The IRS recently posted a revised draft version of the 2022 Partnership Instructions for Schedule K-2 and K-3 (Form 1065) and a similar revised version of the 2022 S Corporation Instructions for Schedules K-2 and K-3 (Form 1120-S).
U.S. Federal Courts reached two important decisions on transfer pricing cases as 2022 came to a close.
In April of this year, the IRS released a memorandum announcing a change to IRS policy regarding the economic substance doctrine in audits.
Consolidated groups have the option to take the position that their aggregate 951(a)(1)(A) and 951A(a) inclusions are reduced by changing the ownership of stock of a CFC within the group. Specifically, taxpayers are taking the position that a group’s aggregate pro rata share of a lower-tier CFC’s subpart F income or tested income is reduced under section 951(a)(2)(B) by reason of both: 1.) a distribution made by the lower-tier CFC to a member, and 2.) a direct or indirect acquisition of stock of the lower-tier CFC by another member.
Jason Rauhe from our Global Business Services practice reflects on 2022.
On November 4, the Department of the Treasury and the Internal Revenue Service released the 2022-2023 Priority Guidance Plan. The Priority Guidance Plan is published to highlight what is most important for taxpayers and the tax administration.
The IRS recently posted a revised draft version of the 2022 Partnership Instructions for Schedule K-2 and K-3 (Form 1065) and a similar revised version of the 2022 S Corporation Instructions for Schedules K-2 and K-3 (Form 1120-S).
When helping clients get current with filing delinquent returns of prior years, we are always asked the question “How far back do we have to go?”
In this blog, Mark O’Dell, CPA, dives into how the IRS is enhancing its Transfer Pricing enforcement.
In a news release, the IRS reminded individuals and entities who missed the April 15 deadline for filing a Report of Foreign Bank and Financial Accounts (FBAR) to submit their annual report on or before October 17, 2022.
IRS Finalizes Instructions for 2022 Schedules K-2 and K-3
As we have communicated previously, there has been guidance from the IRS regarding Schedule K-2 and K-3 filing requirements and answering tax preparer questions. Recently, the IRS has finalized the instructions for partnerships (2022 Partnership Instructions for Schedules K-2 and K-3 (Form 1065)) and S corporations (2022 S Corporation Instructions for Schedules K-2 and K-3 (Form 1120-S)) completing 2022 Schedules K-2 and K-3. These final instructions retain the new domestic filing exception to the requirement to file and furnish to partners and shareholders Schedules K-2 and K-3 for tax years beginning in 2022.
Under the Tax Cuts and Jobs Act taxpayers are required to provide a lot more information about “items of international tax relevance” reported on their returns. For tax years beginning in 2021, the IRS requires passthrough entities (partnerships, S corporations and LLCs) with items of international tax relevance to complete Schedule K-2 and Schedule K-3 to report such items. The IRS finalized the 2022 Instructions for Schedules K-2 and K-3 without substantive changes. The final instructions retain the domestic filing exception provided in the draft instructions.
The final instructions also, among other things, clarify the following:
- When domestic partnerships with solely domestic activity and with partners that are U.S. persons must use Schedules K-2 and K-3,
- How to report capital gains and losses, and
- When to complete certain items on the return with respect to the apportionment factors for research & experimental (R&E) expense.
McGuire Sponsel’s Global Business Services team is available to assist with any questions or support needed in this complicated area. Please reach out to us to schedule a conversation.
Jason Rauhe, CPA is a Principal in the firm’s Global Business Services practice and is responsible for assisting clients and adding depth in all areas of the firm’s international tax consulting services including transfer pricing, and the firm’s compliance expertise.
Rauhe previously served as Director of International Tax at a Top 100 CPA Firm, where he was responsible for the firm’s international tax division and major industry alliance networks.
Recent Resources
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blogGlobal Business ServicesJanuary 20, 2023Transfer Pricing Court Case Updates
by Josh BabbU.S. Federal Courts reached two important decisions on transfer pricing cases as 2022 came to a close.
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blogGlobal Business ServicesJanuary 13, 2023
Transfer Pricing Economic Substance
by Josh BabbIn April of this year, the IRS released a memorandum announcing a change to IRS policy regarding the economic substance...
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blogGlobal Business ServicesJanuary 6, 2023
Single-Entity Treatment of Consolidated Groups for Specific Purposes
by John BodurConsolidated groups have the option to take the position that their aggregate 951(a)(1)(A) and 951A(a) inclusions are reduced by changing...
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blogGlobal Business ServicesDecember 23, 2022
Global Business Services: Reflecting on 2022
by Jason Rauhe, CPAJason Rauhe from our Global Business Services practice reflects on 2022.
