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Obama's "attacks" on foreign tax havens...
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| pmoisse |
What are everyone's thoughts on these latest speeches from Obama talking about tax haven coutries that US companies have set up foreign offices?
Isn't the setting up of foreign offices globalisation at work?
I agree that the personal tax havens for US-sourced personaly wealth could use some investigation, but going after countries that have viable workforces that suit companies well enough to have their European or Asian headquarters there? Seems a bit far fetched.
Why not just adjust the domestic tax reporting laws to try and recoup some of this lost tax revenue instead of going after foreign coutries? |
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| jerZ07002 |
| quote: | Originally posted by pmoisse
What are everyone's thoughts on these latest speeches from Obama talking about tax haven coutries that US companies have set up foreign offices?
Isn't the setting up of foreign offices globalisation at work?
I agree that the personal tax havens for US-sourced personaly wealth could use some investigation, but going after countries that have viable workforces that suit companies well enough to have their European or Asian headquarters there? Seems a bit far fetched.
Why not just adjust the domestic tax reporting laws to try and recoup some of this lost tax revenue instead of going after foreign coutries? |
secrecy laws my friend. Countries like Switzerland and Luxembourg have laws the prevent banks from disclosing the assets of clients. The US can't discover this income without cooperation from these countries. The US already has some pretty tough compliance requirements that punish americans who violate the laws. However, it is very difficult to prove that an american is hiding money overseas when the money was earned on foreign interest and that income is not subject to disclosure. Adding more on the US side would do nothing if tax havens restrict access to the information.
As far as all this BS talk about "loop holes," don't listen to that. The rules they are talking about to defer foreign income is not a loop hole at all. The deferal mechanism was purposefully put into the tax law so that companies actively earning overseas could keep the money overseas to expand their operations. It is meant to make US companies more competitive internationally since many countries don't tax overseas earnings of their corporations. |
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| pmoisse |
Thanks!
From what I read, he sounded like he was going after more business related earnings instead of personal earnings.
The personal earnings stuff is also a tough one in some cases if specific people have foreign citizenship and have a right to hold a bank account or investments in a certain country. now I doubt this applies to many of the people hiding money in Bermuda / Switzerland / Caymans / Panama in numbered accounts ;) |
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| thedoggyworld |
I don't really agree with jerZ much on this one. Obama is hoping to put something like 12 billion $ towards IRS enforcement officers in order to catch American corporations who attemp to channel their earnings through overseas and offshore banks and then claim a much smaller amount to the american government.
Of course we have had people like Bush who worked for these corporations, so the enforcement level was not exactly ideal at the time.
I do not think it is so much of an issue in getting switzerland or other european banks to disclose information to the american government as it is trying to catch people who use the laws of those countries in order to shield themselves from the IRS and american government.
Loopholes.."dont listen to that.."?? I wouldn't listen to the guy. We have AIG, World Com, Tyco, Enron, Housing Bubble..but hey, trust the market! No.
Obama is taking the appropriate measures. |
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| jerZ07002 |
| quote: | Originally posted by thedoggyworld
I don't really agree with jerZ much on this one. Obama is hoping to put something like 12 billion $ towards IRS enforcement officers in order to catch American corporations who attemp to channel their earnings through overseas and offshore banks and then claim a much smaller amount to the american government.
Of course we have had people like Bush who worked for these corporations, so the enforcement level was not exactly ideal at the time.
I do not think it is so much of an issue in getting switzerland or other european banks to disclose information to the american government as it is trying to catch people who use the laws of those countries in order to shield themselves from the IRS and american government.
Loopholes.."dont listen to that.."?? I wouldn't listen to the guy. We have AIG, World Com, Tyco, Enron, Housing Bubble..but hey, trust the market! No.
Obama is taking the appropriate measures. |
dude - i'm talking from experience. My job requires that I read all day nothing but tax laws, the underlying policy, and the congressional record of those laws, and I spent 4 years studying US tax law in school. The 'loopholes' obama is talking about is a provision called Subpart F, which was enacted to tax currently the earnings of US corporations earned offshore in non-economic activities (i.e., investing and intercompany transactions). When the earnings comes from true business activity, i.e., manufacturing, those provisions were specifically designed to allow the US tax to be deferred. That was the design of the law. It can't be a loophole if the law was designed specifically to permit the deferral of tax.
