso-fareast-font-family: Symbol; mso-fareast-language: EN-CA;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Cambria","serif"; font-size: 9.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">the factual role of a trustee and other persons with
respect to the trust property, including any decision-making limitations
imposed thereon, either directly or indirectly, by any beneficiary, settlor or
other relevant person; and</span></div>
<div class="MsoNormal" style="margin-left: 72.0pt; mso-list: l0 level1 lfo1; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto; tab-stops: list 36.0pt; text-indent: -18.0pt;">
<span style="font-family: Symbol; font-size: 10.0pt; line-height: 115%; mso-bidi-font-family: Symbol; mso-bidi-font-size: 9.0pt; mso-fareast-font-family: Symbol; mso-fareast-language: EN-CA;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Cambria","serif"; font-size: 9.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">the ability of a trustee and other persons to
select and instruct trust advisors with respect to the overall management of
the trust.</span></div>
<div class="MsoNormal" style="margin-left: 36.0pt; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; font-size: 9.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">For this purpose, the CRA will look to any
evidentiary support that demonstrates the exercise of decision-making powers
and responsibilities over the trust.</span></div>
<div class="MsoNormal" style="margin-left: 36.0pt; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<b><span style="font-family: "Cambria","serif"; font-size: 9.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;"><span style="mso-spacerun: yes;"> </span>1.7</span></b><span style="font-family: "Cambria","serif"; font-size: 9.0pt; line-height: 115%; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;"> After an examination of all factors, it may be
determined that a trust is resident in Canada even if another country considers
the trust to be resident in that other country.</span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">For
US tax purposes, an estate is not a trust. Whether a US estate is a trust for
US tax purposes will determine the US tax it will bear. Moreover, a US estate
is taxed on its worldwide income, but a non-US estate is taxed only on its US
source income and its ECI income. Whether an estate is a US estate is
determined by looking at the surrounding facts and circumstances. In Rev.
Ruling 81-112, 1981-1 CB, the IRS concluded that the estate was a US estate
after considering the following factors: the domicile of the decedent at time
of death, the location of the estate fiduciaries, the physical location of the
primary beneficiaries, and the physical location of the estate’s major assets.</span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;"></span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">A
non-resident trust is generally deemed to be a Canadian trust if it either had
a Canadian resident contributor or has a Canadian resident beneficiary and a
connected contributor. A connected contributor is defined as a person who
contributed to the trust and within the 5 years before or after was a Canadian
resident. The 5-year preceding period is amended to 18 months if the trust
arose as a consequence of the person’s death. </span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">For
a non-subsection 94(3) trust, the competent authorities for Canada and for the
United States consider all the facts surrounding the estate to determine
whether the estate is a Canadian or US estate. However, for a subsection 94(3) trust,
the CRA says that “It is generally the Canadian competent authority’s position
that it would not be appropriate to cede Canadian residence of trusts subject to
section 94 of the Act in the course of negotiations with the competent
authority of the other Contracting State”. The CRA stands by this position as
if it were somewhat like a treaty override. Section 4.3 of the <i style="mso-bidi-font-style: normal;">Income Tax Conventions Interpretation Act</i>
- in force March 5, 2010 - clarifies that under Canadian law, a trust that is
deemed to be resident in Canada by subsection 94(3) is a Canadian resident
trust for the application of a tax convention. </span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">The
CRA says that </span></div>
<div class="MsoNormal" style="line-height: 150%; margin-left: 36.0pt; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; font-size: 9.0pt; line-height: 150%; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">Furthermore, given that section 94 of the Act
anticipates full relief for the foreign taxes paid by the trust, if any, we
understand the legislation does not contemplate the other country giving up its
right to tax the trust’s income from non-Canadian sources. Accordingly, it is
the Canadian competent authority’s expectation that the negotiation of these
cases with a view to settle the question of dual residence will generally not
be possible or advisable, particularly where both competent authorities are
known, more broadly, to be at an impasse on the matter.</span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">The
combination of the characterization of an estate as a trust and subsection
94(3) can pose issues. Thus a US estate created by a US-resident decedent may
be a deemed Canadian trust if the decedent died within 18 months of a move to
the United States even if the person was US domiciled because he or she had
expressed an intent to live there permanently. Can and should Canada lay a
taxation claim to the estate of that former Canadian resident?</span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">Sunita
Doobay </span></div>
<div class="MsoNormal" style="line-height: 150%; mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">TaxChambers
LLP, Toronto</span></div>
Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-11133010460414485572017-09-27T18:32:00.000-04:002017-09-27T18:32:11.620-04:00Tax Proposals - US and CanadaPresident Trump released his <a href="https://assets.documentcloud.org/documents/4061905/Read-President-Trump-s-Tax-Proposal.pdf" target="_blank">tax proposals</a> today while in Canada the Morneau proposals consultation period will be ending soon on October 2nd, 2017. The Morneau proposals have caused many of us tax practitioners sleepless nights given how far reaching the proposals are. As I have stated in a presentation - the Morneau proposals discourage Canadians from operating their businesses through a corporation. A corporation is a necessary shield for liability purposes Canadians. Americans are often puzzled as to why Canadians operate through a corporation. We do because of the liability shield and the preferential tax rate on the first $500,000 of active business income earned annually by a Canadian Controlled Private Corporation. The combined Ontario Federal rate for the first $500,000 is 15%. Aside from the tax rate and liability shield - a corporation is a necessity to access the R&D credit regime (SRED) of the Income Tax Act.<br />
<br />
