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The IRS has boldly predicted their move towards paperless correspondence. This, of course, will directly impact how taxpayers and tax service providers interact with the IRS.

The Tax Cuts and Jobs Act (TCJA) of 2017 is one of the most significant overhauls of the United States tax code in decades. Among the changes implemented was the Foreign Derived Intangible Income (FDII) Deduction, introduced via PL 115-97, which grants C-Corporations the opportunity to lower the tax rate applied to their foreign-derived income.  

As McGuire Sponsel continues developing international tax relationships with CPAs around the country, the subject of transfer pricing inevitably arises. Transfer pricing conversations typically center on why a study is needed, how often to perform a study, and if McGuire Sponsel performs studies. Download our guide to understand our approach to transfer pricing.

Medtronic and its subsidiary, Medtronic Puerto Rico, have been in dispute with the IRS regarding the transfer pricing method used for intellectual property (IP). Medtronic is a global manufacturer of medical devices and therapies, including insulin pumps, pacemakers, and diabetes treatments. Based on the Medtronic v. Commissioner case, it’s safe to say that intangible assets are always a challenge to benchmark.

 

In January 2024, the new Corporate Transparency Act (CTA) came into effect, introducing beneficial ownership reporting requirements. Lawmakers expressed concerns about small businesses being unaware of these requirements during a hearing on July 9, 2024.

 

 

After the Supreme Court ruling in the Moore case, it seems apparent GILTI is here to stay. U.S. taxpayers will continue to have their pro rata portion of net CFC-tested income included in their U.S. tax returns. In cases in which there are both direct and indirect 10% shareholders, the question is, “whose GILTI is it anyway?”.

In this episode, host ⁠TJ Sponsel⁠ and guest ⁠Greg Lambrecht⁠ discuss strategies for building a successful international tax practice.

On June 20, in a 7-2 decision, the Court ruled in favor of the government, asserting that Congress acted within its authority when passing Section 965 into law.

The Tax Cuts and Jobs Act (TCJA) of 2017 is one of the most significant overhauls of the United States tax code in decades. Among the changes implemented was the Foreign Derived Intangible Income (FDII) Deduction, introduced via PL 115-97, which grants C-Corporations the opportunity to lower the tax rate applied to their foreign-derived income.  

On April 24, 2024, the U.S. Treasury and the IRS released final regulations (TD 9992) under Section 897, the Foreign Investment in Real Property Tax Act (FIRPTA).

 

Are We Really Moving Toward a Paperless Society? The IRS Believes So

In 1978, a man named F. W. Lancaster, a professor at the University of Illinois, Urbana, wrote a now infamous book titled “Toward Paperless Information Systems.” In the book, Lancaster predicted that society would be largely paperless by the end of the century. In a review of this book, Estelle Brodman wrote: “What will happen during the intermediary period to the brave new world? Neither Lancaster nor this reviewer knows, of course, but that the world is moving in the direction of a paperless society, with all that implies for archival records, changes in occupations, and societal pressures, seems very evident now.”

Since this was written, much of our world has moved to digitized information. The IRS has boldly predicted their move towards paperless correspondence. This, of course, will directly impact how taxpayers and tax service providers interact with the IRS.

In a Fact Sheet published in August 2023, the IRS laid out its plan to aggressively move toward paperless filing by the 2024 tax filing season (now mere months away) and to achieve paperless processing for tax returns by the 2025 filing season. In addition to forms already eligible for e-filing (e.g., Forms 1120, 1040, etc.), according to the IRS, an additional 20 forms will be eligible for e-filing, including Forms 940, 941, 941-SS, and 941 (PR). Another 20 “non-tax forms” will also be eligible, although the Fact Sheet does not identify which ones.

By 2025, the IRS indicated that “150 of the most used non-tax forms” will be accessible in digital, mobile-friendly formats. This will allow individuals to file forms from their phones and other electronic devices that do not need an internet connection.

In a recent news release, the IRS reminded taxpayers of three late-filing or penalty relief requests that can be filed electronically as part of the aforementioned initiative. The three specific items were as follows:

  1. Relief for Gain Recognition Agreements
  2. Late Filing Relief for Dual Consolidated Losses
  3. Relief for Partnership Gain Deferral Contributions

The news release indicated that such a request may be filed via eFax at (855) 582-4842. Specific guidance can be found via links in the digital release.

While this initiative may not reduce the amount of junk mail we receive, hopefully, it will reduce the amount of paper used to correspond with the IRS!

Greg Lambrecht, CPA is a Principal in the firm’s Global Business Services practice and advises clients on international tax matters including understanding the consequences and opportunities associated with global tax planning decisions. He also assists clients in managing increasingly complex compliance requirements of companies with international operations.

Lambrecht joins McGuire Sponsel from the Big Four with over a decade of experience leading complex international tax projects for Fortune 150 clients and over 20 years of total experience in international tax.

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