Under the Tax Reform Act of 1986, U.S. partnerships are required to withhold income tax on "effectively connected taxable income" deemed allocable to foreign partners. The U.S. partnership must file a Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, to show the amount of effectively connected taxable income and the total tax…
Read more
Rodriguez, et al. v. Commissioner – Section 951 Inclusions Not Qualified Dividend Income.
Petitioner challenged the IRS's determination that the gross income petitioners reported in 2003 and 2004 based on their ownership of a controlled foreign corporation should have been taxed at the rate of petitioners' ordinary income rather than the lower tax rate they had claimed. At issue was whether amounts included in petitioners' gross income for…
Read more
'Leaver lists' will expose more Swiss banks to US Dragnet!
Credit Suisse and Zurich Cantonal, have obtained government approval to send the US Department of Justice (USDoJ) lists of American clients who have moved assets out of their accounts to another bank. The so-called 'leaver lists' do not identify clients but do name the destination banks, which the USDoJ will then pursue with further disclosure…
Read more
For Hong Kong Chinese Residents that have U.S. Citizenship; maybe it's Time to re-consider?
Scott Michel, a partner and President of Caplin & Drysdale, a DC-based law firm, advises that on July 10, 2013, the Hong Kong Legislative Council moved to enable Hong Kong to enter into stand-alone Tax Information Exchange Agreements and, more importantly for U.S. persons who have financial accounts there, to sign an “intergovernmental agreement”…
Read more