The sleepless nights caused by these proposals is that Canada does not have a limited liability company regime. Limited liability company (LLC) provide the same liability shield that a corporation would provide. The LLC is a structure adopted by the Americans from the Mexicans. It is a flow through similar to a partnership but at the same time provides liability coverage similar to that provided by a corporation. A Canadian limited partnership does not provide that level of coverage.<br />
<br />
The proposals in essence leave us in a limbo in Canada.<br />
<br />
The Trump Tax proposals focus, unlike the Morneau proposals, on economic growth. It allows for businesses who have made investments into capital assets prior to the 27th of September, 2017 to immediately write off the cost of such assets. The US which had the highest corporate tax rates of all OECD members is proposed to have a tax rate of 20%. And the proposals appear to copy Canada's exempt surplus regime making inversions into Canada not desirable anymore. The Code has implemented provisions to discourage inversions into Canada but who can forget the Burger King inversion in 2015.<br />
<br />
The proposals also speak to the repatriation of funds held by US businesses outside of the US and to implement a regime making it less attractive for US companies to shelter their non-US profits in jurisdictions such as Ireland.<br />
<br />
Last but not least - the Trump proposals speak to the repealing the U.S. estate tax. <br />
<br />
<br />
<br />
Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-60244014293635979102017-08-28T17:56:00.002-04:002017-08-28T17:56:29.643-04:00Tax Implications of Cryptocurrency <!--[if gte mso 9]><xml>
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<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Virtual currency or cryptocurrency has become
popular in today’s financial markets and may be here for some time. Investors
increasingly turn to virtual currency to fund transactions and provide
portfolio diversity. The rising popularity of virtual currency has created some
significant tax issues. </span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">On November 30, 2016, the IRS was successful
in its petition pursuant to Code</span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: major-latin;">section </span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">7609(f)
in obtaining a John Doe summons to be served on Coinbase, Inc. The IRS is
seeking information regarding all US persons who conducted virtual currency
transactions on Bitcoin during the period January 1, 2013 to December 31, 2015,
reminiscent of the 2008 John Doe summons </span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: major-latin;">granted to the IRS for information on
US persons with accounts at UBS Switzerland. The July 2008 John Doe Summons
resulted in the release by UBS to the IRS of about 4,500 names of US persons
who held Swiss bank accounts. The issuance of the John Doe Summons against UBS
severely compromised the offshore tax world and led to the implementation of
FATCA and the CRS. The effect of the John Doe summons issued to Coinbase, Inc.
will be watched closely.</span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-fareast-font-family: "Times New Roman"; mso-fareast-language: EN-CA; mso-hansi-theme-font: major-latin;">Unlike other IRS summonses, a John Doe Summons does not list the name of
the taxpayer under investigation because the taxpayer is unknown to the IRS. </span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: major-latin;">A John Doe Summons allows the IRS to obtain the names of all
taxpayers within a certain group. </span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Coinbase, Inc. provides bitcoin wallet
services and is a virtual currency exchange who assists merchants and consumers
to buy, sell, and</span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: major-latin;"> use bitcoin currency. A consumer converts
bitcoin payments to a fiat currency</span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"> (legal
tender backed by the government that issued it) that is then transmitted to the
merchant. A virtual currency exchanger resembles a traditional currency
exchanger, but it can exchange virtual currency for government-backed currency
and vice versa. A virtual currency exchanger is linked to the conventional
banking system and money transmitters: it can receive conventional checks, and credit
card, debit card, and wire transfer payments in exchange for virtual currency. A
virtual currency exchanger is governed by legislation such as FinCen, is deemed
to be a money transmitter under the <i style="mso-bidi-font-style: normal;">Bank
Secrecy Act, </i>and probably falls within the scope of the </span><a href="https://www.oecd.org/tax/exchange-of-tax-information/CRS-related-FAQs.pdf"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">CRS</span></a><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">, which results
in the disclosure of information between more than 100 tax authorities. Wallet
services allow a user to quickly authorize virtual currency transactions with
another user through the use of a traditional money account held at the exchanger.</span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; mso-hansi-theme-font: major-latin;"></span></div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">According to the </span><a href="https://www.irs.gov/pub/irs-drop/n-14-21.pdf"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">IRS
Notice 2014-21</span></a><span class="MsoHyperlink"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">,</span></span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"> a virtual currency is not legal tender but it
is intangible personal property. The notice gives examples of the tax treatment
of various transactions using virtual currency such as:</span></div>
<br />
<ul>
<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";"> </span></span></span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Wages, salaries,
and other income paid to an employee with virtual currency must be reported on
a </span><a href="http://www.irs.gov/pub/irs-pdf/fw2.pdf" target="_blank"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">form</span></a><span class="MsoHyperlink"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"> W-2</span></span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">,
and is reportable by the employee as ordinary income and subject to employment
taxes paid by the employer;</span></li>
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<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Virtual
currency received by a self-employed individual in exchange for goods or
services is reportable as ordinary income and is subject to self-employment
tax.<span style="mso-spacerun: yes;"> </span>A payer must issue a form 1099;</span></li>
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<br />
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</span></span></span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Virtual
currency received in exchange for goods or services by a business is reportable
as ordinary income; and</span></li>
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<br />
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<li><span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7.0pt "Times New Roman";">
</span></span></span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">A gain on
the exchange of virtual currency for other property is generally reportable as
