IC-DISC Strategies Update: Commissions, Complex Computations, IRS Audit Risks, Tax Savings Tactics
Recording of a 110-minute CPE webinar with Q&A
This course will provide an updated guide to accounting professionals, tax advisers, and DISC administrators on the tax benefits and operational requirements of an Interest Charge-Domestic International Sales Corporation (IC-DISC). The panel will review and explain the key strategic steps for establishing and running an IC-DISC, including calculating commissions, spotting IRS audit risks, and tackling the complex computations required. The panel will also address recent IC-DISC developments and outline key IC-DISC tax planning opportunities, including using the optimal DISC ownership structure to maximize DISC benefits.
Outline
- IC-DISC overview
- Applicable IRC sections
- Tax court decisions and IRS guidance
- Implementing an IC-DISC
- IC-DISCs’ future
- Updated IC-DISC ownership structures
- Structuring and implementing IC-DISCs
- Day-to-day operating issues
- IRA ownership of IC-DISCs
- Treaty country ownership of DISC
- Related party DISC partnerships
- Enhanced tax deferral opportunities
- Saving disqualified IC-DISCs
- Compliance and reporting
- Pricing rules
- Computational challenges
- Calculating commissions
- Transaction-by-transaction computations
- Reg § 1.861-8 computations
- Other issues
- Challenges related to the dividend tax increase and 3.8% Medicare tax
- Tax filings and common compliance pitfalls
Benefits
The panel will guide you through issues, including:
- Maximizing unique IC-DISC tax benefits, including the tax benefits from different shareholder structures
- Understanding tax liability for IC-DISC structures under the new federal dividend tax rate and Medicare tax
- Improving liquidity for the parent and shareholders—steps to consider
- Overcoming computational challenges
Faculty
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
Mr. Gasbarra has more than thirty-five years of international tax experience serving a wide array of companies across many industries. He serves major multinational corporations and CPA firms throughout the U.S., as well as privately held businesses with international operations. He advises on a wide range of international tax matters with deep expertise in outbound issues including repatriation, foreign tax credit utilization, export incentives, including the IC-DISC, and the domestic production activities deduction. Prior to founding Forte in 2004, he was the lead partner in EY's Chicago-based International Tax Services department, and prior to that position, he was an International Tax Service Partner at PwC.
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Neal J. Block
Senior Counsel
Baker & McKenzie
Mr. Block has represented U.S. and international corporate clients on domestic and international tax matters for... | Read More
Mr. Block has represented U.S. and international corporate clients on domestic and international tax matters for more than 40 years. He is a leading practitioner in the IC-DISC area, both for tax planning and litigation. He previously chaired the Chicago Bar Association's Committee on Taxation.
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