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IC-DISC Strategies: Mastering the Complex Operational Challenges

Anticipating IRS Audit Risks, Calculating Commissions, and Tackling Computational Intricacies

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, November 30, 2023

Recorded event now available

or call 1-800-926-7926

This course will prepare accounting professionals and tax advisers to fully leverage the tax benefits of IC-DISC (interest charge-domestic international sales corporation) formation. The panel will review and explain the key strategic steps for day-to-day aspects of running an IC-DISC, including calculating commissions, spotting IRS audit risks, and tackling the complex computations required. The panel will outline critical IC-DISC tax planning opportunities, including using the best DISC ownership structures to maximize DISC benefits.

Description

The tax savings available for exporters through an IC-DISC remain a significant incentive for businesses and their owners. Accounting professionals and corporate tax specialists must prepare for the burdensome tax and accounting challenges that come into play after implementing IC-DISCs.

Tax planning involving an IC-DISC requires more intensive review with the currently qualified business income deduction (QBID) for pass-through entities and the Section 250 deduction for FDII available to C corporations. These new demands add to higher-level compliance challenges for advisers to businesses.

Perspectives from advisers with years of experience in IC-DISC structures will help you deal with its most vexing tax challenges, including strategies for handling critical day-to-day operational aspects, calculating commissions, anticipating IRS audit risk areas, improving liquidity for the parent and shareholders, and identifying optimal approaches to complicated computational problems.

Listen as our panel of veteran advisers takes you beyond the basic understanding of how IC-DISCs operate and prepares you to tackle the more advanced issues and challenges.

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Outline

  1. IC-DISC overview
    1. Applicable IRC sections
    2. Tax court decisions and IRS guidance
    3. Implementing an IC-DISC
    4. IC-DISCs future
  2. Updated IC-DISC ownership structures
    1. Structuring and implementing IC-DISCs
    2. Day-to-day operating issues
    3. IRA ownership of IC-DISCs
    4. Saving disqualified IC-DISCs
  3. Compliance and reporting
    1. Pricing rules
    2. Computational challenges
      1. Calculating commissions
      2. Transaction-by-transaction computations
      3. Reg 1.861-8 computations
      4. Other issues
    3. Tax filings and common compliance pitfalls

Benefits

The panel will guide you through issues including:

  • Maximizing unique IC-DISC tax benefits such as the tax benefits from different shareholder structures
  • Understanding tax liability for DISC structures and the QBID
  • Managing day-to-day operational aspects of using an IC-DISC
  • Improving liquidity for the parent and shareholders: steps to consider
  • Overcoming computational challenges

Faculty

Fox, Douglas
Douglas Fox
Senior Manager
Plante Moran

Mr. Fox's specialties include research and development credits, domestic production activities deductions, IC-DISC,...  |  Read More

Gasbarra, Mark
Mark C. Gasbarra, CPA
National Managing Director
Forte International Tax

Mr. Gasbarra has more than thirty-five years of international tax experience serving a wide array of companies across...  |  Read More

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