a capital gain if the virtual currency was held as a capital asset and as
ordinary income if the virtual currency is held for sale to customers in a
trade or business.</span></li>
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<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"></span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
</div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"></span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Reporting is effected in USD: thus whenever virtual
currency is used, a barter transaction takes place, and the parties must know
the FMV of the virtual currency on that day. A taxpayer must track which
virtual currency lot was used for each transaction in order to properly
determine the gain or loss for that particular transaction. Given that the
valuation of a convertible currency is a peer–to-peer demand, the exact FMV in
legal tender of a virtual currency is not always certain. </span></div>
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<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Shortly before the petition was filed with
the US District Court for the Northern District of California to obtain the
John Doe summons, on September 21, 2016 a report was issued by the Treasury
Inspector General for Tax Administration (TIGTA), entitled “<i style="mso-bidi-font-style: normal;">As the use of virtual currencies in taxable
transactions become more common, additional actions are needed to ensure
taxpayer compliance”</i>. </span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">The TIGTA report highlights that not much was
done by the IRS to ensure tax compliance by US persons who use convertible
virtual currencies despite the fact that, as of April 21, 2016, one bitcoin was
equivalent to about USD$443, and bitcoins had a total FMV of more than USD$6.8
billion. The TIGTA report points out that the reporting requirements set out in
</span><a href="https://www.irs.gov/pub/irs-drop/n-14-21.pdf"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">IRS Notice 2014-21</span></a><span class="MsoHyperlink"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin; text-decoration: none; text-underline: none;"> are flawed in </span></span><span class="MsoHyperlink"><span style="color: windowtext; font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin; text-decoration: none; text-underline: none;">that the reporting payer and the recipient payee must report
the payment and receipt of virtual currency in USD; information forms </span></span><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">1099-MISC, 1099-B, 1099-K, and W-2 do not
inform the IRS that the payments were made in virtual currency. As a result,
the IRS has one fewer means of tracking a US person with cryptocurrency on
hand. Thus even though cryptocurrency is property for US tax purposes, no US mechanism
requires a Bitcoin holder to report that holding to the IRS. Because the
identity of the parties using virtual currencies is generally anonymous, the
inevitable result is tax evasion.</span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"><br /></span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">The fear of tax evasion is confirmed by the
IRS agent whose affidavit formed the petition for the John Doe summons to
Coinbase, Inc. In his affidavit the agent cites two examples - of which he had
knowledge - of tax evasion involving convertible virtual currency:</span></div>
<div class="MsoNormal" style="line-height: 150%; margin-left: 36.0pt; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">In the first example, Taxpayer I originally
worked with a foreign promoter who set up a controlled foreign shell company
which diverted his income to a foreign brokerage account, then to a foreign
bank account and lastly back to Taxpayer I through the use of an ATM. Once
Taxpayer I abandoned the use of his offshore structure in favor of using
virtual currency, the steps described above were the same until his income
reached his foreign bank account. Once there, instead of repatriating his
income from an ATIM in the form of cash, Taxpayer I diverted his income to a
bank which works with a virtual currency exchange to convert his income to
virtual currency. Once converted to virtual currency, Taxpayer I’s income was
placed into a virtual account until Taxpayer I used it to purchase goods and
services. Taxpayer I failed to report this income to the IRS.</span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">And in the second example: </span></div>
<div class="MsoNormal" style="line-height: 150%; margin-left: 36.0pt; text-align: justify;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Two separate corporate entities with annual
revenues of several million dollars traded bitcoins resulting in the under
reporting of income. Both taxpayers admitted to disguising the amount they
spent purchasing bitcoins as deductions for technology expenses on their tax
returns. The bitcoin transactions were discovered after repeated requests for
the original documentation necessary to substantiate the technology expense
items claimed on the tax returns.<span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span class="MsoHyperlink"><span style="color: windowtext; font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin; text-decoration: none; text-underline: none;">US persons who reside in Canada and convert virtual
currencies on exchanges other than in the United States, should be advised that
their FBAR filings should disclose all of their holdings of convertible virtual
currencies.</span></span></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%; text-align: justify;">
<span class="MsoHyperlink"><span style="color: windowtext; font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin; text-decoration: none; text-underline: none;">reprinted with permission from the Canadian Tax Highlights, a Canadian Tax Foundation Newsletter. </span></span></div>
Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-81177497026136612592017-05-31T13:34:00.002-04:002017-05-31T13:34:46.158-04:00Two‐Year Holding of CCPC Options<div style="text-align: justify;">
<i>Montminy</i> (<a href="https://www.canlii.org/en/ca/tcc/doc/2016/2016tcc110/2016tcc110.html" target="_blank">2016 TCC 110</a>) is the first case to consider the interaction between regulations 6204(1)(b) and 6204(2) (c). The TCC concluded that the latter does not apply to negate the two-year</div>
<div style="text-align: justify;">
reasonable holding period in the former.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
Were the taxpayers in <i>Montminy</i> entitled to a deduction whereby a CCPC employee defers the recognition of employment income to the year when he or she disposes of the CCPC's shares (paragraph 110(1)(d.1))? In conjunction with section 7, only half of the taxable benefit (simulating a capital gain) is taxed (paragraphs 110(1)(d) and 110(1)(d.1)). The 50 percent deduction is allowed if the shares are prescribed under regulation 6204.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