And, US corporations don't put money in offshore bank accounts to hide money. That is something individuals do. So, the secrecy law issue applies only to individuals and perhaps closely held companies. Major corporations are subject to independent audits by companies like PwC, EY, KPMG, and Deloitte, that are required to catch those types of activities. |
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| thedoggyworld |
Yes but they may have claimed that it was designed to do something but the actual effect turns out to be something completely different that just happens to allow giant corporations to send the USG less.
I wouldn't imagine that the corporate world is feeling the heat that much at this point. The 12 billion he's seeking wouldn't be doled out for awhile let alone investigations, hearings, and enforcement which develop over some time.
If you make a living off the current practices, even better. You have no reason for the status quo to move in any direction. MAYBE YOU ARE ONE OF THE DODGERS! |
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| jerZ07002 |
| quote: | Originally posted by thedoggyworld
Yes but they may have claimed that it was designed to do something but the actual effect turns out to be something completely different that just happens to allow giant corporations to send the USG less.
I wouldn't imagine that the corporate world is feeling the heat that much at this point. The 12 billion he's seeking wouldn't be doled out for awhile let alone investigations, hearings, and enforcement which develop over some time. |
clearly you have no idea about tax policy, so i shouldn't even bother, but here it goes. The quoted text below - which comes from a highly respected international taxation treatise - outlines the general underlying policy of the so-called "loophole" deferral regime. You should really read it so you can speak intelligbly about the issue, instead of from some faint and misguided understanding of the issues.
As outlined below, the so-called loophole provisions were specifically enacted to allow deferal of real economic earnings of corporations earned in foreign jurisdications (so that US corporation would be on the same footing as foreign corporation, which are mostly taxed on a residential basis, i.e., foreign corporations are generally taxed by their residential jurisdiction only on earnings arising in that jurisdiction). As a minor background, most countries do not tax corporation on their worldwide earnings. The US, however, does not follow this general approach, so american corporations are at a significant disadvantage as compared to foreign corporation (in the tune of 35% of foreign earnings, which can make up 50% of the earnings for companies such as GE and GM, minus the allowable tax credit). The subpart F provisions were enacted to allow US corporations to defer tax on some earnings. It can't be a loophole if the specifically intended consequences of the provisions are playing out as desired.
Do yourself a favor and read the quoted text.
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¶ B3.01 Introduction
United States persons holding 10 percent or more of the voting stock of certain U.S.-controlled foreign corporations are subject to a complex statutory regime known as subpart F. In 1962, Congress adopted subpart F 1 acting out of concern over two issues. The first issue was the tax deferral that resulted when U.S. persons owned foreign corporations. 2 Foreign corporations generally paid no U.S. taxes on their foreign-source income. 3 Although foreign countries might have received taxes currently, the United States generally received no taxes until the U.S. owners of the foreign corporations chose to withdraw dividends.
