Tuesday, September 28, 2010
Estate Tax Situation - What were they smoking
Thursday, June 10, 2010
SEC says US unable to meet EU equivalence criteria
Thursday, April 15, 2010
Tuesday, March 23, 2010
HSBC Data Theft Affects 24,000 Swiss Accounts
Stolen data has played a significant role in government crackdowns on tax evaders. Many governments, will pay for stolen data about such taxpayers., e.g., the LGT bank account crackdown by numerous governments including the German and U.S. governments, were propagated primarily based upon stolen data purchased by German tax authorities.
This story could get very dramatic very quickly. Any HSBC customers with Swiss accounts are well advised to consult their tax advisers if they are concerned that they have not correctly reported the income and assets of such accounts.
Redomiciliation of Cayman Island Parent into Switzerland or Ireland
International tax practitioners both in-house and outside are noting a trend towards such redomiciliation transactions. The public perception of Cayman Island corporations and potential adverse legislation cannot be dismissed. In the case of many multinationals, the tax treaty network, low corporate tax rates and potential tax holidays could make Ireland or Switzerland even more attractive than the Caymans. It is a worthwhile exercise for multinationals to evaluate whether redomiciliation could work to their advantage.
Tuesday, March 16, 2010
IRS Announcement 2010-9 Introduces New Tax Reporting Transparency Standards
Until recently, the IRS has exercised a "policy of restraint" with respect to tax accrual work papers, except in the case of "listed transactions." Many practitioners believe that 2010-9 is a sign that this "policy of restraint" is beginning to change. It is possible that 2010-9 is a result of the Textron decision, which is currently being appealed to the U.S. Supreme Court, which addressed whether tax accrual work papers were privileged.
The article focuses on these issues and poses some additional issues and clarifications that will hopefully be addressed in future guidance.
Thursday, March 4, 2010
Levin Bill would exempt most unrelated debt financing income from taxation
In general, tax-exempts are subject to U.S. federal income tax on their unrelated trade or business income (UBTI.) UBTI includes debt financed income (UDFI.) UDFI arises principally in two ways: (1) the tax-exempt borrows to purchase an investment or (2) in the case of an investment in a partnership, LLC or other tax pass-through, the pass-through itself is leveraged, so that the tax-exempt is deemed to have borrowed its pro rata share of the debt of the pass-through for purposes of the UDFI rules.
Many tax-exempts invest through foreign blocker corporations, which effectively blocks the UDFI. However, as discussed at length in the article, foreign blockers also have their drawbacks. For example, if the fund engages in a U.S. trade or business, the blocker could be subject to U.S. taxation (ECI risk) and blockers are not typically entitled to tax treaty benefits.
The Levin Bill would change the definition of UDFI to render blockers unnecessary solely for UDFI blocking. There are, however, numerous circumstances where blockers are still useful.
In this article, I (and other commentators) discuss typical UDFI blocker structures including master feeder structures, as well as parallel and hybrid structures and the advantages and disadvantages of each.
The article is available here
Monday, March 1, 2010
Islamic Finance Article from today's WSJ
This article briefly discusses Islamic finance, Islamic Project Finance and the inconsistencies in what different Shariah Boards deem to be Islamic. There is a brief discussion of the Dubai debacle.
Although this article is very brief, it does pose important questions about Islamic finance structures without rigorously analyzing them. A longer follow up article would be a great idea.
Thursday, February 25, 2010
Senate Passes the HIRE Act
- a $5000 payroll tax credit for companies that hire long unemployed workers
- a one year extension of the increased current expensing of capital expenditures (section 179 extension)
- an expansion of the Build American Bonds program
- a 2 year deferral of the worldwide interest allocation provisions
- the 30 % withholding tax on foreign banks, trusts, and corporations that fail to identify U.S. account holders (see prior coverage of the Foreign Account Tax Compliance Act and related provisions).
Thursday, February 18, 2010
Real Estate Revitalization Act of 2010
A relatively obscure piece of proposed legislation could have a dramatic impact on foreign investment in
Non-U.S. persons are not generally subject to tax on
The Real Estate Revitalization Act would exempt a sale of the stock of a
In addition, dividends and liquidating distributions paid by REITs that are attributable to gains derived by the REIT from the sale of US real property would no longer be subject to U.S. federal income tax (or the U.S. federal branch profits tax applicable to non-U.S. corporations) under FIRPTA.
Thus, as currently proposed, the Act would provide significant benefits to non-U.S. persons who invest in
It is unclear whether this Act will be enacted into law. It does not appear in the most recent Reid Bill.
Accounting Firm Tied to Rothstein Slams Suit as Smear Campaign
Should all professional advisers be concerned about trying to detect financial fraud during the course of rendering their professional services?
Wednesday, February 17, 2010
Virginia Doctor Pleads Guilty to Conspiracy Involving Undeclared Swiss Bank Account
Many investor clients of private equity firms have had to deal with foreign account issues recently. In this climate of active criminal prosecution, it may be prudent to refer all such clients to legal counsel, even where the facts are seemingly very benign.
Tuesday, February 16, 2010
The Reid Jobs Bill
The Reid bill would:
- Fund highway and transit programs through 2010
- Exempt employers from Social Security payroll taxes on new hires who were previously unemployed
- Extend (section 179 expensing) tax break for businesses that spend money on capital investments
- Expand the use of the Build America Bonds program
- Extending the deadline to file for federal unemployment insurance
- The subsidy for Cobra health insurance, which expires Feb. 28
- The biodiesel provisions
Tuesday, January 26, 2010
Foreign Account Tax Compliance Act Podcast
The House of Representatives has already passed the legislation. I highlight issues and concerns regarding this legislation including potentially increasing the cost of capital in the U.S. and violating U.S. tax treaties.
This podcast highlights issues discussed in greater detail in my article titled "Foreign Account Tax Compliance: Problems and Complications."