The taxpayers were employed at Cybectec, a tech company in the competitive IT industry, which established a stock option plan in 2001 to retain employees. In 2007, Cybectec received an unsolicited offer from Cooper Industrial Electrical Inc. to purchase all of its shares; Cooper changed the offer to an offer to purchase all of Cybectec's assets. The founders of Cybectec sought to honour its employees' options by allowing the employees to exercise the options and immediately thereafter to sell the shares to a company related to Cybectec. The employees exercised their options in Cybectec and sold the shares the same day to the related company.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
The taxpayers relied on paragraph 110(1)(d): paragraph 110(1)(d.1) requires that the shares be prescribed. The minister argued successfully that under regulation 6204(1)(b), the shares were not prescribed because once the options were exercised by the taxpayers, the shares were to be immediately purchased by the related company. Regulation 6204(1)(b) provides that a share is prescribed if the issuing corporation or "a specified person in relation to the corporation cannot reasonably be expected to, within two years after the time the share is sold or issued, as the case may be, redeem, acquire or cancel the share in whole or in part." The taxpayers acknowledged that the two-year holding period in regulation 6204(1)(b) was not met, but they said that regulation 6204(2)(c) allowed an exception to that requirement.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
The TCC applied the SCC's guidance in <i>Canada Trustco</i> (<a href="https://www.canlii.org/en/ca/scc/doc/2005/2005scc54/2005scc54.html" target="_blank">2005 SCC 54</a>), according to which an interpretation of a statutory provision must accord with a textual, contextual, and purposive analysis. The TCC concluded that regulation 6204(2)(c) does not disregard regulation 6204(1)(b): the former does not apply to the latter. Regulation 6204(1)(b) "raises a factual question," and the sole object of regulation 6204(2)(c) was, according to the TCC, "to disregard certain rights and obligations, notably to redeem, acquire or cancel the share, if all conditions of paragraph 6204(2)(c) are met." The TCC continued:</div>
<div style="text-align: justify;">
<br /></div>
<blockquote class="tr_bq">
<div style="text-align: justify;">
My conclusion that paragraph 6204(2)(c) of the Regulations does not disregard paragraph 6204(1)(b) is confirmed by the fact that paragraph 6204(1)(b) is applicable in cases where there is no right or obligation to redeem, acquire or cancel the shares at the time of their issue. For example, if, at the time of issue, a share is a common share without conditions, then the share is a prescribed share. However, if the facts show that the corporation knew that it would be redeeming its employees' shares within two years following the issue of the shares, then the share is not a prescribed share, since the expectation that the share will be redeemed is what triggers paragraph 6204(1)(b) regardless of whether the share has rights or obligations attached thereto. This shows that paragraph 6204(2)(c), used to eliminate from consideration certain rights or obligations, is not relevant to paragraph 6204(1)(b).</div>
</blockquote>
<blockquote class="tr_bq">
<div style="text-align: justify;">
Moreover, contrary to situations in which there is a logical connection between the application of subsection 6204(2) of the Regulations and certain subparagraphs of paragraph 6204(1)(a), it is difficult to find a logical connection between the factual issue in paragraph 6204(1)(b), the two-year reasonable expectation, and paragraph 6204(2)(c), the purpose of which is to disregard the right or obligation to redeem, acquire or cancel the share or to cause the share to be redeemed, acquired or cancelled.</div>
</blockquote>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
The TCC acknowledged that the two-year holding criteria did not apply to employees of public companies: tax policy dictates a different treatment for shares of public companies as opposed to those of private companies. The TCC noted the technical complexity of subsections 6204(1) and 6204(2) and said that "surely the time has come for a reform of these subsections."</div>
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<br /></div>
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The case is under appeal to the FCA.</div>
<div style="text-align: justify;">
<br /></div>
<span style="text-align: justify;">Sunita Doobay, TaxChambers LLP, Toronto, Canadian Tax Highlights. Volume 25, Number 5, May 2017 ©2017, Canadian Tax Foundation.</span>Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-80145061714915764142017-05-15T15:43:00.000-04:002017-05-15T15:43:01.774-04:00US Country‐by‐Country Reporting<div style="text-align: justify;">
The US Treasury and the IRS implemented country-by-country (CbC) reporting requirements to ensure that US multinational enterprises (MNEs) are not subject to CbC filing obligations in multiple foreign tax jurisdictions. US CbC reporting requires the ultimate parent entity to annually file IRS <a href="https://www.irs.gov/pub/irs-dft/f8975--dft.pdf" target="_blank">form 8975</a>, “Country-by-Country Report,” including <a href="https://www.irs.gov/pub/irs-dft/f8975sa--dft.pdf" target="_blank">schedule A</a>, “Tax Jurisdiction and Constituent Entity Information.” The reporting period is for the ultimate parent’s annual financial statement that ends with or within its taxable year; if the parent entity does not prepare an annual financial statement, the reporting period is its taxable year.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
Regulation section 1.60384( h) says that the reporting threshold is US$850 million. That amount is equivalent to the €750 million agreed to on January 1, 2015 under the OECD's BEPS <i>Action 13: Guidance on the Implementation of Transfer Pricing Documentation and Country-by-Country Reporting.</i> The <a href="https://www.irs.gov/irb/2016-29_IRB/ar05.html" target="_blank">July 18, 2016 Internal Revenue Bulletin (TD 9773)</a><span id="goog_2111743256"></span><a href="https://www.blogger.com/"></a><span id="goog_2111743257"></span><span id="goog_2111743248"></span><a href="https://www.blogger.com/"></a><span id="goog_2111743249"></span> says that Treasury and the IRS expect other countries to acknowledge that the final BEPS report is inconsistent with a country's requiring local filing by the constituent entity of a US MNE whose revenue is less than US$850 million (paragraph 14). This is consistent with Canada's position. (See "Country-by-Country Reporting Is Here," <i>Canadian Tax Highlights</i>, March 2017: "The CRA administratively offers a Canadian filing exemption if the ultimate parent entity's jurisdiction 'has implemented a reporting threshold that is a near equivalent of €750 million in its domestic currency as it was at January 2015.'")</div>
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<br /></div>
<div style="text-align: justify;">
Fifty-seven countries had signed the OECD Multilateral Competent Authority Agreement on the Exchange of Country by Country Reports as of January 26, 2017. The United States is not a signatory to that agreement but has implemented CbC reporting. The preamble to the final regulations to Code section 6038 says that without the US implementation of CbC reporting, US MNEs would have been required to comply with the varying CbC filing rules applicable in foreign jurisdictions—for example, the cumbersome requirement to use local currency or language in filing. Treasury said the following in TD 9773:</div>