The second issue was the effect of “tax haven devices.” 4 Income was being improperly shifted by some U.S. persons to their foreign corporations through such devices as artificial intercompany pricing, transfers of patent rights, and management fees. 5 Moreover, some taxpayers arranged their affairs so as to reduce sharply or eliminate entirely their foreign, as well as their U.S., taxes. 6
During this time, President Kennedy requested an end to the deferral of U.S. taxes on the earnings of foreign corporations controlled by U.S. persons. 7 Congress, however, adopted a compromise approach that attempted “to end tax deferral on ‘tax haven' operations by U.S.-controlled corporations.” 8
To achieve this limited goal, subpart F requires certain U.S. persons to pay current U.S. taxes on certain types of income and earnings of their U.S.-controlled foreign corporations. In general, a person is affected only if that person owns 10 percent or more of the voting stock of a foreign corporation that meets the test for a controlled foreign corporation. 9 Further, a corporation generally is a controlled foreign corporation only if U.S. 10 percent shareholders own over 50 percent of the stock (by either vote or value). 10
In the 1962 legislation, the definition of “controlled foreign corporation” status was based on a test involving voting power only. 11 Some taxpayers then attempted to use various types of “decontrol” devices. 12 In 1986, Congress broadened the definition of controlled foreign corporation to use value as an alternative to voting power. 13
Subpart F targets for current U.S. taxation certain types of income and activities that Congress considers tax haven devices. One major type is foreign personal holding company income. 14 In 1962, the Senate Finance Committee stated why deferral of U.S. taxes should not be allowed for such income:
Your committee, while recognizing the need to maintain active American business operations abroad on an equal competitive footing with other operating businesses in the same countries, nevertheless sees no need to maintain the deferral of U.S. tax where the investments are portfolio types of investments, or where the company is merely passively receiving investment income. In such cases there is no competitive problem justifying postponement of the tax until the income is repatriated. 15
Another major trigger for current taxes under subpart F is the investment of earnings by a controlled foreign corporation in certain types of U.S. property. Congress felt that such investments were substantially equivalent to dividends. 16
The fact that subpart F is aimed at U.S. tax deferral in combination with tax haven devices is reflected in Section 954(b)(4) . If a taxpayer shows that the controlled foreign corporation paid an effective rate of foreign tax greater than the top U.S. tax rate for corporations, the item of income is not taxed currently to the shareholders in the United States.
Various taxpayers have challenged subpart F on constitutional grounds. The courts, however, have rejected such challenges. 17
The regime of subpart F is not the only system adopted by Congress to limit the tax benefits to U.S. persons from owning foreign corporations. Other major provisions include, or have included, the Internal Revenue Code (Code) sections governing foreign personal holding companies (repealed in 2004), 18 foreign investment companies (repealed in 2004), 19 and passive foreign investment companies. 20 Thus, a U.S. person that owns stock of a foreign corporation must consider the rules on passive foreign investment companies, not just the rules under subpart F on controlled foreign corporations.
A major study conducted in 1987 recommended that Congress “simplify and rationalize” the Code sections that govern foreign corporations owned by U.S. persons, 21 generally retaining, however, the pattern of subpart F. 22 Under the study's recommendations, members of a concentrated U.S. control group would pay current U.S. taxes on a foreign corporation's passive income and base company income, subject to a de minimis rule. Certain other organizations have reported on, or are studying, subpart F. 23
As originally adopted, subpart F contained rules in former Section 963 on “minimum distributions.” Under those rules, U.S. shareholders were not required to include amounts in income under Section 951(a)(1)(A)(i) with respect to a controlled foreign corporation that met certain minimum distribution tests. Congress, however, repealed former Section 963 in 1975. 24 The original subpart F also contained special rules regarding investments by controlled foreign corporations in “less developed countries.” 25 Those special rules were repealed in 1975 as well.
In 2004, Congress narrowed the rules on controlled foreign corporations by repealing the rules on foreign base company shipping income. 26 Further, Congress allowed controlled foreign corporations to distribute certain amounts of cash to U.S. shareholders at low tax rates for one year. 27
Addition and repeal of former Section 956A (1993 and 1996). In 1993, Congress tightened the rules on controlled foreign corporations. 28 The basic purpose was to limit further the ability of U.S. shareholders to defer U.S. taxes on certain earnings of controlled foreign corporations. 29 The most important change was the addition of a new Code section, former Section 956A, taxing U.S. shareholders when a controlled foreign corporation invested its earnings in excess passive assets. 30
In 1996, however, Congress had a change of heart. Congress repealed former Section 956A. 31
Revised relationship between rules on controlled foreign corporations and passive foreign investment companies. In 1997, Congress dramatically changed the relationship between the rules on controlled foreign corporations and passive foreign investment companies. Under certain conditions, a corporation's status as a controlled foreign corporation may protect its shareholders from the rules on passive foreign investment companies. 32 This change, along with the repeal of former Section 956A, makes deferring U.S. taxes through the use of foreign corporations much easier and thereby raises serious tax policy concerns.
