IRS has issued additional guidance, in the form of frequently asked questions (FAQs), on the Code Sec. 3402(t) requirement for government entities to withhold 3% from nearly all contract payments made to persons providing them with property or services.
The Internal Revenue Code (IRC) imposes a tax on the transfer of property by gift. The gift tax applies to both direct and indirect transfers of real, tangible and intangible property. However, the tax does not apply to a nonresident taxpayer that is not a citizen of the U.S. unless the property being transferred is situated within the U.S. at the time of the transfer. The tax does not apply to the transfer of intangible property by a person who is neither a citizen nor a resident of the United States unless such person is an expatriate who lost his or her citizenship within 10 years of the date of the transfer.
Tax Relief Act of 2010 Extends Bush-Era Tax Cuts and Carries a Host of Other Tax Breaks Late on December 9, Senate Majority Leader Harry Reid (D-NV) introduced H.R. 4853, the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the Tax Relief Act). The Tax Relief Act contains a two-year extension of the Bush-era tax cuts that was negotiated by the President and Republicans, and significant estate tax relief. However, it also contains a trove of other tax breaks for businesses and individuals, including enhanced first-year depreciation deductions for businesses, a payroll tax cut of two percentage points for 2011 for employees and self-employed individuals, and a two-year alternative minimum tax (AMT) “patch.” Here’s an overview of what’s in the Tax Relief Act, based on information released late on December 9.
The recent IRS guidance in Chief Counsel Advice (CCA) 201030024 for U.S. S corporations earning dividends from foreign subsidiaries and those with Subpart F income, while not precedent, is welcome guidance and provides a good roadmap for those needing to analyze the issues surrounding passive investment income (too much of which is a big no-no) for S Corporations. For complete text see here: http://www.irs.gov/pub/irs-wd/1030024.pdf
The IRS announced yesterday that it will reorganize the current large and mid-sized business (LMSB) division into the Large Business & International (LB&I) division. For taxpayers with international activities, both individuals and businesses, this means increased resources focused on preventing tax evasion and more educated IRS agents conducting audits of international taxpayers. This reorganization also includes adding 875 new people to the division. This reorganization, renaming and addition of staff clearly show the IRS and Treasury mean business when it comes to international compliance activities, and taxpayers should be cognizant of this when conducting their affairs.