<blockquote class="tr_bq" style="text-align: justify;">
In addition, CbC reports filed with the IRS and exchanged pursuant to a competent authority arrangement benefit from the confidentiality requirements, data safeguards, and appropriate use restrictions in the competent authority arrangement. If a foreign tax jurisdiction fails to meet the confidentiality requirements, data safeguards, and appropriate use restrictions set forth in the competent authority arrangement, the United States will pause exchanges of all reports with that tax jurisdiction. Moreover, if such tax jurisdiction has adopted CbC reporting rules that are consistent with the 2015 Final Report for Action 13 (Transfer Pricing Documentation and Country-by-Country Reporting) of the Organisation for Economic Cooperation and Development (OECD) and Group of Twenty (G20) Base Erosion and Profit Shifting (BEPS) Project (Final BEPS Report), the tax jurisdiction will not be able to require any constituent entity of the U.S. MNE group in the tax jurisdiction to file a CbC report. The ability of the United States to pause exchange creates an additional incentive for foreign tax jurisdictions to uphold the confidentiality requirements, data safeguards, and appropriate use restrictions in the competent authority arrangement.</blockquote>
<div style="text-align: justify;">
The preamble to regulation 1.6038-4 discloses that the United States intends to enter into a competent authority arrangement to automatically exchange CbC reports with a jurisdiction with which it has an income tax treaty or tax information exchange agreement. According to TD 9773, Treasury and the IRS anticipate that information about the existence of competent authority arrangements for CbC reports will be made publicly available, in an as yet undetermined manner (paragraph 16).</div>
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<br /></div>
<div style="text-align: justify;">
Form 8975 is still draft: this is troublesome for US MNEs because most signatory countries require CbC reports in 2016. OECD guidelines say that a foreign subsidiary may be required to file a CbC report if its home country does not require reporting before 2017 (article 2(2) of action 13 of the BEPS report <i>Action 13: Country-by-Country Reporting Implementation Package</i>). In response, <a href="https://www.irs.gov/pub/irs-drop/rp-17-23.pdf" target="_blank">Revenue procedure 2017-23</a> was recently released to allow draft form 8975 to be filed as of September 1, 2017 for an earlier reporting period. The ultimate parent entity must file (or have filed) an income tax return for a taxable year that includes an earlier reporting period, but without a form 8975: procedures for filing an amended income tax return must be followed, and form 8975 attached, within 12 months of the end of the taxable year that includes the earlier reporting period. Ultimate parent entities are encouraged to file returns and forms 8975 electronically. The Revenue procedure says that the IRS will provide the software industry with specific electronic filing information on form 8975 in early 2017, with the intention of making the form available before the September 1, 2017 implementation date.</div>
<div style="text-align: justify;">
<br /></div>
<div style="text-align: justify;">
Sunita Doobay, TaxChambers LLP, Toronto, Canadian Tax Highlights. Volume 24, Number 4, April 2017 ©2017, Canadian Tax Foundation.</div>
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Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-11457394525008547752017-04-09T19:12:00.002-04:002017-04-12T15:06:36.767-04:00 A Reflection on The Common Reporting Standards <!--[if gte mso 9]><xml>
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<br />
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<br />
With over 100 countries as signatories to the <a href="http://www.oecd.org/tax/automatic-exchange/international-framework-for-the-crs/multilateral-competent-authority-agreement.pdf" rel="noopener nofollow" target="_blank">CRS Multilateral Competent Authority Agreement</a> there will be little need for incidents such as the Panama papers (<a href="https://panamapapers.icij.org/" rel="noopener nofollow" target="_blank">https://panamapapers.icij.org/</a>) for tax authorities to find out what their tax residents were squirreling away. The CRS which stands for Common Reporting Standards is in essence an automatic annual financial information exchange tool for tax authorities. It allows a tax authority to inform another tax authority of the financial accounts held by their tax residents in the first mentioned tax authority jurisdiction.<br />
<br />
As of July 1, 2017 the Canada Revenue Agency (CRA) will share, with members of the CRS Multilateral Agreement with which the CRA has formalized a CRS partnership, details of the bank accounts held by their residents in Canada. In return, the CRA will receive information on financial accounts held by Canadian residents outside of Canada from its CRS partners. Canadians investing significant assets overseas where banks pay higher interest rates than domestic Canadian banks will now not be able to remain undetected from CRA. These Canadians who have maintained accounts overseas without disclosing the income earned on such accounts must consider the voluntary disclosure procedures to see relief from penalties that will be levied by the CRA.<br />
<br />
The Canadian Financial Institutions will provide the non-resident's account holder's name and address, his or her date of birth, the account balance or value at year end and certain amounts credited or paid into the account during the year to the CRA. Unlike the U.S. FATCA legislation, the CRS has no <em>de minimis</em> amount for reporting purposes.<br />
The United States is not a signatory to the CRS Multilateral Competent Authority Agreement as its FATCA legislation has been fairly successful in uncovering accounts held outside the US by US persons. Although the U.S. is not a signatory to the CRS – it should be noted that the U.S. has an automatic exchange relationship with 43 countries whereby deposit interest paid to non-residents are disclosed to the tax authorities of these 43 countries. See <a href="https://www.irs.gov/pub/irs-drop/rp-17-31.pdf" rel="noopener nofollow" target="_blank">https://www.irs.gov/pub/irs-drop/rp-17-31.pdf</a>. The 43 countries are: Australia, Azerbaijan, Belgium, Brazil, Canada, Columbia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Guernsey, Hungary, Iceland, India, Ireland, Isle of Man, Israel, Italy, Jamaica, Jersey, Republic of Korea, Latvia, Lichtenstein, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Saint Lucia, Slovak Republic, Slovenia, South Africa, Spain, Sweden and the United Kingdom.<br />
<br />
It is often thought that the U.S. by not being a signatory to the Common Reporting Standards retained the taint of a tax haven. An argument can be made that it does for the tax residents of the countries who are not part of the "automatic exchange relationship". For the tax authorities of those countries - it will be only through a formal request under the tax treaty or tax information exchange agreement that information can be obtained on deposits held by US financial institutions in the U.S.<br />