Possible benefit of controlled foreign corporation status. Congress adopted the rules on controlled foreign corporations to restrict taxpayers, not to help them. Nevertheless, in some cases, a U.S. taxpayer may want its foreign subsidiary to be a controlled foreign corporation. That result may have occurred when the U.S. taxpayer wished to have the foreign taxes paid by the foreign subsidiary fall into the general basket rather than the basket from a noncontrolled Section 902 corporation (now expired). 33
In 2004, Congress added a special deduction for certain persons that receive cash distributions from foreign corporations. This benefit applies, however, only if the payor is a controlled foreign corporation. 34
Special treatment of Hong Kong and China. In 1997, the Internal Revenue Service (the Service) ruled that it would treat Hong Kong and China as separate countries for purposes of subpart F (and the rest of the Code). 35
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1
Revenue Act of 1962, § 12 .
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2
S. Rep. No. 1881, 87th Cong., 2d Sess. 78 (1962).
One of the authors of this book has proposed ending deferral of U.S. tax on foreign-source income earned by U.S. persons through foreign corporations by imposing pass-through treatment with respect to U.S. persons' ownership interests in foreign corporations. See Peroni, Fleming & Shay, “Getting Serious About Curtailing Deferral of U.S. Tax on Foreign Source Income,” 52 SMU L. Rev. 531 (1999); see also Fleming, Peroni & Shay, “Deferral: Consider Ending It, Instead of Expanding It,” 86 Tax Notes 837 (2000) ; Peroni, “Back to the Future: A Path to Progressive Reform of the U.S. International Income Tax Rules,” 51 U. Miami L. Rev. 975 (1997). For reactions to this proposal, see Avi-Yonah, “Comment on Peroni, Fleming and Shay, ‘Getting Serious About Curtailing Deferral of U.S. Tax on Foreign Source Income,'” 52 SMU L. Rev. 531 (1999); Masui, “Comment: A Japanese View,” 52 SMU L. Rev. 541 (1999); Letter from Robert C. Alexander, 21 Tax Notes Int'l 485 (2000) ; Letter from Herman B. Bouma, 86 Tax Notes 1303 (2000) ; Letter from Herman B. Bouma, 87 Tax Notes 580 (2000) ; Letter from J.D. Foster, 87 Tax Notes 155 (2000) ; Letter from Jefferson VanderWolk, 20 Tax Notes Int'l 1469 (2000) . For the responses of the authors of the pass-through proposal to these critiques, see Letter from J. Clifton Fleming, Jr., Robert J. Peroni & Stephen E. Shay, 87 Tax Notes 447 (2000) ; Letter from J. Clifton Fleming, Jr., Robert J. Peroni & Stephen E. Shay, 86 Tax Notes 1794 (2000) .
For additional commentary on the deferral of U.S. taxes and foreign corporations, see Crawford & Terzian, “The Slow Crawl Toward Eliminating Deferral Under Subpart F,” 22 Int'l Tax J. 1 (Summer 1996); McDonald, Cmt., “Anti-Deferral Deferred: A Proposal for the Reform of International Tax Law,” 16 Nw. J. Int'l L. & Bus. 248 (1995); Merrill & Dunahoo, “‘Runaway Plant' Legislation: Rhetoric and Reality,” 72 Tax Notes 221 (1996) ; Shay, “Revisiting U.S. Anti-Deferral Rules,” 74 Taxes 1042 (1996); Skaletsky & Shackelford, “U.S. Tax Deferral Considerations and Strategies,” 12 Tax Notes Int'l 125 (1996) .
For a detailed discussion of the policies of subpart F, see Office of Tax Policy, Department of Treasury, “The Deferral of Income Earned Through U.S. Controlled Foreign Corporations” (Dec. 2000), reprinted in Tax Analysts' Highlights & Documents (Jan. 2, 2001).
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Under current law, foreign corporations pay U.S. tax under Section 882 on certain foreign-source income if that income is treated as effectively connected with a U.S. trade or business under Section 864(c)(4) . Section 864(c)(4) was enacted in 1966. See ¶ C1.04[5][d] .
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4
S. Rep. No. 1881, 87th Cong., 2d Sess. 79 (1962).
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S. Rep. No. 1881, 87th Cong., 2d Sess. 78 (1962).
