IRS DETAILS ON FOREIGN EARNINGS

IRS details on foreign earnings. The Internal Revenue Service provided additional information to help taxpayers meet their filing and payment requirements for the Section 965 transition tax on untaxed foreign earnings. The Tax Cuts and Jobs Act requires certain taxpayers that have untaxed foreign earnings and profits to pay a tax as if those earnings and profits have been repatriated to the united States. The law provides details on the income that must be recognized. It also provides a related deduction which generally lowers the effective tax rate to between 8% and 15.5%. Certain taxpayers may elect to pay the transition tax over eight years. IRS details on foreign earnings.

The IRS released information in a question and answer format related to Section 965 that addresses certain general issues that are not specific to the filing of a 2017 or 2018 tax return. The issues addressed include how to make subsequent installment payments when the transition tax is paid over eight years. The Q&As also address the filing of Transfer Agreements and Consent Agreements. Additional information regarding Section 965 can be found at IRS.GOV. The Treasury Department and the IRS released final regulations related to Section 965 in February and last month released final GILTI   regulations which include revisions to the Section 965 final regulations.

In announcing relief procedures that will enable individuals who relinquished their U.S. Citizenship to come into compliance with their U.S. tax and filing obligations and receive relief for back taxes, the Relief Procedures for Certain Former Citizens apply only to individuals who have not filed U.S. tax returns as U.S. citizens or residents, owe a limited amount of back taxes to the United States and have net assets of less than $2 million. Only taxpayers whose past compliance failures were non-willful can take advantage of these new procedures. Many in this group may have lived outside the United States most of their lives and may have not been aware that they had U.S. tax obligations.

If you were in this group of people and ended up with an IRS tax debt, Federal Tax Resolution can help. We are a Tax Resolution firm with a proven track record of success over the last 36 years. Tax Relief is achieved with a Superior Tax Professional who can determine options that you may qualify for in the IRS Code, including the IRS Fresh Start Program. If you live in Seattle, we can advise you of whether you qualify for the Seattle IRS Fresh Start Program, but its ok if you live outside of Seattle, as we are a  Nationwide Tax Resolution Services firm and can determine your options also.