The Internal Revenue Service Office of Chief Counsel, in a chief counsel advice memorandum released Feb. 24, said an estate is responsible for Section 6677 penalties for failure to file information returns regarding foreign trusts for tax years ending prior to the decedent's death. The estate is responsible for “initial” penalties asserted against the decedent…Read more
FATCA Clears Way for Mexican Authorities to Investigate U.S. Accounts
The Mexican Tax Administration Service (SAT) can access information on thousands of U.S. bank accounts held by Mexican citizens “automatically” under a new collaboration with the IRS. The agreement is part of a reciprocity mechanism between the U.S. and Mexican tax systems stemming from the Foreign Account Tax Compliance Act (FATCA), through which IRS can…Read more
IRS determines sourcing of credit card interest and ATM fees received from outside the U.S.
In Chief Counsel Advice (CCA), IRS has determined the sourcing of credit card interest and fees received by a financial services firm from U.S. citizen and resident alien customers living outside the U.S. and from ATM fees earned by the firm in connection with customer transactions made on third-party ATMs located outside the U.S. The…Read more
New Reporitng for Foreign Investors in U.S. Partnerships
Foreign investors are now required to file a special form, Schedule P. It applies to the ownership of any U.S. partnership including a limited liability company. Now, the 2012 Schedule P (Form 1120-F) is required by a foreign corporation’s ownership of a U.S. partnership. Schedule P also reports the distributive shares of partnership effectively connected…Read more