Source: http://www.intltaxcounselors.com/blog/internationaltaxation,offshoretaxation,foreigncorporation,briandooley,taxhaven,foreigntrust,offshoretrust,/foreign-llc/
Timestamp: 2013-05-21 07:27:58
Document Index: 443225879

Matched Legal Cases: ['§ 301', '§ 301', '§ 301', '§ 301', '§ 301', '§ 301']

Saving Taxes with the 2013 IRS Foreign Entity Classification Rules
To save taxes, you must know if your foreign company is treated as a corporation or a pass through entity. Both have great but different tax savings.
Foreign entities have different rules as to their classifications as a foreign corporation, a foreign partnership or a foreign disregarded entity. For example, most foreign LLC have a default classification as a foreign corporation. You can elect a partnership or disregarded classification on a timely election.
Privately owned businesses must have a ‘pass through” entity to get a foreign tax credit. Yet, they want asset protection with a limited liability entity such as a corporation or an LLC.
The IRS has two solutions. On this page are the entity classifications rules.
On this link is a favorite international tax secret to generate more foreign tax credits and to avoid the PFIC rules.
Mr. George Huff and his advisers leaned this lesson the hard way in Tax Court on this link.
I have the Government’s explanation below. For more information, contact Brian Dooley, CPA at 714-710-91-99 or email me at brian@intltaxcounselors.com .
Tax planning ideas come from reading below and seeing what is not included.
Author note- In this recent IRS memo the IRS disregards this rule if the foreign entity could be a trust. .06 Section 301.7701-3(c)(1)(i) provides that an eligible entity may elect to be classified other than as provided under § 301.7701-3(b) by filing Form 8832, Entity Classification Election, with the appropriate IRS Service Center. Under § 301.7701-3(c)(1)(iii), this election will be effective on the date specified by the entity on Form 8832 or on the date filed if no such date is specified on the election form. The effective date specified on Form 8832 cannot be more than 75 days prior to the date on which the election is filed and cannot be more than 12 months after the date on which the election is filed.
(3) A corrected Form 8832 is filed with the appropriate Internal Revenue Service Center and a copy of the corrected Form 8832 is attached to the single owner’s amended return for the taxable year during which the original election was made as required under § 301.7701-3(c)(1)(ii). The statement “FILED PURSUANT TO REVENUE PROCEDURE 2010-32″ must be included across the top of the corrected Form 8832. Additionally, the corrected Form 8832 must satisfy the requirements of § 301.7701-3(c)(2)(i).
(3) A corrected Form 8832 is filed with the appropriate Internal Revenue Service Center and a copy of the corrected Form 8832 is attached to the owners’ amended returns for the taxable year during which the original election was made as required under § 301.7701-3(c)(1)(ii). The statement “FILED PURSUANT TO REVENUE PROCEDURE 2010-32″ must be included across the top of the corrected Form 8832. Additionally, the corrected Form 8832 must satisfy the requirements of § 301.7701-3(c)(2)(i).
This revenue procedure is effective on September 7, 2010. Any qualified entity that meets the requirements of this revenue procedure as of September 7, 2010, may seek relief under this revenue procedure.
The principal author of this revenue procedure is Bryan A. Rimmke of the Office of the Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this revenue procedure, contact Mr. Rimmke at (202) 622-3050 (not a toll-free call).
This entry was posted in For Attorneys and CPA's and tagged controlled foreign corporation, FATCA, foreign entity, foreign limited liability company, foreign llc, foreign partnership, foreign trust, SECTION 7701 on March 1, 2013 by Brian Dooley.	Post navigation