In theory, Section 482 prevents the shifting of income through improper pricing or fees. Section 482 is not self-implementing, however, and is difficult for the Service to police. See generally Chapter A3.07[3] . In 1984, Congress took strong, direct action regarding the shifting of income through the transfer of patent rights to foreign corporations. See IRC § 367(d) , discussed at ¶ A3.06[3] .
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6
S. Rep. No. 1881, 87th Cong., 2d Sess. 78 (1962).
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Message from the President of the United States Relative to Our Federal Tax System, April 20, 1961, HR Doc. No. 140, 87th Cong., 1st Sess. 6–7 (1961) (hereinafter Message from the President); S. Rep. No. 1881, 87th Cong., 2d Sess. 78–79 (1962); ALI, Federal Income Tax Project: International Aspects of United States Income Taxation 172–173 (1987). The president's proposal was based largely on the premise that allowing deferral of U.S. tax on the U.S.-controlled foreign corporation's foreign-source income had created a tax bias in favor of foreign investment over U.S. investment. Thus, the aim of the proposal was to restore neutrality to a U.S. shareholder's choice between investment in the United States and investment in foreign countries. Message from the President, at 6-7; ALI, Federal Income Tax Project: International Aspects of United States Income Taxation 173 (1987).
Opponents of the president's proposal argued that ending deferral of U.S. income tax on the foreign income of a U.S.-controlled foreign corporation would severely undercut the ability of U.S. persons to compete effectively with foreign-owned companies in foreign markets. These opponents argued that this proposal would impose on U.S. persons engaged in business in a foreign market a substantially heavier tax burden than that borne by their foreign-owned competitors in the foreign market. Thus, in the view of these opponents, deferral of U.S. tax on the foreign income until it was repatriated to the United States was necessary to achieve competitive neutrality in foreign markets. See HR Rep. No. 1447, 87th Cong., 2d Sess. 57–58 (1962); ALI, Federal Income Tax Project: International Aspects of United States Income Taxation 173 (1987).
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S. Rep. No. 1881, 87th Cong., 2d Sess. 79 (1962).
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IRC §§ 951(a) , 951(b) .
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IRC § 957(a) , discussed infra ¶ B3.02[2]{b} .
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11
See former IRC § 957(a), as adopted in the Revenue Act of 1962, § 12 .
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12
See infra ¶ B3.02[2][b .
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13
See infra ¶ B3.02[2][b .
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IRC § 954(c) .
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15
S. Rep. No. 1881, 87th Cong., 2d Sess. 83 (1962).
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S. Rep. No. 1881, 87th Cong., 2d Sess. 88 (1962).
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Estate of Whitlock v. Comm'r, 494 F2d 1297 (10th Cir. 1974) , aff'g on this issue 59 TC 490 (1972) , cert. denied, 419 US 839 (1974) ; Garlock, Inc. v. Comm'r, 489 F2d 197 (2d Cir. 1973) , cert. denied, 417 US 911 (1974) ; Albert L. Dougherty, 60 TC 917 (1973) (Sections 951(a)(1)(B) and 956 are constitutional, even when U.S. taxation results because of earnings and profits accumulated before passage of subpart F).
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See ¶ B2.06 .
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19
See ¶ B2.07 .
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See ¶ B2.08 .
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21
ALI, Federal Income Tax Project: International Aspects of United States Income Taxation 177 (1987).
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ALI, Federal Income Tax Project: International Aspects of United States Income Taxation 186–187 (1987).
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Regarding a pending study by the Treasury Department, see BNA Daily Tax Rep. G-7 (May 4, 1999). Regarding a study by the National Foreign Trade Council Inc., see Tax Analysts' Daily Tax Highlights & Documents 1509 (May 3, 1999); BNA Daily Tax Rep. L-1 (Mar. 26, 1999) (full text of executive summary); 83 Tax Notes 305 (1999) (full text of executive summary). For discussion of the study by the National Foreign Trade Council, see Avi-Yonah, “Competition & Competitiveness: Review of NFTC Subpart F Report,” 83 Tax Notes 582 (1999) ; Fleming, Peroni & Shay, “Deferral: Consider Ending It, Instead of Expanding It,” 86 Tax Notes 837 (2000) .