<br />
Sunita Doobay<br />
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<![endif]-->Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-66354561437227278532017-04-09T17:57:00.004-04:002017-04-09T18:00:50.539-04:00Shielding Non-Resident's Assets via a Canadian LPBefore December 12, 2016, a common tactic for non-Americans was to shield their assets through a Delaware LLC. On the formation of an LLC in Delaware, the beneficial ownership was not disclosed. Thus, a German individual could hold his Parisian condo in an LLC without the US, German, or French authorities knowing that he was the condo's true owner. The U.S. Treasury and the IRS sought to remove this taint of a tax haven by by issuing final regulations on December 12, 2016 that requires a foreign-owned LLC treated as a flowthrough entity (partnership) to file IRS form 5472 ("Information Return of a 25% Foreign-Owned U.S. Corporation") for taxation years that start on or after January 1, 2017. Germany can now access the condo owner's information through a treaty's information exchange article (article 26 of the Germany-US income tax treaty).<br />
<br />
Canada has so far been silent on the similar use of an LP by a non-resident of Canada to shield offshore assets and to conceal their ultimate beneficial ownership from authorities in his or her home country. An earlier article ("Non-Residents and Partnerships," Canadian Tax Highlights, February 2012) summarizes the Canadian taxation of partnerships as follows: "If a partnership interest is not taxable Canadian property and the partnership does not carry on business in Canada, the non-resident partners are not subject to Canadian tax. If there are no Canadian partners, there is also no Canadian reporting."
There currently seems to be no Canadian reporting requirement, and it is not certain whether the OECD's Common Reporting Standard (CRS) Multilateral Competent Authority Agreement will result in the partners of the home country learning about assets held in a Canadian LP.<br />
<br />
The CRS was signed by over 100 countries, including Canada, where it comes into force on July 1, 2017. The CRS allows for an automatic exchange between tax authorities of information about financial accounts held in a signatory jurisdiction by the resident of another signatory jurisdiction. Will the tax authorities of the jurisdiction that holds the financial accounts of the Canadian LP report the Canadian LP information only to the CRA? Or does the CRS mandate the LP to report its financial account information to the tax authorities of a beneficial partner's home jurisdiction?
The CRS jurisdiction governing a partnership is the jurisdiction where the entity resides. A fiscally transparent entity, such as a Canadian LP with non-Canadian partners, will be treated (per The CRS Implementation Handbook, paragraph 83) as a resident of the jurisdiction where it was formed, where it has its place of management, or where it is subject to financial supervision. Assume that Mexican partners supervise the financial accounts of the Canadian LP: the partnership is deemed to be Mexican for CRS purposes. The partnership has nothing to report for the purposes of the CRS to the Mexican tax authorities, because its partners are not non-Mexicans.<br />
<br />
The purpose of the CRS is to facilitate the mutual exchange of financial information by tax authorities as it relates to one another's residents; the CRS is not a mechanism for informing the tax authority about its own residents.
It is likely therefore that non-Canadians will continue to use the Canadian LP to shield their assets from tax authorities in their non-Canadian home jurisdictions, unless Canada enacts legislation or the OECD amends its current guidelines.<br />
<br />
Sunita Doobay
TaxChambers LLP, Toronto
Canadian Tax Highlights
Volume 25, Number 3, March 2017
©2017, Canadian Tax Foundation<br />
<br />
Note: <br />
<div class="comment-content" id="bc_0_0MC">
From a Canadian legal
perspective - an argument can be made that the Canadian LP is a sham. I
hope to write more about this later this month.</div>
Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com1tag:blogger.com,1999:blog-8851789860363372398.post-35733645351061078952016-12-15T10:24:00.000-05:002016-12-15T10:24:03.514-05:00Ontario (not Alberta) Resident Trust<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.taxchambers.ca/wp-content/uploads/2016/12/CTH_Ontario-not-Alberta-Resident-Trust.pdf" target="_blank"><img border="0" height="640" src="https://1.bp.blogspot.com/-ude0kP-xUFA/WFK1L_HPeKI/AAAAAAAAAaQ/3ZIJC2NZnN0GzAf_YcHnvkWwTgDjUKEBQCLcB/s1600/CTH_Ontario%2B%2528not%2BAlberta%2529%2BResident%2BPage%2B1.jpg" width="500" /></a></div>
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<br />Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-76613093940119380932016-11-03T13:24:00.004-04:002016-11-03T13:24:56.340-04:00Tax Under Appeal not Debt in Bankruptcy<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.taxchambers.ca/wp-content/uploads/2016/10/Canadian-Tax-Highlights-October-2016.pdf" target="_blank"><img border="0" height="640" src="https://1.bp.blogspot.com/-Z3D_rxcHRS4/WBtyad67ikI/AAAAAAAAAZs/zAH_et4hQm8ydDbI8AsvHT2S7OuAUYuxgCLcB/s640/Canadian%2BTax%2BHighlights%252C%2BOctober%2B2016_Page_1.jpg" width="500" /></a></div>
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<br />Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-90158735725000888912016-11-03T13:19:00.001-04:002016-11-03T13:19:51.980-04:00US Debt Reclassified as Equity<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.taxchambers.ca/wp-content/uploads/2016/10/Canadian-Tax-Highlights-September-2016.pdf" target="_blank"><img border="0" height="640" src="https://3.bp.blogspot.com/-KWu4ieS3rag/WBtdQuZKKjI/AAAAAAAAAZc/AZKU8BgPQScUzY7BFypm6v77Xgtn3KFnACEw/s640/Canadian%2BTax%2BHighlights%252C%2BSeptember%2B2016_Page_1.jpg" width="500" /></a></div>
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Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-13427842905190545742016-06-17T09:40:00.000-04:002016-06-17T09:40:02.852-04:00Ultimate Beneficiary <div class="separator" style="clear: both; text-align: center;">
<a href="http://www.taxchambers.ca/wp-content/uploads/2016/06/Ultimate-Beneficiary.pdf" target="_blank"><img border="0" height="640" src="https://1.bp.blogspot.com/-iKb2wScCiJg/V2P9SfkCSII/AAAAAAAAAYI/uMDo8Nss5xsPXcYhEmtKc8GyoxNcCGy4wCLcB/s1600/Ultimate%2BBeneficiary_Page_1.jpg" width="500" /></a></div>
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<br />Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-14930647430767632572016-06-01T17:45:00.002-04:002016-06-01T17:45:53.112-04:00Delaware and Florida LLPs and LLLPs deemed corporations for Canadian Income Tax PurposesState legislation authorizing limited liability partnerships (LLPs) and limited liability limited partnerships (“LLLPs) are more recent than the legislation authorizing limited liability companies. And in recent years LLLPs are seen more in cross-border structure including a tower structure described in CRA Ruling 2010-0386201R3. CRA however did not comment in that ruling on how the LLLP would be viewed in Canada – i.e. would it be viewed as a partnership or as a corporation.
