Income Sourcing in Multinational Tax Planning and Compliance: Navigating Residence Issues, Expatriation Rules, Foreign Earned Income

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

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Conducted on Thursday, July 7, 2016

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Course Materials

This course will provide tax professionals with a thorough understanding on how to identify the income-sourcing rules in international tax planning and compliance work; how to recognize the importance of both citizenship and residence in determining tax liabilities of individuals; and how to identify which foreign entities and types of income are subject to special rules.


A critical component of tax planning and compliance for multinational clients is determining whether an item of income is foreign- or U.S.-sourced for purposes of U.S. tax treatment. IRC §§861 through 865 provide the statutory guidance for determining income source. Differences in sourcing priorities between the U.S. and other jurisdictions are resolved by treaty, or by negotiation between the governments involved in the absence of a treaty.

Income source rules determine the amount of foreign tax credit (FTC) allowed, income exempt from U.S. tax, FTC eligibility for tax paid to a foreign government, and whether U.S. source income is subject to withholding tax, so it is crucial that tax advisers have a thorough grasp of the sourcing rules.

There are also specific rules for determining whether a non-U.S. citizen is subject to U.S. taxes. Resident aliens are subject to either the Lawful Permanent Resident Test or the Substantial Presence Test in determining to what degree they will be subject to U.S. tax. Likewise, there are tax provisions for persons expatriating from the United States. The expatriation tax rules under Section 877 imposes an exit tax on U.S. citizens who have renounced their citizenship, as well as on certain long-term residents who have ended their US resident status.

Listen as our experienced panel of international tax practitioners provides a useful and practical guide to sourcing and residence issues as they apply to multinational tax situations.



  1. Income sourcing rules in international tax planning and compliance work
  2. Special source rules that apply to different kinds of income
  3. Citizenship and residence in determining the tax liabilities of individuals, including the rules for determining residency
  4. Tax rules that apply to expatriation
  5. Foreign earned income and a housing allowance may be excluded from the taxable income of a U.S. citizen or resident


The panel will analyze these and other relevant topics:

  • Types of income under the income sourcing rules
  • Allocating income between jurisdictions
  • Reallocation of income
  • Exclusion of foreign earned income


Yoram Keinan
Yoram Keinan

Partner and Chair, Tax Department
Carter Ledyard & Milburn

Mr. Keinan has over fifteen years of experience in tax law both in the United States and Israel. He focuses on U.S. and...  |  Read More

Richard Hartnig
Richard Hartnig

Schwartz International

Mr. Hartnig possesses extensive global tax experience spanning over 30 years in both the government and private...  |  Read More

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