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24
Tax Reduction Act of 1975, § 602(a)(1) .
For rulings regarding former Section 963, see Rev. Rul. 76-67, 1976-1 CB 208 ; Rev. Rul. 75-341, 1975-2 CB 308 ; Rev. Rul. 75-174, 1975-1 CB 252 ; Rev. Rul. 74-521, 1974-2 CB 208 ; Rev. Rul. 74-376, 1974-2 CB 215 ; Rev. Rul. 74-230, 1974-1 CB 187 , declared obsolete by Rev. Rul. 80-367, 1980-2 CB 386 ; Rev. Rul. 74-83, 1974-1 CB 184 ; Rev. Rul. 74-6, 1974-1 CB 191 ; Rev. Rul. 73-182, 1973-1 CB 350 ; Rev. Rul. 72-599, 1972-2 CB 458 ; Rev. Rul. 72-116, 1972-1 CB 220 ; Rev. Rul. 71-518, 1971-2 CB 293 ; Rev. Rul. 71-454, 1971-2 CB 294 ; Rev. Rul. 71-453, 1971-2 CB 292 ; Rev. Rul. 68-640, 1968-2 CB 321 ; Rev. Rul. 68-522, 1968-2 CB 320 ; Rev. Rul. 68-477, 1968-2 CB 317 .
For cases that arose under former Section 963, see American Air Filter Co., 81 TC 709 (1983) ; AMF Inc. v. United States, 610 F2d 739 (Ct. Cl. 1979) ; General Elec. Co. v. United States, 610 F2d 730 (Ct. Cl. 1979) ; Hewlett-Packard Co., 67 TC 736 (1977) , acq. in result, 1979-1 CB 1 .
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25
Former IRC § 955. For rulings in this area, see Rev. Rul. 73-119, 1973-1 CB 348 ; Rev. Rul. 69-485, 1969-2 CB 157 .
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26
See infra ¶ B3.05[5] .
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27
See infra ¶ B3.08[5] .
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28
Revenue Reconciliation Act of 1993 , §§ 13231 , 13232 , 13233 , 13235 , 13239(d) .
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29
See HR Conf. Rep. No. 213, 103d Cong., 1st Sess. 634 (1993).
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30
HR Conf. Rep. No. 213, 103d Cong., 1st Sess. 634 (1993). Regarding former Section 956A, see infra ¶ B3.06 A.
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31
See infra ¶ B3.06 A[1].
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32
IRC § 1297(e) , added by the Taxpayer Relief Act of 1997 , § 1121 , discussed at ¶ B2.08[12] . Congress redesignated former IRC § 1297(e) as IRC § 1297(d) . Tax Technical Corrections Act of 2007, § 11(a)(24)(A).
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For an example of a U.S. taxpayer fighting for controlled foreign corporation status, see Framatome Connectors USA, Inc., 118 TC 32 (2002). Regarding the foreign tax credit rules, see ¶ B4.16 . A court of appeals affirmed without published opinion the Tax Court's opinion in Framatome. See Framatome Connectors USA, Inc. v. Comm'r, 2004-2 USTC ¶ 50,364 (2d Cir. 2004) .
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34
See infra ¶ B3.08[5] .
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35
Notice 97-40, 1997-2 CB 287 . For commentary, see Brewer, “Unilateral Speculation on the Question of Hong Kong,” 76 Tax Notes 1355 (1997) . See also Sherwood, Huang & Shum, “Turnover of Hong Kong to China: International Tax Issues Confronting U.S. and Other Multinationals After July 1, 1997,” 26 Tax Mgmt. Int'l J. 315 (1997).
Document Header:
Checkpoint Contents
International Tax Library
WG&L International Treatises
Kuntz & Peroni: U.S. International Taxation
Part B TAXATION OF U.S. PERSONS WITH FOREIGN ACTIVITIES
Chapter B3: Controlled Foreign Corporations
¶B3.01. Introduction
© Copyright 2009 Thomson Reuters/RIA. All rights reserved.