In a partnership, partners are jointly and severally liable for the partnership debts. In a limited partnership, it is the general partner that is subject to the liability of the partnership. In a limited partnership, a limited partner is shielded from another partner’s errors, omissions, negligence or malfeasance provided that the partner was not directly involved in the other partner’s activity or had knowledge of the activity at the time of occurrence. A general partner in a limited partnership however does not enjoy the same protection as a limited partner and is not shielded from the negligence of his/her partners.
Partnerships in the US are governed by State law similarly to Canada where provincial legislation governs partnerships. When a limited partnership becomes an LLP or an LLLP all partners qualify for the limited liability protection. LLPs in the US have to be registered in the State under which they are formed and where such entity carries on business. LLP legislation tend to be based of the Revised Uniform Partnership Act (1994)(RUPA) however LLP legislation is not uniform from State to State. For example certain States including New York, New York and Nevada only permit professionals to use a limited liability partnership – this is similar to Canada. In other States one does not have to be a group of professionals in order to qualify as an LLP. Attempts have been made to ensure that LLP legislation is uniform across the States and in 1996 there was an attempt to unify the LLP legislation across the States by promulgating Limited Liability amendments (ULLPA) to the RUPA. However some States follow RUPA while others follow the ULLPA amendments. This lack of uniformity has resulted in some States with legislation imposing corporate characteristics on that State's LLP or LLLP. This is why CRA did not blankly deem all LLPs/LLLPs to be a corporation for Canadian income tax purposes and singled out for now the Florida and Delaware LLP/LLLPs.
CRA did allow transitional provisions absent tax avoidance to allow Florida and Delaware LLPs and LLLPs to be treated as partnerships retroactively if the following conditions are met:
- The partners of the LLP/LLLP are carrying on a business with a view to profit;
- The Florida/Delaware LLP/LLLP was formed prior to July 2016 and the
- LLP/LLLP will convert to a partnership recognizable as a partnership by the CRA before 2018.
Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-54017738106946040702016-05-26T17:41:00.001-04:002016-05-26T17:41:27.856-04:00Written Settlement Offer Before Hearing<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.taxchambers.ca/wp-content/uploads/2016/05/Written-Settlement-Offer-Before-Hearing.pdf" target="_blank"><img border="0" height="640" src="https://1.bp.blogspot.com/-iI3iTB5oDjk/V0dtE4rBQ2I/AAAAAAAAAWU/kWhse1DYEvcsEh-_iExi_qnF1cRyaiufgCLcB/s640/Written%2BSettlement%2BOffer%2BBefore%2BHearing_Page_1.jpg" width="500" /></a></div>
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<br />Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-24144158431439922322016-04-21T12:59:00.001-04:002016-04-21T12:59:41.871-04:00Foreign Rectification Orders<div class="separator" style="clear: both; text-align: center;">
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https://3.bp.blogspot.com/-VaGqyswKcgY/VxkGnYUMFiI/AAAAAAAAAV4/rYQOSG4dYoEM5cdEXPQr_3DpoErW-PvVgCLcB/s640/Foreign%2BRectification%2BOrders_Redacted.jpg" width="500" /></a></div>
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Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-20966647980716525172016-02-26T18:20:00.002-05:002016-04-19T18:28:27.187-04:00U.S. Streamlined Foreign Offshore Procedures Certification update – IRS Form 14653<!--[if gte mso 9]><xml>
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<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">In January
2016 the IRS released a revised </span><a href="https://www.irs.gov/pub/irs-pdf/f14653.pdf"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Form
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Residing Outside of the United States for Streamlined Foreign Offshore
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<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">A US
taxpayer residing outside of the United States is eligible to file under the streamlined
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(2) wilfully failed to file FBARs, report income from a foreign financial asset,
or pay tax as required by US law. Non-wilful conduct is discussed in <i style="mso-bidi-font-style: normal;">Non-Wilful Conduct and IRS Compliance</i>.<i style="mso-bidi-font-style: normal;"> </i>(See “Non-Wilful Conduct and IRS
Compliance”, <i style="mso-bidi-font-style: normal;">Canadian Tax Highlights</i> August
2014). Form 14653 is crucial because it certifies that a taxpayer or an estate
did not wilfully or deliberately fail to file a US return or FBAR or report
income and pay tax. Revised form 14653 and the </span><a href="https://www.irs.gov/Individuals/International-Taxpayers/Streamlined-Filing-Compliance-Procedures-for-U-S--Taxpayers-Residing-Outside-the-United-States-Frequently-Asked-Questions-and-Answers"><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">IRS Streamlined Filing Compliance Procedures
for U.S. Taxpayers Residing Outside of the United States Frequently Asked
Questions and Answers</span></a><span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;"> (question
#6) now require a more robust answer that shows that the taxpayer’s conduct was
