Passive Foreign Investment Company Tax Regulations
Navigating Complex Tax Features of Foreign Investments Absent Clear IRS Guidance
Recording of a 110-minute CLE webinar/teleconference with Q&A
Conducted on Thursday, April 8, 2010
Recorded event now available
This CLE webinar will update tax executives dealing with passive foreign investment companies on the material terms of applicable IRS regulations and guidance, how to deal with ambiguous areas of the regulations, and to navigate common tax planning and compliance challenges with PFICs.
Description
At a time when the Obama administration and IRS are closely scrutinizing sources of U.S. companies' income from foreign sources for perceived tax loopholes, the treatment of passive foreign investment companies (PFICs) has become a high-visibility issue.
PFICs can include foreign-based mutual funds, partnerships and other pooled investment vehicles that have at least one U.S. shareholder. Federal regs on PFICs are designed to prevent U.S. shareholders from avoiding income tax on earnings by foreign corporations, under a complex taxation formula.
While IRC sections 1291-1297 are designed to discourage ownership of PFICs by U.S. investors, these regulations feature complicated and strict tax guidelines and involve gaps that can vex tax professionals. Tax advisors must have a thorough understanding of the rules—and their shortcomings.
Listen as our panel of experienced tax advisors, who frequently work with PFICs, brings you up to date on the material terms of the applicable federal regulations and guidance, prepares you to deal with areas where the regs are lacking in detail, and offers alternatives for dealing with common PFIC compliance scenarios.
Outline
- Determination of a passive foreign investment company (PFIC)
- What is a PFIC?
- Income test
- Asset test
- Start-up companies
- Companies with a substantial temporary increase in liquidity:
- Holding companies with substantial minority investments:
- Tax treatment of PFIC income
- Gain from the sale of shares
- Dividends deemed excess distributions
- Interest charge
- Qualified electing fund (QEF)
- Tax planning strategies
- Qualified electing fund (QEF)
- Mark-to-market election for publicly traded companies
- Importance of recordkeeping by PFICs and shareholders
- Enforcement trends
Benefits
The panel will review these and other key questions:
- What are the tax consequences of PFIC status?
- What are the benefits and disadvantages of having a PFIC investment qualified as a qualified electing fund (QEF)?
- What recordkeeping is critical for PFICs and their shareholders?
- When is an operating company in danger of being deemed a PFIC?
Upon completing this seminar, an attendee will have an improved understanding of the federal tax regulations on PFICs and the latest guidance for accurate tax compliance and planning with regard to these structures.
Faculty
Michael J. Miller,
Partner
Roberts & Holland, New York
He has provided U.S. tax advice to domestic and international clients for more than 15 years. Working with foreign clients, he has structured inbound U.S. investments and operations to avoid creation of U.S. permanent establishment and developed structures to take advantage of U.S. income tax treaties, the withholding tax exemption for portfolio interest, and other rules for minimizing U.S. tax.
Carol P. Tello,
Partner, Tax Practice Group
Sutherland Asbill & Brennan, Washington, D.C.
Her practice focuses on cross-border tax planning and IRS controversies for both business and individual clients. She previously worked with the IRS Office of Associate Chief Counsel and she chairs the American Bar Association's Controlled Foreign Corporations and PFICs Subcommittee.
J. Richard Duke,
Principal
Duke Law Firm, Birmingham, Ala.
His law firm specializes in international practice, and he is an adjunct professor of international tax and financial services law at the Thomas Jefferson School of Law. He has authored numerous legal books, journals and articles; and has been named to Worth magazine's list of top 100 U.S. attorneys several times.
Ordering
Online Webinar
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Online Seminar Audio $49.00
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Recorded Event
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plus $9.45 S&H
Available ten business days after the live event
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Program Materials
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Program Materials
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Federal Income Tax Advisory Board
David Bowen
Principal
Grant Thornton
Joseph Calianno
Partner, National Tax Practice
Grant Thornton
Of Counsel
Morrison & Foerster
George Manousos
Partner
PricewaterhouseCoopers
Federal Tax Partner
Nixon Peabody
Tax Controversy Partner
Crowell & Moring
Of Counsel
Skadden Arps
Tom Windram
Managing Director & National Leader, Federal Tax Credits & Incentives
RSM McGladrey
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