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I'd provide a link to the actual cite but the information comes from a website with limited access, for tax professionals, like myself, so the link would lead to a page prompting username and password. You could probably locate the legistlative history through your school library, if you go to school, or a public database.
| quote: | Originally posted by thedoggyworld
If you make a living off the current practices, even better. You have no reason for the status quo to move in any direction. MAYBE YOU ARE ONE OF THE DODGERS! |
If you cheat on your taxes you (specifically you) have to (i) pay your back taxes, (ii) pay interest, (iii) maybe pay a penalty depending on the amount of taxes you didn't pay, and (iv) in rare circumstances it could lead to jail. If I cheat on my taxes two additional things will happen to me, (i) I will, without question, be suspended or disbarred and lose my ability to practice law, and (ii) it will destroy my reputation as a tax lawyer, which will result in me losing any ability to practice tax law again. So, the consequences of being a tax cheat for me are much greater than they are for you.
Specifically, to your ridiculous comment, I pay my taxes, which likely amount to much more than you pay. Actually, I may pay as much (or more) in taxes as you receive in compensation.
FYI - tax lawyers (and lawyers in general) like change. We get paid to explain changes to clients. Even though the Obama proposals of the last few weeks have destroyed some of the planning I have been doing for years (specifically the repeal of the check the box regulations for foreign partnerships), it has opened up the opportunity for new work explaining to clients the consequences of the new tax regime. |
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| thedoggyworld |
Well thank you for your effort into this post. I will take a look at the treatise in awhile here, if you have a link to any of the acts that were passed or the statutes or tax code I wouldn't mind looking.
What would you say that Obama's agenda is since he looking to add 12 billion dollars towards IRS tax enforcement?
In terms of you being an attorney, I can't say that would change my opinion much. I have enough experience with attorneys, and some are more honest than others. I won't comment on my background but it's not that relevant.
I do not know how the tax code got so complicated, but I do know the general history of taxation in the USA. It wasn't that much more than just certain guys coming along and adding in a federal tax, which then has largely increased. And at this point the code is just way too complicated.
I do trust Obama, so?? When these things get complicated, the companies know what the rules and consequences are. For instance people like Bernard Madoff probably broke the law for almost 20 years and didn't get caught until 2009. |
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| pmoisse |
| quote: | | Originally posted by thedoggyworld When these things get complicated, the foriegn companies know what the rules and consequences are. For instance people like Bernard Madoff probably broke the law for almost 20 years and didn't get caught until 2009. |
Foreign companies weren't what inspired my first post. It was US-based companies outsourcing to business units outside the USA so that they wouldn't have to pay US tax on revenue generated from non-US orders (like Caterpillar selling diggers to Brasil - they wouldn't have to pay US tax on that if their Canadian office processed the order for example).
I'm also going through this with the company I work for where orders for Latin American and Canada are now to be processed by our office here in Amsterdam because of the apparent millions in tax savings. I can understand it from a business perspective, even though it's a pain in the ass since we now have to work a 4 to midnight shift over here to make up for the time zone difference.
Even though it's legal, I do think the loophole itself is depriving the US gov't of much needed tax revenue. |
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| Krypton |
| That's why we can do without federal corporate and income taxes. A flat tax or fair tax would do just fine. |
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| jerZ07002 |
| quote: | Originally posted by pmoisse
Foreign companies weren't what inspired my first post. It was US-based companies outsourcing to business units outside the USA so that they wouldn't have to pay US tax on revenue generated from non-US orders (like Caterpillar selling diggers to Brasil - they wouldn't have to pay US tax on that if their Canadian office processed the order for example).
I'm also going through this with the company I work for where orders for Latin American and Canada are now to be processed by our office here in Amsterdam because of the apparent millions in tax savings. I can understand it from a business perspective, even though it's a pain in the ass since we now have to work a 4 to midnight shift over here to make up for the time zone difference.
Even though it's legal, I do think the loophole itself is depriving the US gov't of much needed tax revenue. |
Come on dude - I just spent all that time explaining why itis NOT a loophole. |
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| pkcRAISTLIN |
| i love it when jerz lays the smackdown on the kiddies. |
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