not willful. Both the FAQ and form 14653 (printed in boldface) now require the
following:</span></div>
<div class="MsoNormal" style="line-height: 150%;">
<br /></div>
<div style="line-height: 150%; margin-left: 36.0pt;">
<span style="font-family: "Cambria","serif"; font-size: 11.0pt; line-height: 150%; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Provide specific reasons for your failure to
report all income, pay all tax, and submit all required information returns,
including FBARs. Include the whole story including favorable and unfavorable
facts. Specific reasons, whether favorable or unfavorable to you, should
include your personal background, financial background, and anything else you
believe is relevant to your failure to report all income, pay all tax, and
submit all required information returns, including FBARs. Additionally, explain
the source of funds in all of your foreign financial accounts/assets. For
example, explain whether you inherited the account/asset, whether you opened it
while residing in a foreign country, or whether you had a business reason to
open or use it. And explain your contacts with the account/asset including
withdrawals, deposits, and investment/management decisions. Provide a complete
story about your foreign financial account/asset. If you relied on a
professional advisor, provide the name, address, and telephone number of the
advisor and a summary of the advice. </span></div>
<div style="line-height: 150%; margin-left: 36.0pt;">
<br /></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">Revised form
14653 now also requires that a taxpayer certify whether she was out of the
United States for at least 330 days in any or all of the three years for which
the US tax return due date has passed. <span style="mso-spacerun: yes;"> </span></span></div>
<div class="MsoNormal" style="line-height: 150%;">
<span style="font-family: "Cambria","serif"; mso-ascii-theme-font: major-latin; mso-hansi-theme-font: major-latin;">The
comprehensive information sought by the IRS may indicate that the IRS is
becoming less patient with taxpayers who have not come forward since the
program began in 2009. The above disclosure regarding failure to file, report,
or pay also illustrates the difficulty in establishing non-wilful conduct for failure
to file a US income tax return or an FBAR or report income and pay tax. A
taxpayer should also be cautioned that certification is deemed made under
penalty of perjury: the IRS can seek a felony conviction, a maximum fine of
$100,000, and/or up to 3 years imprisonment (Code section 7206) against a
taxpayer who wilfully makes an incorrect statement. Under Code section 7207 the
IRS can also impose a maximum penalty of $10,000 or up to one year’s imprisonment
for wilfully providing a false statement.</span></div>
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<![endif]-->Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-13743312283711865552016-02-11T20:23:00.001-05:002016-02-11T20:23:12.956-05:00New IRS Information Return Filing Obligation for beneficiaries of a US Estate.Beneficiaries of a US estate must now file IRS return form 8971 which can be found here: https://www.irs.gov/pub/irs-dft/f8971--dft.pdfSunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-44925380268161336392016-01-14T15:25:00.002-05:002016-01-26T15:55:45.198-05:00Uber Driver: Employees?<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.taxchambers.ca/wp-content/uploads/2016/01/Uber-Driver_-Employee_.pdf" target="_blank"><img border="0" height="640" src="http://1.bp.blogspot.com/-kPHO5eyWAyM/VqfcsEvoMdI/AAAAAAAAAUE/RmLIPYVvsm4/s1600/Uber%2BDriver_%2BEmployee__Page_1.jpg" width="500" /></a></div>
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<br />Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-8785575650427874992016-01-06T20:28:00.000-05:002016-01-06T20:28:26.636-05:00Country by Country Proposed Regs Released by the US TreasuryThe proposed country by country reporting regs are out. See https://www.sullcrom.com/proposed-regulations-regarding-country-by-country-reporting for a good discussion on the new rules.Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-9637038268204004382015-12-16T11:22:00.002-05:002015-12-16T11:22:15.215-05:00Federal Court of Canada Strikes Down Ex Parte Jeopardy Order<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.taxchambers.ca/wp-content/uploads/2015/12/80ti0767-Doobay.pdf" target="_blank"><img border="0" height="640" src="http://4.bp.blogspot.com/-Ezds8gUWKZU/VnGOvsr519I/AAAAAAAAATc/99qaewHwZ6U/s640/80ti0767-Doobay_Page_2.jpg" width="500" /></a></div>
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<br />Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-90513052428452329932015-12-04T12:50:00.002-05:002015-12-16T11:21:28.202-05:00Alberta‐Resident Trusts<div class="separator" style="clear: both; text-align: center;">
<a href="http://www.taxchambers.ca/wp-content/uploads/2015/12/Alberta-Resident-Trusts.pdf" target="_blank"><img border="0" height="640" src="http://3.bp.blogspot.com/-4xkZMGHUcaA/VmHSDaO-vzI/AAAAAAAAARk/wwgKXP8bpZk/s1600/Alberta-Resident%2BTrusts.jpg" width="500" /></a></div>
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<br />Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0tag:blogger.com,1999:blog-8851789860363372398.post-62779964848530009652015-10-12T14:15:00.003-04:002015-10-12T14:15:54.864-04:00Quoted in the Accounting Newspaper The BottomLineQuoted on FATCA in <a href="http://www.thebottomlinenews.ca/articles/797">The Bottom Line</a>Sunita Doobayhttp://www.blogger.com/profile/11675736279749922424noreply@blogger.com0